New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>Mainfreight’s (MFT) Dallas investor day further illustrated the longer-term potential of one of New Zealand’s premier growth companies, but also highlighted its earnings susceptibility to: (1) the economic cycle, and (2) network expansion out of sync with volume progression.</li><li>Pleasingly, the company continues to win new customers, with a strong sales focus and an enduring pipeline of new opportunities.</li><li>However, provisional 1H25 profit before tax (PBT) was modestly below market expectations and down -9% against the prior year. </li></ul>

Mainfreight’s (MFT) Dallas investor day further illustrated the longer-term potential of one of New Zealand’s premier growth companies, but also highlighted its earnings susceptibility to: (1) the economic cycle, and (2) network expansion out of sync with volume progression.Pleasingly, the company continues to win new customers, with a strong sales focus and an enduring pipeline of new opportunities.However, provisional 1H25 profit before tax (PBT) was modestly below market expectations and down -9% against the prior year. 

<ul><li>Mainfreight's (MFT) recent Annual Shareholder Meeting trading update was disappointing, reflective of cyclical demand and competitive pressures.</li><li>Sales activity is strong with continuing conversion, but margins are being compromised, with declines across all regions and products, given excess capacity (Warehousing), sluggish volumes, and competitive pricing (Air &amp; Ocean).</li><li>We expect margins to expand as cyclical demand improves over the next 18 months, leading to an acceleration in profit growth over the medium term. </li></ul>

Mainfreight's (MFT) recent Annual Shareholder Meeting trading update was disappointing, reflective of cyclical demand and competitive pressures.Sales activity is strong with continuing conversion, but margins are being compromised, with declines across all regions and products, given excess capacity (Warehousing), sluggish volumes, and competitive pricing (Air &amp; Ocean).We expect margins to expand as cyclical demand improves over the next 18 months, leading to an acceleration in profit growth over the medium term. 

Mainfreight - Knocked Off the Podium — Down to NEUTRAL

<ul><li>Mainfreight's (MFT) FY24 result was broadly in-line with market expectations, though management appears somewhat cautious around the near term outlook given the current challenging operating environment.</li><li>Mixed trading performance in the year was supported by headcount attrition and a significant drop in MFT's annual discretionary bonus provision.</li><li>Air &amp; Ocean's performance was the key positive surprise in 2H24, with an impressive sequential margin bounce, while Transport and Warehousing mildly disappointed. </li></ul>

Mainfreight's (MFT) FY24 result was broadly in-line with market expectations, though management appears somewhat cautious around the near term outlook given the current challenging operating environment.Mixed trading performance in the year was supported by headcount attrition and a significant drop in MFT's annual discretionary bonus provision.Air &amp; Ocean's performance was the key positive surprise in 2H24, with an impressive sequential margin bounce, while Transport and Warehousing mildly disappointed. 

<ul><li>Mainfreight (MFT) will report a material decline in full year earnings when it reports its FY24 result on 29 May 2024.</li><li>That said, it will report higher profits in 2H24 than 1H24, reflecting: (1) seasonality, and (2) that the freight rates and cyclical volume adverse drivers have eased. While cyclical challenges continue to exist in many of MFT's markets, the robust recovery in global freight volumes (in both air and sea) bodes well for growth to re-emerge. </li><li>We believe MFT has a new earnings base from which growth can flow from FY25.</li></ul>

Mainfreight (MFT) will report a material decline in full year earnings when it reports its FY24 result on 29 May 2024.That said, it will report higher profits in 2H24 than 1H24, reflecting: (1) seasonality, and (2) that the freight rates and cyclical volume adverse drivers have eased. While cyclical challenges continue to exist in many of MFT's markets, the robust recovery in global freight volumes (in both air and sea) bodes well for growth to re-emerge. We believe MFT has a new earnings base from which growth can flow from FY25.

Mainfreight - FY24 Preview — Platform for Growth

<ul><li>Mainfreight (MFT) is well placed to benefit from the current cyclical recovery in international freight volumes.</li><li>The global industry is now cycling the destocking event of CY22–CY23, with robust volume growth now evident in recent global sea and air freight data.</li><li>This backdrop will be supportive to MFT's 2H24 period, for which any downgrade risk has now passed, and FY25, during which we expect a resumption of earnings growth. </li></ul>

Mainfreight (MFT) is well placed to benefit from the current cyclical recovery in international freight volumes.The global industry is now cycling the destocking event of CY22–CY23, with robust volume growth now evident in recent global sea and air freight data.This backdrop will be supportive to MFT's 2H24 period, for which any downgrade risk has now passed, and FY25, during which we expect a resumption of earnings growth. 

New Zealand

Mainfreight Limited provides and supplies freight, warehousing and logistics services throughout New Zealand and Australia.  The Company provides freight forwarding services by road, rail, sea and air along with providing international freight forwarding services, customs clearance services and specialized handling of hazardous substances.

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Mainfreight Ltd (MFT NZ)

Mainfreight - No Cowboys at This B-Ranch

Mainfreight’s (MFT) Dallas investor day further illustrated the longer-term potential of one of New Zealand’s premier growth companies, but also...

Forsyth Barr

Mainfreight - Knocked Off the Podium — Down to NEUTRAL

Mainfreight's (MFT) recent Annual Shareholder Meeting trading update was disappointing, reflective of cyclical demand and competitive pressures.

Forsyth Barr

Mainfreight - FY24 — Pic ‘n’ Mix

Mixed trading performance in the year was supported by headcount attrition and a significant drop in MFT's annual discretionary bonus provision.

Forsyth Barr

Mainfreight - FY24 Preview — Platform for Growth

Mainfreight (MFT) will report a material decline in full year earnings when it reports its FY24 result on 29 May 2024. That said, it will report...

Forsyth Barr

Mainfreight - Loading Up

The global industry is now cycling the destocking event of CY22–CY23, with robust volume growth now evident in recent global sea and air freight data.

Forsyth Barr

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