Mainfreight will now not call on shareholders to help fund last year's purchase of 80 per cent of Owens Group until the middle of the year.
Mainfreight yesterday reported a nine-month profit reduced by consolidation of one-time losses from Owens and said Toll Holdings' ownership of a blocking stakein Owens had stopped it gaining the full benefit of the investment.
Toll blocked Mainfreight from buying all of Owens, which means it bears listing costs and cannot rationalise the business as planned.
Excluding Owens, profit rose 29.7 per cent to $8.16 million in the nine months to December 31. Mainfreight consolidated $1.18 million of losses from Owens, dragging the bottom line profit down to $6.38 million, which was still up from $6.29 million last year.
The Owens loss was for a two-month period and was mostly due to one-time costs. The business made a small operating loss in the period but head office costs had since been cut.
The company used bank finance to fund the Owens purchase and sold $15.8 million of new shares in December. A planned sale of shares to existing shareholders via a rights issue in the first quarter has now been deferred to the middle of the year.
"Trying to rush a rights issue by the end of March was quite difficult and bankers are quite happy to defer it," managing director Don Braid said. It also gave more time to divest unwanted Owens businesses.
Mainfreight's shares have risen 12 per cent this year as investors bet on further consolidation in the transport sector. The company has consistently said it is not for sale.
"I think the investing community have seen the benefit that will come from owning Owens long-term. We're finally coming back to where the business is more fairly valued," said Braid.
