Freightways Delivers Record Half Year Earnings
Continued strong growth across all operating divisions has enabled listed express package leader Freightways Limited (NZX:FRE) to achieve a record consolidated operating revenue figure of $106 million for the half year ending 31 December 2003- up 7% on the same period last year.
Managing Director, Dean Bracewell, reports that consolidated net profit after tax and minority interests for the period was $8 million, while cash generated from operations topped $20 million. Earnings before interest, tax and amortisation (EBITA) of $20 million for the half year was 21% up on the corresponding period 12 months ago.
He says the half year result “reflects another record period for Freightways in which all businesses have contributed improved profitability.” As a result, directors have declared a dividend of $7.25 million which exceeds the IPO forecast of $6.75 million when Freightways listed last September, reflecting the strong interim performance. This dividend translates to 5.85 cents per share fully imputed, and will be paid on 31 March 2004. The record date for determination of entitlements to the dividend is 19 March 2004.
In his review of operations Mr. Bracewell says the express package businesses again contributed the majority of revenue and earnings, with key brands like New Zealand Couriers, Post Haste Couriers, Castle Parcels, SUB60, and Security Express “all showing strong growth.”
While the favourable domestic economy and the characteristics of the express package niche of the transport industry continue to create opportunities, “volume growth through increased activity from existing customers and some market share gains were the primary drivers of revenue growth.”
In the area of business mail, DX Mail continued to improve its profitability and the brands in the information management sector delivered significantly improved results. He says the acquisition earlier this month of Archive Security, a long established privately-owned records management business “will add scale and capacity to Freightways’ growing record management business and will position Freightways as the country’s third largest records management operator”.
Mr. Bracewell says the half year results “have surpassed expectations and a continuation of current trading conditions and the successful implementation of growth strategies are expected to deliver a result that will exceed Freightways $36 million EBITA forecast for the full year to 30 June 2004”, as shown in its IPO Investment Statement and Prospectus.
“All markets that we operate in continue to show growth opportunities that will be developed in a disciplined manner,” he says “and the domestic economy, from our viewpoint, remains favourable and we do not foresee any material changes in our operating environment that will negatively impact on performance.”
Note: In the half year report to 31 December 2003, Freightways has presented the operating performance for the prior comparable period on a pro-forma basis to reflect consolidated results had the parent entity existed at that time. Pro-forma adjustments enable a like-for-like comparison and take into account modestly higher compliance and depreciation costs as a result of Freightways’ change of ownership and subsequent public listing.
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