FRE freightways limited

Ann: QUARTER: FRE: Trading Update

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    					FRE
    30/10/2014 10:04
    QUARTER
    
    REL: 1004 HRS Freightways Limited
    
    QUARTER: FRE: Trading Update
    
    An update on the unaudited trading performance of Freightways Limited
    (Freightways) for the three months ended 30 September 2014 is provided below.
    
    This 1st quarter includes 5 extra trading days compared to the prior
    comparative period due to a re-alignment of our accounting calendar, which
    occurs approximately every 5 years. The extra 5 trading days contributed
    approximately additional revenue of $7 million, earnings (operating profit)
    before interest, tax, depreciation and amortisation (EBITDA) and earnings
    (operating profit) before interest, tax and amortisation (EBITA) of $2
    million and net profit after tax (NPAT) and NPAT before amortisation (NPATA)
    of $1.4 million.
    
    Inclusive of the revenue and operating profit generated from these 5
    additional trading days, revenue totalled $122 million, a 17% increase over
    the prior comparative period (pcp). EBITDA of $24 million and EBITA of $21
    million were 27% and 31% above the pcp, respectively. NPATA of $14 million
    and NPAT of $13 million were 38% and 37% above the pcp, respectively.
    
    Freightways' 1st quarter results (unaudited):
    
    Quarter ended:
    Sep-14 $000; Sep-13 $000; Increase %
    Operating revenue 122,299; 104,691; 16.8%
    EBITDA 24,406; 19,231; 26.9%
    EBITA 21,345; 16,327; 30.7%
    NPATA 13,661; 9,892; 38.1%
    NPAT 13,363; 9,790; 36.5%
    
    (Note: For results excluding the impact of 5 additional trading days this
    quarter, refer to attached PDF).
    
    Our result represents the strongest first quarter performance the Company has
    experienced since 2004 and highlights once again the strength of the
    Freightways business model, the positive earnings leverage the Company is
    able to achieve in a growing market and the achievements of those working
    throughout Freightways' businesses.
    
    Express Package & Business Mail division
    
    Inclusive of the impact of the 5 additional trading days, our express package
    & business mail division's revenue of $94 million was 18% above the pcp.
    EBITDA of $18 million and EBITA of $16 million were 33% and 36% ahead of the
    pcp, respectively, as follows:
    
    Quarter ended:
    Sep-14 $000; Sep-13 $000; Increase %
    Operating revenue 94,276; 80,050; 17.8%
    EBITDA 17,881; 13,466; 32.8%
    EBITA 16,299; 12,057; 35.2%
    EBITA Margin 17.3%;15.1%
    
    (Note: For results excluding the impact of 5 additional trading days this
    quarter, refer to attached PDF).
    
    Increased activity from existing customers throughout all geographies and
    industries in New Zealand has been further assisted by quality market share
    gains and some pricing improvement. New Zealand Couriers, Post Haste, Castle
    Parcels, NOW Couriers, Pass The Parcel, SUB60, Kiwi Express, Stuck and
    Security Express, have all delivered record results. Our strategy to extend
    DX Mail's suite of postal services, including through the acquisition of
    Dataprint, is also proving successful, with each of these businesses
    performing well ahead of the pcp.
    
    Information Management division
    
    Inclusive of the 5 extra trading days, our information management division's
    revenue of $29 million is 14% ahead of the pcp. EBITDA of $7 million and
    EBITA of $6 million were 18% and 23% ahead of the pcp, respectively, as
    follows:
    
    Quarter ended:
    Sep-14 $000; Sep-13 $000; Increase %
    Operating revenue 28,795; 25,219; 14.2%
    EBITDA 6,997; 5,920; 18.2%
    EBITA 5,914; 4,823; 22.6%
    EBITA Margin 20.5%; 19.1%
    
    (Note: For results excluding the impact of 5 additional trading days this
    quarter, refer to attached PDF).
    
    Growth from existing customers and market share gains in all locations have
    contributed to increased utilisation of the capacity we have invested in over
    recent years. Following the prior year acquisition of Advance Security
    Destruction, we have commissioned a new document shredding facility in
    Sydney. We have also acquired a small Business Process Outsourcing business
    based in Melbourne. The services offered by this BPO business will be offered
    to customers throughout both Australia and New Zealand. The total initial
    cost of this acquisition was $2 million, and there is a future potential
    earnout amount of $1.8 million. First year EBITDA expectations from this
    acquisition, for the 10 months of our ownership, are $0.5 million.
    
    Both our New Zealand and Australian information management businesses have
    recorded record results.
    
    Corporate
    
    Corporate costs continue to be well contained and capital expenditure remains
    at targeted levels with full year forecast expenditure expected to be
    approximately $17 million.
    
    Outlook
    
    The positive performance evident in this 1st quarter result underpins our
    expectation of year-on-year earnings growth in 2015, subject to business
    factors beyond our control.
    
    Within our express package businesses we remain encouraged by the increased
    activity amongst our existing customer base, both from Business to Business
    (B2B) and Business to Consumer (B2C) deliveries.
    
    Our smaller DX Mail business will continue to operate in a challenging
    market, despite which it is expected to continue to attract customer demand,
    particularly for its overnight street delivery service. Demand for
    Dataprint's physical and particularly its digital mailhouse services is
    expected to continue to increase.
    
    The growth that we are experiencing in our information management businesses
    is expected to continue, including from the digital services that we offer.
    
    Freightways will continue to seek out and develop strategic growth
    opportunities, including acquisitions and alliances that complement its core
    capabilities.
    
    For further information contact:
    
    DEAN BRACEWELL
    Managing Director
    Ph: (09) 571 9672
    End CA:00256988 For:FRE    Type:QUARTER    Time:2014-10-30 10:04:44
    				
 
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