Freightways lifts profit 4%, as courier, mail, file management sales rise

UPDATED: Freightways reports 4% profit growth; warns economic headwinds will impact growth next year

Freightways [NZX: FRE], the logistics and courier business, lifted annual profit by 4%, on increased sales from express packages, business mail and information management.

Profit rose to $43.3 million in the 12 months ended June 30, from $41.7 million a year earlier, the Auckland-based company said in a statement. Operating revenue increased 11% to $749.5 million. The directors declared a final dividend of 12.5 cents per share, up from 11.25 cents per share a year earlier, the company said.

The express package and business mail division, which includes NZ Couriers, Post Haste, Castle Parcels, NOW Couriers, SUB60, Security Express, Kiwi Express, Stuck, Pass The Parcel, DX Mail and Dataprint, lifted operating revenue 8% to $360 million in the period. It reported earnings before interest, tax, depreciation and amortisation rose 13% to $68 million.

Its DX Mail operations increased market share after NZ Post's move to reduce daily mail deliveries to three days a week, Freightways said.

"DX Mail has increased its postie delivery fleet in response to this positive market demand," the company said in a statement. "DX Mail's growth has come from customers who still require overnight delivery for their standard priced letters."

Its information management system, which includes the Online Security Services, Archive Security, Document Destruction Services, Data Security Services brands in New Zealand and The Information Management Group, DataBank, Archive Security, Filesaver, LitSupport and Shred-X in Australia, lifted operating revenue 18% to $122 million. Ebitda increased 18% to $29 million, on the back of earnings growth on both sides of the Tasman, Freightways said.

In the coming year, Freightways expects the express package market to expand, although not at the same rate as it has experienced this year but "consistent with general economic forecasts." It expects to spend $20 million in capital expenditure to support growth and development.

Freightways shares fell 0.9% to $5.50 and have fallen some 4.3% since the start of the year.

(BusinessDesk)