Nervousness about the economic recovery appears to have unsettled Freightways shareholders, who pushed the company’s share price down sharply despite a “robust” 2026 result.
The freight, package, and logistics company reported its results for the year to June 30 on Monday, showing revenue up 13.5% on the year prior to $1.46b, ebita growth was up 14.6% on the year prior to $181.6m, and an ebita margin effectively unchanged at 12.4%.
Despite a result that analysts said showed "resilience", Freightways' share price dropped 4.48%, or $0.63, over the day's trading, closing at $13.42 after $6.9m in trading.
As per convention, Freightways did not provide guidance, but management cautioned that a return to economic activity would be “slower and longer” than previously anticipated due to the war in Iran, which is spiking fuel prices.
In an interview with BusinessDesk, Troughear said the interrupted economic recovery meant the company fell about 30% short of its margin growth target.
He said Freightways would focus on what it could control: retaining customers, pricing for input cost increases, winning “a bit of market share”, and expanding into services adjacent to the company’s existing work.
The company continued to advance its growth plans, eyeing further mergers in Australia, building facilities on the North and South Islands, and leveraging artificial intelligence (AI).
“We’re pretty good at finding those opportunities. So, even though you can’t control some of the macro stuff, I think we’ve got a team of people that are pretty good at controlling some of those other levers that we can get our hands on.”
Resilient, nonetheless
During an analysts' call, Freightways chief financial officer Stephan Deschamps echoed Troughear's caution about the coming year, saying the past quarter had made him "a bit nervous".
Forsyth Barr head of research Andy Bowley said pressure on the business as it entered 2027 had created some nervousness among management, but these would be short-term impacts.
It was fair to describe the 2026 result as showing resilience, given the cyclical pressures.
“They’ve produced a pretty robust result for the last financial year,” he said.
Regarding Freightways’ plans for growth, Bowley said the company had demonstrated its ability to pursue disciplined mergers and acquisitions.
In Australia there was a market opportunity “to the extent that there’s a competitor set that doesn’t provide the same kind of value [and] quality proposition that we know Freightways can provide in New Zealand”.
Australian success, caveated
A Freightways business that showed standout performance was Allied Express in Australia, which recorded a 20% increase in items moved across its network, primarily through existing customers.
Troughear said Allied Express had both claimed more business from these customers, who were also “on a bit of a tear”.
He said after the pandemic it became commonplace for large Australian businesses to have two freight suppliers in case one was swamped with volume. Allied Express had won more of the competing supplier’s business.
But the growth of these customers had also moderated in the fourth quarter.
“So with consumers just having less money in their pockets because they’re spending more on fuel and higher interest rates in Australia, you won’t see 20% type growth. It’s a bit of a one-off.”
Australian revenue was lifted by the acquisition of VT Freight Express (VTFE), based in Victoria, completed on Jan 30, contributing $39.9m in revenue and a net profit after tax of $1.7m for the remainder of the year.
Troughear said that, without the fuel price spike, the company expected VTFE to continue its 10% year-on-year growth track from the past three years, into this year and next.
“The fuel price hike has put a bit of a damper on the construction side of the Aussie economy, so that’ll dampen it down.
“The other sector VTFE is quite strong in is health and beauty. Again, that’s taken a little bit of a hit. It’ll be seen as more discretionary than some other products.”
However, he expected growth in the Brisbane market, where a VTFE office was established in May.
An acquisition of a company in New South Wales to further expand the offering also remained of interest, but no timeframes could be provided.
“There’s a number of opportunities there, so we’re certainly actively talking to a number of those parties.”
IT wins, losses
A positive development highlighted by the company was the in-house development of an AI tool that helped process 800,000 items handled by business mail firm DX Mail.
Troughear said three automated sorting machines had been acquired for DX Mail to save posties hours by organising mail according to the route it would be delivered.
But a portion of the mail would have partial or nonsensical addresses, for instance missing the street or suburb, but naming the business.
So, staff at DX Mail developed an AI tool that could be trained to analyse mail and fill in the gaps.
Troughear said the tool had been plugged into the automated sorting machines and was producing a good hit rate.
“We’re getting that mail processed quicker, getting it delivered quicker, and spending less manual time trying to figure out where it should be going to.”
AI was also expected to improve a new billing system called Evolve; however, the rollout of this IT project is now a year behind schedule, and the scope has increased “a little bit”.
“But ultimately, we’ll end up with a billing database which has all of our New Zealand Express package billing data in one place, that will enable us to run AI over it and understand where our margins are poor, where they’re good, understand if we’re missing any data from customers and we haven’t billed them as a result of that.”
Troughear said the project may cost $2m or $3m more than initially thought, but he was convinced it would be valuable.