Bellwether transport company Mainfreight is expected to report strong earnings growth when delivering its full-year result tomorrow and expectations are reported profit will be up more than 10%.
Most growth is anticipated to come from operations in Australia, Europe and New Zealand, while the US division is expected to still be underperforming.
During the past month, Mainfreight shares traded up from about $23 to more than $26, the latter up 16.5% on a year ago.
Forsyth Barr broker Damian Foster said Mainfreight’s first-half trading had been "subdued", but picked up in the second half and had strong earnings growth.
"Strong Australian growth in second-half 2018 will likely be driven by domestic transport and warehousing," he said.
For its year to March, Mr Foster expects Mainfreight’s revenues will have risen 9.1% to $2.54 billion, earnings before interest, tax, depreciation and amortisation up 7.9% to $213.1 million and reported profit up 10.5% to $112.1 million.
Mr Foster said the outlook for the new financial year was that robust economic conditions in Mainfreight’s key markets would allow the positives of second-half trading to flow into full-year 2019.
Although Mainfreight’s capital expenditure was lower for a second consecutive year, spending would kick back in next year, due to expected land purchases in New Zealand and Australia, he said.
