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Mainfreight Group Limited Financial result for the three months ended June
2007 (Unaudited)

Press Release by Mainfreight Limited at 10:08 am, 21 Aug 2007

This quarterly result is reported under the NZIFRS accounting standards for the first time.  Prior period information has been restated accordingly.

The Mainfreight Group is pleased to report a net surplus of $67.3 million During this reporting quarter, the Group divested its interests in Lep and Pan Orient, with an abnormal gain on sale (after tax) of $61.2 million.  Excluding abnormals and divested operations, the net surplus was $5.8 million compared to $5.5 million in the same quarter last year.

For the continuing businesses, EBITDA performance improved 6.1% to $11.9 million. After taking foreign exchange effects into account, this increase is 10.8%.  Trading conditions during the reported quarter were challenging, however all divisions continued their profit improvement performance.  Consolidated revenues for the period were $210.4 million compared to $2337 million last year.  When comparing revenues from continuing operations these were slightly reduced to $178.0 million compared to $180.5 million Excluding foreign exchange adjustments, continuing revenues increased 4.0%.

Divisional Performance

New Zealand Domestic
In what is traditionally our quietest quarter, and in what we consider to be a challenging economic environment, revenues were reduced by 2.2%, largely as a result of reduced fuel adjustment factors.  EBITDA improved 102%, which included a one off property gain on sale of $0.6 million.
Trading remains flat into the second quarter.

New Zealand International
Revenues were significantly affected by the high New Zealand dollar impacting export volumes, however EBITDA performance was in line with last year.  Import volumes continue to increase and contribute to improving performance into the second quarter.

Australian Domestic
Excluding foreign exchange, revenues continued to improve to AU$27.7 million; an increase of 13.7%.  EBITDA, excluding foreign exchange, remained in line with last year.  EBITDA growth was affected by higher warehousing occupation costs as capacity is increased to cope with future confirmed increased tonnage.

Australian International
Revenues continued to improve, up 10.0% from AU$24.6 million to AU$27.0 million.  EBITDA improved 24.9% to AU$0.74 million.

USA International
Revenues improved 19.1% to US$21.2 million; EBITDA improved to US$1.3 million, up 22.2%.  USA acquisition activity remains intense with due diligence proceeding on schedule.

Asia International
During the quarter this business traded as an associate, where our share of earnings rose 25.7% (excluding foreign exchange) to NZ$0.3 million.  As announced previously, agreement has been reached to purchase the remaining shares not already owned by Mainfreight, and this business will in future report as a fully-owned subsidiary.

Group Operating Cash Flows
Operating cash flows were slightly ahead of last year.  The sale of our interests in Lep and Pan Orient allowed the full repayment of long-term loans, which sees the Group in a positive net cash position of $18.6 million.

Capital Expenditure in the quarter totalled $4.0 million.  The EBITDA improvement of 10.8% in the continuing businesses is satisfactory in what is our quietest quarter.  We expect Group earnings to continue their improvement as the financial year progresses despite tough trading conditions in New Zealand.

ENDS

The Commerce Commission has received an application from Goodman Fielder Limited (Goodman Fielder) seeking clearance to acquire the flour and bread assets of River Mill Bakeries Limited (River Mill Bakeries).

Goodman Fielder is listed on both the Australian and New Zealand stock exchanges and is involved in the manufacture and supply of a wide range of ingredients and food products. The operations relevant to the application for clearance are its New Zealand bakery and flour mill operations. Goodman Fielder's bread brands include: Vogel's, Quality Bakers, Country Split, Freyas, Molenburg, Sunny Crust, MacKenzie, Nature's Fresh and Golden Bake. Its flour mills are situated in Mount Maunganui and Christchurch.

River Mill Bakeries is an independent, privately-owned bread and ingredients manufacturer based in Huntly. It manufactures bread, small goods, pizza bases, frozen goods and cookies as well as importing and distributing a variety of food products. River Mill's bread brands are River Mill, Sun Raised and Millstone, and it produces house brands for Mad Butcher and Export Meats. River Mill Bakeries also owns Canterbury Flour Mills Limited in Ashburton.

In considering the application, the Commission's role is to determine whether the acquisition has the effect of substantially lessening competition in a market.

A public version of the application will shortly be available on the Commission's website http://www.comcom.govt.nzunder Public Registers.

News Release

Compass Group

For immediate release

27 June 2006

Companies wake up to food handling risk

New Zealand is quick to boast of its world-beating position in everything from enterprise to extreme sports, but there's one area where we'd rather not talk about our performance at all. New Zealand holds the unenviable position of food-poisoning capital of the developed world, with rates so far in excess of comparable countries that experts are at a loss to explain it.

Auckland medical officer of health, Greg Simmons, says the cost of this level of foodborne illness to the New Zealand economy is enormous, with some $60m in medical costs and lost productivity annually.

Several hundred people were taken ill as a result of suspected norovirus infection after eating at Eden Park during the second All Blacks test match against the Irish earlier this month, and well over 15,000 of us fell victim to Campylobacteriosis – a nasty bout of nausea and diarrhoea accompanied by muscle pain, fever and headache – alone in the last 12 months, over three times the infection rate in Australia and the United States.

Such risks are not lost on employers. Many large companies have on-site cafeterias and restaurants for their staff and are aware of the impact an outbreak of foodborne illness would have on their productivity and reputation, not to mention their employees' health.

This awareness has been one of the main drivers behind the growing tendency for companies to outsource their catering function to specialist food service operators, harnessing the twin benefits of such companies' specialist knowledge and expertise along with the transfer of all food-related risk out of the contracting organisation.

Farmers Trading Company has two cafeteria facilities catering to over 500 people at its head office and distribution function. Both are operated by Eurest, a division of international food service company Compass Group.

Farmers' national administration manager, Les Tom, says, "Our primary concern is for quality. We want to be confident that our staff are being offered high quality food prepared and served by qualified people. Food safety is obviously a very important part of that focus on quality."

Food itself doesn't cause illness; bacteria and other pathogens do, and these organisms can be present in raw foods such as meat, poultry, eggs, fish and shellfish, which is why thorough cooking is so important. But another important source of infection is healthy food handlers who may contaminate food with bacteria common in the human body through poor hygiene, or else diseased food handlers who may contaminate food with less common pathogens.

Whatever the source of the bacteria, mishandling can allow bacteria to survive, reproduce, or in some cases form a toxin in food or the human body. In short, food handling errors are almost always directly associated with the "dinner plate" microbial contamination that is a prerequisite for foodborne illness.

Eurest's quality and risk manager, Amandeep Kaur, says that this is an area in which a specialist food service company can be invaluable.

"Our procedures for receiving, handling, preparing and serving food are all documented and auditable. We carry out a full on-site risk assessment at clients' premises before starting any contract to ensure that they understand the importance of restricting access to food preparation sites, for example, as well as things like the type of floor surface in the kitchen area and how easy it is to clean.

Kaur claims that a clear focus on risk management and training staff in food safety procedures has been central to Compass' continued growth.

But improved risk management is not the only benefit to employers. Les Tom says there are less tangible benefits from ensuring Farmers' staff eat well, including good morale and a sense of working for an employer who is concerned for their welfare.

"But there are cost savings too," he says. "Having specialists take care of the food service means a huge saving in management time and cost to us. We don't need to staff the facilities or put a senior manager in place to run everything from procurement to HR to facilities management.

"Food service is not our core business or specialism, but with Eurest running it we can depend on it working with us barely having to think about it."

ENDS

Press Release

Massey University 

Malls to get even more “mega” says researcher

The traffic chaos and shopping frenzy that marked the opening of the Sylvia Park mega-mall in Mt Wellington is just a sign of things to come, predicts retail researcher Associate Professor Andrew Parsons.

Dr Parsons, from Massey University’s Auckland campus, says New Zealand is likely to follow overseas trends, with even bigger malls attached to big box complexes, more entertainment, and add-ons such as gymnasiums, swimming pools – and even schools.

He says developers closely follow the needs and changing shopping patterns of customers. “Malls have developed as large covered areas that provide people with a pleasant, safe environment – away from pollution, politics and the weather. “But the catch is that such environments can be very sterile and lacking in excitement. You can stand in a mall and not know where you are – you could be anywhere in the world for that matter.

“Increasingly, people live by themselves and work in an office space by themselves. Going to a mall is one of the few ways available to interact with other people, to sit and socialise. Mall developers are tapping into this. They’re are also aware of the growing popularity of on-line shopping and ‘warmer’ shopping experiences provided by farmers’ markets, for example.

He predicts retainers and developers will counter these changes by building bigger and providing unique, interactive experiences, with retailers letting people try out products in context. “Nike Town in the United States, for example, has full-sized basketball courts in its shop, so that customers can put on the clothes and the shoes and then have a go on the court before they buy them. Some golf shops already have mini driving ranges in store. Extend that to other products and you have a less passive shopping experience.”

Dr Parsons says in the future malls may even have schools attached. “There are already crèches and pre-school centres for the children of both staff and customers. Why not schools? Overseas malls now have swimming pools, adventure parks, mini golf – the sky’s the limit. At the University of Alberta, where I worked for a time, the business school was attached to a mall which contained levels of shops and restaurants as well as student apartments.”

He says new developments like Sylvia Park may seem bright, big, new and modern “but we’re only just scratching the surface of what’s to come in the future”.

Ends