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Mainfreight returns wage subsidy after making more money than expected in lockdown

Mainfreight has voluntarily decided to return its wage subsidy after the business fared better than expected in lockdown.

Mainfreight truck Source: 1 NEWS

In a statement today, the company said its New Zealand transport and warehousing operations experienced significant revenue reduction.

"We were uncertain at this time, just how bad trading would become. Uppermost in our minds was the protection of jobs for our people," a statement said.

Mainfreight was granted $10.61 million under the Government's wage subsidy for its more than 1500 staff. They received the money on April 16.

"Pleasingly, our trading levels have improved through late April and into May and our efforts to reduce overhead costs, defer capital expenditure, and gain new business in the period have been relatively successful.

"Our offshore businesses have also traded better than expected for the most part. Cash flows remain positive, and our bank debt headroom has not been needed.

"Therefore we are in a better position than many and while qualifying under the Government’s criteria, we felt it was appropriate to return the subsidy," the company said.

"We are supportive of the Government measures taken in these extreme circumstances, with the aim to protect New Zealand employment. Our congratulations to them for those decisions."

In announcing its full year financial results to March 31, Mainfreight reported "a satisfactory improvement on the prior year".

Sales revenues for the year are $3.09 billion, and net profit before abnormals $147.98 million. A dividend of 34 cents per share has also been approved, payable on July 17.