Mainfreight hits record earnings on global freight recovery

Photo / Sarah Ivey

Mainfreight, which recently bought Holland's Wim Bosman Group, achieved record earnings in the 2011 financial year as a recovery in global freight supported its grab for market share.

The Auckland-based company reported record earnings before interest, tax, depreciation and amortisation of $91.6 million in the 12 months ended March 31, up from $75.9 million a year earlier.

Net profit fell 29 per cent to $25.7 million, or 26.1 cents a share, as it booked the cost of changes in tax rules around depreciation and one-off charges on the Wim Bosman acquisition.

The company had a swipe at the government's 2010 tax changes, which removed the ability to claim expenses on the depreciation of buildings, calling the legislation "ludicrous and absurd."

"Our record, highest-ever financial performance provides confidence of the opportunity for ongoing improvement," the company said. "The momentum has carried into the new financial year and with the additional contributions that Wim Bosman Group will provide, we are excited by the results that are available to us."

Mainfreight will stump up as much as 120 million euros for the Dutch-business, which gives it a toe-hold in Europe. The deal, which was completed in April, was funded from bank debt, lifting the company's gearing to about 48 per cent from 17.5 per cent before the purchase.

Still, the company managed to cut net debt to $47.5 million from $82.9 million a year earlier, as a weak US dollar and low capital expenditure helped it repay loans.

Mainfreight's board lifted the dividend to 11 cents a share, from 10 cents a year ago, taking the annual payment to 20 cents. The shares fell 0.4 per cent to $9.26 in trading yesterday, and have climbed 19 per cent this year.

Revenue increased across all of the company's sectors, with a record $1.34 billion in sales for the year. The US segment had the biggest contribution at $420.5 million, up a quarter from 2010, while New Zealand domestic revenue rose 8.7 per cent to $290.8 million.

New Zealand international sales climbed 13 per cent to $121.8 million, and the Australian international segment lifted revenue 22 per cent to $247 million. Australia's domestic operation increased sales 19 per cent to $225.3 million.

The Asian business boosted sales 30 per cent to $36.2 million.