Ann: QUARTER: FRE: Trading Update

• Release Date: 29/10/15 09:59
• Summary: QUARTER: FRE: Trading Update
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					FRE
29/10/2015 09:59
QUARTER
PRICE SENSITIVE
REL: 0959 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 2015 is provided below.

The prior comparative period (pcp) included 5 extra trading days compared to
this 1st quarter due to a re-alignment of our accounting calendar that
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.

Exclusive of the revenue and operating profit generated from these 5 extra
trading days in the pcp, Freightways' result for this 1st quarter shows a
revenue increase of 10%, EBITDA increase of 13%, EBITA increase of 15%, NPATA
increase of 14% and NPAT increase of 13%.

Freightways' 1st quarter result (unaudited):

Quarter ended:
Sep-15 $000; Sep-14 $000; Increase %
Operating revenue 126,783; 122,299; 3.7%
EBITDA 25,296; 24,406; 3.6%
EBITA 22,215; 21,345; 4.1%
NPATA 13,951; 13,661; 2.1%
NPAT 13,479; 13,363; 0.9%

The table below shows results excluding the impact of 5 additional trading
days in the first quarter of last year.

Quarter ended:
Sep-15 $000; Sep-14 $000; Increase %
Operating revenue 126,783; 115,299; 10.0%
EBITDA 25,296; 22,406; 12.9%
EBITA 22,215; 19,345; 14.8%
NPATA 13,951; 12,221; 14.2%
NPAT 13,479; 11,923; 13.1%

The benefits of Freightways' successful strategic industry and geographical
diversification, the positive features of the markets it works in and the
successful execution of a wide range of growth strategies are once again
evidenced in this strong 1st quarter result.

Express Package & Business Mail division
Exclusive of the impact of the 5 extra trading days in the pcp, the express
package & business mail division's revenue was 4% above the pcp and EBITDA
and EBITA were 4% and 5% ahead of the pcp, respectively. This division's
unaudited result is as follows:

Quarter ended:
Sep-15 $000; Sep-14 $000; Decrease %
Operating revenue 92,187; 94,276; (2.2)%
EBITDA 17,067; 17,881; (4.6)%
EBITA 15,601; 16,299; (4.3)%
EBITA Margin 16.9%; 17.3%

The table below shows results excluding the impact of 5 additional trading
days in the first quarter of last year.

Quarter ended:
Sep-15 $000; Sep-14 $000; Decrease %
Operating revenue 92,187; 88,276; 4.4%
EBITDA 17,067; 16,381; 4.2%
EBITA 15,601; 14,799; 5.4%
EBITA Margin 16.9%; 16.8%

Sound performance across all Freightways express package and business mail
businesses was underpinned by increased activity from existing customers,
quality market share gains and some pricing improvement. Volume increases
from both Business-to-Business and Business-to-Consumer segments of the
market contributed to this result.

Information Management division
Exclusive of the impact of the 5 extra trading days in the pcp, the
information management division's revenue was 27% ahead of the pcp and EBITDA
and EBITA were 33% and 37% ahead of the pcp, respectively. This division's
unaudited result is as follows:

Quarter ended:
Sep-15 $000; Sep-14 $000; Increase %
Operating revenue 35,178; 28,795; 22.2%
EBITDA 8,633; 6,997; 23.4%
EBITA 7,426; 5,914; 25.6%
EBITA Margin 21.1%; 20.5%

The table below shows results excluding the impact of 5 additional trading
days in the first quarter of last year.

Quarter ended:
Sep-15 $000; Sep-14 $000; Increase %
Operating revenue 35,178; 27,795; 26.6%
EBITDA 8,633; 6,497; 32.9%
EBITA 7,426; 5,414; 37.2%
EBITA Margin 21.1%; 19.5%

This division's performance, as expected, demonstrated resilience to the
economic cycle, with growth being achieved in both Australia and New Zealand.
Increased document storage and destruction volumes generated from both
existing and new customers contributed to improved utilisation of existing
equipment and facilities. Revenue and earnings from businesses acquired in
the latter stages of the prior calendar year and from the relatively new
suite of electronic services on offer also contributed to this result. The
acquisitions of two small businesses, one in Sydney and one in Brisbane,
during this quarter for a total cost of $3 million, are expected to generate
annualised EBITDA of $1 million once fully integrated with our existing
businesses.

Additionally, we have re-launched our New Zealand and Australian information
management businesses under the umbrella brand of TIMG - The Information
Management Group. The new brand better represents the suite of physical and
electronic services now offered by these businesses and enables our sales
teams to have broader 'information management' conversations with our
customers.

Corporate
Corporate costs continue to be well contained and capital expenditure remains
at targeted levels with full year forecast capital expenditure expected to be
approximately $20 million.

Outlook
Freightways' businesses are well-positioned to benefit from the growth
opportunities that exist in both the express package & business mail and
information management markets.

The express package market is expected to continue to expand, albeit not at
the same rate as seen in the prior financial year. The business mail
operations of DX Mail and Dataprint are expected to sustain their positive
growth, largely from market share gains.

The information management market is expected to continue to grow due to the
service and cost advantages for businesses of outsourcing their document and
data storage requirements. Privacy of business information will continue to
be a primary driver of demand for secure document destruction services.
Customers will continue to seek complementary and substitute electronic
services relating to the creation and management of business information,
which Freightways' businesses are also able to offer.

Overall cash flows are expected to remain strong throughout the 2016
financial year.

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:00272489 For:FRE    Type:QUARTER    Time:2015-10-29 09:59:52