Freightways lifts nine-month profit

Thursday 30th April 2009

Freightways, whose courier and freight delivery units include New Zealand Couriers, Kiwi Express and SUB60, posted a 4% gain in nine month profit, saying its ‘resilient’ business model buffers the company from recession.

Net profit rose to $24 million in the nine months ended March 31, from $23 million a year earlier, the company said, citing unaudited management accounts. Sales climbed 9% to $258 million.

Since its first half, the company has continued to experience fluctuating volumes and lower demand from some existing customers, though this has been countered by market share gains and cost containment, managing director Dean Bracewell said in a statement.

Shares of Freightways rose 2.9% to $2.88, outpacing the NZX 50 Index’s 1.9% gain. Investors snapped up shares in the company’s $45 million placement last months at $2.44 a share, which was a 12% discount at the time. Freightways plans to raise a further $5 million via a share purchase plan to strengthen its balance sheet.

The company’s core express package and business mail unit posted a trading result that was below the year-earlier period, which Freightways described as a “sound result.” Its information management unit posted earnings growth in line with the company’s forecasts, while its document destruction businesses had a drop off in activity.

In the near term, the express package business may continue to track below the prior year while information management may face some short-term margin reduction, it said.

Businesswire.co.nz

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