MFT - Mainfreight

[winner (n)]

FY22 results show 'Air and Ocean' volumes up about 20% but revenues up about 84% and profit up 214%. Same sort if picture for 'Transport'

Obviously the huge increase in revenues is the impact of all the global supply chain issues we've heard about — leading to higher freight rates

I assume costs have increased as well - by not as much as revenues — so higher profits.

Is it the sustainability of the the current high freight rates (like Transport rates per tonne were 25% higher in F22 than F21) that worries investors and the possibility of falling profits.

Confession ...never really studied the detail of these companies ....just the big numbers and not the key drivers of how they occur.

[Shareguy]

I think there is warranted concern over freight rates normalising, but what if this is the new normal?

The growth in revenue is it sustainable ? I think so, with new branches opening up the opportunities are enormous.  Very low debt and a very well company.

I have always thought was trading on high fundamentals so have only been buying recently. To me for a high quality proven performer the fundamentals currently look very attractive.

It nearly cracked the $100 and I don't think we will have long to wait, once the general market improves.

[winner (n)]

I think there is warranted concern over freight rates normalising, but what if this is the new normal?

The growth in revenue is it sustainable ? I think so, with new branches opening up the opportunities are enormous.  Very low debt and a very well company.

I have always thought was trading on high fundamentals so have only been buying recently. To me for a high quality proven performer the fundamentals currently look very attractive.

It nearly cracked the $100 and I don't think we will have long to wait, once the general market improves.

So in simple terms mft profit = Activity (freight/storage) X Rates less costs

Looking forward -

Activity likely to increase TICK

Rates ..... some doubt whether the significant increase in rates can hold QUESTION MARK

Costs ..... many are variable and they've proved they can keep costs under control. TICK

suppose 2 TICKS less 1 QUESTION MARK means increased profits likely in years ahead?

[winner (n)]

If shit hits fan not paying the $100m staff bonus will help the bottom line.

Cool they give as much to staff by way of bonuses as they give shareholders by way of dividends

A great example if a company looks after all stakeholders it will be prosper in the long term ......shareholders aren't the only stakeholder.

[BlackPeter]

PE looks cheap but what's E in FY24 or FY25 when freight rates normalise ?

Pretty sure cost will normalise as well when freight rates drop. They just will keep clipping the ticket, though demand (and with that margins) will rise during the next boom phase. No change for them other that they managed to solidify and grow their base with some great investments ... during the bad times.

[Basil]

Jamie Dimon opined recently he was pretty sure we're going into a global recession in 2023. He also cautioned we've never had QT before (quantitative tightening), and the war could drag on for years...  I'm pretty sure these things will materially affect freight rates and volumes world-wide going forward which are still at highly elevated levels because as he mentioned, at this point the average consumers balance sheet is still in good shape.
The beauty of TA is you can simply pace yourself and let the market tell you when the time is right, provided you believe its a good fit for your portfolio, and I am not so sure it is for mine ?

I am not so sure with the ESG side of things the culture is a good fit for me.  If they're paying staff, who are probably already paid very well in a tight and highly competitive market for skilled staff, more than shareholders in dividends it kind of shines a spotlight on what their real purpose is ?  Who really owns the company, the staff or the shareholders ?   If it's the shareholders why are the staff being paid a bonus higher than the dividends?

I have long suspected that some people, (often more prevalent as leaders get towards the end of their working lives) who become extremely wealthy find it too easy to throw other shareholders money around in a quasi-philanthropic or outright benevolent way when they don't need it themselves.  Remind me again what the yield is ?  Ouch...off direct broking, even after the recent huge correction in the share price, only 2.09%

Hmmm...is this company really going to make my semi-retired life more comfortable?  (I fully realise younger investors are probably chasing growth and that's fine but growth and a decent dividend yield are not necessarily mutually exclusive items). 

Horses for courses, I don't think this is for me and regardless of that and their plans for growth which are impressive, in my view strong headwinds going forward are readily apparent and I expect the ski slope downwards to continue in the near term..

[Shareguy]

Fbar says It's dangerous to underestimate Mainfreight (MFT); we've been guilty of doing this at times historically and we were again last week.

FY23 forecast

$4.34 EPS (normalised)
$1.74 DPS
15.6 PE

OUTPERFORM AT $84

There is certainly big headwinds, but Great opportunity in my view for a quality proven performer with huge growth potential. It's a bottom draw share for me.

[Shareguy]

Don and Bruce making large purchases today. Good rise in SP.

Jarden upgraded their earnings forecasts 14-21%
driven by broad based strength across all geographies and
products + higher margin expectations
Their target price NZ$90.00 (from $85.00). Rating
retained at Overweight.

[Peitro]

I am not so sure with the ESG side of things the culture is a good fit for me.  If they're paying staff, who are probably already paid very well in a tight and highly competitive market for skilled staff, more than shareholders in dividends it kind of shines a spotlight on what their real purpose is ?  Who really owns the company, the staff or the shareholders ?   If it's the shareholders why are the staff being paid a bonus higher than the dividends?

I have long suspected that some people, (often more prevalent as leaders get towards the end of their working lives) who become extremely wealthy find it too easy to throw other shareholders money around in a quasi-philanthropic or outright benevolent way when they don't need it themselves.  Remind me again what the yield is ?  Ouch...off direct broking, even after the recent huge correction in the share price, only 2.09%

Who really owns the company, the staff or the shareholders ?   If it's the shareholders why are the staff being paid a bonus higher than the dividends?

Great post, the law of diminishing returns certainly applies to paying staff cash. The 100 Year plan needs to get the balance right.

A share programme for staff, with higher yielding shares, is arguably is much better aligned strategy long term.

[Shareguy]

Craig's lowered tp to $77 outperform. Met guidance.

Average of the 3 is $83.67

[Shareguy]

Is it time for Mainfreight to consider a stock split. A 10 for 1 stock split would put thier share more in line with our market.

Thoughts?

https://investinganswers.com/articles/how-benefit-stock-split

[winner (n)]

Mainfreight share price only high cause they a great company.

They should be extremely proud of their high share price ...... let them take the kudos for it

It possibly gives more credibility where it matters (money markets)

An Aussie paper would not have suggested Mainfreight NZ greatest company if its share price was $7

Let them keep the bragging rights ....no share split ...it'll only cheapen them

Most of the reasons for share splits in that article are unsubstantiated .... Just a good story imo

[Shareguy]

Dark clouds coming

https://edition.cnn.com/2022/11/02/business/maersk-ceo-recession/index.html

[Shareguy]

Now one of my largest holdings. Thursdays half year result will be stella, as flagged. Will be looking closely at US growth.

[Sideshow Bob]

Dark clouds coming

https://edition.cnn.com/2022/11/02/business/maersk-ceo-recession/index.html

There hasn't been much/any drop in pricing out of NZ that I've seen, at least for reefers. East/West trade lanes I understand are down to pre-Covid pricing. But north-south still expensive.

In our business, we've got a container going to Long Beach shortly, and is over $13k NZD for seafreight. I happened across the freight invoice for a shipment in 2018, and was about $4.5k NZD (albeit charged in USD and FX impacts).