Freightways posts $8.5M half year net profit

It announced a 5.85 cents per share fully imputed dividend to be paid on March 31. The $7.25 million dividend pay-out exceeds the forecast of $6.75 million made ahead of its listing and reflecting the strong interim result, chairman Wayne Boyd said.

"A continuation of current trading conditions and the continued successful implementation of Freightways' strategies are expected to deliver a result that will exceed Freightways forecast for the full year to June 30 as shown in its IPO Investment Statement and Forecast," Boyd said.

"From Freightways' viewpoint, the domestic economy remains favourable and we do not foresee any material changes in our operating environment that will negatively impact on performance.

"The outlook for Freightways and its shareholders remains positive."

A pre-tax operating profit of $14.04 million was on sales revenue of $106.87 million, up 7%.

Earnings before interest tax and amortisation (ebita) rose 21% on a proforma basis to $20 million.

Consolidated net profit after tax and minority interests was $8 million. Cash generated from operations was $20 million. All businesses contributed to improved profitability, said Mr Boyd.

The express package businesses, including New Zealand Couriers, Post Haste Couriers, Castle Parcels, SUB60 and Security Express which contribute the majority of Freightways' revenue and earnings, showed strong growth.

Volume growth through increased activity from existing customers and some market share gains had been the primary driver of revenue growth. There was also some small pricing and margin improvement.

DX Mail continued to improve its profitability despite revenue not growing in comparison to the previous half year. A change in business mix to higher margin domestic mail products and improved productivity contributed to an improved result.

The smaller information management brands of Document Destruction Services, Online Records Management and Data Security Services delivered a "significantly improved result".

The acquisition, announced earlier this month, of Archive Security, a long established privately owned records management business, will see this business contribute more, Boyd said.

Freightways shares, which were issued at $1.60 each, were up 3 cents at $2.35.

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