Buy-up on horizon after profit increase

Freight and logistics company Mainfreight is poised for acquisitions at home or abroad now that its Owens Group division and Australian operations are delivering profits.

Managing director Don Braid said that with consolidation complete, the Auckland-based company was looking to grow.

"We've lifted our eyes to see what's on the horizon and are looking to see if there are any suitable acquisitions available," he said.

Yesterday, the company delivered a nine-fold increase in half-year net profit of $10.33 million compared with the period a year ago.

For the six months to September, operating profit was $17.6 million, up 365 per cent from the previous year. Revenue was $438 million, up 1.7 per cent. Excluding the write-offs from some of Owens' unprofitable units and the loss of some low-margin business, revenue was up about 8 per cent.

Mainfreight also boosted its interim dividend to 5c a share, up from 3c in the earlier period.

Braid said he expected strong results to continue in the second half.

First NZ Capital analyst Andrew Mortimer said the overall result was better than expected, especially the Owens division.

"If you strip out the Owens business, there seems to be some evidence of a flattening-out in the domestic business, which might be expected given the slowing economy," he said.

Although economic indicators pointed to a downturn, Mainfreight said it had not seen an impact to domestic freight tonnages yet.

The company is no longer solely reliant on New Zealand. It considers itself a global business, with operations in the United States and China as well as Australia.

Nearly 40 per cent of its net surplus this year came from overseas operations.

Domestic operating profit was $9.74 million, up 32 per cent from the previous period.

The gains were largely because of positive results from Owens, which had an operating profit of $3.4 million compared with a deficit of $5.91 million the year before.

Mainfreight took control of fellow transport group Owens this year after buying the 11.6 per cent blocking stake held by Australia's Toll Holdings in May.

The company's Australian domestic division had operating profit of $957,000 from a deficit of $1.23 million a year earlier.

Its Australian international unit reported a 125 per cent year-over-year increase in operating profit to $4.7 million. US operations were up 118 per cent to $1.2 million.