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Mainfreight full year profit rises 6.3%

NZ NewswireNZ Newswire 25/05/2016 Jonathan Underhill

Mainfreight, the transport and logistics group, reported a 6.3 per cent gain in full-year profit as improved trading in New Zealand, Asia and Europe was offset by weaker results in Australia and the Americas.

Profit rose to $87.6 million, or 87.65 cents a share, in the 12 months ended March 31, from $82.4m, or 82.58 cents, a year earlier, the Auckland-based company said in a statement. Sales climbed to $2.28 billion from $2.05b.

The full-year results showed a continuation of softer trading in Australia and the US in the first half results announced last November when managing director Don Braid said improved revenue and margins and better cost control in the second half would lift its full-year results.

That was confirmed on Thursday when Braid said better management of overhead costs and a wider gross margin helped make up for a poor first half.

"Had we managed overhead costs better in the first six months of the financial year, we would be better placed than this result portrays," Braid said.

The company will pay a final dividend of 23 cents a share, fully imputed at 28 per cent, on July 22 with a record date of July 15. That lifts total payments for the year by 8.8 per cent to 37 cents.

Mainfreight shares last traded at $16.47 and have gained about 3 per cent in the past 12 months, lagging behind the S&P/NZX 50 Index's 19 per cent gain. The stock is rated a 'buy' based on the consensus of five analysts polled by Reuters.

Sales in New Zealand, the company's biggest market, rose 3.8 per cent to $563 million while earnings before interest, tax, depreciation and amortisation gained 5.5 per cent to $77.6 million. New facilities in Auckland, Hamilton and Christchurch pushed up overhead costs but also lifted service levels, it said.

By contrast, a 2.6 per cent gain in Australian sales to A$503 million wasn't enough to lift earnings, which fell 8.2 per cent to A$34 million on weaker gross margin performance and overhead cost increases.

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