Record result for logistics company

Peter McIntyre.
Peter McIntyre.
Logistics company Freightways booked a record first-half trading result, with revenue and profit up on a year ago due to sound contributions from all its multiple divisions.

Operating revenues for the half to December were up 6%, from $206.7 million to $218.2 million, earnings (operating profit) before interest, tax, depreciation and amortisation (Ebitda) were up 6% to $42 million, while after-tax profit was up 3%, from $21 million to $21.7 million Freightways also benefited from a one-off $1 million non-taxable benefit to operating profit, from a belated earn-out payment from a European acquisition, which it excluded from comparing with last year's figures.

Shares in Freightways were up 1.3% at $4.63 following the announcement. Its interim dividend is up from 9c to 10c.

Managing director Dean Bracewell said highlights included the widespread strength of the result, which delivered record performances in the express package and information management businesses, plus several successful business acquisitions which enhanced business positioning.

For second-half guidance, Mr Bracewell expected the growth evident in the half-year result to ''continue for the foreseeable future''.

Craigs Investment Partners broker Peter McIntyre said while Ebit was up 2.7%, driven by 0.2% profit margin gain, profit margins overall were similar to last year.

While gaining traction, volume growth was similar to the same time last year.

Forsyth Barr broker Andrew Rooney said the result appeared to be driven by growing New Zealand courier volumes, reflecting the economic backdrop.

The key question for investors concerns Freightways longer-term profit margins, which have been challenged by an adverse margin mix for some time.

''A particularly positive characteristic of our half-year performance is that it was widespread, with all Freightways brands recording improved performance compared to the previous corresponding period,'' Mr Bracewell said in a statement.

Freightways express package and business mail division operates a multi-brand strategy around the country: New Zealand Couriers, Post Haste, Castle Parcels, NOW Couriers, SUB60, Security Express, Kiwi Express, Stuck, Pass The Parcel, DX Mail and Dataprint.

Mr Bracewell said their collective operating revenue of $168 million for the half year was up 7% on a year ago.

The company's information management division again recorded a strong result, on both sides of the Tasman, with revenue growth in their respective currencies of 13% in New Zealand and 9% in Australia, both ahead of a year ago.

There was also growth in document and computer back-up tape storage, increased document destruction activity and in the take-up of the digital services, he said.

simon.hartley@odt.co.nz

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