Mainfreight Ltd (MFT: NZX)

IRG

Tuesday 14th January 2014

Mainfreight Ltd (MFT: NZX) is a global supply chain logistics provider, with businesses operating in 214 branches throughout New Zealand, Australia, the Netherlands, Belgium, France, Poland, Romania, Russia, Finland, China, Hong Kong, Singapore, Chile and the United States. The Company provides its customers service across a range of logistics services, which include Managed Warehousing, Domestic Distribution, Metro and Wharf Cartage and International Air and Sea Freight operations. On April 1, 2011, the Company acquired Wim Bosman Group in Europe. 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 founders Bruce Plested and Neil Graham at 96c each.

Performance for First Half of FY2013

Total revenue (sales) increased 1.7% to $952.70 million (excluding foreign exchange effects, this is an increase of 4.0% over the same period last year).
Net surplus before abnormals was $29.87 million for the first six months of its 2014 trading year. This was an increase of 7.7% over the same period in the prior year.
EBITDA performance improved 3.7% to $63.30 million, an increase of $2.24 million over the previous year. Excluding foreign exchange effects, the increase is 6.1%.
Abnormal items after tax for the period total $11.96 million, made up of:
Settlement of a dispute with the previous owners of the European acquisition, culminating in an after tax gain of $12.74 million
The discovery of fraud (within a New Zealand subsidiary, Daily Freight, which is currently before the Court) with an estimated after tax cost of $684,000, net of recoveries to date
Balance of $97,000 relating to redundancy costs incurred in the United States and Europe as business units have reduced team numbers.
After abnormals, a net surplus of $41.83 million was recorded, compared to $27.74 million for the same period last year.

During the second quarter, EBITDA improved 26.6% and revenue lifted 3.1% over the first quarter's performance. Regionally, Australasia and Asia have contributed strongly, while results from Europe and the Americas are disappointing. [Source: Mainfreight Annual Report 2013 & NZX Announcements]

Trading during the first three months of the 2014 financial year saw reduced volumes and profitability across most of the Mainfreight network, however performance through August and September improved and this has continued through October and into November.

The Directors are satisfied with the direction and development of the Group. The next twelve months will continue the developments that Mainfreight has undertaken. The company said it expects to lift earnings in the current year, with measures put in place to improved trading at Mainfreight USA likely to show up in the fourth quarter, while Europe will take longer to improve.
The share is trading at $12.46 as of 13th Jan, 2014.

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