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Freightways posts 3% gain in full-year profit

Freightways posts 3% gain in full-year profit, sees further growth in 2015

By Jonathan Underhill

Aug. 18 (BusinessDesk) - Freightways, New Zealand’s largest listed courier and data management company, posted a 3 percent gain in full-year profit, driven by growth in its express package and business mail business, and said it expects further growth in 2015.

Net profit was $41.7 million in the 12 months ended June 30, up from $40.3 million a year earlier, the Auckland-based company said in a statement. Operating revenue climbed 6 percent to $432 million. Profit was just below the forecasts of Forsyth Barr and First NZ Capital at $42.8 million and $42.2 million respectively.

The company said it expects growth in 2015, helped by increased demand from existing customers of its express packaging business, while its DX Mail business "will continue to operate in a challenging environment." In information management, growth on both sides of the Tasman "has been equally strong," it said.

Sales at express packaging and business mail rose 8 percent to $332 million and earnings before interest, tax, depreciation and amortisation climbed 11 percent to $61 million.

The multi brand company, whose businesses include New Zealand Couriers, Post Haste Couriers and DX Mail, has been expanding its information management interests, buying document management companies Docushred and Document Destruction Services, as well as Advance Security Destruction Services and Document & Data Storage Management in Australia.

The information management unit lifted sales by 3 percent to $103 million and Ebitda rose 5 percent to $24 million, saying the gain would have been greater if not for the foreign exchange effect of bringing revenue home to New Zealand from Australia.

"We expect the positive performance evident in this full-year result to continue and expect to achieve year-on-year earnings growth again in 2015, subject to business factors beyond its control," the company said. "Freightways will continue to seek out and develop strategic growth opportunities, including acquisitions and alliances to complement its core capabilities."

The company has grown operating revenue and Ebitda every year except on in the past decade. It will pay a final, fully-imputed dividend of 11.25 cents a share, up from 9.75 cents a year earlier.

The shares last traded unchanged at $4.90 and have gained 18 percent in the past 12 months, outpacing a 13 percent increase in the NZX 50 Index. The stock is rated a 'hold' based on the consensus of six analysts polled by Reuters.


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