Another Record Result For Freightways
Freightways Limited (NZX:FRE) was able to achieve record revenues and earnings for the year ended 30 June 2007, despite a challenging New Zealand marketplace.
The company reports that consolidated operating revenue for the year (30 June) rose to $283 million, up 10% on the prior corresponding period, with earnings before interest, tax, depreciation and amortisation (EBITDA) of $62.9 million, 8% ahead of the previous year.
Cash generated from operations for the year before interest and tax also reached a record $62.3 million, while consolidated net profit after tax and before amortisation (NPATA) of $30.9 million, was 6% higher than the prior corresponding period.
Freightways has declared a final dividend of $11.6 million, delivering a full year payout in line with its dividend policy. The final dividend translates to 9.0 cents per share (fully imputed), to be paid on 01 October 2007. The record date for determination of entitlements to the dividend is 14 September 2007. This brings the total payout in respect of the year to $23.2 million or 18 cents per share (fully imputed), 4% higher than the previous corresponding period.
According to Managing Director Dean Bracewell “it was an eventful 12 months for Freightways in which it has performed soundly in New Zealand, established a firm presence in Australia and delivered another record result.”
He says the New Zealand marketplace “with low organic growth and a generally higher cost operating environment, has tested the resilience of the Freightways operating model and market strategies.” Despite this, the Freightways core express package businesses “delivered an on-par result compared to the previous year while the emerging information management and business mail segments of the market again delivered strong growth.”
In his report Mr Bracewell says the core express package brands of New Zealand Couriers, Post Haste Couriers, Castle Parcels, SUB60, Security Express and Kiwi Express again contributed the majority of revenue and earnings. These businesses continued to invest in areas that further enhance their competitive advantages and where additional capacity will be required to accommodate future growth. This included the relocation of all Freightways businesses operating in Hamilton into a purpose-built facility to service the growing Waikato and Bay of Plenty regions.
DX Mail continued its growth in the business mail niche, which was accelerated by the acquisition of the franchisor rights of the Pete’s Post mail delivery business in December 2006 that operates in Taranaki, Manawatu, Wanganui, Hawkes Bay and Bay of Plenty. DX Mail is a nationwide business mail competitor to NZ Post and is seen as an emerging growth business of Freightways.
The information management sector produced a number of new opportunities on both sides of the Tasman for Freightways. In July 2006 it extended its reach to Australia with the acquisition of DataBank, a data storage business with established branches in NSW and Victoria. DataBank subsequently entered the Queensland market in January 2007 where it also introduced a document storage service.
In July 2007, Freightways purchased the document destruction business of Shred-X in Queensland. As a result Freightways is now able to provide Queensland customers a full suite of information management services.
These recent Australian initiatives are seen as important initiatives for Freightways as it continues on its path to diversify its activities. “They provide a broader platform from which Freightways expects to develop further growth opportunities,” Mr Bracewell says.
The internal linehaul providers, Fieldair Holdings and Parceline Express continued to provide a seamless and efficient air and road linehaul service, respectively.
Freightways will move to reporting under International Financial Reporting Standards (IFRS) from 01 July 2007, commencing with its results for the half year ending 31 December 2007.
Looking forward, Mr Bracewell says that Freightways’ performance in the short term “will continue to be influenced by the challenging New Zealand marketplace. Medium to longer term and subject to factors beyond our control, Freightways is exceptionally well positioned in all aspects of its business to continue to achieve positive outcomes for shareholders and other stakeholders.”
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