MFT - Mainfreight. Global Freight & Logistics

[bull....]

Yes, seems about right? The fundamental drivers of this business and the medium term market conditions would suggest a slight correction?
But the market does what the market does

macro factors / geopolitics will over time drive more squeezed margins as things slow down more next yr . share price will re-rate down over time is my pick.

the fact there reducing capex and headcount says it all going forward as they try to protect profits

[Rawz]

macro factors / geopolitics will over time drive more squeezed margins as things slow down more next yr . share price will re-rate down over time is my pick.

the fact there reducing capex and headcount says it all going forward as they try to protect profits

Yes agree bull that’s what I thought too when I read that part

[Bikeguy]

macro factors / geopolitics will over time drive more squeezed margins as things slow down more next yr . share price will re-rate down over time is my pick.

the fact there reducing capex and headcount says it all going forward as they try to protect profits

Yes, have to agree…golden run for freight movement is clearly coming back to earth globally.

[Muse]

The full 2H PBT result (-42.1%) more or less inline with the first quarter (-43.3%), implying a fractional improvement in YoY performance in the 2nd quarter - a start.

Consensus for FY24 NPAT is $278m. With $124.5m achieved in 1H, that implies the business must achieve $153.5m in the 2H to meet consensus, or a 23% lift. Page 6 of the management discussion & analysis "we expect our second six months of trading to improve, albeit marginally." A 23% lift probably qualifies more than marginal. Main reason for this appears to be Australia, which was the strongest performer in 1H, being called out as having a harder outlook in the 2H.

If consensus of NPAT $278m / EPS $2.76 achievable, current SP looks reasonable if fully priced at 21x, in the context of a tough cyclical trading environment for a growth company.

Cashflow a bit of a lowlight....
Operating cashflow: $186.5m
less investing CF: -$127.1m
less leases: -$81.2m
FCF before financing/divies: -$21.6m

Could just be working capital cycle I haven't followed MFT particularly closely. Likely a factor of chunky capex in a relatively depressed trading environment.

[alokdhir]

macro factors / geopolitics will over time drive more squeezed margins as things slow down more next yr . share price will re-rate down over time is my pick.

the fact there reducing capex and headcount says it all going forward as they try to protect profits

I hope u understand that freight business bottoms earliest before real economy recession which u are trying to figure in ..in your assessments .

They have clearly mentioned that this was and WILL be their worst HY in a while ...MFT outlook guidance is very well respected as they are most honest and straight talker company !!

But still u think it shud or is worth $ 30 then how about passing some at $ 40 to me before that mate ...I am and will be in the Q outside your house ..lol

[bull....]

The full 2H PBT result (-42.1%) more or less inline with the first quarter (-43.3%), implying a fractional improvement in YoY performance in the 2nd quarter - a start.

Consensus for FY24 NPAT is $278m. With $124.5m achieved in 1H, that implies the business must achieve $153.5m in the 2H to meet consensus, or a 23% lift. Page 6 of the management discussion & analysis "we expect our second six months of trading to improve, albeit marginally." A 23% lift probably qualifies more than marginal. Main reason for this appears to be Australia, which was the strongest performer in 1H, being called out as having a harder outlook in the 2H.

If consensus of NPAT $278m / EPS $2.76 achievable, current SP looks reasonable if fully priced at 21x, in the context of a tough cyclical trading environment for a growth company.

Cashflow a bit of a lowlight....
Operating cashflow: $186.5m
less investing CF: -$127.1m
less leases: -$81.2m
FCF before financing/divies: -$21.6m

Could just be working capital cycle I haven't followed MFT particularly closely. Likely a factor of chunky capex in a relatively depressed trading environment.

good stuff , like you say they look too optimistic too me

[Muse]

good stuff , like you say they look too optimistic too me

To be fair I’m not close to MFT so i dont know the normal seasonal patterns - ie normal 1H/2H splits. There was plenty of good stuff in the report in terms of new customers wins and commencements.

[Bikeguy]

good stuff , like you say they look too optimistic too me

They are a great company, and fairly straightforward in how they assess and present their company, however my thoughts are they are being abit too optimistic about the headwinds they are now being impacted by, and will continue to experience over this coming cycle,
Nothing wrong with backing yourself though…my bet is a downward correction, immediately and over the coming months.

[Rawz]

1H = $124.5M
2H = $130.7M (Marginal improvement i.e. 1H + 5%)
FY24= $255.2M

$255.2m / 101.1m shares = $2.52 eps

$2.52 eps x 20pe = $50.4 fair sp?

[777]

And will open at $60