Freightways reports strong first quarter, seeks directors' fee hike

Thursday 27th October 2011 1 Comment

Freightways has reported a record first-quarter profit to shareholders at its annual meeting today who are being asked to increase directors' fees.

The express freight company said net profit rose 19 percent to $8 million in the three months to Sept. 30. Sales gained 9 percent. The shares rose 1.2 percent to $3.35 on the news and have doubled from its 2003 IPO price of $1.60.

Earnings before interest, tax, depreciation and amortisation rose 8 percent to $16.6 million. The company operates under brands including New Zealand Couriers, Castle Parcels and Sub 60 couriers. It competes with a New Zealand Post joint venture.

Freightways is asking shareholders to increase the pool for directors’ fees by $98,000 to an aggregate $434,000. On Wednesday, Skellerup Industries shareholders approved a rise in directors' fees but earlier this week Nuplex Industries pulled a proposal to increase directors' fees.

Freightways said proxies have been received for approximately 65 million ordinary shares.

The company attributed its strong first quarter result to its business model and its market leading brands. Freightways’ information management division had revenue growth of 14 percent in the first quarter, producing EBITDA growth of 5 percent.

"Revenue growth in this division continues to be outstanding and as our new capacity is utilised we also expect to see improving margins," the company said.

Freightways isn’t providing a profit forecast for the full year and says it is still managing its cost base and looking for growth from its existing customer base in the express package business.

"Based on our experiences from the last financial year and what we have experienced in the first quarter of the 2012 financial year, we expect to see continued gradual improvement in the market segments we operate in," shareholders were told.

Pricing initiatives will contribute positively to the express freight division but margins will be lower this year in the information management division.

BusinessDesk.co.nz

Comments from our readers

On 27 October 2011 at 6:39 pm John said:

A solid result but with a share price going nowhere on what basis do the Directors think they need to be rewarded