Overseas drive delivers goods for Mainfreight

Don Braid says the company has a lot of hard work ahead. Picture / Martin Sykes

Mainfreight has reported a record profit thanks to a strong performance in its offshore business, which the transport company expects will shield it from the slowing economy.

Profit for the year to March 31 was $29 million, more than doubling from $13.5 million the previous year. Meanwhile, revenue was up from $857 million to $886.5 million.

Earnings before interest and tax (ebit) was seven times for the Australian domestic division at $4.16 million, more than double in the United States international division at $4.03 million, and up 71.5 per cent for Australian international at $12.86 million.

Group managing director Don Braid said the results were pleasing "but at the same time I think we are realists.

"We realise that we've got a lot of hard work and challenging work in front of us and we look forward to taking that challenge up and running with it."

The company did not give any forecasts for this year but continued offshore expansion was part of the plan.

"Mainfreight is becoming a significant global logistics business from our humble start here in New Zealand and I think that's good for Mainfreight's shareholders as it's good for the economy," Braid said.

Improved performance offshore, which now contributes more than 52 per cent of revenue, would also protect the company from any slowdown in the domestic economy.

"What's exciting about it is that we've done well here with four million people," he said.

"If we can have that same recipe, which we think we've got right ... then we're in economies with 20 million people for Australia and 240 million people in America and 1.4 billion people in China."

Mainfreight said the results met expectations signalled during the year, although it was better than the market expected and the share price reacted accordingly, closing up 35c yesterday at $5.65 a share.

Last June, Mainfreight bought the remaining 20 per cent of the Owens Group business for $13.9 million, and a 24.5 per cent stake in Hirepool, which came with the purchase of Owens, should be sold this year.

Braid said Hirepool was not a core business for Mainfreight and with other shareholders the company had decided to sell, although he would not speculate as to its value.

Mainfreight's associated businesses in China and Britain continued to improve albeit at levels of growth below the company's expectations, while New Zealand domestic revenue was up 1.5 per cent to $269.2 million and ebit was up 9.8 per cent at $24.78 million.