logistics

Supermarket chain Progressive Enterprises is planning to spend up to $200 million on new supermarkets and refurbishing existing stores during the next five years.

Owned by Australian-based Woolworths Ltd, the company today said it had spent $320m on a large programme of work during the past three years, since Woolworths bought Progressive in late 2005. That work included installing new ordering, merchandising, point of sale and back office systems, as well as store refurbishments and buying land and buildings for new supermarkets.

Progressive employs more than 19,000 staff nationwide and owns 148 Countdown, Foodtown and Woolworths supermarkets.

Spending of $150m to $200m would fund the development of three to five new supermarkets each year for the next five years, and refurbishment of 18 to 20 stores every year for the next three to five years.

Progressive said it also intended to integrate back office support services including accounting and information technology to Woolworths' shared services platform, establish new functions in-house which were previously outsourced at high cost, and invest in improved supply chain systems.

Progressive managing director Peter Smith said the company expected to increase its total staff numbers in 2009. Each new store would add at least 120 new jobs once opened, he said.

While about 100 support positions could be affected by proposed changes, the company was working on alternative career and job opportunities within Progressive and the greater Woolworths Ltd group.

Investors have begun bailing out of Brambles Ltd after it announced a major US customer, Wal-Mart, was reviewing its pallet arrangements with the logistics firm.  Brambles shares had slumped 14.56 per cent to $A8.57 ($NZ10.28) amid uncertainty over the financial impact of the announcement.

Brambles said Wal-Mart was changing its handling of pallets, including its arrangements with Brambles' pallet and container business CHEP, and other pallet pooling companies.  But the Australian logistics company did not give details of whether the decision would have any financial impact.

CHEP is owned by Brambles and currently manages the picking up and sorting of pallets, used to move goods, at many Wal-Mart facilities in the US.  Shaw Stockbroking analyst Brent Mitchell said it was difficult to quantify the revenue and profit at risk through CHEP's Wal-Mart contracts.  "That information is not available, so it's a bit hard to put figures on it," Mr Mitchell said.  He speculated that Wal-Mart contributed no more than 5 per cent to CHEP's US profit.  "It doesn't appear that all the businesses are at risk. You'd have to expect the Wal-Mart business to be at the low end in terms of the margin range."

Nevertheless, investors were responding to the uncertainty of how the announcement might affect Brambles outlook.  "The uncertainty that it has created has caused that reaction," Mr Mitchell said.

Brambles said Wal-Mart had indicated it may contract directly with third party pallet management service providers to retrieve and sort pallets at its own facilities in the US, or provide the services itself.  The company said it was working with Wal-Mart to identify ways in which CHEP could continue to supply low-cost services to Wal-Mart and its supply chain.  "Brambles and CHEP strongly value the relationship with Wal-Mart and will continue to work with Wal-Mart to develop the optimal supply chain solution for this important customer," it said in a statement.

Brambles was bullish in its outlook at its first half results in February, with plans to expand CHEP into India.  The company booked a first half net profit from continuing operations of $US296.7 million, which was up 10 per cent, or 3 per cent in constant currency terms.

CHEP sales increased 12 per cent to $US1.75 billion in the half year, led higher by CHEP Americas, where sales rose 11 per cent on strong demand for grocery products.

Freightways' first-quarter profitability was flat as the express delivery company continued to be shackled by the sluggish economy. Managing director Dean Bracewell told shareholders at the annual meeting in Auckland yesterday that operating earnings for the three months to September 30 were up by 4 per cent. But higher interest rate costs meant net profit was flat at $7.7 million, he said.

Mr Bracewell declined to comment on mounting takeover speculation. Freightways, which shares the New Zealand express package market with NZ Post in a near-duopoly, has long been touted as a likely takeover target. Suggestions that Toll Holdings might launch a bid have been around for a couple of years. This month, the Australian Financial Review reported that as well as Toll, Qantas, FedEx and Deutsche Post's DHL were interested.

"I have no doubt that it's on at least a couple of companies' radar screens," First NZ Capital analyst Andrew Mortimer said. "I certainly wouldn't discount it but it's a question of timing. It's got an open register and it's vulnerable."

Mr Bracewell said he saw no short-term let-up in the challenging New Zealand conditions. "We said at the full-year we expected a flat environment and that's what we've got," he said. "It will come back; it always does. And when it does we'll be ready with good-quality capacity and we'll reap the benefits of it then, but I couldn't put a time frame on that."

At close the Freightways share price was down 15 cents at $3.80.

Growth in the business mail and information management businesses continued to outpace the core express business, Mr Bracewell said. Capital investment of $15 million would be spent during the 2008 year including the initial development of a recently acquired information management site in Wellington.

Freightways' largest shareholder is Fisher Funds, which has a 9.8 per cent stake. Fisher Funds chief investment officer Warren Couillault said Freightways was doing well relative to the conditions it was operating in. "It does feel to me that the underlying barometer of the economy, in moving freight around the country, has been weak for about a year and a half," he said. "The fact that they're holding their bottom line is good, given that they've got huge cost increases in labour, occupancy and energy. "The little nibbling acquisitions they are making in data and storage are good as well. That will give them a springboard in Australia and it's exactly what we want them to be doing."

Directors Sue Sheldon and Sir William Birch were re-elected to the board at the meeting. Directors' fees were increased from $225,000 to $336,000. This includes $52,000 to be available if a sixth director, likely to be an Australian, is added to the board.

Mainfreight has taken another step towards its goal of becoming a major global logistics player with the $76 million acquisition of United States freight forwarder Target Logistics.  The New Zealand freight forwarder and logistics company will pay $3.54 a share for Target, which is listed on the American Stock Exchange and incorporated in Delaware.

Mainfreight already has acceptances from Target's three major shareholders, who together hold 66.5 per cent of its stock, and under Delaware law is able to compulsorily acquire the rest of the company.  Managing director Don Braid said the remaining Target shareholders were able to challenge the acquisition in the courts, but he didn't think that was likely.

Mainfreight's offer is at a significant premium to Target's current share price which last closed at $2.59.  "We think we've paid a fair price for Target shareholders and a fair price for Mainfreight," Mr Braid said.

All going smoothly, the acquisition will be completed by November or December with Mainfreight intending to run Target as a stand-alone company retaining its brand and current management.  Target has 34 offices across the US, more than 3000 customers and about 350 staff.  It has an international network of agents in more than 70 countries and has a strong presence on China and Southeast Asia routes, with many of its US customers manufacturing in Asia.

Its revenue in the year to June 2008 is expected to exceed $255 million and earnings will be positive from day one for Mainfreight.

Forsyth Barr analyst Rob Mercer said the acquisition did not come as a surprise.  "They've bought exactly what they've said they've been targeting. It looks like it's a well-run business."

Mainfreight shares closed up 5 cents at $7.10.

AUSTRALIA'S biggest private transport owner, Linfox, surprised the investment community yesterday with the purchase of Westgate Logistics for an estimated $180 million.

The move triggered speculation that it was part of the Fox family's grand plan to list on the Australian Securities Exchange for at least $1.5 billion.  The market has been waiting for a second force behind Toll Holdings, and analysts say Linfox is conscious of this.  It is not the first time Linfox has listed on the ASX. It listed in 1987, but that lasted less than two years before the family bought back the company.  Linfox is the second biggest transport company in Australia and has operations in 11 countries.

To fund its expansion -- especially projects in other parts of the Fox family empire such as Avalon and Essendon Airports -- it will need large amounts of capital.  Pricing multiples in the transport industry have never been so high. Transport companies are selling for 15 to 20 times earnings.

As a private company, Linfox does not release profit figures, but it says the latest acquisition will bump up its turnover from $1.8 billion to $2 billion.  This is still a far cry from transport industry leader Toll Holdings, which is forecast to report annual revenue in 2007 of close to $10 billion, and net profit of almost $500 million.  Linfox's purchase of Sam Tarascio's Westgate business follows two other acquisitions in the past year, including Bill Gibbons' freight forwarder FCL Freight last August for $170 million and Provincial Freightlines in May this year.

Apart from his transport interests, Mr Tarascio is one of Melbourne's most high-profile builder-developers, with a current construction work book of more than $700 million. His Salta Constructions is one of Australia's largest and most diversified privately owned building groups.  Westgate beefs up its warehouse capabilities and extends its offerings to customers to include more dangerous goods warehousing. It also ensures that it maintains at least one of the big retailers as a key client.  Right now Coles is Linfox's biggest client. Indeed, Linfox founder Lindsay Fox used to sit on the Coles board.  But, with Coles for sale, future contracts may be reviewed. Westgate has a big chunk of the Woolworths transport business.

Linfox has been trying to consolidate its position in the Australian transport market for the past two years, even before Toll Holdings' purchase of Patrick Corporation.  For instance, Lindsay Fox spoke to Chris Corrigan about selling Linfox into Patrick and taking a 20 per cent stake in the merged entity. These plans were derailed when Paul Little's Toll came along and made an offer for Patrick.  He then spoke to Qantas about selling its business.  Sources close to Qantas say the Fox family wanted $1.1 billion, which the airline considered far too much.

Executive chairman Peter Fox's goal is to turn Linfox into a $4 billion to $6 billion operation by 2010, but after the Toll-Patrick merger, the Australian transport landscape changed so dramatically that it forced many of the smaller transport operators to either close or sell out.

Peter Fox said Linfox decided to build up its acquisitions because if it had sat still after the Toll deal it would now be finished. "We have made three acquisitions in the past year to consolidate our position in the industry," he said.  "You can only be number one or two or maybe three in this industry. The others will get squeezed out."  Because of this he expects the third-biggest transport operator, Allan Scott's transport business, to put up the for-sale sign.  "Let's face it, Allan Scott is 84 and there isn't a clear succession in place as far as I can see," he said.  Not surprisingly, Linfox would be first in line to bid for the business. "It's a good business and I can't imagine the ACCC letting Toll buy it.  "Then again, you never know. I didn't expect them to let the Patrick deal go through."

Transport is one of the toughest industries to operate in. It got even tougher when Toll emerged as a fully integrated logistics and transport operator.  It got tougher again with the rising fuel prices, heavy capital expenditure in IT and difficulty in getting staff.  For this reason there will be a lot more consolidation in the next few years.  "As I see it, this place is built on monopolies and duopolies. Companies at the bottom will get squeezed out," he said.  Mr Fox said the company was not looking at listing at the moment. But, he said, "Never say never."

NZX-listed Freightways has bought a small Christchurch company as part of its plans to grow a significant trans-Tasman information management business. Managing director Dean Bracewell said document storage company MSS Christchurch would be integrated into its New Zealand information management unit, Archive Security.

MSS was bought for $1 million, and would consolidate the unit's No. 2 information management place behind multinational Recall, he said. Separately Freightways yesterday announced the purchase of Queensland-based document destruction and recycling company Shred-X Group for $A8.7m ($NZ9.6m). Shred-X had a small Victorian operation, and overall was complementary to the recent purchase of data storage business DataBank in Queensland. "We want to replicate what we've done in Queensland elsewhere in Australia for sure ..." Bracewell said.

Information management was an underdeveloped market, and, as that market grew, Freightways wanted to increase its presence.

Freightways was eyeing or in talks over other similar companies that offered storage, back-up storage and destruction solutions, but it could not give a timeframe for any purchases, he said. Including synergies, MSS was expected to add earnings before interest, tax, depreciation and amortisation (Ebitda) of $300,000 to the group in the 2008 financial year. Shred-X was expected to add Ebitda of more than $A1.4m in the June 2008 year. Freightways remained confident of hitting internal financial targets for its full-year result due to be released around August, Bracewell said. One analyst has picked a $27m net profit.

About 80 per cent of Freightways' revenue is from its express package brands – including SUB60, New Zealand Couriers, Post Haste Couriers, and Kiwi Express – where it competes with NZ Post. The remainder of its revenue was from information management and its business mail unit.

Freightways' shares yesterday closed up 7c at 400c.

Toll Holdings

Logistics giant Toll Holdings (Au:TOL) is hinting at major new acquisitions now that its restructuring is complete, and the freight business Linfox is in its sights. Toll is not underestimating the competition issues this might create with the authorities. Nevertheless, it was to open the way to acquisitions that Toll split itself into two companies: Toll owning the logistics assets, and a new company Asciano owning assets such as stevedore Patrick Corp, rail company Pacific National and its stake in Virgin Blue. This was done in order to satisfy the Australian regulator, which was making moves to break Toll's competitive power. Toll has grown enormous on the back of acquisitions, numbering 22 at the time it made its pitch for Patrick. One of its most problematic has been the NZ railway assets now contained in Toll NZ. But this is a pinprick compared to its successes.

Hellaby Holdings

Hellaby (HBY) chief executive David Houldsworth announced his resignation last week, closing another chapter in the diversified company's recent decline. At the beginning of May Hellaby announced it had initiated a strategic review of the footwear businesses, and was considering a number of alternatives to create additional value from them. But last week it issued a profit warning, saying annual profit would fall by a third due to a disappointing performance from its industrial assets. Hellaby has been a strong recovery story for many years, with a clever eye for acquisitions. It developed in two directions, footwear and clothing and industrial assets, adding value for shareholders along the way. But in a still strong economy it seems to have lost its way. The acquisition of BBQ Factory at a premium price, when the latter failed to list on the sharemarket, was very unlike Hellaby. And recently even the strong assets have been slipping.

Mainfreight is in acquisition negotiations with three United States freight-forwarding companies as it looks to continue its international expansion.

Managing director Don Braid said negotiations on value were under way with three mid-sized companies that have multiple US locations and branches in Asia and Europe. A fourth potential takeover target had yet to be visited by Mainfreight's senior management team, he said.

The transport and logistics company made the announcement as it reported another strong annual result - an after-tax profit of $36.4 million for the year to March 31, a 25 per cent increase on the previous year. A one-off gain of $19.2 million from the sale of its 24.5 per cent stake in Hirepool boosted the total net surplus to $55.6 million.

The directors approved a final dividend of 8 cents a share, bringing the total dividend for the year to 15c a share, compared with 12c the year before. The result was slightly ahead of analyst expectations and Mainfreight's share price closed up 15c at $7.25.

After-tax profit grew by $7.4 million, most of which came from Mainfreight's overseas operations, with Australia and the United States contributing $6.5 million and New Zealand $0.9 million.

Overseas operations accounted for more than half - 54 per cent - of the net surplus before abnormals.

Mr Braid said New Zealand trading conditions had been more difficult in the past six months, with decreasing domestic and export freight volumes. New Zealand domestic revenue of $270 million was unchanged from the year before, though earnings before interest and tax improved by 5 per cent. Mainfreight had to gain market share to hold its revenue in New Zealand, Mr Braid said. "I think we've performed pretty well in a tough market."

In the New Zealand international business, revenue was up by 3 per cent to $153.4 million. Mr Braid said Mainfreight was continuing to win market share from competitors in Australia and the US. In Australia, Mainfreight now had a good network in all the state capitals and was continuing to expand into the smaller regional centres, he said.

"While some of these branches are yet to be profitable, in Mainfreight fashion we see this as further opportunity for growth."

In the US, Mainfreight revenue grew by 25 per cent to $111 million and the company opened new branches in San Francisco and Boston. Margins in the US had improved because of Mainfreight's ability to load more direct containers from each branch, rather than via gateway branches, Mr Braid said.

First NZ Capital analyst Andrew Mortimer said some of Mainfreight's overseas growth was quite extraordinary. "They've obviously built some good businesses and have clearly done a good job," he said. "And it's lucky because the New Zealand market is in the doldrums."

Mr Braid said Mainfreight had continued to see overseas trading improvement during the first two months of this financial year. "In New Zealand the environment remains challenging in what is traditionally a quarter of low activity for us."

Though not issuing any guidance, Mr Braid said Mainfreight remained confident about its growth potential in the near term.

The Mainfreight Group is pleased to report another record net surplus after taxation before abnormals of $36.4 million for the twelve months of the 2007 financial year.  This represents a $7.4 million, or 25% increase when compared to the same period last year.

A further $19.2 million of abnormal gains is added to our net surplus as previously discussed, bringing total net surplus for the year to $55.6 million.

Consolidated revenues (sales) increased to $968 million from $887 million; an increase of $81 million.  Excluding foreign exchange this is an increase of 5.5%.

This is a very satisfactory performance, where all divisions in all countries contributed positively to the result.

Our global interests have performed exceptionally well, particularly Australia and the United States.  In both markets this performance will continue to strengthen as we develop market share across the supply chain.

While trading conditions in New Zealand were challenging, we have been able to improve on our last year's performance and are confident of continuing to do so.

In this past year we have been able to achieve good organic growth as well as divesting our interests in four businesses, three subsequent to balance date, which has allowed us to considerably strengthen our balance sheet, pay increased dividends to shareholders, and position ourselves for substantial future growth, assisted in the short-term by acquisition.

Net surplus earnings before abnormals from outside of New Zealand now exceed 54% of our group total, and will continue to grow in significance.

Divisional Performance

New Zealand
Trading conditions in the New Zealand economy were certainly more difficult in the past six months, where domestic freight volumes were markedly decreased and export volumes diminished on the back of the New Zealand currency appreciation.

Our Domestic contributions are satisfactory in light of trading conditions, where EBIT improved 5% on static revenue growth.

The benefits of the Owens and Mainfreight International merger and increased improvement in LEP performance saw EBIT improve 43% to $3.8 million on revenue growth of 3%.  Post year end "Owens" has been removed from the brand.

In our domestic operations we continue to build our range of service offerings utilizing the intensity of our network and warehousing capability.  These will provide further opportunities for us to grow our business, increasing the range of services for our customers across the supply chain.

With our International business, our focus continues on growth in our import products and airfreight capability.  This directly reflects the changing New Zealand trade patterns.  Our regional presence has been strengthened and we expect to open two new branches in Hamilton and Dunedin.

During the year we significantly increased our airfreight growth in both perishable and dry products further enhancing our number one IATA ranking

Australia
Our growth and presence in Australia continues to rise.  Domestically our operations maintained their momentum of the past year, with EBIT improving in excess of 137% to $9.9 million, on a revenue increase of 25%.

In our international divisions our overall result was dampened by the lumpy performance of the projects division, Pan Orient.  However EBIT still improved to $13.9 million, up 8% on a revenue increase of 11% to $309 million. Of greater significance was the performance of Mainfreight International where EBIT improved 34% to $6.1 million and revenues increased 11% to $140 million.

Domestically, our high quality, next day transport services in the express freight market continue to attract customers.  We have established a very good network in all state capital cities and continue to expand into the smaller regional centres.  While some of these branches are yet to be profitable, in Mainfreight fashion we see this as further opportunity for growth.  As we intensify our network we are poised to expand our current small niche market position to offer a greater range of services.  This is likely to include a dangerous goods delivery product to complement our warehouse operations which have already expanded into this arena.

Our Logistics business is expanding at the fastest rate we have seen, with demand for warehousing operations unprecedented in our history.  We continue to focus on small to medium-sized customers offering a finely tuned combination of quality, technology-based warehousing services.

In our international sector, we have expanded our service offering to include bulk liquids in the food and chemical sectors and further enhanced the perishable supply chain.  Airfreight growth remains a high priority and we have now established licensed airfreight bond stores in each state.  We are expecting our airfreight revenues to grow exponentially and likely to match seafreight revenues within three years.

With a relatively small market share in all three sectors, our opportunities remain strong to grow these businesses in the near term.

USA
We continue to increase market share and improve margins and returns in the USA.  Our EBIT improved 50% to $6 million, on revenue growth of 25% to $111 million.

During the year two new branches were opened in San Francisco and Boston and, while yet to be profitable, they remain key to our overall strategy of establishing stronger networks throughout each country where we have a presence.

Our ability to load direct containers from each branch to worldwide destinations rather than via gateway branches has improved margins and assisted trade-lane growth.

Associates
Just satisfactory returns were received from our associated businesses in Asia contributing $1.1 million, an increase of $0.1 million or 10% from the previous year.  The potential from these markets remains unfulfilled and we are focused on increasing our shareholding in current activities and expanding our presence in the greater Asian area through acquisition.

The Hirepool investment, divested in July 2006, contributed $0.5 million in the four months of trading.

Group Operating Cash Flows

Operating cash flows were at similar levels to last year; $47.9 million compared with $47.4 million.  Higher tax payments and slightly reduced cash collection performance impacted this area.

During the year net capital expenditure totalled $34.3 million.  Property development accounted for $27.3 million of this.

Hirepool funds of $22.7 million were received with a further $4.7 million expected subsequent to balance date.  These proceeds were distributed to shareholders by way of special dividend in December 2006.

Net debt increased to $67.4 million from $61.7 million.

Dividends

The Directors have approved a final dividend of 8 cents per share fully imputed with the books closing on 13 July 2007; payment will be made on 20 July 2007.  This takes the full dividend for the year to 15 cents per share plus the special dividend of 28 cents per share paid in December 2006  Last year's total dividend was 12 cents per share.

Acquisitions
We are pleased with the momentum achieved in our current search for suitable companies to acquire in the USA and Asia.  A number of opportunities in the USA have been explored, and negotiations are underway with three target businesses.

Divestments
Post year-end, and as previously advised, LEP Australasia and Pan Orient were divested to LEP's agent and minority shareholder Agility.  It is expected that this sale will be unconditional by 31 May 2007.

Outlook
This past year has been significant in its achievements and performance. Trading during the first two months of this year continues to see improvement by our offshore interests.  In New Zealand the environment remains challenging in what is traditionally a quarter of low activity for us. We remain confident about our growth potential in the near term. Acquisition activity is very positive, divestment funds will further strengthen our balance sheet and we remain committed to taking Mainfreight to the world.

The foyer of Mainfreight's new $30 million head office and warehouse is immaculate. It is several metres high, with floor-to-ceiling windows at one end and company philosophies - such as "the man on top of the mountain didn't fall there" - written in bold silver text around the walls.

One of the company's first vehicles, a restored Bedford truck, sits proudly off to one side.

The foyer is so stylish, well lit, and spacious that it resembles an art gallery, slightly at odds with the trucks roaring in and out of the gates outside.

But managing director Don Braid isn't so sure: "An art gallery? Huh, I don't know about that."

Braid - who isn't keen on having his opinions or personal history in the public domain - has to be gently persuaded to be interviewed. More than once he instructs: "Don't you write this article about me."

He is possibly the most self-effacing leader of a major listed company in New Zealand, but you can tell why he would make a good leader. He is tough, a straight-talker, and incredibly dedicated to Mainfreight.

"I don't see it as a job, to be honest, it's a lifestyle, it's what we passionately believe in. We have Mainfreight in our hearts and we love what we do."

And while he is every bit the smooth corporate player, it is not too much of a stretch to imagine him behind the wheel of one of the company's blue trucks.

Braid has always been in transport, joining Freightways in 1978 and shifting to Mainfreight in 1994. He has been managing director since 2000.

Mainfreight, which listed in 1996, has been the top performer on the NZX-50 in the past two years. It delivered a return of about 140 per cent in 2006 on the back of some pretty impressive global expansion. In 2005 it returned 64 per cent.

Braid does not attribute the company's success to his leadership but to the culture and beliefs fostered by founders Bruce Plested and Neil Graham.

Plested is the chairman of the company's board. He started Mainfreight in 1978, and is one of New Zealand's great entrepreneurs.

Mainfreight's philosophy is simple, and logical: build a strong team culture, promote from within, reward good work. But the difference is that this company appears to adhere to it, and is backed up by the board.

"What we have today is based around the culture and beliefs those founders have. We have been able to build on that and create some success out of that," says Braid. "It's all to do with how the business envelops its people to deliver a good quality service - that is the key."

The company has always hired intelligent, energetic people who understand what its customers need, he says. "We are looking to train our guys from the depot floor through the business, so we promote from within, creating an environment where people can forge meaningful careers."

Braid sits in an open-plan office with the rest of his management team. "So we are still able to smell the diesel."

The company has fostered an egalitarian culture among its staff of 3225, and does not believe in hierarchy, bureaucracy or superiority.

The company now earns half its revenue from its overseas operations. It did make a loss in Australia in 2004 and 2005, but has since recovered. For the nine months to December 31, 2006, its Australian domestic revenues jumped 14 per cent to $97.5 million, with earnings before interest, tax, depreciation and amortisation up 14 per cent to $7.8 million. Braid attributes the turnaround in Australia to the management team buying in to the Mainfreight culture.

Mainfreight is very excited about the prospect of growth in the next five years, he says.

"Unfortunately for New Zealand, a lot of that growth is going to be offshore. We still have plenty to do here in New Zealand, but a big portion of our growth will come from Australia, the US and Europe."

Braid is staunch about keeping Mainfreight New Zealand-owned, and does not see why other Kiwi companies can't make it overseas if they are confident about their product.

"Because New Zealand is so far away, you have to get on your bike and go to those countries. You have to go there and do your research."

Braid admits "a lot of us have skin in the game". One of the company's founders, Neil Graham holds a 6.5 per cent share, Braid holds a 2 per cent share, and Plested an 18 per cent share.

"That is helpful and perhaps flies in the face of some bureaucratic and stupid governance rules that apply in America and are starting to invade here, where shareholding by board members is frowned upon. We want to see the success of this business for our own personal gain as much as we do for our shareholders."

Mainfreight is targeting niche operations overseas, and is not ruling out expanding to other services. "We have a sufficient entrepreneurial spirit in the business that we will explore opportunities as they arise."

Braid believes it has shown a "glimmer" of what is possible in the performance of the business in the past two years.

"We are not constrained by the boundaries of one country, perhaps some other businesses are. I think of fantastic New Zealand companies like Fisher & Paykel and Nuplex who we admire, and if we can follow in their footsteps and grow offshore, it's got to be good for the economy."

It would be helpful if the Government could implement a tax regime that helps companies expanding overseas bring all their profits back, says Braid

"But who the hell are we to try and change the Government, we might as well get on and focus on what we do best - which is developing Mainfreight."

Don Braid

* Age: 47

* School: Timaru Boys' High School

* Career: Boss of Daily Freightways, managing director of Mainfreight