Firm steers around quake woes
A record result for NZX-listed courier delivery and document destruction company Freightways has come despite some post-quake attrition in its Christchurch subsidiaries.
The company's bottom line net profit after tax was up 11 per cent to $21 million in the first half of the 2012 financial year, the six months to December 31.
Operating revenue was up 8 per cent to $206.7m compared with the same half in 2011, and earnings before interest, tax, depreciation and amortisation [ebitda] increased 9 per cent, excluding a non-recurring benefit of $1m.
But Freightways chief executive Dean Bracewell said its courier companies were experiencing higher costs and slightly tighter margins while navigating post- earthquake Christchurch because CBD businesses had spread out further across the city.
Freightways earns 76 per cent of its revenue from express package delivery businesses including New Zealand Couriers, Post Haste, Sub 60, Kiwi Express and business mail services such as DX Mail.
"Whereas, in the past, we would go into the city and make several deliveries within 100 metres up the street, we're now travelling to a number of different businesses that are spread out around town," Bracewell said. Tourist entities that had helped support Freightways' recently purchased souvenir postage and postcard seller - Universal Mail - had also disappeared, he said.
But, despite the changing landscape of Christchurch, Bracewell said the biggest blow to the company had been the loss of experienced contractors who had moved out of the city in the aftermath of the quakes.
"The fact that customers have spread themselves around town we can adapt to, we cope; it's harder and it costs more money, but losing experienced contractors out of the town is the hardest thing to replicate."
Business mail volumes were also falling and Bracewell said the company would counter the trend by increasing its market share.
The remainder of Freightways' revenue comes from its information management businesses including Archive Security and Document Destruction in New Zealand and Shred X in Australia. Information management had grown from about 5 per cent of the business to 25 per cent and its revenue was up 15 per cent.
Ebitda for that division was up 21 per cent over the same period.
Freightways will pay a 9 cents a share fully imputed interim dividend on April 2. Its shares were down 5c, or 1.1 per cent, to $4.45 late yesterday. Fairfax NZ
Taranaki Daily News