Courier business Freightways profit increased by 4.8%; eyes on the growth of e-commerce
Freightways’ express parcel and refrigerated service has been the most successful over the past year.
Freightways increased its profits by 4.8%, helped by its courier service and recently acquired the Big Chill business.
Profit reached $ 49.6 million as of June 30, from $ 47.4 million the year before. The latest profit was reduced by an additional payment of $ 23 million to Big Chill Distribution after exceeding performance targets.
Freightways, whose brands include New Zealand Couriers, Post Haste Couriers and Castle Parcels, expanded into temperature-controlled delivery and storage in April last year with its acquisition of Big Chill, which it says owns about 11% of New Zealand’s billion dollar market.
The company’s express parcel and refrigerated service was the best performer over the past year, increasing revenue 36% to $ 572.6 million. Total group revenue increased 27% to $ 801 million.
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“We see growth opportunities in our messaging business as e-commerce continues to grow,” said Managing Director Mark Troughear. “The emergence of new consumer trends, such as people wanting more direct access to fresh food, is one of them. “
Freightways has increased the amount it charges for deliveries, as part of its “effort pricing” strategy that targets areas of its business where prices do not fully reflect the cost of providing the service.
This saw the average compensation of its couriers improve by 8 percent and reduce the turnover of its courier fleet by 10 percent, the company said.
“By retaining more experienced couriers, it means better experiences for our customers,” said Troughear. “We have an increasing number of candidates applying to join our fleets and our employees feel more valued, so they are more productive and more commercial.
“As a result, we went through a difficult time with a growing team and increased activity. “
Freightways will pay a final dividend of 18 cents per share on October 1. It’s a turnaround from last year when the board decided not to pay a final dividend after its business was disrupted by Covid-19.
Troughear said the latest foreclosure will impact the business and revenue of the business.
He said the company has activated its protocols to operate at Alert Level 4.
“There is leeway in our banking facilities and the ability to adapt our cost base to adapt to changing events,” he said.
Freightways shares edged up 0.1 percent to $ 13 and gained 31 percent in the past year.