Wednesday, July 1, 2009

Mainfreight Annual Report Packs a Punch

If I didn't already run a business I would want to work at Mainfreight Ltd [MFT.NZ].

I say this after reading yet another rather rip-roaring company report that you couldn't help being inspired and motivated by.

The cover of the A4 sized report has every employee's name printed on it, a rather unique idea that just shows how important Mainfreight's workers are to management and how integral they are to the sustained long term success of the company through its family culture.

Bruce Plested, Executive Chairman, has stressed a few poignant reasons why Mainfreight will be able to cope with the economic downturn:

(They have) "Committed people, hundreds of whom have been with Mainfreight for
between 10 and 30 years.

Internal promotion.

An ongoing graduate programme whereby we now have 286 university
qualified people spread through our business in New Zealand,
Australia, USA and China.

Compulsory in-house training for all new people in New Zealand and

Weekly performance measurement in more than ten key activities –
in every branch in every country – produced at branch level.

Weekly branch profit reporting – produced at branch level at all
160 worldwide branches.

Ownership of many of our specialised operating sites.

Ever developing technology now standardised and integrated between
our branches in New Zealand, Australia, USA, China and Hong Kong.

Many thousands of great customers, who strive and innovate, who
work hard and are an integral part of our success."

Along with all the usual facts and figures a typical company report contains, there is inspirational company mantra that isn't merely empty verbiage and also a huge focus on the current economic climate, what the company is doing to ameliorate the effects of this downturn and how they see we can use this recession as an opportunity to change our direction as a country in a big way.

Bruce also goes on to add that New Zealand is a country slipping behind in the wealth stakes and we really need to do something to get off our butts and work to increase our productivity, something that has been holding the country back for nearly 40 years, but especially in the last 10.

He gives advice as follows that most people with at least half a brain would agree with:

"Why don’t the losers in the election go and get a job instead of the
futile debate they engage in, and the bureaucracy they carry?

Why not wipe the jury system for a wide range of crimes and let a
judge decide guilt or innocence?

What about a four-year electoral period to enable the development of
longer term strategies?

Instead of building new prisons let’s release enough inmates on a
regular basis to accommodate new offenders.

Let’s provide free university education for the skilled people we
need, i.e. doctors, scientists, teachers, engineers, if they fulfil certain
employment criteria in New Zealand.

Introduce capital gains taxes on sales of property other than the
family home.

Lower company tax to 10% or thereabouts. Nothing will boost our
economy more than nurturing our businesses. The tax will still be
earned by the Government, as dividends are taken.

If we really want a cycle track the length of New Zealand, why not
attempt to do it using volunteers, the unemployed, companies or just
challenge us to find a way.

Appoint successful young business people to serve on the boards of
SOEs, and other Government run organisations. As day follows night,
weak boards result in weak management and poor outcomes.

Don’t allow local bodies to own majority shareholdings in strategic
assets, i.e. ports, airports, electricity. Much of this monopolistic
structure is effectively bound in shackles through incompetent and
agenda driven boards."

He does muddy his economic waters a little by mentioning the economically illiterate Rob Muldoon and financial genious Roger Douglas in the same breath and commenting that we can learn things from them -in Muldoon's case what not to do (my emphasis).

Mostly good advice apart from a brain hemorrhage at the Prison system but great commentary that every third form economics student and every other company CEO should read.

I recommend that you have a read too.

Disc I own MFT shares

Download the 2009 Mainfreight Annual report here.

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