Freightways’ earnings on track
Shareholders updated on solid first quarter at AGM
Freightways said sales and profit rose in its first quarter, putting the courier and information management company on track for annual earnings growth. Net profit was $15.1 million excluding certain items in the three months ended September 30 from $14.1m a year earlier, the Aucklandbased company said. Operating revenue rose 7 per cent to $143m.
The market update was provided to shareholders at their annual meeting yesterday, the last at which Dean Bracewell will attend as managing director, having announced last month that he would step down after 18 years in the role and 34 years with the company.
The company’s stock down 6c yesterday at $7.54, having gained 371.25 per cent since the company’s initial public offering in 2003 at $1.60 a share.
Bracewell marked the occasion by saying he had enjoyed “a wonderful career with this great company” and chair Sue Sheldon praised his long and successful tenure and “very substantive contribution”.
But most of Bracewell’s address to shareholders was delivered in typical no-nonsense style.
“The markets in which Freightways operates in both New Zealand and Australia remain positive,” he said.
“The increased volume and activity, compared to the prior comparative period, that is evident in this trading update has provided a sound start to the 2018 financial year.
Accordingly, Freightways continues to target year-on-year earnings growth.”
That would mean an increase on 2017’s $60.9m profit, which was up 22 per cent from a year earlier.
“Strategic growth opportunities, including acquisitions and alliances that complement existing capabilities, will be executed where they make commercial sense,” Bracewell said.
In August, Freightways expanded its reach into waste management with the acquisition of Australian State Waste Services and its related entities, a group that provides medical waste services in Sydney and sur- rounding regional areas.
Operating revenue at its biggest division, express package and business mail, rose 7.3 per cent to $105m in the first quarter and earnings before interest, tax and amortisation (ebita) rose 5 per cent to $18.2m. Its ebita margin slipped to 15.7 per cent from 16.5 per cent a year earlier. Operating costs included investment in additional airfreight capacity and premises and one-time costs to relocate four Christchurch businesses onto one site, the company said.
Information management operating revenue rose 6.8 per cent to $38.4m and ebita climbed 17 per cent to $7.9m. Its ebita margin rose to 20.6 per cent from 18.9 per cent. The earnings figures for information management exclude a net $542,000 of gains in the quarter.
“This first quarter result represents a sound start to the financial year, the highlights being; the strong revenue growth in the express package and business mail division, the completion of our transition to new premises in Christchurch and the stepped earnings improvement in the information management division,” the company said.
Mark Troughear, a 21-year company veteran, is to take up the role of chief executive on January 1.
—