KEY POINTS:
Freightways has reported a 2 per cent lift in half-year net profit after tax to $16.77 million.
The result for the six months ended December compared with $16.45 million a year earlier, and was achieved on consolidated operating revenue up 12 per cent to $161.9 million. Profit before income tax rose 1 per cent to $24.54 million.
The courier and document storage company today said its core express package business had performed well and its emerging businesses had delivered outstanding performance.
An increased interim dividend of 9.5 cents per share, fully imputed, was declared, compared with 9cps a year ago.
Freightways said its core express package business was expected to continue to perform soundly, although growth would again be influenced by the performance of the domestic economy.
Emerging growth businesses in the business mail and information management markets were expected to continue their development.
Cost increases were expected to moderate in the near term, although the price of fuel continued to be volatile and remained well above historic levels.
Freightways operates in the domestic express package market, which contributes most of its revenue and earnings, with the brands of New Zealand Couriers, Post Haste Couriers, Castle Parcels, SUB60, Security Express and Kiwi Express.
"In the current operating environment of low organic volume growth and rising costs, Freightways has been careful to continue to make decisions for the long term good of the business," the company said.
"As such, our investment in facilities, technology, customer service initiatives and most importantly in the training and development of our people has continued."
Earnings from the express package business had again been on a par with the prior corresponding period, Freightways said.
DX Mail, which is competing with NZ Post, had produced an "outstanding" performance, although its contribution to Freightways' earnings remained relatively small for now.
It was seen as an emerging growth business as was the information management market, where Freightways provided data storage, document storage and document destruction services, Freightways said.
The information management businesses were growing strongly on both sides of the Tasman.
In July 2007, Freightways announced the acquisition of the document destruction businesses Shred-X and Document Destruction & Paper Recyclers in Australia.
Those acquisitions had delivered against Freightways' initial expectations and enabled the closer investigation of further growth opportunities in Australia, the company said.
Increased outsourcing of the storage and management of backed-up computer data, archived documents and document destruction had contributed to strong growth.
Corporate costs had increased with the establishment of an office in Australia to support the development and growth of the company's Australian businesses, Freightways said.
The company's finance facilities were re-negotiated in August for a further three year period, with sufficient funding headroom to enable the execution of any near term incremental acquisition opportunities.
During the period, the company had increased its borrowings to support its recent growth and capacity initiatives. While about 50 per cent of total debt was hedged, the average interest cost had increased as a result of the general market increase in interest rates.
Freightways shares were up 1c in early trade today to $3.20.
- NZPA
