Freightways business diversification
should keep them in good stead for
The announcement today of Freightways Ltd(FRE) and that its profit is up by 2% should be welcome news to shareholders.
The local economy has been stagnant for some time now and severe pressure from increased business costs has had a clear impact on the bottom line, considering revenue was up 12% on last year.
Labour, fuel, electricity and other state imposed business taxes and costs have dragged the results down and will continue to do so until company taxes are slashed and the emphasis on new taxes, like carbon related "green" taxes have been removed from the lexicon of daily life.
The future will be tough but an effort a few years back to diversify revenue streams and invest in a broader range of businesses that Freightways owns has seemed to have paid off.
Document management business in Australia and New Zealand has offset the less rapidly growing traditional areas of delivery services throughout NZ.
Mr Market today didn't like what it heard and pushed the share price down 1.25% to NZ$3.15 but in my humble opinion, the market should be well pleased that the company managed to deliver a solid, but not spectacular result, considering the economic stress kiwi citizens are clearly under.
Management deserve a good 8.5 out of 10 for this last half year.
Disclosure I own FRE shares
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c Share Investor 2008