Freightways applies to list on ASX, posts 29 per cent revenue lift in challenging New Zealand economy

Freightways' brands include New Zealand Couriers, Big Chill, DX Mail and Dataprint.

Freightways Group will today apply to be listed on the Australian stock exchange, encouraged by a solid performance by the Allied Express business across the Tasman which helped lift overall operating revenue by 29 per cent and net profit by 7.3 per cent.

The group will remain on the NZX, and said a dual listing reflects the changing profile of the business.

The group noted “quite different” market dynamics on each side of the Tasman, with growth in the Australian economy but a sluggish economic environment in New Zealand as businesses grappled with a tight labour market, high labour costs, inflation and destructive weather.

Operating revenue for the Australian business grew by 143 per cent. In contrast, New Zealand overall revenue increased by 6 per cent.

Group earnings before interest, tax and amortisation (ebitda) in the year ended June 30 rose 14.8 per cent to $145.2m, compared to $126.5m in FY22.

Net profit was $75.2m, compared to $70.1m the previous year. The group will pay a final dividend of 26c per share on October 2.

Freightways in August last year invested $160m in Allied Express, one of Australia’s largest independently owned courier and express freight providers.

The company said leveraging its footprint across five Australian states had produced pleasing revenue growth.

“Now we are looking to make even more of their presence through world-class facilities that have the capacity to cope with a doubling of revenue in an express delivery market which is around eight times larger than New Zealand’s.”

Freightways said it was looking for merger or acquisition opportunities in the years ahead.

A “challenging” economic climate of the past six months was expected to continue through FY24.

“In New Zealand, while same-customer volume is lower than in FY23, we have secured new customers who are mitigating this impact.

“The tight labour markets in both New Zealand and Australia re beginning to ease.

“In the short term, we are cautious about the impact of the economy, particularly in New Zealand.”

The group was excited about the potential to grow revenue and profitability on both sides of the Tasman in the longer term.

The group’s new 13,000sq m Big Chill cold store facility at the Ruakura Superhub will open in October, adding to nine depots in a nationwide network. The Ruakura addition would enhance the group’s links to Port of Tauranga, Waikato and Bay of Plenty and increase same-day and overnight services to Auckland, the group said.