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Fliway to lose major customer

NZN 12/06/2016 Tina Morrison

Listed transport and logistics group Fliway expects the loss of a large customer will hurt revenue and earnings next financial year.

The customer, which Fliway didn't name, is consolidating its transport and logistics business with a rival following a competitive tender process, Auckland-based Fliway said.

The customer contributes between 4 and 5 per cent of Fliway's total revenue and will likely make up about 10 per cent of Fliway's earnings before interest, tax, depreciation and amortisation in the year to the end of June, the company said. The work is expected to transition from August 2016.

"This is a material customer for Fliway and, while there will be no impact on the FY16 results ... at this stage there is expected to be a significant impact on the FY17 revenue and earnings," Fliway said.

"Targeted areas of cost reduction will be considered in order to minimise the financial impact of this customer loss, but only where there is no impact to service for our customers."

The company said it was disappointed to have not been retained the business, and will continue seeking to win contracts with new customers.

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.

Its stock last traded at $1.08, after being sold at $1.20 in an initial public offering in April last year.

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