Mainfreight Limited Analysis

Overview

The company's origins go back to 1978 and listing was achieved in June 1996 following sale of 60% of the shares on issue by founder Bruce Plested and Neil Graham at 96c each. The company is a specialist freight forwarding and distribution business, with interests also in managed warehousing, transportation of hazardous substances, air & ocean international freight, full truckload freight and Global Supply Chain Logistics. Based in Auckland, the group's business units include: Domestic transportation and Managed warehousing in NZ, Australia, Americas and Europe, air & ocean international transportation in NZ, Australia, Americas, Europe and Asia with agents world-wide and wholesale air and ocean freight.

Expansion in the late 1990’s included a series of acquisitions including a 75% stake in Lep International (NZ), Lep Air International in Australia and Australian express transport operator K & S Express plus Express Lines, an Australian Air & Ocean operator with interests in Asia. In July 2003, Mainfreight launched a takeover bid for Owens Group, ending up with 79.6% after Toll Holdings acquired a minority position. In May 2005, it completed a full takeover of Owens Group when Toll sold its 11.8% stake. In April 2007 it sold Pan Orient Project Logistics and its 75% shareholding in LEP (New Zealand and Australia) for over AU $83m.

The 2008 year was significant for Mainfreight with a US$53.7m acquisition of US based Target Logistics, a freight forwarding and logistics company; MFT also acquired remaining interests in their Asian operations giving them 100% ownership.

In April 2011 Mainfreight made its largest acquisition to date, a €110.0m acquisition of Europe based (Netherlands) Wim Bosman Group. European operations have now been rebranded as Mainfreight.

In the 2024 financial year revenues are NZ$4.72 billion with 337 branches in 27 countries, and with 10,644 team members.

Performance

The following information was extracted from Mainfreight Limited's half year results, released on 13 November 2024:

Financial result for the six months ended 30 September 2024 (Unaudited)

Commentary

Mainfreight is pleased to confirm our half-year financial results to 30 September 2024. This result is marginally better than our estimated guidance released during our Texas Investor Day on 7 October 2024.

Result Summary

Revenue NZ$2.55 billion up 8.4%

Profit before tax (PBT) NZ$161.2 million down 7.8%

Net profit NZ$114.56 million down 8.0%

• Adjusted for foreign exchange impact Group Revenue is up 9%, PBT is down 7.7% and Net profit is down 7.9%.
• Operating cash flows increased from $186.8 million to $191.7 million.
• An interim dividend of 85 cents per share has been set by the Directors.

This result has been well signalled during our Investor Day briefing. The small improvements in PBT occurred across all regions. However, the majority came from the New Zealand business units.

Freight volumes and warehousing utilisation have all increased on the prior period.

This improvement in profitability during our second quarter is expected to continue into the second six months of our financial reporting period.