In a Share Investor Q & A out 20 Sept 2010, on Ian Morrice, CEO of The Warehouse Group Ltd [WHS.NZX], Ian gives some very interesting answers to my questions to him. We cover aspects of his business life, retailing in general and the Warehouse Group specifically and some other topics thus far not broached by other interviewers.
One answer that really interested me was the answer to the following question on the Australian retail market and any possible move back there:
"SI - Ryman Healthcare Ltd [RYM.NZX] has recently announced a move into the Australian market while Telecom NZ [TEL.NZX] is selling up their Australian assets. Do you you see the possibility of The Warehouse going back to that market given the right opportunity and a more appropriate execution of an expansion there?
IM - We would consider it but not through taking the Red Sheds model to Australia.
SI - What mistakes were made when the company entered the Australian market in 2000 and how would you do things differently if you entered that market?
IM - Any future move into Australia would fully consider the competitive environment and the availability of the appropriate footprint in the right locations".
Ian's predecessor, Greg Muir, gained a foothold into Australia in August 2000, by acquiring the Clint's Crazy Bargains/Silly Solly's chain of 115 discount variety stores and ended up losing the thick end of $200 million of shareholders money when Ian bailed out in 2005.
Not Ian's fault of course and it looks like any further entry into Australia would be a bit more considered and planned rather than the rush of blood to the head that Greg Muir - former director at Hanover Group and current director at Pumpkin Patch Ltd [PPL.NZX] - had when he decided to plunk down north of $100 million to buy the aforementioned chain.
I was very excited about the move into OZ back in 2000 but upon reflection and 10 years more experience in the stockmarket I now realise I had my head firmly in a place that never sees the sun in terms of the planning of the Australian expansion. I still believe that a more considered and planned approach to expansion of the company in Australia would be a wise move on Ian's part.
I have got a Share Investor Q & A coming out, probably next week sometime, from the CFO of Ryman Healthcare Ltd [RYM.NZ] but have managed to jack up a good one today with The Warehouse Group Ltd [WHS.NZ] CEO Ian Morrice.
The Warehouse is a company with a long established history in New Zealand as the bargain retailer and it has been a great investment for long term shareholders over the past.
Over the last 5 years though the company has stalled in growth and now faces more serious competition from its rivals.
It has been headed by canny Scot, Ian Morrice for the last few years and he has done well. What do we know of his plans for the Red Sheds and how he intends to take the company into the future will be of interest as well as how the man works.
With that in mind I thought I would like my readers to put some questions to Ian and The Warehouse.
Please leave your questions here at the bottom of this post or email me here.
Its 2010 full year results, a loss of NZ$2.35 million, is on track according to management and sales are going according to plan.
The company has stated that it doesn't expect profit for at least the next 3 years.
Ecoya will be heavy on marketing and image and expect these two elements to help them establish a strong brand and hopefully sales and profit will eventuate.
I am naturally skeptical of a company that isn't making money from the get go and wanted to know more.
The Q & A was conducted via email while Geoff was in North America on a sales trip for ECO and I want to thank him for taking the time to do this while he was busy with his business.
The Q & A
Share Investor - What was the primary reason you decided to buy into Ecoya and why list on the NZX when the money raised was only comparatively small and could have been found privately?
Geoff Ross - We choose to invest in Ecoya for many reasons. We saw a growth category, an ability to scale up relatively easily, a global opportunity, high margin, and a business that fitted with our skill set in high end consumer brands. Also the CEO of the business was a person we had worked with before and we rated highly. He had created a good product and got the business off to a good start.
We chose to list on the NZX because even though a small raise as it provided a good structure for our capital requirements – a fair valuation and the warrants to raise further capital as our business grows. Being a listed company also gives a credibility when operating in international markets. You are taken with a degree of seriousness when dealing with large clients such as department stores and also your key suppliers.
SI - You seem to be satisfied by the 2010 full year profit out earlier this month, is it fair to make any comparisons, good or bad, with previous years given the youth of the company and the rapid growth of Ecoya from a very small base?
GR - I think it is very important to make comparisons with previous years, even when young. Our goal is to double the size of the business each year. That is the trajectory we want to show in a high growth business such as this and that is what we want to report to our shareholders.
S I - How well did you think the EcoyaIPO was received by investors and the market in general?
GR - I would say OK. Previous shareholders of 42 Below had a good experience with us and were positive toward Ecoya because of our prior relationship. Investors outside this group are still pretty cautious at present. I would say that we got a better response from Institutions than I thought. And a weaker response from retail than I thought we would get. I would say this year is a very tough one for IPO’s. We got ours away, but I would suspect that further IPO’s, if any, will be slim on the ground this year.
SI - How was the value of the company arrived at, at just under $45 million it seems high given the company has yet to turn a profit and has sales of just over NZ$ 4 million?
GR - We did a huge amount of work on this. Our Investment Banking partners – Cameron and Partners were involved and we created various models. We have internal forecasts out 10 years. These were used in our valuations. We also looked at like valuations in this category – a useful one is a company called L’Occitane which just listed in Hong Kong. Typically valuations in this category are multiplies of Revenue. In our view we believe the value is fair for a growth proposition.
Growth Stories are relatively unusual in this market. A company such as Xero Ltd [XRO.NZ] listed with virtually no revenue. Rather the value is set on the combined prospect of the strategy, the opportunity and the ability of the the management to execute with the capital they now have. A growth company cannot be valued in the same way as say an old established Telco with limited growth prospects.
SI - Do you think the company has raised enough cash to allow it to pursue its stated aims and will it need more, apart from the exercising of the 2 warrant tranches, as the company develops?
GR - Yes.
SI - Why were pro-forma financial results used in the Ecoya Prospectus instead of the actual results, isn’t that misleading investors?
GR - By law you have to put in financial statements through to the end of the financial year you are in (Pro-forma statements) and then prospective numbers for a complete year following this. Which is what we did. We registered our prospectus a little before the end of our financial year – so that remaining period legally required prospective statements (which I understand you are calling pro-forma in this case)
SI - You built up 42 Below and sold it within a very short time-frame before any profits were realized. Is it going to be the same scenario with Ecoya and if not how will it be different?
GR - We will also grow Ecoya very quickly. We have a strategy which is about building the size of our revenue generating asset. In the years ahead we may simply ease off the growth pedal and allow the business to start generating a profit. At 42 Below we had several countries running profitably. However rather than easing off on the growth and allow the company to show a profit we continued with an aggressive growth plan and invest into new markets. If offers are presented, we will entertain them.
SI - The sector in which Ecoya operates is highly competitive, with quite a number of established players, what makes you confident that you can play them at their own game or, as you have stated in the Prospectus, that they would be interested in purchasing Ecoya sometime down the track?
GR - The challenge will not be play them at their own game – rather take a different approach. The battlefields really are brand and sales. We need to build a better looking brand, a better performing brand and a brand with a more compelling consumer story. And in sales we need to be better at it than the rest. We use our own people rather than reps or agencies. We think having your own people accountable to daily targets is a stronger way to build presence than leaving your sales in the hands of another group.
SI - What key elements will allow Ecoya to make inroads on its competition?
GR - Brand design is critical – we need to look great on the shelf and then in peoples living rooms and bathe rooms. Our environmental story is strong – using sustainable soy wax is also strong (most other candles are paraffin based – and lighting a paraffin candle in your living room is like starting a car in your living room) . We will also be doing a lot of the PR and marketing techniques that got 42 Below noticed.
SI - What are you doing to contain costs considering the current economic environment and the focus by other businesses on this important factor or is that not possible given the growth path factored into the company?
GR - It is absolutely important and is of course possible to contain costs. We run a very strong back office. We have an on line system that runs from a cellular hand held in our sales peoples hand through to head office, management accounting and then through to the orders of raw materials. This system allows us to look at any moment what is being sold, what the margin is and what our results are showing at that point. Everything is tracked by the minute.
SI - How has the introduction into the North American market been received and which retailers are selling your range?
GR - I have just come back from the US where I was selling up there. It is very early days, however I would have to say it has been received very well. It is a competitive market with out doubt – however the brand was received very well and the great thing about the US is that it is that much bigger. On my first call the Store (25 Park) agreed to take the brand on and we filled out the order form. The store owner then said – oh we have three more stores, can you replicate the same order for each store. The US has that much more scale to it.
SI - The global body and bath market is estimated in the ECO Prospectus at around US$22 billion. How much of a market share of that revenue do you expect to be selling within the next 5 years?
GR - We haven't released that to the market. I would say that we are not going for a share of the global market – rather a share of some specific markets. These being Australasia (where we aim to be have a significant share within the next 5 years), The US, and parts of Europe. Australia is currently our biggest market and will be for some time as we utilize the ‘home ground’ advantage.
SI - When is the company expected to turn a profit?
GR - Again this timing hasn’t been released to the market. We can say that the company will be investing in growth and that our current plans do take the company into profit. However this date is outside the years prospective financial statements and therefore has not been released.
SI - Marketing seems to be your area of expertise and you have used it to achieve some good results from companies that you have been previously involved with. How much will good marketing play in the growth of Ecoya and is it great word of mouth from current customers who will do most of the marketing for you?
GR - Marketing is vital. And word of mouth a big part of it. However our challenge is to make sure our customers want to talk about the brand to their friends – and their friends want to talk about it when they see it in peoples homes.
SI - Why are you lending shareholder money to directors to buy shares in Ecoya and isn’t there a more appropriate way to incentivize management to do better?
GR - We don’t have big director fees. In fact I would guess that we pay our directors less than any other listed company. In stead we want our directors interests aligned with shareholders – so that means shares. And we want to do this in a way that makes it attractive for very senior people to join our board. To get people of the calibre of Rob Fyfe from Air New Zealand Ltd [AIR.NZ], or Rich Frank, ex head of Disney, you simple can't offer them a small directors fee alone. We looked at ways of rewarding them with shares (rather than big directors fees) and the best solution seemed via a loan to them to purchase those shares. It is a meaningful way to reward directors and it does so with a currency that is the same as all shareholders.
SI - There is a considerable sum of money flowing from Ecoya to related parties for consultancy work and management fees on an ongoing basis. Is that practical given the relatively small capital base that was raised in the IPO?
GR - Yes there are two consultancy fees. One covers myself as Executive Chairman, Stephen Sinclair as CFO and Grant Bakers involvement. We are all on the board and we are all active in management. Currently Ecoya is 100 % of my time. This fee covers all our time and all our directors fees for all three of us. I consider this a nominal fee for three people who are both active in the business and on the board. The other consultancy fee covers our CEO – all of his time and his role on the board. Again it would make him one of the lowest paid CEO’s on a listed company. All of us are there to grow the value of the business and shareholdings, not by pulling big fees. So this is why there are consultancy fees – it covers senior management who aren't being paid by any other means.
SI - Is Ecoya capable of footing it with the big boys, especially as the company gains some sort of scale in terms of customer base and revenue size?
GR - Absolutely. We have paid a lot of attention to our systems and built a platform we can now grow from. You need this in place before embarking on a high growth strategy.
SI - What are your biggest challenges as the company expands?
GR - The challenges will be typical to those in any high growth business. When you double the size of your business each year you need to continually make sure you have the right organizational structure, you are re negotiating contracts to get the benefit of scale, you are watching stock control to make sure you don’t run out and you keep up with demand and you keep listening to your customers.
SI - Any business has inherent risks, especially a start up like Ecoya. How do you manage those risks in the normal business operating environment that changes due to economic cycles and other outside and inside influences?
GR - This is a huge question and could take pages. In short - I think this is part of the role of our board. We have monthly meetings where our results are tracked. We are continually reviewing our FX policy, our financial position VS plan, our product offering VS key competitors, performance of sales people etc.
SI - How much, if at all, has the founding and growing of 42 Below influenced your approach to Ecoya, how it operates currently and how it will operate in the future?
GR - It has been a huge influence. There are a lot of similarities between high end spirits and high end home fragrance and bath products. We learnt a lot at 42 Below. We want to use all those learning's going forward.
SI - Do you still have any financial interest in 42 Below?
GR - No.
SI - Who are some of your business mentors/heroes and why?
GR - I think Rob Fyfe at Air New Zealand has done a great job. You can feel and see the improvements in that company, to have done this in a company the size of Air New Zealand and done it so quickly is very impressive – they have now been named best Airline in the world. I think Richard Branson because the Virgin brand always feels fresh and young despite now having been round for a while and being a very large organization. I think John Key is doing a pretty good job (mostly) of running New Zealand as a company.
SI - What company or companies do you admire the most (apart from Ecoya)that you don't have a financial interest in and why?
GR - Wow – heaps. From Apple and Stationary company Smiggle for great use of design. To local success stories like Les Mills, Ice Breaker, and Eco Store.
SI - Are there any particular books , periodicals or websites that you have read that you would recommend to Share Investor readers in terms of business and investing?
GR - I like Wired and Fast Company magazine out of the US. Both usually at the front end of new business and especially at the front end of technology. I also like magazines like Vanity Fair or fashion magazines like Nylon as you keep abreast of popular culture and get a sense for where the next consumer trends are coming from. I like reading stuff that keeps me in touch with what is happening in popular culture and what will therefore drive the next consumer trends.
SI - In my investing experience I have found the level of business leadership in New Zealand wanting – with a few very notable exceptions - when it comes to making good long-term decisions based on sound business skills, the basic understanding of running a business and accountability when it comes to making mistakes and this is often reflected in businesses hiring from an overseas talent pool. What are your views on how we can get good shareholder representation in the boardroom?
GR - I think companies are putting the wrong people on their boards. The two most important qualities in a board I believe are:
Have people on them who have actually built and run companies. At 42 Below all our board members had built or run their own company. The same is true at Ecoya. Too many boards have people who have never run a company – they are lawyers, accountants or management consultants. These people may have great skill sets, but they should not dominate a board. When this happens then only a narrow set of skills are being deployed at the board. No one is on there who is hungry for growth – rather they are on the board simply as a watch captain, not a driver.
Have board members who are comfortable challenging each other. A piece of advice I got from Mark Weldon was “Don’t build a board where everyone is the same and therefore likely to have the same opinion – you and the other board members need to be challenged” Too many boards I have seen have career board people and all cut from the same cloth. I can’t imagine there is a great deal of debate going on at their meetings.
SI - What do you see as the strongest and weakest quality of your leadership style?
GR - Strongest – I hope I am a good listener. Weakest – give people a bit much rope.
SI - Where do you see yourself and the business you lead over the next five years?
GR - Ecoya to be the most respected brand in Home Fragrance, Body and Bath. Globally.
SI - Thanks for your time.
Geoff Ross Bio - From various sources
Geoff Ross has an advertising background and started with Saatchi & Saatchi back in the early 1990s. He most famously developed and grew and listed vodka maker/distributor, 42 Below , and sold it to Bacardi in 2006 for NZ$ 138 million.
Geoff bought into Ecoya in 2008 and is currently helping run The Bakery, a platform from which Geoff and others are helping fund high growth business start-ups.
The Bakery has helped underwrite the Ecoya business.
About Ecoya -From 2010 Prospectus
The business operated by Ecoya was established in April 2004. It has experienced strong growth since the 42 Below founders invested in February 2008. During this time a skilled management team has been assembled, along with a platform for continued growth.
Ecoya manufactures and sells a broad range of body & bath and home fragrance products.
Ecoya uses natural ingredients to create environmentally friendly products that perform for the consumer (e.g. soaps, hand & body lotions and hand wash) and their home (e.g. scented candles and diffusers).
Worldwide, many consumer groups are becoming more house proud, paying more attention to their home style and also entertaining more at home. The Ecoya brand, packaging and merchandising will utilise a strong sense of design and aesthetic, which is an important part of meeting the needs of this developing consumer characteristic.
The term that Ecoya uses for a brand with an environmental platform that contains strong design with luxury elements is “Eco Luxe”. Ecoya expects Eco Luxe will be a growing segment within its home fragrance and body & bath categories.
Ecoya is also proud of its origins in Australasia and the Board believes that this provenance adds to the brand story as Ecoya expands into the Northern Hemisphere, as Australasia is perceived as a fresh and ‘New World’ region for fragrances and body & bath care.
Ecoya plans to maximise its international market opportunity. It is already selling its products across Australia and New Zealand in selected gift stores, home stores and department stores (such as David Jones’ 37 stores in Australia and Ballantynes in New Zealand) and in Nuance Group Duty Free in Australia.
Sales are being made in Shanghai (China) and Ecoya currently expects to have its first sales in the USA in May 2010.
I have a Share Investor Q & A coming up from Ecoya Ltd [ECO.NZ] Executive Charmain Geoff Ross next week but this post is related to Ryman Healthcare Ltd [RYM.NZ] in terms of a future Q & A.
Ryman is a company with great past growth rates and a good outlook for further growth far into the future because of the demographics of its customers but mostly operates under the business radar.
We don't know alot about the company apart from its great bottom -line so thought it would be a good idea to put some questions to the company CFO Gordon Macleod and have a poke around the facts and figures behind that great financial posterior.
With that in mind I thought I would like my readers to put some questions to Gordon and Ryman.
Please leave your questions here at the bottom of this post or email me here.
I have been very critical of Ecoya Ltd [ECO.NZ] since their early May 2010 IPO because of the over inflated value that ECO management put on the company and the scant financial information revealed to the investing public leading up to the IPO. The full year 2010 profit result out a few weeks back does nothing to sooth my critical soul.
Many of you have also had critical things to say about the company (it is more interesting to read someone sticking the knife in)and I have seen little positive written about the company except from the company itself and organising brokers for the IPO.
I think it is time we heard from management directly to get some issues hopefully cleared up and maybe put me in my place.
The ECO PR company contacted me over a mistake that I made with some figures from the 2010 result and one thing led to another and I managed to jack up a Q & A with Executive Chairman, Geoff Ross.
With this in mind, I would like my readers to submit questions that they might have surrounding the company and its IPO.
I will give you a week to submit them and I will include them with mine in the Q & A.
Please submit them here where they will appear at the bottom of this post or email them directly to me here.
Mainfreight Ltd [MFT.NZ] is a fledgling player in the global logistics business with an expanding footprint in the United States, Asia and an established presence in Australasia.
It has found the last year or so tough going 1, 2 , as other logistics companies also have, but has managed to keep a lid on their business costs by paring back on capital expenditure, freezing employee pay-packets and bonuses and paying very close attention to the day to day running of the business.
The company has a had a good history of expansion and profitability since it was founded with one truck by Bruce Plested in 1978 and as Don Braid has been on board since 1994 the company has grown considerably in revenue and profitability, has been listed publicly since 1996 and has found a foothold in Asia and the United States.
But what of the next 12 months and longer?
How will the business go under his leadership, will it continue its historically excellent financial results or will it flounder like so many other New Zealand companies have as it expands in the United States.
What new ideas does he have to take this company through the $1 billion revenue barrier and beyond and establish Mainfreight as a truly global logistics company
With this in mind I submitted some questions to Don via email and he kindly offered to answer them.
The Q & A
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Share Investor - Like other New Zealand companies 2008-2009 has been a tough year for Mainfreight. What have you learnt from the economic downturn in terms of the company’s strengths and weaknesses and has that made Mainfreight a stronger company?
Don Braid - We found an element of complacency and a lack of urgency, or even acknowledgment of a recession, amongst our people despite our disciplines and culture, which identified a need to encourage tougher, faster decision making and to seek out opportunities.
SI - What are your thoughts on the recession and recent (apparent) recovery - if you want to call it that - and what effect that will have on the company's overall strategy in all the markets that you operate?
DB - We continue to manage the business week to week focusing on margin and cost. Our sales campaigns are very active as we look to increase sales growth at every opportunity, attracting new customers with exceptional quality. We don’t wish to waste any of the opportunities provided by the recession.
SI - Have you responded to the recession in an appropriate way by cutting costs and easing back on business expansion when other companies have used this time as an opportunity to expand their businesses because of cheaper assets and lower credit costs?
DB - We identified our areas of weakness, tightened cost controls including freezing salaries and bonuses, and focused on the opportunities available. We have treated acquisition opportunities with caution; distressed businesses are not necessarily good investments.
SI - How is Mainfreight currently doing in its various markets of operation and how well are profit margins holding up?
DB - We can do better in each market, and are working hard to further improve returns.
SI - What are the biggest commercial threats to your businesses in terms of competition and is your reaction to this competition likely to be aggressive or reactive in nature?
DB - We have always operated in a competitive market and enjoy being on the front foot.
SI - Any business has inherent risks. How do you manage those risks in the normal business operating environment that changes due to economic cycles and other outside and inside influences?
DB - Mainfreight’s culture of weekly profit and loss reporting, branch management responsibility and flat management structure assists us in managing risk. We scrutinise performance at every turn and maintain a strong discipline of cash management.
SI - The subsidy of Toll Holdings trucking business by the New Zealand taxpayer has reared its ugly head again recently. Can you do anything about that in your position and if so what?
DB -We will compete as we always have. We will continue to bring pressure to bear on the Government to ensure KiwiRail deals with the issue commercially. We are also of the opinion that the Government should appoint a commercially capable board rather than the current culture of political appointees.
SI - What are your biggest challenges as the company expands and do you prefer organic expansion rather than the purchase of companies to pursue revenue and profit growth?
DB - Organic growth is always the preference; acquisitions when and only if they fit the profile and requirements of the Group. Great people remain our most valuable resource.
SI - The issue of capital raising by other companies this year has been in the business news headlines. Why have you been able to avoid this to date and do you see the issue of capital raising being an issue for Mainfreight at a later stage should the economic downturn last longer?
DB - There has been no need to raise capital. Our debt to equity ratio is satisfactory and our relationship with our banks remains important to managing our debt facilities. These facilities have just been renewed for a further three years with improved covenants.
SI - Mainfreight pays a relatively low dividend compared to other NZX listed companies. Is that a conscious decision to keep more capital in the business for its day to day operation or are there other reasons for this?
DB - On listing in 1996 we stated that a dividend payment ratio of 40% to 50% of net profit is prudent, and allowed for further capital reinvestment. While at times we have exceeded this ratio we do wish to continue to re-invest in our business. Growth remains a high priority.
SI - What is your opinion on bonuses paid with stock options and other incentive pay and how do you feel about executives of other NZX listed companies receiving incentives even though pre-determined targets have not been met?
DB - We are not in a position to comment on remuneration in other listed companies. Ours continues to be reviewed to ensure we remain competitive and fair.
SI - Given enough time and expansion in the United States, where will be your main hubs and will you continue to build and own them given the huge capital expense they must be?
DB - The US remains an important part of our growth strategy and we are excited about the potential evident in this market. Capital investment will be evaluated and tailored to the returns available.
SI - The US market has been brutal to a couple of NZX listed companies, with Pumpkin Patch and Michael Hill recently losing lot of shareholder money by expanding there. How has your company planned to ameliorate any possible losses there as you expand and do you have an exit strategy if business there doesn’t look good or are you confident that in the long term the Mainfreight’s business there will be a strong one?
DB - We remain confident that our US operations will become significant contributors and a beachhead for our ongoing global development.
SI - How do you retain the wonderful family friendly Mainfreight culture that has been fostered over the years and is so central to the success of the company as it has moved from a smaller company to the one that it is now and how will you hold on to it as you grow into a larger business and into different markets and cultures?
DB - Our culture and style of doing business remains very important to us. Every day we work hard to maintain and develop this culture. The actions of our leadership team are key. The elimination and rejection of bureaucracy and hierarchical attitudes and actions at every step are paramount. Our people’s freedom to take responsibility, ownership and to contribute no matter their role is pivotal to our success.
SI - Along the lines of the question above, how much input does every worker at Mainfreight have into the business, is it like the culture at Toyota, commonly known as the “Toyota Way” where if anyone has a good idea that will improve productivity or the business in some way then they are credited for that input and rewarded in some way?
DB - As above.
SI - Who came up with those quotes on the back of all your vehicles and why?
DB - Many people contribute to the quotations, however Bruce Plested initiated the original concept. We hope the quotations make people think about what’s important in life. They also allow our owner drivers to express themselves through their chosen quotations.
SI - You and Bruce Plested are both very strong leaders and characters, how do you balance those strong personalities when you make company decisions?
DB - We enjoy a great deal of debate, we have respect for each other and a passion for the business. What is right for the business is key – the individual’s agenda is not a consideration.
SI- Who are some of your business mentors/heroes and why?
DB - Mainfreight’s Board of Directors remain key mentors and confidants.
SI - Who is your favourite New Zealand business leader/s and why?
DB - We have a lot of respect for many New Zealand business leaders; more so those business leaders who are forthright in their opinions, and who are energetic in growing their businesses and their people. Those who reject mediocrity and bureaucracy, and who are prepared to get off their backsides and develop their businesses around the world.
SI - In relation to the two questions above are there any particular books or periodicals that you have read that you would recommend to Share Investor readers?
SI - In my investing experience I have found the level of business leadership in New Zealand wanting – with a few very notable exceptions - when it comes to making good long-term decisions based on sound business skills, the basic understanding of running a business and accountability when it comes to making mistakes and this is often reflected in businesses hiring from an overseas talent pool. What are your views on how we can get better shareholder representation in the boardroom?
DB - New Zealand business needs leaders around the board table who have a passion for the business, are energetic and prepared to get involved, are commercial in their thinking and are not just appointed as part of “the club”. Political appointments have no place in New Zealand’s business future.
SI - Is there enough long-term thinking and planning when it comes to making decisions in the boardroom that affect New Zealand companies?
DB - Infrastructure planning in this country is woeful. Three-year political appointments don’t help. Entities would be better served by boards who spend less time on plans and budgets, focusing instead on strategic and competitive advantage to drive businesses (and the country) forward.
SI - I have recently become a dad for the first time and am now aware of higher demands on my time. I am sure the life of managing director at Mainfreight is very busy. How have the demands of Mainfreight impacted on your family and what skills as a dad have you used in your business life and where and how do you find the balance between home and work? Is it just good time management?
DB - A passion for life helps to keep things in perspective. Always ask a busy person if you want to get things done!
SI - What do you see as the strongest and weakest quality of your leadership style?
DB - Am not qualified enough to answer.
SI - Where do you see yourself and the business you help run over the next five years?
DB - Mainfreight will be a bigger and better business than it is today. We have some lofty goals to achieve and we remain an ambitious bunch!
SI - Thanks for your time Don.
Don Braid's Bio - Supplied by Mainfreight
Don Braid, Group Managing Director of Mainfreight Limited, was educated at Timaru
Boys’ High School and has over 30 years’ experience in freight forwarding and logistics both New Zealand and internationally. He joined Daily Freightways in 1978, gaining a thorough grounding in all aspects of the business and eventually heading up that company.
In 1994 Mainfreight purchased the business, and Don went on to hold various senior management roles at Mainfreight prior to his appointment as Managing Director in 2000.
Don has led the Mainfreight team through a significant period of change and expansion to become the successful global supply chain logistics provider it is today, with businesses operating in over 160 branches throughout New Zealand, Australia, Asia and the United
States.
His efforts were recently recognised when he was selected as the 2008 Deloitte/Management magazine Executive of the Year. Don is a member of the Board of the Starship Foundation.
Mainfreight History- Supplied By Mainfreight
Mainfreight was founded by Bruce Plested, joined later by Neil Graham in 1978 with a 1969 Bedford JI Truck and $2,700 in paid up capital. Mainfreight entered a highly regulated market which required all freight travelling over 150km to be moved on rail, and which was dominated by a virtual cartel of giant transport companies.
When deregulation occurred in 1985 Mainfreight were hardened from this market environment, and was evolving a deep culture and a vision of what we could achieve. Having formed Mainfreight International in 1984, Mainfreight established a beachhead in Australia in 1989, with an operation in Sydney, followed the next years by depots in Melbourne and Brisbane.
Investment in Australia was driven by a vision to let our customers treat New Zealand and Australia as one market, with Mainfreight's spread of branches and services, along with the best technology and people providing a bridge across the water. Mainfreight was publicly listed in June 1996 on the NZ Stock exchange (code MFT) and now has interests in the USA and Asia.
In a Share Investor Q & A out 20 Sept 2010, on Ian Morrice, CEO of The Warehouse Group Ltd [WHS.NZX], Ian gives some very interesting answers to my questions to him. We cover aspects of his business life, retailing in general and the Warehouse Group specifically and some other topics thus far not broached by other interviewers.
