Courier eyeing up Australian openings

Dean Bracewell

Courier company Freightways yesterday confirmed plans to make more acquisitions in Australia, as it released an optimistic earnings outlook for the year.

Freightways managing director Dean Bracewell told reporters after its annual general meeting in Auckland yesterday that it had been "encouraged" by its trips to Australia where confidence in the economy "remains high".

It had discovered possibilities for acquisition in the express package and data information markets, he said.

"There are a number of opportunities, and so we like to think in time and at our own pace, we will realise those opportunities," he said.

"We have a fantastic history in the New Zealand marketplace but we believe we can do more overseas."

Freightways had experienced strong earnings from Australian information management company Databank Technologies which it purchased in July, said Bracewell.

Freightways' profit for the three months to September was $6.3 million, up from $6.1 million in the same period last year, and revenue jumped by 12 per cent from $62 million to $70 million.

Bracewell said Databank in Australia had partly driven the increase in earnings for Freightways.

Despite a "tough" year, trading conditions for the business in New Zealand had improved since September and while it was "too early to celebrate", the company was well positioned to benefit from increased activity in the marketplace.

In the long-term, market conditions would "inevitably improve", said Bracewell, because the company's growth was based on providing just-in-time courier services that businesses relied on heavily.

Shares in Freightways closed yesterday up 7 cents to $4.

Freightways was not looking to diversify away from its businesses of express package, business mail and information management.

"It is a sensible long-term strategy. When you have got opportunities that are in front of you, it makes more sense to develop those than it does to create something new in an area where you don't have any experience."

It had "leveraged its capability" in the express package market through its deal with Qantas to market the freight capacity on services operated by Qantas in New Zealand.

While there has been talk that Freightways was a takeover target Bracewell appeared unfazed.

"We are unaware of anything at this stage to substantiate any rumours. We do not get distracted by the talk of takeovers," he said.

Freightways chairman Wayne Boyd said the 2006 year had been challenging, yet the Freightways subsidiaries performed well.

Its core business is in express package services, made up of NZ Couriers, Poste Haste Couriers, Castle Parcels, SUB60 and Security Express and Kiwi Express.