Mainfreight lifts June quarter net profit to $2.13m

10.00am

Transport and logistics operator Mainfreight today reported its first quarter net profit rose 86 per cent to $2.13 million, excluding the results of its 80 per cent-owned Owens Group.

When consolidating Owens' trading and the associated costs of acquisition and restructuring, Mainfreight had a June quarter loss of $212,000.

The Owens trading results included abnormal restructuring costs after tax of $728,000. Ownership costs of Owens totalled $1.0m after tax, including goodwill amortisation and interest expense.

The balance of $598,000 was trading losses from within the Owens Group. Consolidated revenues for the group doubled to $222.7m.

Mainfreight has been blocked from a full takeover of Owens by Toll Holdings, which snared a 12 per cent stake. However, Mainfreight has been asset stripping Owens, selling off large chunks of the company.

The results of asset sales will be reported in the next quarter.

Mainfreight said those businesses remaining in Owens had mixed results with the dry freight division performing well while the perishables division performed poorly and below expectations.

Owens Transport results disappointed. Improvements to profitability were expected in the second and third quarters.

"The rationalisation programme initiated within Owens has been relatively successful. There is further work required to see this business structured appropriately," the company said.

Mainfreight said that overall the company was very positive about second quarter trading.

"Indications are that this strength will progress through to the third quarter."

Excluding acquisition and foreign exchange movements, revenue in the first quarter increased by 14.0 per cent.

The domestic division revenues grew 12.4 per cent to $47.5. Ebit (earnings before interest and tax) improved 14.6 per cent to $4.2m. Mainfreight said the strong trend seen during the previous year continued with market share increased and a New Zealand economy which continued to remain strong.

New Zealand International division revenues were flat but ebit fell 56.7 per cent to $158,000 with Mainfreight's Lep business falling below expectations.

Australian domestic revenues, excluding foreign exchange movements, improved 37.5 per cent to $16.63m with ebit up 11.5 per cent to a deficit of $1.51m.

Mainfreight said it viewed the Australian improvement with "some satisfaction and expected accelerating results in the second and third quarters".

Australian sales were increasing rapidly, Mainfreight said.

Australian International revenues rose 17.2 per cent to $51.1m million and ebit rose 74 per cent to $957,000.

Mainfreight said the consolidation of Owens into Mainfreight had been relatively successful although some duplicated costs remained.

USA International revenues improved 14 per cent to $17.3m and ebit improved from break even last year to a $101,000 profit.

The Asian Associates division revenues rose 44 per cent and ebit was up 90 per cent.

Mainfreight shares closed yesterday at $2.00, having risen from $1.30 a year ago.

- NZPA