KEY POINTS:
Mainfreight is considering buying three US businesses as its overseas performance continues to improve.
The listed transport company yesterday posted a record net profit for the year ended March 31 of $55.6 million, up from $29 million the previous year. Revenue was $968.2 million, up from $886.5 million.
Managing director Don Braid said the result was very satisfying and justified the firm's global expansion strategy. Mainfreight, which has operations in Australasia, the US and Asia, has been the best performing stock on the NZX for the past two years.
"It's a good, positive contribution from everybody," Braid said of the result.
Discussions were under way in the US with three businesses, all of whom could be acquired, he said.
Before including abnormal gains of $19.2 million, including the sale of a stake in equipment hire business Hirepool, net profit was up from $29 million to $36.4 million.
Australian and US divisions contributed $6.5 million towards the $7.4 million increase in net surplus before abnormals, Braid said.
"Which vindicates the decision we took some years ago to continue to move our business offshore."
Trading during the first two months of the new financial year had shown continued improvement in overseas operations, which accounted for more than half of net surplus before abnormal items.
New Zealand remained challenging - freight volume had decreased as the kiwi gained in value - although the company was confident of continued improvement.
Two new depots were expected to open in Hamilton and Dunedin.
A strengthened balance sheet and the divestment of non-strategic businesses had positioned the company well for global expansion, Braid said.
Mainfreight's performance in Asia was described as satisfactory.
"The disappointing thing for us is that it's in the biggest freight market in the world and our growth is not strong enough in that market."
The company wanted to increase its profile in Southeast Asia and China, likely through acquisition or increased shareholding in current operations, Braid said.
Warren Couillault, chief investment officer at 11.7 per cent shareholder Fisher Funds, said revenue and profit growth in the Australian domestic business was a positive sign. "There's a lot of growth there and it could be a really big business ... "
Forsyth Barr analyst Greg Main said an acquisition in the US would help Mainfreight's presence in Asia. "You can't look at them in isolation, everything's kind of related."
Mainfreight's shares closed up 15c yesterday at $7.25. A fully imputed final dividend of 8c a share would take the total for the year to 15c, plus a special dividend of 28c last December.
