Freightways tops $200M in revenue

Press, 27 October 1982, Page 33

Freightways tops $200M in revenue

PA Wellington The tax-paid profit of Freightways Holdings, Ltd, reached SIOM last year, an increase of 48 per cent, and its gross revenue topped S2OOM for the first time.

The year was notable for those two milestones, the managing director, Mr R. H. Pettigrew, says in his review, included in the annual report for the year ended June 30, and just released. “Continuing tight control of operating costs has enabled us to realise a further improvement in operating profit to 7.8 cents m the revenue dollar, compared with 7.2 c last year. “Trading for the year reflected the buoyant pre-elec-tion business conditions which were maintained well into 1982 with the volume of goods movement at a much more stable level than in the preceding year." The group's two major divisions — forwarding and road — had produced most satisfactory results with international operations making a worth-while contribution. The Security Services Division completed its first year of trading as Armourguard with a considerably improved performance. “With the demand for security systems showing very steady growth, this division is expected to develop further during the current year," says Mr Pettigrew.

"Outside shareholding in associate companies has again produced a very good return, our share of the taxpaid profit increasing 59 per cent over 1981.”

With an investment now totalling $5,579,000 in capital subscribed and the share of retained earnings in associates, this aspect of Freightways’ operations is becoming an increasingly important part of the group. As already reported, in the year ended June 30, net profit increased from $7,240,000 to $10,708,000 after group turnover totalled $210,743,000 ($161,120,000 in 1981). The annual dividend rate improved from 24 to 28 per cent (14c a share), requiring $2,971,000 ($2,515,000) covered 3.5 times (2.8 times).

The earnings per ordinary share improve from 34.1 to 50.3 c while the earning rate on average shareholders' funds moves up from 22.5 to 27.5 per cent. Shareholders’ gross equity slips from 54.4 to 54.2 per cent with the current ratio 1.19 to 1 (1.22 to 1). At balance date the 50c ordinary shares had a net asset backing of $1.54 ($1.27 in 1981). The 10 major shareholders are listed: Mayne Nickless, Ltd, (Melbourne), 24 per cent: AMP Society, 8.97; NML, 6.77; TNL Group, Ltd, 4.70; CML, 3.66; NZSB group, 2.97; Government Life Insurance,

2.73; ANZ Custodians, Ltd. 2.70; Norwich Union, 1.98; State Insurance, 1.27 per cent. There were 14.756,455 ordinary shares on issue at June 30.

In his report, the chairman, Mr J. A. Valentine, says that expansion will continue when suitable opportunities arise, either through internal growth by new services, or through acquisition.

Mr Valentine listed the major external investments:—

• N.Z. Maritime Holdings, Ltd, (15.3 per cent): a further 107,241 shares were acquired during the year. ® TNL Group. Ltd (12.1 per cent) no change in this shareholding. ® Carlton Cranes, Ltd (50 per cent).

• Chemical Cleaning, Ltd (49 per cent).

• Trans-Express Investments, Ltd (50 per cent). ® Grower Holdings, Ltd (Hastings): a 24.9 per cent interest acquired in March, 1982.

• Flexible Hoses. Ltd. (Auckland): 60 per cent acquired. © Speedy Carrying Company, Ltd (Auckland): assets and business acquired in April.

• Trans-Security, Ltd (New Plymouth): acquired.

• Freightways International (Far East), Ltd (Hong Kong): established in December.