New depots and jobs coming as Mainfreight 'savours' best profit

Tuesday, 28 May 2019

Mainfreight chief executive Don Braid, left, with founder and chairman Bruce Plested at a recent function - the company has reported a bumper profit.

Mainfreight has posted its best ever annual profit of $141 million across all the countries where it operates and is opening new depots.

Managing director Don Braid said that while the company had expanded into new regions in New Zealand, it was a global business that operated in 24 countries employing 8067 people.

'We created 506 new jobs worldwide with 90 in New Zealand where we have 2290 employees, including the owner drivers. But I can't predict numbers for the coming year. It depends on performance.'

'While we will bask for a moment, savouring this result, we remain very conscious of the task ahead,'

Mainfreight says it lifted wages of its lowest paid employees.

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Those tasks include opening a 12,000 square metre Mount Maunganui transport facility in mid-2020, bigger depots for south and west Auckland, and the South Island.

'Our logistics business increased its warehousing footprint, including expansion into Cromwell to service the fast-growing Central Otago region, and has new sites under construction in Hamilton, with planning underway for Tauranga. A ninth site in Auckland has also opened.'

A Mainfreight truck at its new Christchurch Airport depot.

New facilities are also on the books for Whakatane and Levin, an extension for Oamaru, and replacement facilities for Napier, Masterton, Blenheim and Gore.

'In our Air & Ocean division we continue to increase air and sea freight tonnage. Improved perishable air freight handling facilities in Auckland have assisted increased capability. We have also completed a major solar installation at our Westney Road facility in Auckland post-result.'

'We have again increased salaries for those at the lower end of our pay range in New Zealand and Australia, in addition to the usual annual salary increases,' he said.

The New Zealand operations achieved revenue of $718m up $52m or 7.9 per cent.

Braid said investment to improve Mainfreight's network will increase overheads in the years ahead.

The Australian business returned 'satisfactory' revenue of A$710m (NZ741m) up A$86m ($NZ90m) or 13.9 per cent after a slow start to the year.

A transport branch was opened Toowoomba and plans were underway for additional domestic freight facilities in Sydney and on Queensland's Sunshine Coast. Construction of an Adelaide facility will begin soon.

Mainfreight opened four new warehouses with more planned for Brisbane, Sydney, Melbourne and Perth.

The American business was improving at a slower rate than desired but returned revenue of US$493m (NZ$753m) up US$58m (NZ$88m), or 13 per cent.

In Europe, improved margins saw revenue hit E€376m (NZ$642m) up E€40m (NZ$68m) or 12 per cent.

'Strong performance in transport, particularly in the Netherlands, lays a good foundation for future improvement.'

Rebranding of local names to Mainfreight was continuing with completion expected by the end of the year.

Revenue in Asia was down US$9m (NZ$15m) to US$74m (NZ$126m) but margins improved. Mainfreight quit 'an amount of unprofitable wholesale air freight business, reducing revenue'.

'We continue to build our profile and network within the Asia region, opening branches in Kuala Lumpur, Malaysia, and two branches in Japan at Tokyo and Fukuoka. This lifts our Asian footprint to eight countries and 21 branches.'

Trade tariffs affecting the China/USA trade route saw trade volumes fluctuate and Mainfreight was diversifying to alleviate dependency on volatile US trad lines.

Mainfreight's after-tax profit before abnormal items was $141.08m up $29m or 26 per cent.

Abnormal costs after tax were $3.4m and included $2.9m writing down a European brand name, with the balance of $503,000 for restructuring in Europe and the US.

Shareholders will receive a final dividend to 34 cents a share taking the total dividend to 56c a share.