Mainfreight confirmed earnings growth stalled in its latest year, even as it achieved record sales, as the transport group struggles to bed down its European business in the face of a weak regional economy.
Earnings before interest, tax, depreciation and amortisation fell 0.5 per cent to $137.5 million in the 12 months ended March 31, in line with the company's March guidance. Sales rose about 4 per cent to $1.88 billion. Net profit fell 18 per cent to $65.9 million after one-time charges of about $2 million versus one-time gains of $14.7 million a year earlier.
Mainfreight cemented its foothold in Europe in early 2011 with the acquisition of Netherlands-based Wim Bosman Group for 110 million euros plus earnouts. While the new business was expected to lift earnings, Mainfreight lost key trading accounts in its first 12 months of ownership while having to cope with poor trading conditions in the face of a European recession and bedding in the operations.
"This is our most challenging business unit, as we confront and guide the business through a series of issues - including high-margin earning customer losses, poor economic trading conditions and the transition from private ownership to being a contributing member of the Mainfreight Group," the company said in a statement.
"In all geographical segments, excluding Europe, we have exceeded the revenue and EBITDA levels of the prior year," it said.