Delivering the right results

Courier firm Freightways' first-half earnings leapt almost 50 per cent as the strong economy continued to boost its freight volumes and profit margins.

Net profit for the country's second biggest courier company rose to $11 million for the six months to December, up 46 per cent from $7.7 million a year earlier.

Sales of $117.2 million were also up 10 per cent.

Managing director Dean Bracewell said the growth had largely come as customers of its New Zealand Couriers, Sub60 and Post Haste units were sending more out the door.

A rise in market share of 2 per cent during the period had been mostly won from its larger rival, Express Courier, a venture between New Zealand Post and DHL Worldwide.

Bracewell estimated the two companies each held about 41 per cent of the market.

He said the ownership change at its major competitor (New Zealand Post) was not expected to have any negative impacts on the company's performance. "We back ourselves to be competitive in the future."

Local economic conditions had been favourable to the business and Bracewell expected this to continue through to the second half.

Although he would not venture a full-year forecast, a "strong" result was expected, within the consensus of analysts which yesterday ranged from $22 million to $26 million.

Freightways will pay a fully tax-paid dividend of 7.5c per share on March 31, up from 5.85cps.

Despite the positive result, shares in the company, which listed in September 2003, shed 3c yesterday to close at $3.17.

- additional reporting Bloomberg