Annual Report 2013 - Mainfreight

Capital
Expenditure
This year’s focus is on
expanding our facilities
to accommodate
rapid business growth,
particularly in the
Australian market.
Capital Expenditure is directed and
approved by the Board of Directors
from recommendations made by senior
management.
Expenditure can be classified into three
divisions; Property and Buildings, Information
Technology and General, including Plant and
Equipment.
PROPERTY AND BUILDINGS
Property and Building decisions are based
on growth, specialised facility needs, and
operational efficiency gains, in conjunction
with cash flow availability.
Monies expended on property in the past
year totalled $33.6 million. Capital required
for property development during the 2014
financial year is likely to be approximately
$67 million.
INFORMATION TECHNOLOGY
Information Technology expenditure
decisions are based on improving ongoing
operational and administrative efficiencies
and the ability to further enhance our
competitive advantages within the market,
including adding further value to our
customer relationships and their supply
chain requirements. Capital Expenditure on
Information Technology in this past year was
$7.8 million.
GENERAL
This area covers plant and equipment,
containers, forkhoists, trailers, pallet racking
and trucks.
Decisions for this area of expenditure are
based on our operational requirements.
In the main we lease all small tonnage fork
hoist equipment, with ownership of large
hoists only. Containers, pallet racking and
the like are better to be owned to assist
operational control.
Some trucks in New Zealand, Australia and
the United States are purchased for short
term initiatives, and once viable for owner
operators, they are transferred. Within the
European business, trucks and associated
trailer equipment are owned or leased. This
practice is likely to continue as we develop
our business throughout Europe.
Capital Expenditure in the past year in this
category was $21.8 million.
50 Mainfreight | Annual Report 2013