Mainfreight seeks growth in international markets

By LIAM DANN

Mainfreight managing director Don Braid says the company is ready for further international expansion after it recorded a full-year profit of $9.01 million - up 36 per cent on last year.

Braid indicated that Mainfreight would have liked to be among the bidders for Tranz Rail, but it could not compete with a company the size of Toll Transport.

"It's difficult for us - on the size of the New Zealand economy - to be a major player in the Tranz Rail situation," he said. "Toll Transport have a market [capitalisation] of $2.2 billion, we have a market cap of $100 million."

To compete against the larger operators Mainfreight had to move into bigger markets.

"Australia, Asia and the US provide those opportunities."

The plan was to expand existing businesses in those markets through organic growth and acquisition where appropriate, Braid said.

The Australian domestic operation still provided the company with plenty of room to improve. It remained the bugbear in Mainfreight's results - its revenue was down to $48 million from $52 million the year before.

That division was identified as the only weakness in the group last year. Braid said that in the latter part of the year changes were made to ensure the business was managed and led by Australians and geared towards Australian customers.

He said the New Zealand result was acceptable, but Mainfreight expected to do better this year. Revenue for its New Zealand domestic operation was $161 million, up from $146 million.

Last week Mainfreight bought a 10.1 per cent stake in rival transport company Owens Group.

Braid said the move was evidence of a commitment to New Zealand as Mainfreight's home base.

Total revenue for Mainfreight was up 4.1 per cent to $417 million. If exchange rate movements were discounted then revenue would have been almost double that.

Operating cash flows improved from $16.2 million to $16.9 million. The company will pay a dividend of 3.5c per share on July 11.