Leading New Zealand express company Freightways delivered record profits in the year ended June 30,2013, and expects a further improvement over the coming 12 months.
The company’s net profit improved by 6 per cent to NZ$38 million (€23m), excluding $2.1million of non-recurring income. Operating earnings before interest, tax, depreciation andamortisation of intangibles (EBITDA) grew 7 per cent to $77 million and earnings before interesttax and amortisation of intangibles (EBITA) was 5 per cent higher at $65 million. Freightways’consolidated operating revenue increased by 6 per cent to $406 million (€245m), which was anotherrecord.
Managing Director Dean Bracewell said record results “have been achieved in both the expresspackage & business mail division and the information management division”.
The express package & business mail division, which operates through New ZealandCouriers, Post Haste, Castle Parcels, NOW Couriers, SUB60, Security Express, Kiwi Express, DX Mailand Dataprint, reported a 6 per cent rise in operating revenue to $308 million for the year.Operating profits also rose with EBITDA up 3 per cent to $55 million and EBITA 1 per cent higher at$49 million.
Bracewell said that the express package business mix continued to change as increasingnumbers of consumers buy goods online, resulting in faster growth in Business-to-Consumer (B2C)volumes than Business-to-Business (B2B) volumes. “This has required increased investment incustomer support, IT development and establishing specialised services for this market,” he says.“These strategies have proven successful, as reflected in the growth we are achieving.”
The business mail division has also seen a change in its business mix with a decline in itstraditional box-to-box letter volumes and general business mail through digital substitution.Freightways has implemented a number of strategies to address this natural decline, includingacquiring Dataprint, a full service mailhouse, with physical and digital mail deliverycapabilities.
The company also said it expects New Zealand Post’s planned network changes to impact on thelatter’s mail volume and thus expects mail customers to hold discusssions with DX Mail aboutalternative services.
The information management division, which generates 27 per cent of group earnings, increasedrevenue by 8 per cent to $100 million and improved operating profits by 13 per cent to EBITDA of$23 million and EBITA of $19 million respectively.
Looking ahead, Bracewell said Freightways “expects to be operating in a positive, but slow,growth environment for the foreseeable future” and expects similar profit growth in 2013-14 as thisyear.
He added: “In our express package business we expect overall incremental volume growth fromexisting customers, with B2C retail deliveries generated through online shopping again expected togrow more rapidly than B2B retail volumes. The information management division is again expected todeliver good year on year improvement underpinned by strong volume growth. In addition, Freightwayswill continue to seek out and develop growth opportunities, including acquisitions and alliancesthat complement its core capabilities.”
The company also highlighted its strong performance over the last decade since listing on theNew Zealand Stock Exchange (NZX) in September 2003 during which its revenue and profits more thandoubled and it delivered Total Gross Shareholder Returns of 387 per cent as of July 2013.
