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Mainfreight first-half dividend rises as profit soars

Thursday 10th November 2011

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Mainfreight has increased its interim dividend by a quarter after posting a 77 percent increase in first-half profit.

The logistics company is paying an interim dividend of 12 cents per share, up three cents a share on last year. The dividend is a nice Christmas present to shareholders as it is payable on Dec. 16.

The increased payout is possible because the company notched up a record net surplus after taxation and abnormals of $29.1 million in the six months ended Sept. 30, up from $16.47 million last year.

Excluding abnormal, profit rose 80 percent. Profit was achieved on a 38.4 percent rise in revenue to $802.9 million.

"The increase in dividend reflects the strength of the financial results for the half year and our expectations for the full year's trading," the company said.

Mainfreight's share price has risen 28 percent this year. The company is 17 percent owned by a trust associated with chairman Bruce Plested and family interests associated with managing director Don Braid own 2.8 percent, according to the 2011 annual report.

Mainfreight says it continues to find growth and profits despite world financial and economic conditions. The company said its interim result was a record and the third quarter will "reflect a similar trend".

The newly acquired European business Wim Bosman Group produced earnings before interest, tax, depreciation and amortisation (Ebitda) of 10.59 million euros. The company said it was pleased with the acquisition even though freight volumes were reduced during the European holiday period of August.

Underlying earnings in the domestic New Zealand division rose 25.8 percent, while the International New Zealand division increased earnings by 20.7 percent.

The Australian domestic result rose 70 percent and strong trading continues in Australia in October and November. The Australian International division posted a 15.4 percent increase in earnings even though revenue fell 3.3 percent.

Ebitda in the United States business rose 44.4 percent but the company said its CaroTrans wholesale network continued to struggle with earnings falling 11.9 percent on static revenue. The company had mixed results in Asia.

BusinessDesk.co.nz



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