Freightways first quarter revenue rose 4 percent from a year earlier to $85 million, with strong growth from its information management division.As anticipated, the core express package and business mail division had reflected the slow pace of economic re
Freightways first quarter revenue rose 4 percent from a year earlier to $85 million, with strong growth from its information management division.
As anticipated, the core express package and business mail division had reflected the slow pace of economic recovery, and the company remained cautious on the outlook for the division, Freightways said today.
Overall earnings before interest, tax, depreciation and goodwill amortisation for the three months to September were up 2 percent to $15.4m from a year earlier. Net profit for the quarter fell 4 percent to $6.7m due to the higher cost of bank margins compared to a year earlier.
The information management division had operating earnings growth of 26 percent, and was expected to continue its sound growth. While the cost of increased capacity would start to come to bear throughout the balance of the 2011 financial year, the benefit from the recurring nature of the revenue would drive sustainable long term value.
Recent investment in additional capacity for the information management division in Melbourne and Wellington had been well received by the market, and demand for the services in those places had accelerated, Freightways said.
That growing demand had led to decisions to invest in additional storage capacity in Sydney, Perth, Adelaide and Auckland during 2011, while the company had recently extended its service footprint by establishing the Shred-X brand in South Australia and New South Wales.
The commercial impact of the Christchurch earthquake on Freightways would not be material. An initial sharp decline in express package and business mail volume, both into and out of Christchurch, in the first week following the earthquake recovered to normal levels by the end of September, Freightways said.
At the document storage division of the company's Christchurch information management business collapsed racking restricted the ability to provide normal levels of service. The extraction of archive boxes, rebuilding of racking and return to normal services was well advanced.
The information management business was insured for this type of incident in relation to its earnings and equipment.
Freightways shares were down 2c to 305 in late morning trading.
