New Zealand Professional Investment Services Firm

Forsyth Barr

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.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Mainfreight July 2021 Team Newsletter Insights</h2>
Mainfreight’s (MFT) 76 page semi-annual employee newsletter (published today) highlights the challenges of the past 12-18 months but also the&nbsp;strong&nbsp;growth and network investment that continues. The company now has 297 branches in 26 countries. For investors wanting to better understand the Mainfreight culture the newsletter [<a href="https://www.mainfreight.com/getmedia/be93919b-517d-4e11-b1cf-6381e0785c73/MAINFREIGHTNEWSLETTER-JUL2021-NZX.pdf?ext=.pdf" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://www.mainfreight.com/getmedia/be93919b-517d-4e11-b1cf-6381e0785c73/MAINFREIGHTNEWSLETTER-JUL2021-NZX.pdf?ext%3D.pdf&amp;source=gmail&amp;ust=1626829744687000&amp;usg=AFQjCNEYN0yacQ9rAlissxY1QmZVacOpRQ" rel="noopener">https://www.mainfreight.com/getmedia/be93919b-517d-4e11-b1cf-6381e0785c73/MAINFREIGHTNEWSLETTER-JUL2021-NZX.pdf?ext=.pdf</a>] is worth flicking through. We include key excerpts as follows:
Don Braid, CEO: “The supply chain&nbsp;congestion that we all are experiencing is not expected to abate any time soon. Our customers’ ordering patterns are impacted by supply and manufacture delays, and further complicated by air and sea freight capacity constraints and costs….As a result of the growth we have seen in this past year and&nbsp;the expected growth we can see in front of us, we are again committing significant capital to extend our network and build facilities that provide capacity and capability to satisfy our customers’ expectations.”
Australia: “Our financial performance was very strong in every sense of the word and this success has allowed us to again get cracking on our&nbsp;network expansion. We have no less than&nbsp;14 new branches planned over the next 4 years&nbsp;and we will increase our physical presence in cities and towns by 12. There is no doubt that our desire to expand our presence across the regions is setting us apart from our competitors who often like to stick to the big cities and focus on the easy stuff…..(Air &amp; Ocean) it’s been a great start to the financial year&nbsp;with some exciting new customers joining us&nbsp;and our teams full-on planning how to give them the best possible Mainfreight experience.”
New Zealand: “Strong localized relationships go a long way towards building a competitive barrier, another feature that was magnified during 2020. With more branches opening nationally and internationally, we have increased opportunity to bypass traditional transhipment hubs and do more direct loading to the final destination, which also reduces cost. This is a key point of difference heading into the 2022 financial year, and one more reason to slow down delivery expectations as a means to capture loading efficiency….. (Transport) Even with the lockdowns at various levels throughout last year, between March 2020 and February 2021, a total of 1,263 new accounts started trading with Mainfreight domestically…. Whilst volumes and financial performance have been encouraging, our focus for 2021/22 is to reset the business for continued growth, and ensure our standards, quality and service levels meet our customers’ expectations and Mainfreight’s.&nbsp;Network expansion continues at a frenzied pace, including ‘popups’ in selected towns to help bridge capacity until permanent projects are completed….Mainfreight 2Home Christchurch are the first branch in New Zealand to use a fully electric truck on day-to-day deliveries and pick-ups.
Europe: “We remain&nbsp;steadfast on intensifying our network with new branches&nbsp;or extensions planned this year for Romania, France, the UK, Russia, and the Netherlands. In April we opened two Transport branches in Romania in Timisoara and Bacau, in May we moved into our first large UK warehouse, and by the middle of 2021 our Ocean division will separate from Air in London to establish a new branch…. Return on Revenue Targets – Air &amp; Ocean 6-8%, Warehousing +15%, Transport +10%”
Americas: “With a new financial year ahead of us&nbsp;we have good momentum building…A special shout out to our Transport team as they closed the door to freight forwarding of freight through the implementation of our new LTL software, and at one of our busiest times. It was great to see you get in behind the change with the excitement of working as a team to make this happen….The US Transport team spent the last financial year&nbsp;transforming our freight culture, from that of a freight forwarder to an every-day carrier, to align our business with the other Transport divisions in other areas of the Mainfreight world. Armed with an every-day freight mentality for the first time, our journey began. No pain, no gain…..Mainfreight offices are ready to achieve revenue growth in this new financial year, and the resulting freight volumes will fill our inbound and outbound line-hauls, which are now close to 500 per week. We are super excited to double down on our brand, with a commitment and plan to brand 100 pieces of equipment, earmarked for this year.”
The next news flow from MFT is due on Thursday 29 July 2021 with an Annual Shareholders Meeting trading update. This is likely to be positive given (1) the margin benefits within Air &amp; Ocean from global congestion, (2) the supportive macro backdrop assisting consumer demand in key regions, and (3) new customer wins achieved over the past 12 months.
Cheers Andy
Andy Bowley&nbsp; Head of Research
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.2&amp;permmsgid=msg-f:1705763231013636858&amp;th=17ac169eff7d8afa&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ8JIVDptynT6oCFc0lIDMiZPGNfWKmtAgUJoNASjwPANatfu6SRRDISq6GGRzoeop6kC3qgiPUTEaB62_pRica3ytslF3TYbAlwP-quvCWP6Z8LvKXhpeiHSGU&amp;disp=emb" class="editor-image img-responsive"></figure>
 M:&nbsp;<a href="tel:+6421338941" target="_blank" data-stringify-link="tel:+6421338941" data-sk="tooltip_parent" rel="noopener">+64 21 338 941</a>&nbsp;|P:&nbsp;<a href="tel:+6444958246" target="_blank" data-stringify-link="tel:+6444958246" data-sk="tooltip_parent" rel="noopener">+64 4 495 8246</a>&nbsp;| TF: 0800 367 227&nbsp; Level 22, NTT Tower, 157 Lambton Quay, Wellington

Mainfreight July 2021 Team Newsletter Insights
Mainfreight’s (MFT) 76 page semi-annual employee newsletter (published today) highlights the challenges of the past 12-18 months but also the&nbsp;strong&nbsp;growth and network investment that continues. The company now has 297 branches in 26 countries. For investors wanting to better understand the Mainfreight culture the newsletter [https://www.mainfreight.com/getmedia/be93919b-517d-4e11-b1cf-6381e0785c73/MAINFREIGHTNEWSLETTER-JUL2021-NZX.pdf?ext=.pdf] is worth flicking through. We include key excerpts as follows:
Don Braid, CEO: “The supply chain&nbsp;congestion that we all are experiencing is not expected to abate any time soon. Our customers’ ordering patterns are impacted by supply and manufacture delays, and further complicated by air and sea freight capacity constraints and costs….As a result of the growth we have seen in this past year and&nbsp;the expected growth we can see in front of us, we are again committing significant capital to extend our network and build facilities that provide capacity and capability to satisfy our customers’ expectations.”
Australia: “Our financial performance was very strong in every sense of the word and this success has allowed us to again get cracking on our&nbsp;network expansion. We have no less than&nbsp;14 new branches planned over the next 4 years&nbsp;and we will increase our physical presence in cities and towns by 12. There is no doubt that our desire to expand our presence across the regions is setting us apart from our competitors who often like to stick to the big cities and focus on the easy stuff…..(Air &amp; Ocean) it’s been a great start to the financial year&nbsp;with some exciting new customers joining us&nbsp;and our teams full-on planning how to give them the best possible Mainfreight experience.”
New Zealand: “Strong localized relationships go a long way towards building a competitive barrier, another feature that was magnified during 2020. With more branches opening nationally and internationally, we have increased opportunity to bypass traditional transhipment hubs and do more direct loading to the final destination, which also reduces cost. This is a key point of difference heading into the 2022 financial year, and one more reason to slow down delivery expectations as a means to capture loading efficiency….. (Transport) Even with the lockdowns at various levels throughout last year, between March 2020 and February 2021, a total of 1,263 new accounts started trading with Mainfreight domestically…. Whilst volumes and financial performance have been encouraging, our focus for 2021/22 is to reset the business for continued growth, and ensure our standards, quality and service levels meet our customers’ expectations and Mainfreight’s.&nbsp;Network expansion continues at a frenzied pace, including ‘popups’ in selected towns to help bridge capacity until permanent projects are completed….Mainfreight 2Home Christchurch are the first branch in New Zealand to use a fully electric truck on day-to-day deliveries and pick-ups.
Europe: “We remain&nbsp;steadfast on intensifying our network with new branches&nbsp;or extensions planned this year for Romania, France, the UK, Russia, and the Netherlands. In April we opened two Transport branches in Romania in Timisoara and Bacau, in May we moved into our first large UK warehouse, and by the middle of 2021 our Ocean division will separate from Air in London to establish a new branch…. Return on Revenue Targets – Air &amp; Ocean 6-8%, Warehousing +15%, Transport +10%”
Americas: “With a new financial year ahead of us&nbsp;we have good momentum building…A special shout out to our Transport team as they closed the door to freight forwarding of freight through the implementation of our new LTL software, and at one of our busiest times. It was great to see you get in behind the change with the excitement of working as a team to make this happen….The US Transport team spent the last financial year&nbsp;transforming our freight culture, from that of a freight forwarder to an every-day carrier, to align our business with the other Transport divisions in other areas of the Mainfreight world. Armed with an every-day freight mentality for the first time, our journey began. No pain, no gain…..Mainfreight offices are ready to achieve revenue growth in this new financial year, and the resulting freight volumes will fill our inbound and outbound line-hauls, which are now close to 500 per week. We are super excited to double down on our brand, with a commitment and plan to brand 100 pieces of equipment, earmarked for this year.”
The next news flow from MFT is due on Thursday 29 July 2021 with an Annual Shareholders Meeting trading update. This is likely to be positive given (1) the margin benefits within Air &amp; Ocean from global congestion, (2) the supportive macro backdrop assisting consumer demand in key regions, and (3) new customer wins achieved over the past 12 months.
Cheers Andy
Andy Bowley&nbsp; Head of Research

 M:&nbsp;+64 21 338 941&nbsp;|P:&nbsp;+64 4 495 8246&nbsp;| TF: 0800 367 227&nbsp; Level 22, NTT Tower, 157 Lambton Quay, Wellington

Mainfreight: July 2021 Team Newsletter Insights

Mainfreight Ltd

Mainfreight: July 2021 Team Newsletter Insights