Fliway Group Limited | |
Results for announcement to the market - NZX Appendix 1 | |
Reporting Period | 6 months to 31 December 2016 |
Previous Reporting Period | 6 months to 31 December 2015 |
Amount (000s) | Percentage change | |
Revenue from ordinary activities | $43,221 | -1.40% |
Profit (loss) from ordinary activities after tax attributable to shareholders | $2,195 | -38.70% |
Net profit (loss) attributable to shareholders | $2,195 | -38.70% |
Dividends | Amount per share | Imputed amount per share |
Interim Ordinary Dividend (for 2017 financial year) | 2.00 cents | 0.78 cents |
Record Date | 31-Mar-17 |
Dividend Payment Date | 20-Apr-17 |
Net Tangible Assets | Current Year | Previous corresponding year |
Number of shares | 45,437,910 | 45,437,910 |
Net Tangible Assets per share | $0.19 | $0.20 |
Audit: | The interim financial statements attached to this report have not been audited. |
Comments: | Please refer to the attached report for detailed commentary on the results. |
FLIWAY GROUP LIMITED | |
INTERIM REPORT | |
FOR THE SIX MONTHS ENDED 31 DECEMBER 2016 | |
Contents | |
Directors Report | 2 |
Comprehensive income | 4 |
Changes in equity | 5 |
Financial position | 6 |
Cash flows | 7 |
Notes to the Financial Statements | 8 - 10 |
Directory | 11 |
FLIWAY GROUP LIMITED |
DIRECTORS REPORT |
OVERVIEW - BUSINESS DEVELOPMENT SUCCESS |
Stronger performance from the Business Development teams in both the Domestic and International divisions |
meant revenue for 1H17 was down year on year by only 1.4% despite the customer loss announced in June 2016. |
The December month's revenue was 5% ahead of last year as the new customer wins and existing customer uptrades |
delivered a strong revenue finish to the first half of FY17. Further customer contract wins with commencement dates |
in 2017 have seen us secure additional capacity in both Transport and Warehousing. |
Fliway Group performance was impacted by the customer loss. As indicated at the time, it was expected the |
EBITDA impact could appropximate 10% of Fliway's historical EBITDA performance and this has been reflected |
in the 1H17 results. Issues additionally impacting the business have been capacity constraints in the Transport |
business unit as a result of internal linehaul equipment availablility and the Kaikoura earthquake, which transferred |
significant rail freight volumes onto road, thereby consuming capacity overflow options over a peak trading period. |
Customer volumes, particularly in the second quarter, exceeded the network capacity in Transport. |
Additional work was gained through the wider relationship with UPS and a number of initiatives were undertaken |
in the UPS-Fliway joint venture to lower the cost of package delivery in New Zealand, in order to create a more |
competitive international destination offering and facilitate higher levels of import package growth moving forward. |
DIVISIONAL PERFORMANCE |
Domestic Division |
Transport volume levels for the six months to December were ahead of last year as a result of the excellent |
business development work in that division that has seen new accounts either trading or signed, approximating |
$5 million in annualised new revenue. The higher freight volumes in the Transport business unit have seen Fliway |
operating outside its network capacity, requiring short term supplementary capacity solutions that have come at a cost |
premium due largely to that capacity being consumed by the consequences of the Kaikoura earthquake which significantly |
increased the road freight task as rail freight was disabled. |
Internally, the Transport business unit implemented cost initiatives as a result of anticipated lower volumes that |
reduced capacity, at a time when new business and customer uptrades saw volumes increase ahead of last |
years levels. This short term capacity shortfall created cost issues that will have more economic solutions implemented |
against them in the future. |
In the Logistics business unit, warehousing revenues were slightly down on last year, with strong cost |
management delivering a comparable profit result to last year. As a result of the business development wins in |
the domestic division, Fliway will be increasing warehouse capacity in Auckland by a further 6,000 square metres, |
or approx. 20%, in quarter 3 to accommodate the new growth. |
The roll out of the new Warehouse Management System is progressing well and will deliver productivity gains once |
fully implemented. |
International Division |
EBITDA for the division was in line with last year, as a result of strong customer focus and good results from the business |
development team in winning new customers. The first half of FY17 saw significant changes in Flway International, with |
management changes, a continuation of low sea freight rates and some customer churn. The management team of the |
division has been re-organised and is performing well under the new leadership, strengthening relationships with |
network partners, customers and carriers. |
As part of the customer focus initiatives in International, progress is being made on creating improved |
technological solutions to deliver for customers improved data and visibilty whilst at the same time moving |
to a paperless environment with improved workflow. |
UPS-Fliway Joint Venture | |
In 1H17 import packages handled by the joint venture grew on the prior year by 13% and with a more competitive import | |
cost, the expectation is to further grow these import volumes to produce higher financial returns in the future. | |
The contribution from the UPS-Fliway joint venture was down on last year, with NPAT down by $0.155 million, as a | |
result of a strategy designed to improve the cost of delivering a package in New Zealand in order to drive continued | |
import package growth. | |
GROUP CASHFLOWS AND DEBT | |
Operating cashflows were $1.1 million compared to the prior year's half figure of $3.0 million, as a result of the | |
the lower earnings and an increase in working capital levels by $1.2 million. The higher revenues in December 2016 | |
pushed debtor levels and with lower payables saw net working capital lift on the prior year, with the intention to | |
manage this position back to historical levels, subject to continued revenue growth. | |
Net capital expenditure for the half year was $1.6 million, with $1.3 million of that spend relating to truck | |
expenditure as Fliway returns to a more normal vehicle replacement cycle. The prior year FY16 truck spend was | |
suppressed due to the significant fleet refresh in FY15 ahead of the NZX listing. | |
Fliway debt levels at 31 December 2016 were $8.8 million as compared to a bank facility of $18 million and represent | |
1.5 times EBITDA, ensuring the balance sheet gearing still allows room for growth. | |
DIVIDEND | |
Consistent with prospectus and historical guidance with respect to the percentage of NPAT payable and the | |
weighting between the first half and second half earnings, Fliway's Directors have approved the payment of an | |
interim ordinary dividend of 2.0 cents per share. The dividends are payable on 20 April 2017 to shareholders | |
recorded on the share register as at 5:00pm (New Zealand time) on 31 March 2017. | |
OUTLOOK | |
The first half reflects a perid of change in the business and a re-positioning for future growth. Transport capacity, margins | |
and cost management remain priorities for the Group in order to convert the significant new customer wins in 1H17 | |
into improved profitability in 2H17. | |
The balance sheet and declared dividend remain conservative to ensure capacity exists in whatever form required | |
to convert the strong sales pipeline into improved future earnings. | |
Sales growth remains a focus for the Group as Fliway looks to sell to capacity in it's network and increase | |
relationships with existing customers and business partners. 1H17 volumes finished the year strongly and | |
with significant new customer wins still to come on board, it is our expectation that current momentum will be | |
continued, giving us confidence that 2H17 will deliver improved results over the prior year. | |
Craig Stobo, Chairman | Duncan Hawkesby, Managing Director |
Fliway Group Limited published this content on 08 February 2017 and is solely responsible for the information contained herein.
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