Freightways 1Q revenue up 8.3%, forecasts year-on-year earnings growth

Thursday 25th October 2018

Courier and information management company Freightways said September quarter revenue was up 8.3 percent and reiterated that it expects year-on-year earnings growth.

Revenue was $155.1 million in the period, the first quarter of the firm's financial year, and net profit lifted 0.2 percent to $15.1 million, chief executive Mark Troughear said in speech notes for the company's annual meeting.

Freightways is seeing increased demand for services in both its express package and business mail and its information management divisions and it "continues to target year-on-year earnings growth," he said.

"The markets in which Freightways operates in both New Zealand and Australia remain positive. Freightways has continued to experience demand for its services in both divisions, which has provided a sound start to the 2019 financial year," said Troughear.

Auckland-based Freightways said facility utilisation in its information management division was 81 percent in New Zealand and 61 percent in Australia at the end of June. It is targeting 83 percent for New Zealand and 70 percent for Australia in the current financial year.

It also remains focused on developing the secure destruction and medical waste divisions to establish "a new arm of growth for Freightways."

In the first quarter of the current financial year, it bought a bolt-on secure destruction business in Western Australia, a medical waste business in Victoria as well as a 75 percent stake in a digital online back-up business servicing New Zealand and Australia.

"Strategic growth opportunities, including acquisitions and alliances that complement existing capabilities, will continue to be executed where they make commercial sense," he said.

Overall capital expenditure for the 2019 financial year is still expected to be approximately $20-22 million, said Troughear.

Freightways, which delivers some 50 million items annually through brands including New Zealand Couriers and Post Haste Couriers, reported a 2.1 percent lift in net profit to $62.2 million in the year to June 30.

The shares last traded down 1.1 percent at $7.20 and have fallen 5.1 percent so far this year.

(BusinessDesk)

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