Mainfreight optimistic for future growth
Trucking and logistics firm Mainfreight says all regions of its global business are expected to outperform last year's result.
The company's operating profit was up more than 10 per cent during the first quarter.
Speaking at the Mainfreight annual meeting this afternoon, chief executive Don Braid said the challenge was to sustain that throughout the rest of the year.
Mainfreight recently delivered a record full-year profit of $89.6 million for the year to March, up 36 per cent.
Future growth would be partly fuelled by capital expenditure of $100m, Braid said.
In the medium to long term, Australia was expected to exceed New Zealand's earnings, he said.
"Some of our shareholders wanted us to come home from Aussie in the early days, but we've got it right."
Europe, Asia and the United States would create "significant growth" in the longer term, with a focus on air and sea freight, Braid said.
Mainfreight's preference was outright ownership of the logistics chain, rather than forming more partnerships, he said.
"There's a risk with it, but with that risk comes great opportunity and profit for the business."
Acquisitions could also help drive growth, but Braid said any opportunities would need "to fit our jigsaw".
During the full year, operating profits had improved globally except in Europe, where they fell 5.6 per cent.
Braid said United States sales had also disappointed, but gained some momentum in the last quarter.
"We've continued that momentum into this first quarter," he said.
No capital expenditure would be made in the US, with all infrastructure currently leased.
"When we know how big we could be there, we'll know if we have to buy 100 acres or 1000 acres."
The relatively small Asian business would remain primarily focused on air and ocean, he said.
"We don't want to own warehouses there just yet, and we sure as hell don't want to be running trucks around inside of China."
The company was looking to open a second operation in Thailand and set up in Vietnam by the end of the financial year.
It was also considering Malaysia and the Philippines.
During his unscripted address, Braid touched on the company's culture, and the value of its longstanding employees and directors.
He said he had just signed off $15m worth of bonus cheques for employees around the world.
"Anyone that begrudges us paying that bonus, would see that ebitda slide away," he said.
Directors Carl Howard-Smith and Bryan Mogridge were both re-elected.
However, three shareholders, including a representative from the Shareholders Association, vocally opposed the re-election of Mogridge on the basis of his directorships with PGC and Rakon.
Mogridge would not address the criticism, but said he would talk to individuals afterward.
"This is a Mainfreight meeting, and it should remain that way."
Chairman Bruce Plested backed Mogridge, saying he had been a valuable addition to the board.