Freightways shares hit new record

Freightways shares surged to another record yesterday after the express freight group said the strong economy would continue to underpin its profits.

Managing director Dean Bracewell, speaking to shareholders at Freightways' annual meeting in Auckland, said: "As at October, we have seen no sign of a trend that would suggest a slowdown in any area of our business."

He was confident full-year profit would exceed last year's $16.14 million profit.

The comments boosted Freightways' shares 15c to $2.85, taking returns to shareholders during the past year to well above 75 per cent.

Net profits for the four months to the end of October rose by more than two-fifths from $4.6 million to $6.5 million. Sales rose from $67.1 million to $74.8 million.

"You're all very sombre. I would have thought the trading update would have lightened the meeting," chairman Wayne Boyd told the 200 shareholders present.

Existing customers were sending more express freight, the company was increasing its market share and there had also been minor improvements in pricing and margins.

Freightways owns New Zealand Couriers, Castle Parcels, Poste Haste and Sub 60 couriers as well as business mail and information management businesses.

It is the kind of company the stock exchange would like more of because it has a profit record going back 40 years, a big share of its market, it generates a lot of cash and it needs little capital.

Shares were sold to the public in September last year for $1.60. In the 12 months since listing, gross dividend plus share price had appreciated, adding up to a 77.5 per cent gain, shareholders were told.

They then applauded the board and executives as well as re-electing two directors, reappointing the auditors and adopting a new constitution.

The chairman voted undirected proxies and the company adopted a constitution that changes to fit stock exchange rules without always having a shareholder vote. Both have been controversial at other meetings but yesterday held no complaints.

Shareholder Maurice Copeland rose to say he started a courier business 40 years ago that became Freightways. "We thought 12 courier drivers covering Auckland would carry the situation," he said. "The whole operation cost £500 to set up."

Freightways had had three changes of owner in two years before its private equity owner, ABN Amro Capital, sold down via the public share sale.

It got rapped by the Securities Commission for selling shares after six months, as was allowed in the small print of the prospectus, although a letter in the document said it would hold for 12 months.

But yesterday the company paid tribute to ABN Amro Capital director Michael Taranto, who attended the meeting.

Freightways has 6800 shareholders and 90 per cent are New Zealanders. The biggest institutional investor is Fisher Funds Management.

Bracewell said the company was continuing to explore complementary acquisitions after buying Archive Security this year.

He repeated that the company would like to look at NZ Post's courier assets if they were for sale.