The New Zealand Growth Fund returned +0.7% in July, compared to its benchmark return of +0.6%.

Mainfreight (+13%) delivered an impressive trading update at its annual meeting, a stark contrast to the last couple of annual meetings that have seen results meaningfully down year-on-year. Profit before tax was up an impressive 78% on a year ago through the first 16 weeks of the new financial year. While admittedly a "low bar" given challenges last year, it was still the strongest performance since the post-COVID highs. Stronger results came across the board, with double-digit profit growth in all 3 products and all 5 geographies. The most evident improvement was in the New Zealand business, which has heavily invested in transport and warehousing capacity during the recent downturn, incurring overhead costs ahead of gaining new business needed to utilise that capacity. However, recent customer wins the company flagged in May are now driving much improved performance. The company has also been matching its sales-led mentality with a stronger focus on "return on revenue", being profitability from each dollar of revenue. While the business is far from content with progress in some areas, particularly the US Transport division, it continues to strive to become a significantly larger and more profitable business in the large non-Australasian markets. As shareholders, it is pleasing to see the company has become more disciplined in demanding stronger performance and profitability before allocating further capital for expansion in the US.

Electricity companies Contact (-2%), Meridian (-2%), and Mercury (-3%) all released their operating updates, taking disclosure through to the end of their June financial year. Performance for the year is expected to be strong across all three companies, given the majority of their short-term sales are at fixed prices, and ample water in hydro lakes nationwide meant they did not need to buy expensive cover from thermal generators, as they did in the 2024 dry winter. Looking out longer term, long-dated wholesale futures prices have finally eased back to what should be sustainable levels that have been talked about for several years now. This is likely due to a combination of their large renewable development pipelines progressing further, in conjunction with muted demand growth and potentially also the proposed LNG import terminal giving greater confidence in availability of a reliable gas supply.