Freightways subsidiary Big Chill pushed utilisation of its new Ruakura operation up to 76% in the half year to end December.
Freightways subsidiary Big Chill pushed utilisation of its new Ruakura operation up to 76% in the half year to end December.
Freightways is on the hunt for merger and acquisition opportunities on both sides of the Tasman, despite the “slow grind” it sees ahead for New Zealand’s economic growth.
The listed, diversified freight provider posted positive revenue and earnings growthin the first half of the 2025 financial year, but noted the “depressed” economy meant declines for its express courier and temperature-controlled businesses and Australia’s sluggish economic growth.
Chief executive Mark Troughear said the company had its eyes open for merger and acquisition chances at home and in Australia, but most opportunities were probably across the Tasman due to the fragmented and densely populated transportindustry there.
“They tend to operate in niches ... in a particular state or it could be in a particular part of the supply chain or in a particular service standard ... and we’re looking at those niches.”
Freightways would not be waiting for the economies in both countries to pick up pace.
“It’s more about just finding the right fit. If we can find the right fit, buy it at the right price, then we will find a way of funding it. That will depend on how big it is but we’ll find a way.”
The Australian economy was only slightly more buoyant than New Zealand’s as higher interest rates had a drag effect on organic growth, Troughear said, but Allied Express had recorded an 8% increase in volumes and reaped the benefits of new automation systems in Sydney and Melbourne.
While interest rates in both countries were starting to fall and business confidence appeared to be slowly returning, the company remained “cautious about any rapid recovery in New Zealand and to a lesser extent, in Australia”.
“Volume in the half year was as expected and we expected that it will be a slow grind for the economy to provide some organic growth in New Zealand in H2.”
The company said it would focus on restoring margins for both its business divisions in FY25 and FY26 as “modest organic growth” occurs and market share gains were realised.
This subsidiary’s new Ruakura facility was contributing positively to earnings. It was now at 76% utilisation but activity levels had been lower than expected.
Troughear said this was a good example of Kiwis spending less in tough times.
“This business tends to handle really good quality food... it ends up in a cafe or a restaurant or a supermarket and we’re shipping a bit less of that food these days because maybe people can’t afford that bit of salmon or whatever.
“It’s the same thing for the courier businesses... people are buying a few less things and so our customers are sending one or two less items than they did in better times.”
Freightways posted half-year revenue of $662.1m, 6.7% up on the corresponding 2024 period. Ebitda at $86m was a 6.5% improvement. Net profit after tax of $44.7m was an increase of 9.5%.
