Trading Update
An update on the unaudited trading performance of Freightways Limited (Freightways) for the three months ended 30 September 2015 is provided below.
The prior comparative period (pcp) included 5 extra trading days compared to this 1st quarter due to a re-alignment of our accounting calendar that contributed approximately additional revenue of $7 million, earnings (operating profit) before interest, tax, depreciation and amortisation (EBITDA) and earnings (operating profit) before interest, tax and amortisation (EBITA) of $2 million and net profit after tax (NPAT) and NPAT before amortisation (NPATA) of $1.4 million.
Exclusive of the revenue and operating profit generated from these 5 extra trading days in the pcp, Freightways’ result for this 1st quarter shows a revenue increase of 10%, EBITDA increase of 13%, EBITA increase of 15%, NPATA increase of 14% and NPAT increase of 13%.
Freightways’ 1st quarter results (unaudited):
| Quarter Ended: | Excluding extra 5 trading days: |
||||
|---|---|---|---|---|---|
|
Sept-15 $000
|
Sept-14 $000
|
Increase
% |
Sept-14 $000
|
Increase
% |
|
| Operating revenue | 126,783 | 122,299 | 3.7% | 115,299 | 10.0% |
| EBITDA | 25,296 | 24,406 | 3.6% | 22,406 | 12.9% |
| EBITA | 22,215 | 21,345 | 4.1% | 19,345 | 14.8% |
| NPATA | 13,951 | 13,661 | 2.1% | 12,221 | 14.2% |
| NPAT | 13,479 | 13,363 | 0.9% | 11,923 | 13.1% |
The benefits of Freightways’ successful strategic industry and geographical diversification, the positive features of the markets it works in and the successful execution of a wide range of growth strategies are once again evidenced in this strong 1st quarter result.
Express Package and Business Mail division
Exclusive of the impact of the 5 extra trading days in the pcp, the express package & business mail division’s revenue was 4% above the pcp and EBITDA and EBITA were 4% and 5% ahead of the pcp, respectively. This division’s unaudited result is as follows:
| Quarter Ended: | Excluding extra 5 trading days: |
||||
|---|---|---|---|---|---|
|
Sept-15 $000
|
Sept-14 $000
|
Increase
% |
Sept-14 $000
|
Increase
% |
|
| Operating revenue | 92,187 | 94,276 | (2.2)% | 88,276 | 4.4% |
| EBITDA | 17,067 | 17,881 | (4.6)% | 16,381 | 4.2% |
| EBITA | 15,601 | 16,299 | (4.3)% | 14,799 | 5.4% |
| EBITA Margin | 16.9% | 17.3% | 16.8% | ||
Sound performance across all Freightways express package and business mail businesses was underpinned by increased activity from existing customers, quality market share gains and some pricing improvement. Volume increases from both Business-to-Business and Business-to-Consumer segments of the market contributed to this result.
Information Management division
Exclusive of the impact of the 5 extra trading days in the pcp, the information management division’s revenue was 27% ahead of the pcp and EBITDA and EBITA were 33% and 37% ahead of the pcp, respectively. This division’s unaudited result is as follows:
| Quarter Ended: | Excluding extra 5 trading days: |
||||
|---|---|---|---|---|---|
|
Sept-15 $000
|
Sept-14 $000
|
Increase
% |
Sept-14 $000
|
Increase
% |
|
| Operating revenue | 35,178 | 28,795 | 22.2% | 27,795 | 26.6% |
| EBITDA | 8,633 | 6,997 | 23.4% | 6,497 | 32.9% |
| EBITA | 7,426 | 5,914 | 25.6% | 5,414 | 37.2% |
| EBITA Margin | 21.1% | 20.5% | 19.5% | ||
This division’s performance, as expected, demonstrated resilience to the economic cycle, with growth being achieved in both Australia and New Zealand. Increased document storage and destruction volumes generated from both existing and new customers contributed to improved utilisation of existing equipment and facilities. Revenue and earnings from businesses acquired in the latter stages of the prior calendar year and from the relatively new suite of electronic services on offer also contributed to this result. The acquisitions of two small businesses, one in Sydney and one in Brisbane, during this quarter for a total cost of $3 million, are expected to generate annualised EBITDA of $1 million once fully integrated with our existing businesses.
Additionally, we have re-launched our New Zealand and Australian information management businesses under the umbrella brand of TIMG – The Information Management Group. The new brand better represents the suite of physical and electronic services now offered by these businesses and enables our sales teams to have broader ‘information management’ conversations with our customers.
Corporate
Corporate costs continue to be well contained and capital expenditure remains at targeted levels with full year forecast capital expenditure expected to be approximately $20 million.
Outlook
Freightways’ businesses are well-positioned to benefit from the growth opportunities that exist in both the express package & business mail and information management markets.
The express package market is expected to continue to expand, albeit not at the same rate as seen in the prior financial year. The business mail operations of DX Mail and Dataprint are expected to sustain their positive growth, largely from market share gains.
The information management market is expected to continue to grow due to the service and cost advantages for businesses of outsourcing their document and data storage requirements. Privacy of business information will continue to be a primary driver of demand for secure document destruction services. Customers will continue to seek complementary and substitute electronic services relating to the creation and management of business information, which Freightways’ businesses are also able to offer.
Overall cash flows are expected to remain strong throughout the 2016 financial year.
Freightways will continue to seek out and develop strategic growth opportunities, including acquisitions and alliances that complement its core capabilities.
For further information contact:
DEAN BRACEWELL
Managing Director
Freightways Limited
Ph: (09) 571 9670
