Freightways first-half profit rises 3 percent on growth in courier, data management units

Monday 24th February 2014

Freightways said profit grew 3 percent in the first half as New Zealand's largest listed courier and data management company lifted earnings in both its business units.

Net profit was $21.7 million in the six months ended Dec. 31, a record first-half result, from $21 million for the same period a year earlier, which including a one-time $1 million gain, the company said in a statement. Sales grew 6 percent to $218 million, while earnings before interest, tax, depreciation and amortisation was up 6 percent to $42 million

The multi brand Auckland-based company, whose businesses include New Zealand Couriers, Post Haste Couriers and Fieldair, has been expanding its information management interests. Last year it acquired kiwi document shredding companies Docushred and Document Destruction Services, as well as Advance Security Destruction Services and Document & Data Storage Management in Australia.

"Four acquisitions were completed during the latter stages of the half year that add scale to our existing operations and significantly expand our customer base," Freightways said in a statement. "All these acquisitions have migrated successfully and are at this early stage performing to expectations."

The shares rose 1.3 percent to $4.63 and have climbed 3.2 percent in the past 12 months. The stock is rated a 'hold' based on the consensus of six analysts polled by Reuters, with a median price target of $4.38.

In guidance given for the year ahead the company reiterated that growth will continue but gave no specific detail other than the expectation that capital expenditure will be approximately $16 million to support that growth. First-half capex was $9 million.

Its data management services operating revenue, which makes up 23 percent of Freightways' income, grew 3 percent to $51 million in the first half, with growth in the New Zealand portion of the sector up 13 percent, and in Australia up 9 percent. EBITDA climbed 5 percent to $12 million.

The express package and business mail unit's operating revenue was up 7 percent to $168 million, with EBITDA up 6 percent to $31 million.

The company said its business mail operator DX Mail was down on the previous year, as it continued to be challenged by ongoing decline in the use of physical letters and postage. It didn't give details.

Freightways will pay an interim dividend of 10 cents a share, up from 9 cents a year earlier. This represents a pay out of about $15.4 million, compared to $13.9 million the previous year. The record date is March 21, and will be paid out on April. 7.

BusinessDesk.co.nz

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