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Fliway profit jumps on strong first half

NZ NewswireNZ Newswire 22/08/2016 Jonathan Underhill

Fliway Group, the listed transport and logistics group, says full-year profit has jumped 156 per cent as lower costs made up for a drop in international revenue.

Profit rose to $5.6 million in the year ended June 30, from $2.19m a year earlier, the Auckland-based company said on Tuesday. Sales fell 1.8 per cent to $82.6m.

In June the company said it lost a major customer, which would hurt revenue and earnings in 2017. The customer, which it didn't identify, accounted for about 10 per cent of Fliway's earnings in the 2016 year, it said at the time.

Chairman Craig Stobo says the company will focus on cost control while working to strengthen existing customer relationships, making acquisitions and pursuing work in new sectors.

"While we continue to experience softer revenue we are aggressively managing costs to protect the profit position."

Revenue fell in the latest year as a result of a "reduced fuel adjustment factor" and the loss of Dick Smith Electronics as a customer in the domestic division, and depressed shipping rates and lower freight volumes in the International business, Fliway said.

Domestic revenue fell 0.2 per cent to $55.7m and earnings before interest, tax, depreciation and amortisation gained 21 per cent to $10.2m. In international, sales fell 4.9 per cent to about $27m and ebitda dropped 7.7 per cent to $3.6m.

Fliway will pay a final dividend of 5.35 cents a share, up from 2.8 cents a year earlier and bringing total payments for the year to 8.65 cents.

Net debt fell 30 per cent to $5.8m while operating cash flow rose to $6.7m from $5.7m. Capital spending fell to $2.6m from $4.6m.

Fliway transports and warehouses freight throughout New Zealand and coordinates freight movements internationally, including customs clearance. It has 400 staff, 170 vehicles in its fleet, and 15 sites nationwide. It also owns half of UPS-Fliway, a joint venture its had for the past 17 years with UPS, one of the world's largest package delivery companies.

The stock last traded at 95 cents after being sold at $1.20 in an initial public offering in April last year.

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