Freightways (NZX: FRE ) is generally regarded by the market as a well managed company that provides a mixture of organic growth and growth by acquisition, with reliable dividends.
FRE provides express package services throughout New Zealand, with its complementary Information Management division providing data and information storage services. Its express package business delivers approximately 200,000 items each business day through its brands New Zealand Couriers, Post Haste Couriers, Castle Parcels and NOW Couriers.
FRE’s Information Management division includes the New Zealand brands Data Security Services, Document Destruction Services and Archive Security while the Australian Information Management brands include DataBank and Shred-X.
The company’s earnings before interest, tax and goodwill amortisation (EBITA) increased for 11 consecutive years from 1999 to 2009, before dipping in 2010, followed by a bounce-back in the year to 30 June 2011.
FRE’s first quarter results for the quarter ending 30 September 2011 were strong, which sees the company begin the new financial year well. First quarter revenue rose 9% to $93 million, EBITA rose 9% to $14.2 million and net profit of $8 million was up 19%, the highest ever first quarter net profit result since its IPO. The core express package & business mail business performed well during the first quarter, while the higher growth Information Management division again performed well.
Its recent acquisition of Iron Mountain NZ is expected to deliver $12 million of revenue in its first year and the acquisition is also expected to be EPS accretive in its first year. FRE expects to see continued gradual improvements in its markets and it is well placed to benefit when this occurs.
Status: GROWTH BUY
FRE’s shares today traded at $3.31
For sharemarket and fixed income trading enquires contact: Dan Stratful at Investment Research Group (IRG) Authorised Financial Adviser (AFA) 0800 437 8489, 09 304 0232, email@example.com **A disclosure statement is available, on request and free of charge.
Disclaimer In accordance with the Financial Advisers Act 2008 (“the Act”) Sharechat is “Class Advice” and any advice or recommendations contained on this webpage is not “Personalised Advice” as defined by the Act. This means Sharechat does not take into account an investor’s particular financial position, financial needs, financial goals, risk profile or asset allocation. Investor’s who require “Personalised Advice” should contact an Authorised Financial Adviser (AFA).
Daily ShareChat articles report how the main experts in the market might view a certain share and we provide this commentary as a useful resource for investors. Content on this site does not in any way constitute a recommendation to buy, hold or sell any particular share. Investors should always seek professional advice before making any investment decisions.