New Zealand’s Freightways achieves record results in 2012

New Zealand parcel and courier company Freightways has achieved record results in its 2012 fiscal year, on the back of volume and price increases, new business and acquisitions. The Group which delivers around 200,000 items each working day and 50m a year said today that it has achieved a 17% improvement in profit after tax in the year up to the end of June, to $36m,compared to the same period last year.

Operating revenue rose 8% to $382m, with earnings before tax up 9% to $62% excluding one-off costs.

The Group’s Express Package and Business Mail division accounted for 75% of group revenues, with its sales for the year up 5% compared to 2011, to $292m, while earnings before tax was up 8% to $48m.

The company said its particularly strong first quarter of the financial year underpinned a “very good” first half of the year, while the second half of 2012 had not proved as strong, as expected, but remained positive.

Managing director Dean Bracewell said growth in the division came from all locations across New Zealand, and from most industry sectors.

He said: “Increased volumes from existing customers, quality market share gains and price increases, including the recovery of higher fuel prices, underpinned the revenue growth.”

Bracewell added that online shopping continued to be the fastest-growing source of income for Freightways.

Freightways said most business customers in the Christchurch area of New Zealand had returned to activity levels seen before last year’s earthquake, but its DX Mail subsidiary was continuing to be affected by the relatively low tourism-related volumes in the wake of the disaster, which caused widespread damage to New Zealand’s second-largest city in February 2011, with significant aftershocks in June and December of last year.

The aftermath of the earthquake also saw operating costs for courier delivery and pickups increasing.

During the year, Freightways said its Post Haste and Castle Parcels depots at the Group hub in Auckland were nearly completed, with the project also allowing its NOW Couriers unit to operate on the site.

In the rest of the group, Freightways’ Information Management division saw its revenue of $91m up 21% compared to the same period last year, which Bracewell described as “particularly encouraging”.

The division accounting for a quarter of group revenues has seen the Freightways Group diversifying into areas like document security, online security and data services.

Bracewell said during the 2012 year new services were added to the division, with acquisitions including multinational information management firm Iron Mountain’s New Zealand operations and Sydney-based Filesaver Pty Ltd.

Looking ahead, Freightways said it was expecting gradual improvement in its markets, although the company’s managing director noted that adverse global economic conditions could have an impact.