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Full Year Presentation
8 August 2005
This presentation relates to the Freightways Limited NZX announcement and media release of 8 August 2005.
As such it should be read in conjunction with, and is subject to the explanations and views contained in, those releases.
Presentation
2005 highlights
Operating performance
Business strategy
Outlook
2005 Highlights
General Highlights
• All subsidiaries have performed very well
• Strategies continue to realise profitable growth in both ‘Core’ Express Package and ‘Emerging’ Business Mail and Information Management markets
• Archive Security acquisition performed fully to expectation during first full year of ownership
Financial Highlights
2005 2004 variance
$000 $000 %
Operating revenue 233,725 214,498 9%
EBITDA 54,996 45,618 21%
EBITA 50,539 40,714 24%
NPAT 21,991 16,137 36%
NPATA 26,948 21,081 28%
Earnings per share (NPAT) 17 cents 13 cents 30%
Operating Performance
• 9% revenue growth compared to 2004
• 5-year compound average annual revenue growth of 7%
Operating Revenue
-
50
100
150
200
250
Jun99 Jun00 Jun01 Jun02 Jun03 Jun04 Jun05
Year Ended
$M 2nd Half
1st Half
Where Revenue Growth Has Come From
180
190
200
210
220
230
240
2004 Organic Pricing Market share Acquisition 2005
Growth drivers
$M
214
4.5%3% 0.5% 1% 234
EBITA
• 24% EBITA growth compared to 2004
• 5-year compound average annual EBITA growth of 19%
-
10
20
30
40
50
Jun99 Jun00 Jun01 Jun02 Jun03 Jun04 Jun05
Year Ended
$M 2nd Half
1st Half
Drivers of EBITA Growth
• Good cost control
• Disciplined margin focus relating to new business
• Favourable business mix
• Leverage gained by adding revenue to established national infrastructure
Cash Flows
• Cash generated from operations of $55m reflects strong EBITDA result
• Capital expenditure at expectation of $8.6m
• Borrowings reduced by $4m during the year
Balance Sheet
• Continuation of strong negative working capital position
• Increase in fixed assets of $4m (net of depreciation)
• Reduction in bank borrowings of $4m
• Goodwill amortised over 20 years ($5m annual charge)
Dividends
Jun-05 Dec-04 Jun-04 Dec-03
Dividend declared $10.7m $9.45m $8.55m $7.25m
Cents per share 8.50 7.50 6.90 5.85
Full year (cps) 16.00 12.75
Key points:• Increase of 26% compared to 2004• Fully Imputed• Record date 16 September 2005• Payable 30 September 2005
Finance Facilities
• Refinancing completed November 2004 to replace subordinated debt with core bank debt
• Interest savings of approximately $500k p.a. flow from 1 July 2005
• New finance facility provides $140m core debt and $15m acquisition facility
• Debt drawn to $127m at 30 June 2005
Business Strategy
Business strategy
• Continued development of growth opportunities in Freightways’ existing three core markets
• Positioning, People, Performance, Profit
• Explore incremental and complementary growth opportunities
• Invest in IT and infrastructure
Outlook
Capital expenditure
2006 2005Forecast Actual
Capital expenditure $7.2m $8.6m
Depreciation $5.3m $4.5m
• 2005/06 includes stepped investment in core IT infrastructure
Outlook
• A less buoyant economy is expected
• Investment in people and infrastructure
• Characteristics of competitive environment expected to remain unchanged
• Consistent application of proven market strategies
• All subsidiaries well positioned to accommodate growth
• Positive outlook for shareholders and all other stakeholders
Summary
Strong successful business
Positioned to deliver continuing earnings growth
Delivering an attractive dividend yield