Freightways, New Zealand’s leading express operator, achieved record profits in the year endingJune 30, 2012, thanks to e-commerce growth and continued diversification.
The listed company improved net profits by 17% to NZ$36 million (€23.7 million) whileconsolidated operating revenue increased 8% to NZ$382 million (€251 million).
The Express Package & Business Mail division, which contributes 75% of group revenue,performed well through its broad range of brands, including New Zealand Couriers, Post Haste,Castle Parcels, NOW Couriers, SUB60, Security Express, Kiwi Express and DX Mail. The division’soperating revenue increased 5% to $292 million while operating profits (EBITA) improved by 8% to$48 million.
A particularly strong first quarter underpinned a very good first half year result. As expected,revenue in the second half was comparatively not as strong as in the first half, yet revenue growthnevertheless remained positive and consistent throughout that period, Freightways noted.
“Increased volumes from existing customers, quality market share gains and price increases,including the recovery of higher fuel prices, underpinned the revenue growth,” said managingdirector Dean Bracewell, “with growth in this division coming from all locations across New Zealandand from most industry sectors. Online shopping continued to generate our fastest growing source ofincome.”
Bracewell added that while activity levels in most businesses located in Christchurch havereturned to pre-earthquake levels, DX Mail continues to be affected by relatively lowtourism-related mail volume. At the same time, the overall cost of doing business in Christchurchhas gone up due to the increased difficultly in moving around to effect pick-ups and deliveries andincreased labour costs.
Meanwhile, dedevelopment of the Post Haste and Castle Parcels depots at Freightways’ Aucklandhub is almost complete, which allows NOW Couriers to come onsite, having previously operated fromanother location.
The Information Management division, which generates 25% of Group earnings, reported operatingrevenue of $92 million, up 21%.
Bracewell said the diversification strategy undertaken by Freightways in recent years “hasbroadened our revenue and earnings base and created a wide range of growth opportunities that arebeing successfully developed. In addition, the integration of recent acquisitions on both sides ofthe Tasman has added to the depth of Freightways’ presence in the Information Managementindustry.”
Looking ahead Bracewell said he expects Freightways “to see continued gradual improvement in themarkets it operates in, as experienced recently. The background of an uncertain global economywhich may have an adverse impact on the economies of New Zealand and Australia will neverthelessinfluence Freightways future performance. Growth trends evident in this latest full year result inthe Express Package & Business Mail division remain positive and we expect the InformationManagement division to continue to deliver sound year-on-year earnings growth.”
Capital expenditure for 2013 of $14 million is earmarked to support the growth and developmentof both Freightways divisions, with cash flows expected to remain strong throughout the next 12months.
