Ann: FLLYR: FLI: Fliway Group Delivers IPO Forecast Result

• Release Date: 28/08/15 08:34
• Summary: FLLYR: FLI: Fliway Group Delivers IPO Forecast Result
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					FLI
28/08/2015 08:34
FLLYR
PRICE SENSITIVE
REL: 0834 HRS Fliway Group Limited

FLLYR: FLI: Fliway Group Delivers IPO Forecast Result

NZX and Media Release
28 August 2015

FLIWAY GROUP DELIVERS IPO FORECAST RESULT
FINANCIAL RESULTS FOR THE TWELVE MONTHS ENDED 30 JUNE 2015
HIGHLIGHTS:
o FY15 earnings  exceeded FY15 PFI forecasts, NPAT up 33.0% on PFI
o Improved capacity management in the domestic business unit
o Core financial objectives achieved with revenue up 3.3% from FY14
o Warehousing site move in Auckland to accommodate growth
o Wellington shed capacity filled
o Dividend of 1.9 cents per share, in line with PFI forecast
o Special dividend of 0.5 cents per share, reflecting lower offer costs
New Zealand Freight and Logistics business Fliway Group Limited (NZX:FLI),
reports earnings for the 12 months ended 30 June 2015 ahead of the forecasts
made at the time of its April 2015 initial public offering (IPO).

$000's, Audited FY15 Actual
FY15 PFI1

Variance % FY14 Actual
Variance %

Sales Revenue
Operating Profit
Net Profit after Tax

Pro-Forma EBIT2
Pro-Forma EBITDA3
84,169
3,459
2,190

6,870
8,909
85,265
3,007
1,646

6,620
8,692
(1.3)%
15.0%
33.0%

3.8%
2.5%
81,511
6,033
4,786

6,835
8,289
3.3%
(42.7)%
(54.2)%

0.5%
7.5%
1. PFI is the prospective financial information included in the Prospectus
dated 6 March 2015 (as amended on 19 March 2015)
2. EBIT is earnings before interest and tax and is a non-GAAP measure and is
reconciled below
3. EBITDA is earnings before interest, tax, depreciation and amortisation and
is a non-GAAP measure and is reconciled below

Group revenue of $84.2 million for the year was ahead of FY14 by 3.3 per
cent, and pro-forma EBITDA of $8.9 million for the year was up by 7.5 per
cent.  As forecast, reported net profit after tax (NPAT) of $2.2 million was
lower than the prior year due to one off costs related to listing on the NZX
and a number of non-cash IFRS adjustments.
Fliway Group Chairman, Craig Stobo said: "This is a sound first result as a
listed company. Fliway has continued to demonstrate earnings growth in the
International freight forwarding and express package businesses, improved
capacity management in the domestic business unit, and delivered on its core
financial objectives."
Comparing performance against prospective financial information (PFI),
reported NPAT for the year was 33.0 per cent above the forecasted $1.6
million.  This was principally as a result of offer costs being $0.5 million
lower than allowed for in the PFI. Pro-forma EBITDA was 2.5 per cent ahead of
the company's PFI forecast of $8.7 million, with results from the domestic
division and the joint venture delivering ahead of forecast. Revenues were
1.3% lower than the PFI forecast of $85.3 million as a result of a reduced
fuel adjustment factor in the domestic business and lower shipping rates in
the international freight forwarding market.
OPERATIONAL PERFORMANCE
Within the domestic business unit, in the second six months of FY15, the
Transport division improved its operating costs as a result of the capital
investment of the past two years and continuing to pursue the strategy of
selling to capacity in the network.
In the logistics division, a site move to larger warehouse premises was
required in Auckland to facilitate growth from existing customers and the
acquisition of a new customer. In Wellington, where the Fliway warehouse was
previously operating below capacity, a new customer was signed up resulting
in that warehouse now being fully utilised.
In a further property transaction, an agreement to lease was executed in June
for a new site in Christchurch that will deliver a larger, more efficient
Transport dock and provide additional warehousing capacity in FY16. The new
site will allow the company to facilitate the growth in customer warehousing
requirements within the Christchurch market
The Fliway international business unit has seen lower revenue than forecast
as a result of reduced shipping rates, and some customer churn.  The volatile
pricing on shipping rates, combined with lower volumes meant the
International business unit experienced softer revenue during the last
quarter of FY15, and this will likely continue in FY16. The International
division remains focused on bringing on new customers and ensuring its cost
base is optimised.
The UPS-Fliway joint venture business unit has delivered a strong
contribution to the group result with growth in revenue ahead of forecast.
Cost control discipline continues to ensure that revenue gains are maximised.

GROUP CASH FLOWS
Operating cash flows for the year were $5.7 million, ahead of FY14 by $0.4
million and ahead of forecast by $3.0 million as working capital levels were
below anticipated levels mainly due to strong debt collection rates which
pushed debtor days down and reduced absolute accounts receivable balances.
Net capital expenditure totalled $4.3 million, above forecast by $0.3 million
mainly as a result of the capital costs associated with the exit and
relocation of an Auckland warehouse to a larger facility.
NET DEBT
A combination of lower offer costs and improved working capital has resulted
in Fliway having a better cash position than forecast in the PFI, with net
debt of $8.2 million as at 30 June 2015 compared to forecast net debt of
$10.7 million. The forecast contemplated reducing the interest bearing debt
to $12.5 million. This action would have resulted in $2.5 million of the bank
debt facility being unable to be redrawn, therefore the decision was taken to
maximise flexibility and capacity by retaining more in cash.

DIVIDEND
Consistent with PFI and relating only to the earnings period from the 9th of
April 2015 (IPO date) to 30 June 2015, Fliway's directors have approved the
payment of a maiden dividend of 1.9 cents per share with respect to ongoing
earnings and a special dividend of 0.5 cents per share reflecting the lower
costs involved in the IPO of the business (fully imputed for New Zealand
shareholders). The dividends are payable on 20 October 2015 to shareholders
recorded on the share register as at 5pm (New Zealand time) on 30 September
2015.
Fliway Group's Managing Director, Duncan Hawkesby said: "FY15 has been a
milestone year for Fliway.  We successfully completed our $25 million Initial
Public Offering which allowed us, amongst other things, to reduce our term
loan facilities, providing us with greater flexibility to capitalise on
future growth opportunities."
OUTLOOK
Fliway's Chairman further commented: "We reaffirm the December 2015 IPO
earnings forecast.  Whilst we expect revenue will be softer than PFI forecast
for 1H16, our cost position is strengthening.  We will continue to seek to
increase our penetration with existing customers as well as pitching for work
in new sectors, and looking to grow strategically through acquisitions  We
look forward to meeting many of our new shareholders at our Annual
Shareholders Meeting to be held on 23 October 2015."

For further information contact:

Duncan Hawkesby     Jim Sybertsma
Managing Director     Chief Financial Officer
Ph: +64 (0) 21 882 882    Ph: +64 (0) 275 716 464

ABOUT FLIWAY
Listed on NZX (NZX:FLI), Fliway is one of NZ's largest fully integrated
logistics providers.  We offer seamless global supply chain solutions - from
international freight to warehousing & domestic delivery to business or the
home.  We have a great team of over 400 people, backed by a strong network of
global partners & built off an extensive New Zealand footprint.
www.fliway.co.nz

APPENDIX: EXPLANATION OF NON-GAAP FINANCIAL INFORMATION, RECONCILIATION
BETWEEN REPORTED EARNINGS AND PRO-FORMA EARNINGS
Fliway monitors its profitability using the non-GAAP financial measures of
EBIT and EBITDA. The use of EBIT removes the effects of the Fliway Group's
capital structure and tax position and the impact of certain non-cash items
(fair value movements in financial instruments and other gains or losses on
the sale of assets). The use of EBITDA also further removes the effect of
depreciation and amortisation.

A reconciliation between EBIT, EBITDA and NPAT is presented below. The
measures are not defined by NZ GAAP, IFRS, or any other body of accounting
standards and therefore Fliway's calculation of these measures may differ
from the similarly titled measures presented by other companies. These
measures are intended to supplement the NZ GAAP measures presented in
Fliway's financial information. They should not be considered in isolation
and are not a substitute for NZ GAAP measures.

Pro Forma EBITDA and Pro Forma EBIT are non-GAAP profit measures which
reflect a number of historical and prospective Pro Forma adjustments.

Fliway uses EBITDA to evaluate the operating performance of the business
without the impact of depreciation, amortisation, capital structure and the
tax position. Fliway also uses EBIT to evaluate the operating performance
over time without the impact of the capital structure and Fliway's tax
position.

Fliway considers that it is common practice to evaluate profitability based
on both EBITDA and EBIT which allow for a better comparison of operating
performance with that of other companies in comparison to NZ GAAP measures,
although caution should be exercised as other companies may calculate EBITDA
and EBIT differently.

In addition, EBIT and EBITDA also include the attributed EBIT or EBITDA from
Fliway's 50% interest in UPS-Fliway as set out below.

$000's FY15
Actual
FY15 PFI Variance % FY14
Actual Variance %
Reported Operating Profit 3,459 3,007 15.7% 6,033 (42.7)%
Adjust for:
Listing Costs 2,035 2,505 -18.8% - n.a.
Public Company Costs
(Full Year Effect) -320 -320 0% -500 (36.0)%
UPS-Fliway EBIT 1,584 1,399 11.9% 1,272 24.5%
Loss on sale 112 29 -286.2% 30 273.3%
Pro-Forma EBIT 6,870 6,620 3.8% 6,835 0.5%
Depreciation* 2,039 2,072 -1.6% 1,454 40.2%
Pro-Forma EBITDA 8,909 8,692 2.5% 8,289 7.5%

* Depreciation charge includes UPS-Fliway depreciation
End CA:00269236 For:FLI    Type:FLLYR      Time:2015-08-28 08:34:13