- Even though Freightways faced many challenges last year, in FY21, it moved forward.
- Reported a record performance in earnings.
- The acquisition of Big Chill helped significantly in its growth.
Freightways Limited (NZX:FRE) faced many challenges due to COVID-19 last year, but in FY21, the Company moved forward by advancing the Pricing For Effort initiative for the courier brands, and integrating information management systems in its pick-up and delivery practices.
Workforce also grew by around 350 people through the acquisition of Big Chill. It was a very important step as it enabled the Company to give value-added services to its customers. Its express package brands moved from being business-to-business to business-to-customers brands. The year also saw the company gain market share significantly.
FY21 earnings report shows strong growth
FRE announced its full-year results on 23 August 2021. It reported a revenue growth of 27%. Its EBIT grew by 22% and NPAT grew by 4.6% with adjustment for the accrual of the final Big Chill payment. The Company’s EBIT increase before other expenses was 33% and NPAT grew by 30% before other expenses.
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For the year ahead, the Company will continuously focus on penetrating niche markets, as Big Chill’s success has demonstrated that there is scope for expansion for this part of the business. It will have continued emphasis on refining the DX mail network to make it as efficient as possible.
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Further, it plans to roll out dataprint for digital services.
Declares final dividend
While last year, the Company did not declare any final dividend for FY20 due to the impact of COVID-19, this year, it has returned with the payment of the final dividend. It announced a dividend of 18cps with some 7cps as fully imputed credits to be paid on 1 October 2021.
The Company had a record year in terms of earnings and performance across the businesses despite the continued disruptions caused by periodic lockdowns.
However, the Company will focus on growing its margins in Australia and continue to build profitability in NZ brands although there are several constraints like shortage of labour, which is taking the cost of labour higher, disrupted supply chain and future lockdowns.
Even though the company has had a robust FY21 on the back of the acquisition of Big Chill and the revamp of other business units, uncertainty around the Coronavirus spread and level 4 lockdowns are making the Company cautious. If the level 4 lockdown extends for a longer period, the Company will have to evaluate its cost base, but if level 4 moves to level 3, the Company is poised to be back on track.
On 25 August 2021, FRE was trading up by 1.40% at NZ$13.060, at the time of writing.