Mainfreight sees full-year sales topping $2 billion after all units record first-half growth

Mainfreight said full-year sales should exceed $2 billion in 2015 after it reported sales and earnings growth across all its businesses in the first half.

Mainfreight [NZX: MFT] said full-year sales should exceed $2 billion in 2015 after the NZX-listed transport group reported sales and earnings growth across all its businesses in the first half.

Earnings before one-time items and foreign exchange movements rose about 17 percent to $33.7 million in the six months ended Sept. 30, the Auckland-based company said in a statement. Sales rose 3.6 percent to $987 million.

The company said at its annual meeting in July that it expected growth across its businesses this year although today it said the strongest gains of the first-half were achieved in the first three months of the year, “with performance falling below our expectations in August and September.” Still, it sees “plenty of growth opportunities”.

“Expectations for our sales revenues to exceed $2 billion for the 2015 financial year remain high, and we do expect to have improved earnings over the prior year,” managing director Don Braid said in the statement.

Mainfreight will pay a first-half dividend of 14 cents a share, up 1 cent from a year earlier, on Dec. 12, with a record date of Dec. 5.

Net profit fell 20 percent to $33.5 million, mainly reflecting a year-earlier gain of $11.6 million from a settlement with the previous owners of its European business, Wim Bosman, after a dispute over the loss of several key trading accounts.

Today the company said it was seeing some improvement in its European business, with sales rising 4.1 percent to 129.8 million euros and earnings before interest, tax, depreciation and amortisation climbing about 31 percent to 5.2 million euros.

The majority of the increase came in the first quarter, with some gains given up with the onset of the European holiday period in July and August. While trading improved in October and November, it was still below expectations.

“Our most challenging area remains Belgium, where management changes and restructuring continue to dominate our focus as we look to improve returns,” the company said.

In New Zealand, sales rose 5.3 percent to $255.9 million and Ebitda rose 8.1 percent to $29.9 million. It said domestic freight volumes “remain strong and are anticipated to increase as we enter the pre-Christmas peak.” New Zealand Air & Ocean volumes were ahead of year-earlier levels although sale were impacted by declining ocean freight rates, it said.

Results in Australia were below expectations, with sales climbing 5.3 percent to A$236 million and Ebitda up 9.4 percent to A$15.4 million.

“Margins are recovering in our domestic operations and while revenues continue to increase, our expectations are for stronger sales growth into the new financial year,” it said.

In Asia, Mainfreight reported a 17 percent jump in sales to US$ 21.8 million and a 23 percent gain in Ebitda to US$2.2 million.

Its Americas division produced mixed results.

Sales rose 16 percent to US$207 million and Ebitda gained 19 percent to US$10 million, although this was all driven by its Mainfreight USA unit, which recorded 24 percent sales growth and 70 percent Ebitda growth.

The CaroTrans business had “a disappointing first six months” as margins shrank and Ebitda fell 14.3 percent.

“We have seen some improvement in CaroTrans’ results for October, however we are not confident of regaining lost ground by year end,” it said.

Mainfreight shares last traded at $16.05 and have gained 34 percent so far this year, ahead of the NZX 50's 15 percent gain.