MFT - Mainfreight

[Shareguy]

What's happened to investor update stated on their website to be released 2 Feb 2023

[winner (n)]

What's happened to investor update stated on their website to be released 2 Feb 2023

Held up because of the floods I reckon

[winner (n)]

What's happened to investor update stated on their website to be released 2 Feb 2023

Maybe like their on time delivery performance ......often not on time

[Shareguy]

Not like them. Maybe the floods I guess.....Price creeping up.

[Left Field]

Nearly missed this...... not marked price sensitive?

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MFT/406411/388032.pdf

We remain satisfied with the level of improvement year-to-date. However, general trading conditions late December and into January have been more subdued, particularly across our USA and Asian operations. The combination of lower international sea freight and airfreight volumes and lower trading rates are reflected in reduced revenue and profit before tax levels for both the USA and Asia.
In the past month, domestic transportation in the USA has been less than satisfactory.

A few wrinkles appearing, but no problems all will be well?

[Sideshow Bob]

A few wrinkles appearing, but no problems all will be well?

Market not quite liking it so much - down almost $4/3%.

Albeit back to where it was on Friday....

[Left Field]

Market not quite liking it so much - down almost $4/3%.

Agree..... signs margins and growth under pressure. Market doesn't like uncertainty.

[Basil]

Does any other company give detailed sector P&L info like that with their year to date trading updates?
Nice and as transparent as you can ever hope to get from any company.  Top marks for shareholder communication that's for sure!
Doesn't look too bad to me but I guess the trend in some parts of the world is not their friend.

[winner (n)]

Last 17 weeks revenues and PBT lower than same period last year

That's negative %ages in the context of the big %ages in the report

They say markets are forward looking .....seen the recent past decline and expecting this to continue?

Could be a case of no worries if Kingfish keep buying

[Shareguy]

A great company facing headwinds.

FY2023 is going to be a stunner no question. Craig's have FY24 EPS at $3.67 which at $74.30 is a PE of 20 which I think is about right and the average over 10 years.

Will look to add if it go's back down to low $60.  Very happy long term holder.

[Shareguy]

Craig's upgrade target price on update.

A mixed performance
Trading update for 2H to-date
Reuters
MFT.NZ
Bloomberg
MFT NZ
Ticker Exchange
MFT NZC
Price at 09 Feb 2023 Price target - 12mth
74.60 92.30
At the interim result in November MFT commented that revenue growth for the first 5 weeks of 2H was up 2%, with PBT up 11%. For the 17 weeks to the end of January revenue declined 2% and PBT declined 0.8%. While there is some skew towards Christmas trading we estimate this implies the last 12 weeks saw a revenue decline of approx. 4% and PBT down 6%. We expected a declining trend through 2H reflecting some deterioration in economic conditions and as the impact of lower freight rates lapped the strong 2H 22 period. This appears to have been the case with much of the revenue/PBT decline coming from the Air & Ocean (A/O) division, which reported revenue down 18.4% and PBT down 9.3% for 2H to-date.
Vs CIPe - A/O better but Transport weaker
Relative to our estimates the A/O revenue decline was broadly in line with expectations, but with better than expected margins. Offsetting this Transport revenue growth was weaker than expected and margins also weaker. This appears to be largely driven by a poor performance in the US, with Australia and Europe performing well, and NZ 'subdued'. Warehouse revenue and margins were broadly in line with CIPe.
Forecast changes: CIPe lifted but we expect mkt consensus to fall
We have made little change to our FY23 estimates (CIPe PBT +0.8%) with the weaker Transport result offset by the better than expected A/O margins. For later years we have lifted our PBT estimates by 4-5%. However, we note we are materially below consensus PBT for FY23 (CIPe revised to $597m vs mkt ex-CIP $619m).
Price Target $92.30 (prev $81.10). Overweight rating remains
Our Price Target remains based on the average of 1) our forward DCF valuation ($95.20, WACC 8.4%) to incorporate a longer-term view of capital intensity and interest rate movements, and 2) international peer PE multiples (22.0x, $89.40). Our revised Price Target implies a forward PE of 22.7x. The increase in our Price Target reflects an increase in our medium and longer-term forecasts and an increase in peer multiples.

[Shareguy]

Fbar have also upgraded from $87 to $90 for same reasons.

[Shareguy]

https://www.nzherald.co.nz/business/truckometer-traffic-data-shows-economic-growth-in-low-gear/ZBKSD26MX5CBJP4BVLH4IENON4/

[Shareguy]

FB downgrades. Note today

Mainfreight (MFT) enjoyed some significant COVID-19 tailwinds as (1) the freight rate super cycle boosted Air & Ocean (A&O) earnings, and (2) the twin benefits of the flight to quality and just-in-case logistics helped volumes. As the former rapidly unwinds and cyclical pressures impact demand we expect a more challenging trading period through FY24. Group earnings should fall materially, and more so than current consensus expectations, despite management's ability to soften the profit impact of falling freight rates by flexing staff bonuses

Earnings revisions
We materially lower our FY24 and FY25 earnings estimates as shown in Figure 3. The downgrades reflect (1) lower A&O revenue and PBT assumptions to reflect the rapid reduction in freight rates, which MFT will pass-through to customers, and (2) slower progress in Transport as cyclical conditions impact top-line momentum and cost pressures continue to impact margins. Our Warehousing assumptions are largely untouched. Our revised estimates imply a PBT decline of -18% in FY24, yet FY24 PBT is still +132% higher than FY20. Moreover, the PBT CAGR from FY20–FY26E at 19.5% (see Figure 4) is consistent with MFT's long term average

[Shareguy]

Spoke to a broker today who said the market generally is very quiet with not a lot happening. Thought Mainfreight is an outstanding buy at current prices and has been buying on weakness for portfolios.