half year presentation 7 february 2006. this presentation relates to the freightways limited nzx...
TRANSCRIPT
Half Year Presentation
7 February 2006
This presentation relates to the Freightways Limited NZX announcement and media release of 7 February 2006.
As such it should be read in conjunction with, and is subject to the explanations and views contained in, those releases.
Presentation
2006 Half year highlights
Operating performance
Business strategy
Outlook
2006 Half Year Highlights
General Highlights
• All subsidiaries delivered improved year on year performance
• Strategies continue to realise profitable growth in both ‘Core’ Express Package and ‘Emerging’ Business Mail and Information Management markets
• Kiwi Express has performed fully to expectation since acquisition in October 2005
Financial Highlights
Dec-05 Dec-04 variance$000 $000 %
Operating revenue 129,796 117,226 11%
EBITDA 31,043 28,212 10%
EBITA 28,668 26,000 10%
NPAT 13,536 11,238 20%
NPATA 16,006 13,785 16%
Earnings per share (NPAT) 11 cents 9 cents 20%
Operating Performance
• 11% revenue growth compared to Dec 2004
• 5-year compound average annual revenue growth of 8%
Operating Revenue
-
50
100
150
200
250
Jun99 Jun00 Jun01 Jun02 Jun03 Jun04 Jun05 Jun06
Year Ended
$M 2nd Half
1st Half
Where Revenue Growth Has Come From
100
105
110
115
120
125
130
135
2005 Organic Pricing New business Acquisition 2006
Growth drivers
$M
117 1%
4%
5% 1% 130
EBITA
• 10% EBITA growth compared to Dec 2004
• 5-year compound average annual EBITA growth of 18%
-
10
20
30
40
50
Jun99 Jun00 Jun01 Jun02 Jun03 Jun04 Jun05 Jun06
Year Ended
$M2nd Half
1st Half
Drivers of EBITA Growth
• Successful implementation of growth strategies
• Disciplined margin focus relating to new business
• Successful implementation of pricing strategies to lessen the impact of increased costs
Balance Sheet
• Continuation of negative working capital position
• Increase in intangibles of $1m (net of amortisation), due to Kiwi Express acquisition for $3.5m
• Goodwill amortised over 20 years ($2.5m half year charge)
• Net bank borrowings increased by $2m only
Cash Flows
• Cash generated from operations of $27m reflects strong trading result
• Interest paid at expectation and below last year
• Capital expenditure at expectation of $4m for the half year
• Acquisitions for the half year were $3.6m in total
Dividends
Dec-05 Dec-04 Dec-03
Dividend declared $10.90m $9.45m $7.25m
Cents per share 8.50 7.50 5.85
Key points:• Increase of 13% compared to 2004• Fully Imputed• Record date 17 March 2006• Payable 31 March 2006
Finance Facilities
• Finance facilities include $140m core debt facility and $15m acquisition facility
• Net debt of $126m at 31 December 2005
• Acquisition of Kiwi Express funded using core debt facility
Business Strategy
Business strategy
• Continued development of growth opportunities in Freightways’ existing three core markets
• Positioning, People, Performance, Profit
• Explore complementary growth opportunities
Outlook
Capital expenditure
2006Half Year Full
Year Actual Forecast
Capital expenditure $4.0m $7.8m
Depreciation $2.4m $4.8m
• 2005/06 includes stepped investment in core IT infrastructure
Outlook
• Existing customers are expected to continue to grow at a lower rate than the previous year
• Investment in people and infrastructure to drive/support growth
• Characteristics of competitive environment expected to remain unchanged
• FRE competitive advantage will be further enhanced through additional customer-oriented technology solutions
• Consistent application of proven market strategies
Summary
Strong successful business
Positioned to deliver continuing earnings growth
Delivering an attractive dividend yield