Mainfreight Limited — Annual Report 2021

May 25, 2021

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Results announcement

(for Equity Security issuer/Equity and Debt Security issuer)

Results for announcement to the market	Results for announcement to the market	Results for announcement to the market
Name of Issuer	Mainfreight Limited
Reporting Period	12 months to 31 March 2021
Previous Reporting Period	12 months to 31 March 2020
Currency	NZD
	Amount (000s)	Percentage Change
Revenue from Continuing Operations	$3,543,838	14.5%
Total Revenue	$3,543,838	14.5%
Net Profit/(Loss) from Continuing Operations	$188,110	18.2%
Total Net Profit/(Loss)	$188,110	18.2%
Interim/Final Dividend
Amount per Quoted Equity Security	$0.45000000
Imputed Amount per Quoted Equity Security	$0.07941176
Record Date	9/07/2021
Dividend Payment Date	16/07/2021
	Current Period	Prior Comparable Period
Net tangible assetsper Quoted EquitySecurity	$8.2706	$6.6199
A brief explanation of any of the figures above necessary to enable the figures to be understood
Authority for this Announcement
Name of person authorised to make this announcement	Tim Williams, Chief Financial Officer
Contact person for this announcement	Tim Williams
Contact phone number	+64 9 259 5510
Contact email address	tim@mainfreight.com
Date of release through MAP	26/05/2021

Unaudited financial statements accompany this announcement.

PRELIMINARY FULL YEAR REPORT ANNOUNCEMENT

Mainfreight Limited For Full Year Ended 31 March 2021

Preliminary full year report on consolidated results (including the results for the previous corresponding full year). This report has been prepared in a manner which complies with generally accepted accounting practice and fairly presents the matters to which the report relates and is based on unaudited financial statements, which are in the process of being audited. The Listed Issuer has a formally constituted Audit Committee of the Board of Directors.

Income Statement for the Year Ended 31 March 2021

Income Statement for the Year Ended 31 March 2021
Note	2021 2020 $000 $000
Operating Revenue Interest Income Total Revenue Transport Costs	3,543,531 3,094,736 307 658
	3,543,838 3,095,394 (2,141,744) (1,803,460)
Labour Expenses Other Expenses Earnings before Interest Costs, Tax, Depreciation, Amortisation and Abnormal Items	(723,444) (670,103) (211,836) (222,502)
	466,814 399,329
Depreciation of Right of Use Assets Finance Costs Relating to Lease Liabilities Other Depreciation and Amortisation Expenses Other Finance Costs Profit Before Abnormal Items and Taxation for the Year Income Tax on Profit Before Abnormal Items Net Profit Before Abnormal Items for the Year Abnormal Items 4 Income Tax on Abnormal Items 4 Abnormal Tax Item - Reversal of deferred tax liability on buildings 4 Abnormal Items After Taxation Profit Before Taxation for the Year Income Tax Expense Net Profit for the Year Earnings per share for profit attributable to the ordinary equity holders of the company are:	(113,938) (111,877) (16,225) (17,021) (68,460) (57,852) (5,784) (6,326)
	262,407 206,253 (74,297) (58,278)
	188,110 147,975 - (4,783) - 1,309 - 14,700
	- 11,226 262,407 201,470 (74,297) (42,269)
	188,110 159,201 Cents Cents
Basic and Diluted Earnings Per Share: Total Operations	186.81 158.10

Statement of Comprehensive Income for the Year Ended 31 March 2021

Statement of Comprehensive Income for the Year Ended 31 March 2021
	2021 2020 $000 $000
Net Profit for the Year Other Comprehensive Income Other comprehensive income to be reclassified to profit or loss in subsequent periods: Exchange Differences on Translation of Foreign Operations Income Tax Effect Net Other comprehensive income to be reclassified to profit or loss in subsequent periods Other comprehensive income not to be reclassified to profit or loss in subsequent periods: Revaluation of Land including Foreign Exchange Movements Income Tax Effect Net Other comprehensive income not to be reclassified to profit or loss in subsequent periods Other comprehensive income not to be reclassified to profit or loss in subsequent periods: Defined Benefit Pension Provision Income Tax Effect Net Other comprehensive income not to be reclassified to profit or loss in subsequent periods Other Comprehensive Income for the Year, Net of Tax Total Comprehensive Income for the Year, Net of Tax	188,110 159,201 (22,545) 23,850 (2,782) 3,323
	(25,327) 27,173 55,814 1,233 (5,324) -
	50,490 1,233 (159) (228) 40 57
	(119) (171) 25,044 28,235 213,154 187,436

Balance Sheet as at 31 March 2021

Balance Sheet as at 31 March 2021
Current Assets	2021 2020 $000 $000
Bank	139,555 116,140
Trade Debtors Income Tax Receivable Other Receivables	489,246 420,839 251 2,937 89,531 73,129
Non-current Assets
	718,583 613,045
Property Plant & Equipment Right of Use Assets Software	755,566 652,639 162,597 123,936 567,956 615,250 53,510 53,542
Goodwill Other Intangible Assets	208,626 226,566 1,607 4,578
Deferred Tax Asset	18,461 15,038
TOTAL ASSETS
	1,768,323 1,691,549
	2,486,906 2,304,594
Current Liabilities
Bank	- 6
Trade Creditors & Accruals Employee Entitlements Provision for Taxation	412,826 339,562 91,997 69,565 30,344 19,207
Lease Liability for Right of Use Assets	118,158 124,128
Asset Finance Loans Non-current Liabilities Bank Term Loan Employee Entitlements Deferred Tax Liability	9,198 2,732
	662,523 555,200 210,000 267,698 2,922 2,887 6,571 6,654
Lease Liability for Right of Use Assets	467,276 502,734
Asset Finance Loans TOTAL LIABILITIES Shareholders' Equity Share Capital Retained Earnings	22,568 3,082
	709,337 783,055
	1,371,860 1,338,255
	85,821 85,821 897,383 773,720
Revaluation Reserve	141,094 90,604
Foreign Currency Translation Reserve	(8,660) 16,667
Defined Benefit Pension Reserve	(592) (473)
TOTAL EQUITY TOTAL LIABILITIES AND EQUITY
	1,115,046 966,339
	2,486,906 2,304,594

The accompanying notes form an integral part of these financial statements.

Statement of Changes in Equity for the Year Ended 31 March 2021

2021	Foreign Defined Asset Currency Benefit
$000 Ordinary Revaluation Translation Pension Retained Shares Reserve Reserve Reserve Earnings Total Balance at 1 April 2020 85,821 90,604 16,667 (473) 773,720 966,339 Profit for the Year - - - - 188,110 188,110 Other Comprehensive Income - 50,490 (25,327) (119) - 25,044 Total Comprehensive Income for the Year - 50,490 (25,327) (119) 188,110 213,154 Transactions with Owners in Their Capacity as Owners:	Ordinary Revaluation Translation Pension Retained Shares Reserve Reserve Reserve Earnings Total 85,821 90,604 16,667 (473) 773,720 966,339 - - - - 188,110 188,110 - 50,490 (25,327) (119) - 25,044
Supplementary Dividends Dividends Paid Foreign Investor Tax Credit	- - - - (2,132) (2,132) - - - - (64,447) (64,447) - - - - 2,132 2,132
Balance at 31 March 2021	85,821 141,094 (8,660) (592) 897,383 1,115,046
2020	Foreign Defined Asset Currency Benefit
$000 Ordinary Revaluation Translation Pension Retained Shares Reserve Reserve Reserve Earnings Total Balance at 1 April 2019 85,821 89,371 (10,506) (302) 673,931 838,315 Profit for the Year - - - - 159,201 159,201 Other Comprehensive Income - 1,233 27,173 (171) - 28,235 Total Comprehensive Income for the Year - 1,233 27,173 (171) 159,201 187,436 Transactions with Owners in Their Capacity as Owners:	Ordinary Revaluation Translation Pension Retained Shares Reserve Reserve Reserve Earnings Total 85,821 89,371 (10,506) (302) 673,931 838,315 - - - - 159,201 159,201 - 1,233 27,173 (171) - 28,235
Supplementary Dividends Dividends Paid Foreign Investor Tax Credit	- - - - (2,413) (2,413) - - - - (59,412) (59,412) - - - - 2,413 2,413
Balance at 31 March 2020	85,821 90,604 16,667 (473) 773,720 966,339

Cash Flow Statement for the Year Ended 31 March 2021

Cash Flow Statement for the Year Ended 31 March 2021
	2020 2020 $000 $000
Cash Flows From Operating Activities
Receipts from Customers Interest Received Payments to Suppliers and Team Members Finance Charge on NZ IFRS 16 Leases Interest Paid Income Taxes Paid	3,459,132 3,092,861 307 658 (2,992,486) (2,705,526) (16,225) (17,021) (5,784) (6,326) (68,662) (63,846)
NET CASH FLOWS FROM OPERATING ACTIVITIES Cash Flows From Investing Activities Proceeds from Sale of Property, Plant & Equipment Proceeds from Sale of Software Purchase of Property, Plant & Equipment Purchase of Software Advances to Team Members NET CASH FLOWS FROM INVESTING ACTIVITIES Cash Flows From Financing Activities Proceeds of Long Term Loans Dividend Paid to Shareholders Repayment of Loans Lease Payments NZ IFRS16	376,282 300,800 3,529 4,930 - 52 (104,048) (143,286) (18,030) (16,728) (2) -
	(118,551) (155,032) 62,054 40,554 (64,447) (59,412) (118,073) (32,421) (107,125) (100,644)
NET CASH FLOWS FROM FINANCING ACTIVITIES NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS Net Foreign Exchange Differences CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS AT END OF PERIOD Comprised Bank and Short Term Deposits Bank Overdraft	(227,591) (151,923) 30,140 (6,155) (6,719) 7,109 116,134 115,180
	139,555 116,134
	139,555 116,140 - (6)
	139,555 116,134

The accompanying notes form an integral part of these financial statements.

1 Corporate Information

The preliminary full year report announcement of Mainfreight Limited ("the parent") and its subsidiaries ("the Group") for the full year ended 31 March 2021 were authorised for issue in accordance with a resolution of the Directors.

Mainfreight Limited is a company limited by shares incorporated in New Zealand whose shares are publicly traded on the NZX Main Board (New Zealand Stock Exchange).

2 Accounting Policies

Accounting policies remain consistent with the prior year ended 31 March 2020 financial statements.

3 Required NZX Disclosures Movements in Ordinary Shares on Issue Closing Balance Average Balance During Year Net Tangible Assets Net Tangible Assets Net Tangible Assets per Security (cps) Net Tangible Assets excludes Software and Deferred Tax Assets. Dividends Paid and Proposed Recognised Amounts Declared and Paid During the Year to Parent Shareholders Final Fully Imputed Dividend for 2020: 34.0 cents (2019: 34.0 cents) Interim Fully Imputed Dividend for 2021: 30.0 cents (2020: 25.0 cents) Unrecognised Amounts Final Fully Imputed Dividend for 2021: 45.0 cents (2020: 34.0 cents)	2021 Shares 100,698,548 100,698,548 2021 $000 832,842 827.06 2021 $000 34,237 30,210	Parent 2020 Shares 100,698,548 100,698,548 2020 $000 666,615 661.99 2020 $000 34,237 25,175
	64,447 45,314	59,412 34,238

After the balance date, the above unrecognised dividends were approved by directors' resolution dated 25 May 2021.

4 Abnormal Items

Abnormal items are determined in accordance with the principles of consistency, relevance and clarity. Transactions considered for classification as abnormal items include acquisition and disposal costs; impairment or reversal of impairment of assets; business integration; and transactions or events outside of the Group’s ongoing operations that have a significant impact on reported profits.

During the year the Group had no abnormal expenses (2020 $4,783,000). The related after tax expense was nil (2020 $3,474,000).

In the year the Group had no abnormal gains (2020 nil). The related after tax gain was nil (2020 $14,700,000).

These items comprised of:

	2021 Year 2020 Year		Pre-Tax Tax $000 $000 - -	After Tax $000 - - After Tax $000
			- -
			Pre-Tax Tax $000 $000
	Brand Name Impairment		(3,949) 987	(2,962)
	Redundancies Building Depreciation Taxation		(835) 322 - 14,701	(513) 14,701 11,226
			(4,784) 16,010

5 Annual Report and Annual Meeting

The annual report is expected to be available on 25 June 2021. The Annual Meeting is to be held at 4.00pm on Thursday 29 July 2021; venue to be advised.

5 Segmental Reporting

An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses whose operating results are regularly reviewed by the entity’s chief operating decision maker and for which discrete financial information is available. The Group operates in the domestic supply chain (i.e. moving and storing freight within countries) and air and ocean freight industries (i.e. moving freight between countries).

New Zealand, Australia, The Americas and Europe are each reported to management as one segment as the businesses there perform both domestic and air and ocean services.

The segmental results from operations are disclosed below.

Geographical Segments The following table represents revenue, margin and certain asset information regarding geographical segments for the years ended 31 March 2021 and 31 March 2020.

Year Ended 31 March 2021	New Australia The Asia Europe Inter-	Total
Operating Revenue - Sales to customers outside the group - Inter-segment sales Total Revenue PBT & Abnormal Items Net Interest Expense Depreciation & Amortisation Capital Expenditure Trade Receivables Non-current Assets Total Assets Total Liabilities Year Ended 31 March 2020 Operating Revenue - Sales to customers outside the group - Inter-segment sales Total Revenue PBT & Abnormal Items Net Interest Expense Depreciation & Amortisation Capital Expenditure Trade Receivables Non-current Assets Total Assets Total Liabilities	Zealand Americas Segment 845,554 939,340 859,647 155,392 743,905 - 2,199 25,773 50,574 160,354 44,708 (283,608) 847,753 965,113 910,221 315,746 788,613 (283,608) 97,814 76,573 38,627 10,501 38,892 - 6,289 7,267 4,948 143 3,055 - 48,411 46,910 27,779 3,086 56,212 - 73,612 18,503 9,859 1,418 18,686 - 107,640 129,358 140,222 52,032 105,504 (45,510) 672,691 473,197 229,823 17,862 374,750 - 805,375 640,163 410,136 92,505 584,237 (45,510) 348,340 379,753 272,829 52,965 363,483 (45,510) New Australia The Asia Europe Inter- Zealand Americas Segment 752,913 796,545 761,950 94,786 689,200 - 396 20,352 48,421 73,489 38,133 (180,791) 753,309 816,897 810,371 168,275 727,333 (180,791) 87,691 51,344 30,881 5,236 31,101 - 5,277 8,301 5,045 153 3,913 - 46,799 45,164 24,481 2,945 50,340 - 62,225 71,497 9,025 1,126 16,141 - 83,982 105,889 119,361 24,618 110,812 (23,823) 560,315 451,269 236,302 17,765 425,898 - 665,587 590,187 385,118 64,399 623,126 (23,823) 299,026 364,160 258,797 33,125 406,970 (23,823)	$000 3,543,838 - 3,543,838 262,407 21,702 182,398 122,078 489,246 1,768,323 2,486,906 1,371,860 Total $000 3,095,394 - 3,095,394 206,253 22,689 169,729 160,014 420,839 1,691,549 2,304,594 1,338,255

Division Segments

The following table represents revenue and PBT regarding the three main types of services for the years ended 31 March 2021 and 31 March 2020.

Year Ended 31 March 2021 Domestic Warehousing Air & Ocean Transport Forwarding Revenue 1,610,741 452,116 1,480,981 PBT & Abnormal Items 140,527 42,207 79,673 Year Ended 31 March 2020 Domestic Warehousing Air & Ocean Transport Forwarding Revenue 1,550,299 409,749 1,135,346 PBT & Abnormal Items 119,682 34,317 52,254 Reconciliation between non-GAAP and the Income Statement	Total $000 3,543,838 262,407 Total $000 3,095,394 206,253 2021 2020 $000 $000
Profit Before Taxation for the Year Abnormal Items	262,407 201,470 - 4,783
Profit Before Abnormal Items and Taxation for the Year Interest Income Finance Costs Relating to Lease Liabilities Other Finance Costs EBITA Depreciation of Right of Use Assets Other Depreciation and Amortisation Expenses EBITDA (adjusted) EBITDA (adjusted) is defined as earnings before net interest expense, tax, depreciation, amortisation, abnormal items royalties (segment only; not Group). There are no customers in any segment that comprise more than 10% of that segment's revenue. Bank term loan is allocated based on segment net assets excluding bank term loan. The geographical segments are determined based on the location of the Group's assets.	262,407 206,253 (307) (658) 16,225 17,021 5,784 6,326 284,109 228,942 113,938 111,877 68,460 57,852 466,507 398,671 and