Showing posts with label profit announcement. Show all posts
Showing posts with label profit announcement. Show all posts

Sunday, February 24, 2008

Mainfreight drives excellent results through prudent management

The performance of Mainfreight (MFT) the New Zealand niche global logistics player, over the last 9 months to the end of December 2007 has been excellent in the light of slowing global economic conditions.

Key results:

*after tax profit of $NZ29.37 million, a 17.5% increase on last year.
*revenue up 8.83% on 2007, to $645.37 million.
*strong revenue increases from New Zealand, Australia, Asia and the USA.
*new acquisitions either performing to plan or exceeding expectations.

Full MFT, NZX profit announcement


Like Michael Hill International(MHI) and divisions of other New Zealand business operators who have a global reach, Mainfreight's New Zealand growth pales by comparison to their foreign business.

Freightways(FRE) the New Zealand courier company, has found the domestic conditions tough going in their latest profit announcement. Mainfreight has done better than many to manage the economic downturn here though, their opening of a large logistics "supersite" in the South Auckland area, NZ's largest market, has helped focus costs and given them better economy of scale in that important industrial area.


The Labour backed, Government owned, rail service seems to be having an impact on the company though:

"A shortage of rail equipment during the period hampered opportunities to move increased volumes on rail, and is of ongoing concern".

Clearly a state run rail service is going to be an ongoing source of pain for the company.

Management are positive with their long term outlook for the company as far as foreign markets are concerned though:

"Our market share remains small relative to the size of each offshore market, providing significant opportunities for further development in excess of GDP growth in each country. For example, the declining US dollar has seen the start of significant export growth from the United States which will assist export volumes for our American operations. "

It is encouraging to see a positive view of their business, in the light of uncertain global economic conditions, and their management seems prudent in the face of tougher economic conditions, domestically and internationally.

In the first 2 months of this year, indicators are that growth has continued along the lines of the last 9 months and exceeded previous years in respect of revenue growth.

Shareholders have excellent management to thank for driving the results of the company over the last 9 months.


Disclosure: I own MFT shares


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Michael Hill's profit shines

Results for Michael Hill International(MHI) were expected by the market as they were telegraphed a few weeks back but it is pleasing to see the breakdown.


http://media.apn.co.nz/webcontent/image/jpg/Michael-Hill.jpg
Under Michael Hills careful
management his company looks
set for a good long term future.



I have been a long term follower of this company and have only admired it from a distance, having bought a very small holding late last year I am very pleased that I did.

Key figures:

* Operating revenue of $209.191m up 4.8%
* EBIT of $30.799m up 27.8%
* Net profit after tax of $19.480m up 27.1%
* 19 new stores opened during the six months
* Total of 210 stores open at 31 December 2007

Full profit rundown from NZX


Australia and Canada performed well over the last 6 months but New Zealand stores were flat, reflecting the poor economic conditions that we are currently facing. Business is likely to be tough in New Zealand for the lead up to the General Election at the end of the year and tax cuts offered by National are likely to stimulate the retail sector at the start of 2009.

Australia clearly has much more store growth to come, their current 136 stores vs the New Zealand store count of 52 would equate to roughly 250 stores when you figure OZ has five times the population that NZ has. Even store growth in Auckland is likely to be added to as its citizens need approx 30,000 ft of new retail space very year just to accommodate population growth.

Canada has the most fascination with me though. It has grown stongly in revenue over the last 6 months and doubled their operating profit on a base of 22 stores.

Their apparent success here, after just a few years, makes this market one to watch closely for the future direction of the company as a whole. Not just for profits that should come from the Canadians though.

I'm highly interested in their eventual push further south, into the clutches of the US consumer.

This market will be MHI's toughest one yet and if successful will clearly make the company a true global player, something the man, Michael Hill, has had designs on for many years.

The route the company is taking into the USA differs from that of another prospective Kiwi global player, Pumpkin Patch Ltd(PPL), Pumpkin opened in the US first, while MHI's strategy of entering a smaller, similar market seems to be a wiser move in my mind, less short term risk but a bigger long-term payoff.

It will be interesting to see where Michael Hill International will be in 10 years, last weeks profit announcement and associated figures make the possibility of global success in the long term an attainable goal.


Disclosure: I own MHI shares


Essential Links:

Investor Information

Related articles from Share Investor

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Wednesday, February 13, 2008

Fletcher Building raises profit through canny management

Fletcher Building Ltd [FBU.NZ] had a profit announcement today that was "inline" with market expectations and given current market uncertainties, the share price was savaged by NZ 28c, down to $8.87 on big volume of over 2.3 million shares.


Chart for Fletcher Building Limited Ordin (FBU.NZ)

1d 5d 3m 6m 1y 2y 5y max

Today's FBU chart tells the story after
a positive result out today.



To be fair the proceeding 6 months have been excellent, with a 22% rise in net profit of $235 million and a revenue increase of 19% to just over $3.5 billion. Costs clearly have been contained when you look at those two figures and compare.

Jonathon Ling has done well at his first full year as CEO and the previous head, Ralph Walters, has structured the company in such a way that revenues are diverse and able to push the company forward during economic downturns.

All Fletcher's business units increased profit.

Looking forward, Fletcher Building has over a billion dollars worth of work on backlog in New Zealand and things look positive in the infrastructure arena where governments of both colours look to build more roads and other public works.

The likes of the proposed $2 billion plus tunnel through Helen Clark's electorate of Mt Albert and the Eden Park redevelopment for the 2011 world cup could only be handled by the likes of a company Fletcher's size, so the likelihood of them getting the bulk of those contracts is in their favour.

CEO Jonathon Ling has managed Fletcher
Building well during his first hear. His
challenge now is to try and replicate that
during tougher times.


On the downside though, residential house building is currently facing a slump, while the future for that sector looks bleak in the short to medium term. Fletchers are big residential builders in New Zealand and Australia and supply substantial volumes of building products to other big contractors and small builders alike.

The acquisition last year of American Formica Corp, for close to NZ $1 billion, seems to have folded into the mixture of Fletcher's businesses well but for a slower than expected restructuring of the business and associated costs and a 10% drop in new US housing starts having an affect on laminate sales.

It will be very interesting to see how Formica do if the downturn is as severe and as long as some predict.

In retrospect it wasn't a good time for Fletchers to buy when they did last year. The purchase price and timing of the market would have been such that a lower sticker price would have been the order of the day.

As we know though it is hard to pick markets.

I personally don't think todays announcement warranted the canning the share price took and one would have to say it doesn't bode well for the NZX during this profit season if a company can report a 22% lift in after tax earnings and have "Mr Market" knock more than 3% off company capitalisation.

I give this result a 9.5 out of ten. Good effort, excellent results and great management.


Disclosure:
I own FBU shares


Fletcher Building @ Share Investor

Fletcher House built on hard times
Fletcher Building down tools in the short term
Why did you buy that stock? [Fletcher Building Ltd]
A solid foundation for the future
Fletcher's got game


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Fletcher Building History - Auckland University

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The full NZX /Fletcher Building press release:


FBU
13/02/2008
HALFYR

REL: 0900 HRS Fletcher Building Limited

HALFYR: FBU: FBU Half Year Results Announcement

Name of Listed Issuer: Fletcher Building Limited

For Half Year Ended: 31 December 2007


This report has been prepared in a manner which complies with generally
accepted accounting practice and gives a true and fair view of the matters to
which the report relates and is based on unaudited accounts.
The amounts as presented have been prepared in a manner which complies with
New Zealand accounting standards which comply with International Financial
Reporting Standards (IFRS).

CONSOLIDATED OPERATING STATEMENT FOR THE HALF YEAR ENDED 31 DECEMBER 2007

Unaudited

Current Half Year NZ$'M; Up/Down %; Previous Corresponding Half Year NZ$'M

Total operating revenue: $3,547m; up 19%; $2,980m.

OPERATING SURPLUS BEFORE UNUSUAL ITEMS AND TAX: $327m; up 11%; $295m.

Unusual items for separate disclosure: 0; n/a; 0

OPERATING SURPLUS BEFORE TAX: $327m; up 11%; $295m.

Less tax on operating profit: $83; down 10%; $92m.

OPERATING SURPLUS AFTER TAX BUT BEFORE MINORITY INTERESTS: $244m; up 20%;
$203m.

Less minority interests: $9m; down 10%; $10m.

OPERATING SURPLUS AFTER TAX ATTRIBUTABLE TO MEMBERS OF LISTED ISSUER: $235m;
up 22%; $193m.

Extraordinary items after tax attributable to Members of the Listed Issuer:
0: n/a: 0.

OPERATING SURPLUS (DEFICIT) AND EXTRAORDINARY ITEMS AFTER TAX ATTRIBUTABLE TO
MEMBERS OF THE LISTED ISSUER: $235m; up 22%; $193m.

Earnings per share: 47.0 cps; up 14%: 41.1 cps

Interim Dividend: 24 cps

Record date: 21 March 2008

Date Payable: 10 April 2008

Tax credits on latest dividend: 100% for New Zealand comprising imputation
credits.

Non New Zealand tax payers can benefit from the partial refund of the New
Zealand tax credits as outlined in the attached press release.

SUMMARY

Directors today announced the group's unaudited interim results for the six
months ended 31 December 2007. Net earnings were $235 million, compared to
$193 million in the previous corresponding period. This is an increase in
earnings per share from 41 cents to 47 cents.

Operating earnings (earnings before interest and tax) and after Formica
restructuring costs of $16 million were $394 million, compared to $340
million in the previous corresponding period. The increased earnings are due
to the Formica acquisition, ongoing operational improvements and some small
acquisitions.

The interim dividend of 24 cents per share is an increase of 2 cents per
share over the previous interim dividend and is the twelfth consecutive
dividend increase by the company. Total shareholder return was negative 4
percent for the half-year, influenced heavily by the uncertainty in equity
markets internationally.

The 22 percent increase in net earnings reflects strong operating
performance, with all divisions recording higher earnings than in the
previous corresponding period. Laminates & Panels' earnings increased on a
like-for-like basis, and also benefited from the acquisition of Formica
Corporation on 2 July 2007.

The Chief Executive Officer, Mr Jonathan Ling, said: "This is a pleasing
performance which reflects the group's ability to deal with variable and
sometimes difficult operating conditions. Across our businesses, commercial
and infrastructure markets are still strong, which is best exemplified in New
Zealand with a construction backlog of over $1 billion. While there is some
weakness in residential markets and provided there is no significant change
in economic conditions, we remain comfortable with our earnings prospects for
this financial year".

Key Points

- Group net earnings up 22 percent to $235 million
- Operating earnings up 16 percent to $394 million
- Cashflow from operations up from $227 million to $245 million
- Earnings per share up from 41 cents to 47 cents
- Interim dividend of 24 cents per share with full New Zealand tax credits -
the 12th consecutive dividend increase
- Acquisition opportunities being evaluated

Contact:
Jonathan Ling Bill Roest
Chief Executive Officer Chief Financial Officer
Phone: +64 9 525 9169 Phone: +64 9 525 9165
Fax: +61 9 525 9032 Fax: +64 9 525 9032

Monday, February 11, 2008

Freightways packages up a good result

http://www.freightways.co.nz/images/header_logo.gif
Freightways business diversification
should keep them in good stead for
the future.



The announcement today of Freightways Ltd(FRE) and that its profit is up by 2% should be welcome news to shareholders.

The local economy has been stagnant for some time now and severe pressure from increased business costs has had a clear impact on the bottom line, considering revenue was up 12% on last year.

Labour, fuel, electricity and other state imposed business taxes and costs have dragged the results down and will continue to do so until company taxes are slashed and the emphasis on new taxes, like carbon related "green" taxes have been removed from the lexicon of daily life.

The future will be tough but an effort a few years back to diversify revenue streams and invest in a broader range of businesses that Freightways owns has seemed to have paid off.

Document management business in Australia and New Zealand has offset the less rapidly growing traditional areas of delivery services throughout NZ.

Mr Market today didn't like what it heard and pushed the share price down 1.25% to NZ$3.15 but in my humble opinion, the market should be well pleased that the company managed to deliver a solid, but not spectacular result, considering the economic stress kiwi citizens are clearly under.

Management deserve a good 8.5 out of 10 for this last half year.

Disclosure I own FRE shares

Freightways @ Share Investor

Long VS Short: Freightways Ltd
Freightway's keeps delivering
Why did you but that stock: Freightways Ltd
Freightway's delivers
Freightway's packages up a good result

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Freightway's Financial Data




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