Mainfreight

By Dan Stratful (AFA)

Tuesday 14th August 2012

Mainfreight (NZX: MFT ) reported its best ever results at revenue, EBITDA and net surplus levels in the year ending 31 March 2012 (FY12) as the Wim Bosman European acquisition added significantly to the result.

FY12 revenue increased 35% to $1.8 billion, EBITDA rose 50% to $138 million and net surplus (before abnormals) was up 39% to $65.7 million.

NZ operations contributed just 25% to total revenue in FY12 showing that MFT is increasingly becoming a global logistics operator.

Total net debt increased during the year to $249 million from $48 million in FY11 due to the Wim Bosman acquisition and capital expenditure. MFT remains satisfied with its European investment and expansion plans but was disappointed with the FY12 European result.

The FY13 year has begun with trading conditions broadly in line with expectations, however European operations continue to disappoint. The first quarter result for the 3 months ended 30 June 2012 (1Q) saw a 10% fall in EBITDA to $28.8 million. The European region again disappointed in the 1Q however the financial performance improved in all other regions including New Zealand, Australia, Asia and the United States where MFT saw improved revenue growth and profitability.

Looking to the remainder of FY13 and Australia and New Zealand are expected to continue to trade well with an ongoing operational performance expected in both markets. MFT remains committed to the USA and expects significant growth in FY13, while in Asia it is well placed to take advantage of logistics supply chain opportunities in the region.

Analysts' expect a profit of $73 million in FY13 with $83 million expected in FY14.

MFT's shares have performed well over the last 3 years and may consolidate their position in the near term before moving higher over the next few years.

About Mainfreight:
MFT is a global supply chain logistics provider which commenced operations in 1978. MFT began operating in Australia in 1989, the USA and Asia in 1998 and in Europe in 2011. MFT entered the European market through the acquisition of Wim Bosman in April 2011 and it intends to extend its network to all major trading nations of the world. MFT listed on the NZX in June 1996.

Status: Hold

MFT shares today traded at $9.49

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