26 Oct 2012

Freightways profit rises

8:30 pm on 26 October 2012

Freightways' profit has risen 14% in the first three months of the new financial year, driven by a small lift in revenue from its main express mail business and a strong performance by its information management arm.

The listed logistics company says profit rose to $9.2 million in the September quarter, while revenue rose 8% to $101 million.

At its annual meeting in Auckland on Thursday, Freightways managing director Dean Bracewell told investors that result has been achieved in a low-growth environment.

Mr Bracewell says the projected full-year result is expected to be within analysts' expectations.

He says the company has put up prices in its main express and business mail division to partly offset cost increases caused by higher road user charges and insurance.

In its information management division, the impact of significantly lower paper prices was offset by a strong performance in document and data storage operations.

Mr Bracewell says the company is mindful that any further deterioration in the global economy will influence the market Freightways operates in.

He says the company sees a slow-growth environment ahead, but it has done pretty well in s environments.

Mr Bracewell says ultimately Freightways' customers will determine the company's performance.

Dispute settlement 'close'

Freightways says it is close to resolving a dispute over the price it pays New Zealand Post to access its network.

Its letters delivery business, DX Mail - the only national competitor to NZ Post - depends on access to NZ Post for half its mail service and is challenging the price it pays to use it.

Mr Bracewell says it is a small component of his company's operation but it is important to address the matter. He expects an independent panel to resolve the issue next year.

The company's shares were up 6c to $4.47 on Thursday.