Freightways $15.4m year net profit beats forecasts

Freightways Ltd today reported a net profit of $15.4 million in the June year.

The company listed in September last year. In February, it said it would exceed the $13.2m net profit it forecast in its prospectus.

The company said it was strongly positioned for growth.

"From Freightways' viewpoint the domestic economy remains favourable and we are unaware of any material changes to our operating environment that may negatively impact on our performance.

"Subject to economic and business factors beyond our control, the outlook for Freightways, its shareholders and all other stakeholders remains positive."

Consolidated operating revenue for the year rose 10 per cent to $214.5m. Earnings before interest, tax and amortisation (ebita) were 27 per cent higher at $40.7m and consolidated net profit after tax (npat) before minority interest was $16.1m.

Earnings per share came to 13.7 cps and the company will pay a fully imputed 6.9cps dividend on September 30.

The final dividend payout of $8.55m bought the full year payout in line with the dividend policy outlined in Freightways' prospectus, and exceeded the IPO final dividend forecast of $7.25m.

Cash generated from operations before interest and tax was $48.2m.

The company said it exceeded its IPO forecasts "on all fronts".

Freightways' core express package business contributes the majority of revenue and earnings. Its brands -- New Zealand Couriers, Post Haste Couriers, Castle Parcels, SUB60 and Security Express -- all achieved strong growth over the prior year.

A favourable domestic economy, continuing growth in demand for the time sensitive delivery of packages and modest pricing and market share gains were the primary drivers of revenue growth.

Growing volumes, a focus on business mix, margin integrity and cost management all contributed to efficiencies and productivity gains, the company said.

Freightway said its DX Mail business mail operation increased its contribution as it gained further sales traction. DX Mail is a national business mail competitor to NZ Post and is seen as an emerging growth opportunity. Demand for its services has seen the faster than anticipated development of DX Mail's independent mail delivery network.

Low revenue per mail item and the high cost components associated with mail delivery will in the near term result in DX Mail's contribution being relatively modest in the perspective of Freightways' total earnings.

Freightways said it also sees online security services as an emerging growth opportunity.

"Continued penetration in the document destruction, computer media storage and retrieval and records management markets has contributed to continued strong growth in this smaller business."

The acquisition of Archive Security, a primarily Wellington-based business, has been successfully implemented, the company said.

Aircraft for the Fieldair Holdings subsidiary are being upgraded.

Freightways shares were down 3c to 254 today short after the result. The shares were issued at $1.60 and listed at $1.75.

- NZPA