Freight giant upbeat on growth

Freight and logistics company Mainfreight expects the strong growth in its third quarter earnings will continue to the end of the year.

Yesterday, the company disclosed a net profit of $10.3 million for the three months to December, boosting the total for the year so far to $20.3 million, up from $7.66 million for the three quarters a year ago.

"It was a good all-round result, where every division had contributed positively and was up on last year," said managing director Don Braid.

In particular, growth had come from a better performance across the Tasman and an improvement in transport group Owens, now bedded in after Mainfreight took control last year.

With the improvements expected to continue into the fourth quarter, Braid was positive about the year ending March 31 and was confident heading towards 2007.

Mainfreight shares closed up 5c on a record high of $3.95, having traded between $2.05 and $3.90 this year.

Proving the company was no longer solely reliant on New Zealand, net profit from its overseas division increased from 24 to 41 per cent.

Strong progress had been made across the Tasman with operating profits in the Australian domestic division leaping to $3.8 million from $0.317 million last year - its best performance yet.

Braid said ongoing business confidence in Australia was assisting all Mainfreight's divisions and was continuing into the fourth quarter.

Although contribution from overseas divisions would continue to grow in the future, Braid still saw opportunities for the company back home with new services and products.

Domestic revenues increased $4.3 million to $203.9 million during the quarter, but freight tonnage remained on a par with last year.

"Does that say we've got a flattening economy? Maybe it does, but maybe it just says it has slowed down a bit," said Braid.

Mainfreight had historically done well in a poorly-performing economy and Braid saw opportunities ahead as companies looked at efficiency as the economy slowed. "Particularly in terms of whether they are going to invest in another warehouse or place stock with a third party like us."