Freightways shares rise on improved Q1 performance

Courier and data management company Freightways has followed a record full-year result with an improved first quarter.

Freightways shares (NZX: FRE) are up 1.6% today to $4.48, after starting the year at $3.68.

At its annual shareholders meeting in Auckland today, Freightways says revenue increased 8% for the three months to September 30 to $100.9 million, compared to the same period last year, while earnings before interest, tax,depreciation, and amortisation (EBITDA) rose 12% to 18.7 million.

Net profit after tax for the three months is $9.2 million, up 14% on the same period in 2011.

The company says its first quarter performance in a low-growth environment demonstrates its resiliance and successful strategic development.

"Past decisions to diversify operations geographically and by industry to increase the company's growth opportunities are evident in this earnings result, as is Freightways' ability to better withstand the inevitable performance cycles of the broader economy and our specific markets," managing director and chief executive Dean Bracewell says.

The company's express package and business mail division lifted sales by 4 percent to $76 million and earnings before interest, tax, depreciation and amortisation by 5 percent to $13 million. Freightways said it made "modest price increases across the entire division" to help make up for cost increases.

Information management sales rose 23 percent to $25 million and ebitda jumped 36 percent to $6 million, which it said reflected a strong performance for its document and data storage operations, offset by "significantly lower prices" for sales of paper in the document destruction business.

Bank funding costs fell in the latest quarter, reflecting the renegotiation of its facilities in September last year.

Freightways said its recently acquired Iron Mountain NZ, Filesaver and DataPrint are performing to expectations.

Looking ahead, express package volumes are expected to "remain sound" while letter volumes through DX Mail will "remain under pressure."

Shareholders voted on several resolutions today, including the re-election of chairman Sue Sheldon and director Mark Verbiest, as well as a proposed 5% increase in directors fees.

Freightways' data management division contributed 25% of the company's earnings in 2012, about half each from its New Zealand and Australian businesses.

- additional reporting from BusinessDesk

dwilliams@nbr.co.nz

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