- 30 July 2015
2015 Annual Meeting
Mainfreight Shareholders gathered in Auckland to hear about our current position & future direction and to cast their votes at our 20th Annual Meeting of Shareholders on July 29 2015. For those unable to attend we provide this video, the transcript of the Chairman's address, and a copy of the Managing Director's presentation (below).
Ladies and Gentlemen, your Company has performed satisfactorily over the past year.
Our net profit before abnormals increased by 7.7% or $6 million on increased sales of 6.8%. We also achieved global revenue of $2.054 billion for the year, a number not surpassed by many New Zealand companies.
Operationally, the year was quite difficult, especially in New Zealand, where in Christchurch we completed the rebuild of our facilities, while continuing to work on the same site with the builders. This was a long, frustrating and costly project, which affected us for nearly two years. Now with completion, we have much work to do to regain our place in this important market.
Similarly, at Westney Road in Auckland where we extended our warehouse and incorporated chilled storage, the builders had to work around us and we had to work out of temporary sites at excessive cost for most of the year.
These two wonderful new sites, plus our new rail serviced facility in Hamilton, have set us up superbly for the future. They have also added close to $8 million to our annual overheads, primarily in interest, and provision for depreciation, and these costs are likely to take six to eighteen months to absorb.
We have additional new facilities to build in Auckland and Christchurch within the next two to three years, but these are likely to be of a lesser scale than those built in 2014-2015. We are also building a 46,000m2 facility in Epping, Melbourne due for completion by April 2016.
I awoke on Friday, July 10th at 6.00am, to news that the Government was considering closing down the railway system.
Within a few hours it became clear that this was not being considered by the Government. It was a “recommendation” amongst others, which Treasury had made to the Government, before their latest budget. Included in the advice was “close down the rail network and launch a year-long public relations consultation to soften up the public for the pre-ordained decision”.
Apart from Government and Treasury’s appalling treatment of rail since its sale to the smirking merchant bankers in 1992, who made hundreds of millions for themselves,
– to its sale to Toll Holdings, latterly taken over by “Japan Post”,
– to its repurchase by Government to try to ensure its survival, and hundreds of millions of profit to Toll (now part of “Japan Post”).
Yes, apart from – what about realising that it is extraordinarily damaging to our country to not understand that our transport infrastructure is screaming out for a strategy that considers road and rail (passenger and freight) and ports.
Without rail, our opportunities for passenger transport are restricted, our desperation for more roads intensifies to the point of impossibility, and our options for port locations become hopelessly restricted.
How on earth could Treasury not see these connections, and our Government not see the need for an overall strategy? Does no-one understand that having a dozen ports, allows the overseas shipping companies to play them all off against each other for price and service, mostly while the local ratepayers provide the ports’ finances.
At this time last year, we had not contemplated the large fall in dairy prices, and its likely effect on New Zealand. Neither had we seen the collapse of iron ore prices in Australia, and its effect on the economy. There are but the most meagre signs of growth in the USA and Europe, and lately some uncertainty in the China economy.
Such is the global business community in which we operate, and passionately love. We love this business because it is tough, the competition is fierce, and it takes huge energy to win – and Mainfreight is good at winning
I hope that you have all read and enjoyed our annual report and the July newsletter. There are those who would have us publish these things online, or send hard copies only when requested. Let us keep up the power of the physical written word, the insights provided by great photography, and the value of family and friends browsing these publications.
Our profits in every country have improved on the previous year, as they did also in the year prior to that (with the exception of Europe). We believe that even with the global headwinds and increased overheads, we will be able to report record profits again in this current year.
Before moving on, I would like to acknowledge Sir Don Rowlands at this, our twentieth annual shareholders meeting. It has been some months now since Sir Don’s passing, and this I think will be the first time Sir Don has not been present at our AGM.
He was our long-time colleague, friend and mentor and is very sadly missed. We are very pleased to have Lady Coralie here today.
Fellow shareholders, I would now like to ask the Group Managing Director, Don Braid, to give his presentation.