Mainfreight record profit paves way for dividend rise

Mainfreight has reported a 77pc increase in interim profits - and dividends are going up by a quarter. Photo / Sarah Ivey

Mainfreight, the logistics company, reported a 77 per cent increase in interim profit that allowed it to increase its dividend by a quarter.

The company is "confident but not cocky" about its prospects for the full year, managing director Don Braid told BusinessDesk.

Braid was travelling to Invercargill today for the funeral of a storeman killed at the company's premises last week. It was the first workplace fatality in Mainfreight's 33-year history.

The company is paying an interim dividend of 12 cents per share, up three cents a share on last year. The dividend is payable on Dec. 16.

Shares of Mainfreight fell 1.7 per cent to $10.05 in a declining market and have gained 28 per cent this year.

The increased dividend payout comes as the company notched up a record net surplus after taxation and abnormals of $29.1 million in the six months to Sept. 30, up from $16.47 million last year.

Excluding abnormals the profit rose 79.7 per cent. The profit was achieved on a 38.4 per cent rise in total revenue to $892.9 million.

Braid said the Australian business was the standout performer in the result.

The Australian domestic result rose 70 per cent and strong trading continues in Australia in October and November.

"We've done our time in Australian and have learnt our lessons," said Braid.

He said the company had no limits to growth.

"It is limited by the world logistics market. We are very excited about where we are," said Braid.

Earnings before interest, tax, depreciation and amortisation (Ebitda) in the domestic New Zealand division rose 25.8 per cent, while the International New Zealand division increased earnings by 20.7 per cent.

The Australian International division posted a 15.4 per cent increase in earnings even though revenue fell 3.3 per cent.

Ebitda in the United States combined business rose 44.4 per cent but the company said its CaroTrans unit struggled with earnings falling 11.9 per cent on static revenue.

The company had mixed results in Asia.

"The increase in dividend reflects the strength of the financial results for the half year and our expectations for the full year's trading," the company said.

The company said its interim result was a record and the third quarter will "reflect a similar trend".

The newly acquired European business Wim Bosman Group produced Ebitda of 10.59 million euro.

The company said it was pleased with the acquisition even though freight volumes were reduced during the European holiday period of August.

The company is 17.38 per cent owned by a trust associated with chairman Bruce Plested and family interests associated with Braid own 2.8 per cent, according to the 2011 annual report.

The company sees the close association between ownership and the board and managers as a positive and has disagreed with critics of the age and length of tenure of board members.

Braid said the boards of state-owned enterprises changed every three years and the board members never got to grips with the company. Mainfreight's board was experienced and had knowledge of the business.