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Freightways lifts underlying annual profit 7%

Freightways lifts underlying annual profit 7%

Aug. 15 (BusinessDesk) – Freightways Ltd., the courier and data management company, lifted underlying annual net profit 7% from a combination of volume and pricing increases as well as new business.

The Auckland-based company boosted bottom-line profit 29% to $29.9 million for the year ended June 30, although it was distorted by $1.3 million in one-off costs associated with the Christchurch earthquakes and lower tax charges. Revenue rose 7% to a record $353 million. Stripping out one-off costs and an abnormal tax change, underlying earnings were $31 million.

“This result is underpinned by progressively improving performance from the core express package and business mail division and again outstanding performance from the information management division,” the company said in a statement.

Freightways said it had been affected by both the Christchurch earthquakes and the Queensland floods but none of its team was seriously injured and contingency plans ensured minimal disruption to service.

The company said highlights included the core courier business returning double-digit earnings growth in the second and fourth quarters, the outstanding performance of the information management division “and the overall resilience again shown by Freightways, despite the challenges of nature and the economy.”

The courier division, which includes the New Zealand Couriers, Post Haste Couriers, Castle Parcels and DX Mail brands, lifted earnings before interest, tax and amortisation (EBITA) 4% to $45 million while the data management division's EBITA rose 12% to $14 million.

Freightways said it expects gradual improvement in 2012 and will actively manage its cost base.

It has strengthened its earnings profile in recent years by diversifying its activities both geographically and in the information management market.

“Freightways will continue to seek and develop growth opportunities to support this strategy and will also explore other opportunities to complement its core capabilities,” it said.

“Subject to business factors beyond its control, Freightways is well positioned to reap the benefits of further improvement in the markets in which it operates.”

The company will pay a fully imputed 7.25 cents per share final dividend, taking the annual payout to 14.5 cents, up from 14 cents the previous year. Earnings per share rose to 19.5 cents from 15.2 cents.

Rob Mercer at Forsyth Barr, who has a “buy” recommendation on the stock which he values at $4.12, said the result was in line with his forecasts.

Freightways shares rose 0.6% to $3.28. They have risen from $2.67 a year ago but are down from their $3.54 peak in May.


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