Freightways lifts Q1 earnings 37%

Freightways has affirmed it is on track to lift 2015 earnings after recording the strongest first-quarter performance in a decade, widening its profit margin on a 17 per cent increase in sales.

Shares of Freightways rose 6.8 per cent to a record $5.50 after the announcement.

Profit rose 37 per cent to $13.4 million in the three months ended September 30, from $9.79m a year earlier, the Auckland-based company said in a statement.

Operating revenue climbed to $122m from about $105m. The first quarter included five extra trading days that added $1.4m to profit.

Freightways operates a suite of courier-related brands and said on Thursday that New Zealand Couriers, Post Haste, Castle Parcels, NOW Couriers, Pass The Parcel, SUB60, Kiwi Express, Stuck and Security Express, "all delivered record results" in the first quarter.

It attributed the gains to increased demand from existing customers and from winning market share. The company has lifted operating revenue and pretax earnings every year bar one in the past decade.

"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," managing director Dean Bracewell said.

"The positive performance evident in this first quarter result underpins our expectation of year-on-year earnings growth in 2015."

In the company's biggest business, the express package & business mail division, sales climbed 18 per cent to $94.3m and earnings before interest, tax and amortisation jumped 35 per cent to $16.3m.

Its DX Mail business "continue to operate in a challenging market," although its suite of postal services were all performing ahead of the same year-earlier period, including Dataprint acquired in 2012.

Freightways' information management division recorded a 14 per cent increase in sales to $28.8m and a 23 per cent gain in Ebita to $5.9m.