Sharechat Logo

Freightways

By Dan Stratful

Monday 28th November 2011

Text too small?

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, dan.stratful@irg.co.nz
**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).

DISCLAIMER: To the extent that any of the content above constitutes advice, it is general advice that has been prepared without reference to investor’s objectives, financial situation or needs. Before acting on any advice, investors should consider the appropriateness of the advice and IRG recommend that investors should obtain appropriate financial, legal and taxation advice before making any financial investment decision. The report is based on information compiled from public information and private research. IRG have completed the report on a best endeavours basis and do not accept any liability of loss or damage. IRG suggest that clients use this as part of a decision making process and check key data before making any investment decisions.
Employees may have an interest in the securities discussed in this report.



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Freightways meets guidance with 6 percent gain in profit before items, sees similar 2014 growth
Freightways profit to increase 6 percent in 2013 and 2014, lagging expectations; shares drop
Freightways 1H profit rises 11 percent to record, meeting estimates, see slow growth ahead
Freightways lifts September quarter profit by 14 percent
Freightways beats estimates gain 24% in FY profit, sees growth in 2013
Freightways buys Dataprint for up to $6.5 million
Freightways first-half profit jumps 20%, lifts dividend
Freightways continues buy-up of info management firms with Australian acquisition
Freightways reports strong first quarter, seeks directors' fee hike
Freightways' directors seek 29% pay rise, first increase in four years