Freightways profit up 11 per cent to $24.3 million

NZ Couriers is one of Freightways' core businesses. Picture / Glenn Jeffrey

Transport company Freightways has announced an 11 per cent rise in profit to $24.3 million in the year to June 30.

The record result was achieved during a very challenging year, through a continuing focus on fundamental business disciplines, the company said in its announcement today.

Along with the net surplus after tax of $24.3 million, earnings per share were 19.1cps, a rise of 9 per cent on a year earlier.

Consolidated operating revenue rose 10 per cent to $257 million, earnings before interest, tax and amortisation (EBITA) were up 6 per cent to $53.4 million.

Consolidated net profit after tax and before amortisation (NPATA) was $29.3 million, up 9 per cent, while cash generated from operations before interest and tax was $53.3 million.

A final dividend of 8.75cps, fully imputed, will be paid on September 30, bringing the total payout for the year to 17.25cps, fully imputed, an 8 per cent rise.

Freightways said its core express package business was expected to continue to perform soundly, although growth would be influenced by the New Zealand domestic economy which continued to show signs of slowing.

It had seen evidence of that slowing among its customers for some time now and had not yet seen any signs to suggest the business environment would be any less challenging in the near term.

Growth of the business mail division would also be partly influenced by slowing business activity, Freightways said.

But it was expected the information management division would continue to show strong growth due to increased outsourcing and ongoing organic growth.

The recent acquisition of DataBank in Australia was an important step in the development and growth of Freightways, diversifying the company's interests both geographically and also deeper into the information management market.

In time it was expected DataBank would create the opportunity to develop further growth initiatives in Australasia, Freightways said.

Capital investment of about $9 million was expected during the next financial year in areas supporting growth in core and emerging businesses.

Freightways acknowledged organic growth in the core express package operations had been modest, with the primary drivers of revenue growth being good gains in market share and the increased pricing necessary to offset rising fuel costs.

Its brands of New Zealand Couriers, Post Haste Couriers, Castle Parcels, SUB60 and Security Express were joined by Auckland and Wellington-based Kiwi Express, which was bought last October.

In the past year the information management division - Archive Security, Document Destruction Services and Data Security Services - had again increased their contribution to the result.

Archive Security in particular had achieved significant growth, both from existing customers and from new customers outsourcing management of their archived documents, Freightways said.

That growth had brought forward plans to extend its facilities in the main New Zealand business centres.

Having recently finished an extension in Christchurch, the company planned to extend in Auckland during the 2007 financial year and in Wellington shortly after that.

Freightways shares were down 15c to $3.67 in early trade today.

- NZPA