FLLYR: MFT: Mainfreight Full Year Results to 31 March 2019 08:40a.m. 
28/05/2019 08:40  
REL: 0840 HRS Mainfreight Limited  
FLLYR: MFT: Mainfreight Full Year Results to 31 March 2019  
Financial result for the twelve months ended 31 March 2019 (Unaudited)  
Mainfreight is pleased to announce our full year financial results to 31  
March 2019; this result our best ever.  
Revenue $2.954 billion Up $337.39 million or 12.9%  
EBITDA $257.05 million Up $41.94 million or 19.5%  
Net profit (before abnormals) $141.08 million Up $29.08 million or 26.0%  
Adjusted for foreign exchange impact, revenue is up 10.8%, and EBITDA up  
Abnormal costs after tax totalled $3.46 million. Of this, $2.93 million  
relates to the further write down of the European brand name which is in the  
process of being discontinued. The balance, $0.53 million, is restructuring  
costs in Europe and the Americas.  
Our well-signalled strategy of intensifying our global branch network, within  
cities, within countries and of course, between countries, has continued  
during this past year. The benefit of our network development across our  
three core products - domestic transportation (Transport), warehousing  
(Logistics) and international freight forwarding (Air & Ocean and CaroTrans)  
- is reflected in these improving financial results.  
We expect to continue enhancing our network in the coming years, with an  
expected $350 million of capital expenditure on land and buildings projected  
over the next two years. It is expected that further investment in leased  
facilities will also continue, to offset short-term growth requirements from  
increasing customer demand.  
Divisional Performance (figures in local currencies)  
New Zealand (NZ$)  
Revenue $718.79 million Up $52.75 million or 7.9%  
EBITDA $110.56 million Up $12.03 million or 12.2%  
Our network intensity and reach has never been stronger than in this past  
year, where we have seen our influence increase in every region in New  
Zealand. We now have a branch network across all three products which  
extends from urban centres into regional areas with populations less than  
20,000. As a result, delivery times and quality have improved, and we have  
been able to secure new customers, including providing import and export  
services from many regional locations never before serviced by Mainfreight.  
Additional regional branches are in the final stages of planning, for  
implementation during the current financial year.  
Strong financial performance culminated in a record EBITDA result for the New  
Zealand business.  
Our Logistics business increased its warehousing footprint, including  
expansion into Cromwell to service the fast-growing Central Otago region, and  
has new sites under construction in Hamilton, with planning underway for  
Tauranga. A ninth site in Auckland has also opened post-result.  
In our domestic Transport operations we expect to open the new 12,000m2 Mount  
Maunganui facility mid-2020, and our requirement for improved, larger  
facilities to manage growth, sees us with planning underway for new  
facilities in South and West Auckland, and the regional centres of Whakatane  
and Levin, an extension for Oamaru, and replacement facilities for Napier,  
Masterton, Blenheim and Gore.  
In our Air & Ocean division we continue to increase air and sea freight  
tonnage, with increasing support from our regional locations. Improved  
perishable air freight handling facilities in Auckland have assisted  
increased capability in this sector. We have also completed a major solar  
installation at our Westney Road facility in Auckland post-result.  
Australia (AU$)  
Revenue AU$710.17 million Up AU$86.90 million or 13.9%  
EBITDA AU$55.37 million Up AU$5.49 million or 11.0%  
After a relatively slow start to our financial year we have achieved  
satisfactory full year results in Australia.  
The new branch location for Transport was opened in Toowoomba (having been  
delayed), and the Geelong branch moved to a new facility. Plans are underway  
for additional domestic freight facilities in Sydney and on Queensland's  
Sunshine Coast. Construction of our new Adelaide facility is expected to  
commence late 2019.  
In our Logistics business, four new warehouses were opened with an additional  
AU$12 million of new business. Our standing in the premium beverage sector  
continues to grow. New warehouse business has in turn flowed into domestic  
freight tonnage. Additional warehousing capacity is planned in the coming  
year for Brisbane, Sydney, Melbourne and Perth, including purpose-designed  
capacity to aid warehousing of retail dangerous goods, which will be  
complemented by our specialist dangerous goods transport business,  
Our Air & Ocean business improved both its sales growth and profitability  
over the prior year, with a strong emphasis on export related growth,  
particularly in the perishable airfreight sector. As with the balance of our  
Air & Ocean network globally, there is an emphasis on the development of LCL  
consolidation activity.  
Asia (US$)  
Revenue US$74.45 million Down US$(9.42) million or (11.2)%  
EBITDA US$6.31 million Up US$1.39 million or 28.2%  
Our performance across Asia has improved at EBITDA level through a focus on  
improving margins. As a result, an amount of unprofitable wholesale air  
freight business was exited, reducing revenue levels.  
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.  
In addition, we are looking to add a further six regional sales desk  
locations in second tier cities across the region, boosting our sales reach  
and capability.  
Of note during the period is the growth of intra-Asian freight movements.  
Whilst small in terms of revenue per container, these movements are an  
important and growing feature of trade within the region. Trade tariffs  
affecting the China/USA trade route saw trade volumes fluctuate, peaking  
prior to the July 2018 implementation. Diversifying our trade focus will  
assist, alleviating dependency on the volatile USA trade lanes.  
Europe (Euro EUR)  
Revenue EUEUR376.28 million Up EUEUR40.17 million or 12.0%  
EBITDA EUEUR23.26 million Up EUEUR5.49 million or 30.9%  
It is pleasing to see progress being made in our European business. The  
strong performance in Transport, particularly in the Netherlands, lays a good  
foundation for future improvement across the network. A focus on cross-dock  
and pick-up and delivery efficiencies, together with line-haul utilisation,  
has resulted in improved margins.  
In Logistics two new warehouses were commissioned during the year, with  
utilisation levels improvement month on month as new customers are gained.  
Our Air & Ocean operations continue to find growth on the back of our global  
expansion and network effectiveness. Opening a second branch operation in  
Germany (Hamburg) provides more sales opportunities. Pleasing progress  
continues in the relatively new locations of the UK and Italy.  
We expect to continue to intensify our European footprint as sales growth  
Rebranding to Mainfreight continues, and we expect completion by year end  
across all assets.  
The Americas (US$)  
Revenue US$493.86 million Up US$58.60 million or 13.5%  
EBITDA US$26.11 million Up US$7.08 million or 37.2%  
Improvement from our American interests continues albeit at a slower pace  
than we would wish. Finding efficiency in our domestic Transport operations  
has been a contributor to the lift in EBITDA. A satisfactory increase with  
plenty of opportunity in front of us to grow a much larger business across  
all three products.  
The Transport operation has initiated more direct Mainfreight-controlled  
line-haul services across our major city network, improving utilisation and  
margins. As sales growth allows, this will continue until all  
third-party/agent usage is ended.  
Our Air & Ocean business continues to find growth, with a strong emphasis on  
developing more LCL consolidation services to and from the core  
Mainfreight-to-Mainfreight trade lanes globally. Significant sales  
opportunities are under tender currently.  
CaroTrans, our wholesale sea freight operation, has improved processes,  
revenues and profitability, and is well positioned to further lift its  
performance over time.  
Our Logistics operations continue to build a portfolio of new customers to  
lock in utilisation gains in their recently implemented warehouse facilities,  
with a focus on also gaining the domestic transport and/or international  
freight components.  
The Americas region continues to offer us large scale opportunity for market  
share gains. Our sales effectiveness needs to further improve for this to  
We remain confident that the momentum of the year just concluded will  
Group Operating Cash Flows  
Operating cash flows were $197.42 million, up from $140.24 million in the  
prior year, reflecting increased profitability, acceptable cash collection  
processes and increased depreciation.  
Net debt is $130.48 million, down from $196.85 million, a reduction of  
Gearing ratios improved from 21.7% to 13.5%  
During the year net capital expenditure totalled $89.18 million, with  
expenditure for land and buildings accounting for $30.83 million, plant and  
equipment of $42.80 million, and information technology of $15.55 million.  
It is our expectation that capital expenditure required for the following two  
years for property development globally will be in the vicinity of $350  
The Directors have approved a final dividend of 34.0 cents per share fully  
imputed at the 28% company tax rate, with the books closing on 12 July 2019;  
payment will be made on 19 July 2019. This takes the full dividend for the  
year to 56.0 cents per share; a 24.4% increase year on year.  
We are proud of this financial result, our best ever, particularly as it  
contains healthy profit improvement across all of our global regions.  
Whilst we will bask for a moment, savouring this result, we remain very  
conscious of the task ahead.  
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. The ongoing investment required to improve and further intensify  
our network adds increased overheads for the years ahead.  
To counter these cost increases, our teams across the world are focused on  
achieving sales growth, and taking market share. In addition to gaining new  
customers, when we analyse the trading statistics for our current Top 500  
customers, there remains plenty of scope to extend their use of a wider range  
of our services and across more of our locations.  
Aside from increased costs, there is a level of uncertainty in global trade  
and slowing economies. Whilst not immune to such external effects, we  
continue to position ourselves to counter the headwinds and look for ongoing  
Our improved financial result will again allow us to pay a discretionary  
bonus to our people who meet the criteria set by the Board of Directors. The  
profit before tax of $197.07 million equates to a potential bonus of $27.24  
million, which is an increase of $6.55 million or 31% on the prior year's  
payment. It delights us to be able to do so; allowing our people to share in  
the success of the company.  
We are confident of our strategies, and that our commitment to network  
intensification, alongside high quality logistics services, will provide  
improving results for the future.  
Mainfreight will release its financial results for the first half of the 2020  
financial year to the market on 13 November 2019.  
For further information, please contact Don Braid, Group Managing Director,  
telephone +64 9 259 5503, +64 274 961 637 or email  
End CA:00335141 For:MFT Type:FLLYR Time:2019-05-28 08:40:23  

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