Freightways chief executive Mark Troughear Photo: Supplied
Transport and information management company Freightways posted a modest lift in first half profit as an expansion into the Australian parcel market and price rises countered a slowing home market.
It said its more diversified business on both sides of the Tasman had allowed to counter rising interest rates and labour costs, and slower growth.
Key numbers for the six months ended December compared with a year ago:
- Net profit $45.2m vs $43.7m
- Revenue $552m vs $442m
- Interim dividend unchanged at 18 cents a share
The Express Package division was lifted by the contribution of the recently acquired Australian firm Allied Express, which increased its market share, while the New Zealand operations carried lower volumes but compensated with increased prices.
Chief executive Mark Troughear said the previous year benefited from the consumer spend up after the end of Covid lockdowns, so a moderation was not unexpected.
"I think people are out, maybe buying more holidays and airline flights and coffees and wines and what have you, and maybe a few less goods, but still pretty strong result."
He said the acquisition of the Allied Express business had given them not just a lift and diversification of earnings but plenty of scope for growth.
"It's a really strong performance, they're well positioned and the Australian Express market is enormous, it's about seven or eight times larger than New Zealand, so there's plenty of opportunity over there."
A decline in business for the medical waste business, as the Covid boost receded, dented the overall earnings of the Information Management and Waste division, while the Big Chill refrigerated freight business lifted as did the DX Mail operation.
Troughear said Freightways was wary in an environment of higher interest rates, inflation, cautious consumer spending, and labour shortages, which would see the company look to control costs and use its cash flow carefully.
However, he said Australia offered the best chance of finding acquisition targets and expansion.
