Correction to Freightways' 2024 Annual Report
Freightways Group Limited | Freightways House, 32 Botha Road, Penrose, Auckland, New Zealand | DX BOX CX10120, Auckland 1061, New Zealand | P (64) 09 571 9670
NZX | ASX ANNOUNCEMENT
19 August 2024
CORRECTION TO FREIGHTWAYS’ 2024 ANNUAL REPORT
Note 31 in the Freightways 2024 annual report incorrectly indicated that the Freightways Dividend Reinvestment
Plan (DRP) will be offered with respect to the FY24 final dividend. The DRP will not be offered for the FY24 final
dividend.
Attached is the corrected annual report.
ENDS
For further information please contact:
Stephan Deschamps
Chief Financial Officer
Freightways Group Limited
Ph: +64 9 571 9670
---
Annual Report 2024
Better
places
Financial Year Ended 30 June 2024
The
power
of
movement
Moving you to a better place is about never standing still
We’re committed to being forward-looking and forward-
acting in everything we do. In a challenging year, that drive,
and our diversified portfolio helped absorb a lot of the
downward pressure on the sectors and economies
in which we operate.
Our people power our progress through our culture.
We work hard to engage everyone in their work and to
offer them training and opportunities across our brands.
In particular, we pride ourselves on ensuring that employees
and contractors are fairly paid for and have opportunities
to be recognised for their efforts, skills, knowledge
and experience.
This year, we got on with picking up, processing, and
delivering to help our customers. And our teams went above
and beyond to remind businesses and households that
they can trust us to do right by them. Those processes, will,
in turn reassure our shareholders that we remain a strong
investment choice with good prospects for future growth.
Our commitment to communities also remains strong.
From grassroots causes to our ongoing partnerships with
KidsCan, RSPCA Queensland, Westpac Rescue Helicopter
and more to exploring ways to reduce our emissions in the
future as viable alternative cell technology emerges, we are
determined to do right by communities and to offer our
support, especially in these times of greater need.
Our businesses have been resilient in current
economic conditions, and we are optimistic about the
future. In particular, we are confident that we have made
good use of the last two years to invest wisely in our
infrastructure, road and air networks, systems, processes
and, of course, our people. We’re better placed as a result.
Good growth awaits.
Image:
Some of the awesome
Big Chill Ruakura team
Freightways Group Limited and its subsidiariesfreightways.co.nz1
Contents
OVERVIEW
04 This year's highlights
06 Our growth strategy
08 Our family of brands
PERFORMANCES
10 Chair and CEO’s Report
20 Living our capabilities in 2024
22 Ruakura. Our new chilled facility
28 Allied Express. Auto-sortation for Sydney
34 Our community
36 Creating Freightways Global
SUSTAINABILITY
42 Environmental statement
44 Materiality review
46 SDG 3 Good health and wellbeing
48 SDG 8 Decent work and economic growth
50 SDG 9 Industry, innovation and infrastructure
52 SDG 13 Climate action
LEADERSHIP
54 Our Board and Leadership
RESULTS
57 Directors' Report
67 Financial statements and notes
CHAIR AND CEO’S
REPORT
ALLIED EXPRESS.
AUTO-SORTATION FOR SYDNEY
10
36
22
54
28
57
RUAKURA.
OUR NEW CHILLED FACILITY
OUR BOARD
AND LEADERSHIP
CREATING
FREIGHTWAYS GLOBAL
DIRECTORS’ REPORT
AND FINANCIALS
2Freightways Group Limited and its subsidiariesfreightways.co.nz3Freightways Annual Report | Financial Year ended 30 June 2024
UTILISATION OF BIG CHILL
3PL SITE AT RUAKURA IN-
LINE WITH EXPECTATION
BY YEAR END8
%
GROUP WIDE
REVENUE
GROWTH
23
%
AUSTRALIA
REVENUE
GROWTH
Highlights
This year's
10
%
GROUP WIDE EXPRESS
PACKAGE REVENUE
GROWTH
3
%
GROUP WIDE
EBITA*
GROWTH
2
%
EXPRESS
PACKAGE EBITA*
GROWTH
14
%
DOCUMENT
DESTRUCTION
REVENUE GROWTH
7
%
GROWTH IN CASH
GENERATED FROM
OPERATIONS
8
%
POSTAL
REVENUE
GROWTH
*EBITA is a non-GAAP measure (GAAP - Generally Accepted Accounting Principles)
4
Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz5
Freightways
growth strategy
OUR PURPOSE
What we do
Freightways is a business that is
always on the move. Across the
Group, we pick-up, process and
deliver physical and digital items
providing a reliable and efficient
service for our customers. We look
to develop our people through career
opportunities. We seek appropriate
and sustainable returns for our
investors. And we look to move the
dial for communities through the
causes we support and employing
or contracting local people.
OUR PRINCIPLES & CAPABILITIES
How we work
Three principles guide how our teams
and our partners deliver:
• We take ownership and
responsibility at every level for what
we do and what we can improve.
• We think commercially about
the deals we make so that they
make sense for our customers, our
contractors, our business and our
shareholders.
• We work as a family by supporting
people, by prioritising their safety
and wellbeing and by doing our
best to ensure they get home
safe each day.
We depend on our capabilities
to deliver what our customers,
investors and communities expect.
We’re efficient. This critical capability
enables us to move around
100,000,000 items through our
various businesses every year.
We are reliable. We target flawless
execution, which enables us to shift
multiple items through multiple
touchpoints in our network, across
two nations, every day. We act like
entrepreneurs. We recognise and
execute on high-value opportunities.
We always look forward and up.
We love our customers, both
internal and external because
we know they’re crucial to our
commercial success.
OUR VISION
Why we do this
Better outcomes won’t just happen.
It takes a conscious effort from
our team to move things forward
for our customers, our team, our
shareholders and our communities.
Our “why” is to move you
to a better place.
STAKEHOLDERS:
OUR CUSTOMERS
OUR TEAM
OUR SHAREHOLDERS
OUR COMMUNITY
ACTIVITIES
PRINCIPLES
CAPABILITIES
VISION
Ta ke
ownership
Think
commercially
Work as
a family
Strive for
efficiency
Deliver
reliably
Love our
customers
Act like an
entrepreneur
EXPRESS PACKAGE
AND BUSINESS MAIL
TEMPERATURE
CONTROLLED
INFORMATION
MANAGEMENT
WASTE
RENEWAL
“We move
you to a
better place”
Pick-up, Process and Deliver
6Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz7
Product Destruction
& Renewal
National
Delivery
Same Day
Third Party
Logistics
Digital Mailhouse
Aviation
Mail Delivery
Express
Courier
Medical
Waste
Document &
eDestruction
Online
Back-up
Digital Information
Processing
Document Media
& Storage
Third Party
Logistics
I
N
F
O
R
M
A
T
I
O
N
M
A
N
A
G
E
M
E
N
T
W
A
S
T
E
R
E
N
E
W
A
L
T
E
M
P
E
R
A
T
U
R
E
C
O
N
T
R
O
L
L
E
D
E
X
P
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E
S
S
P
A
C
K
A
G
E
A
N
D
B
U
S
I
N
E
S
S
M
A
I
L
Our family
of brands
Our market-leading
brands combine
shared infrastructure
within New Zealand
and Australia
respectively, with
specialist knowledge
in each niche.
We work across a
range of business
sectors, achieving
high levels of quality
and efficiency,
through our focus on
adding value to how
we pick-up, process
and deliver.
Our strong culture
and commitment
unifies our people
and feeds our deep
team spirit.
We draw on all of
that to continue to
evolve our businesses
to meet the changing
needs of our
customers.
EXPRESS PACKAGE
AND BUSINESS MAIL
Our multi-brand strategy in the
Australasian courier and business
mail markets caters to a range
of customer needs and delivery
timeframes. It enables us to win
a niche with a specialist focus –
but also leverage the combined
infrastructure across each segment.
Our New Zealand Express Package
operations share branch networks,
air and road linehaul, and IT. These
brands include New Zealand Couriers,
Post Haste, Castle Parcels, NOW
Couriers, SUB60, Security Express,
Kiwi Express, STUCK, Kiwi Oversize,
Freightways Global, and Pass the
Parcel. We also offer airfreight
capability for our overnight Express
Package delivery service through
our joint venture airline, Parcelair,
and our linehaul partner, Parceline.
Our national Australian network
is operated by Allied Express and
includes a full spectrum of national,
local and 3rd Party Logistics (3PL)
courier services.
DX Mail is New Zealand’s only
dedicated business mail specialist
offering time-sensitive physical
postal services. It leverages the
Express Package network ensuring
it can operate in a lean manner.
Dataprint offers mailhouse-print
services and digital mail presentation
platforms across New Zealand. Our
technology and solutions transform
data into effective communications
for customers.
TEMPERATURE
CONTROLLED
Big Chill Distribution and
ProducePronto make up our national
temperature-controlled business,
together servicing the chilled logistics
needs of Kiwi businesses. Combining
our chilled national linehaul with an
urban, chilled van network allows
us to offer national delivery, same
day delivery, 3PL and 4PL under one
responsive umbrella utilising the
Big Chill depots nationwide.
INFORMATION
MANAGEMENT
The Information Management
Group (TIMG) helps businesses in
New Zealand and Australia protect
and add value to the data they
entrust us with. It offers physical
storage and information management
services, as well as digital information
processing services such as
digitalisation, business process
outsourcing, online back-up and
eDiscovery services. Last year we
increased the utilisation of our
New Zealand storage facilities by
starting an eCommerce 3PL service
called Stocka.
W A S T E
RENEWAL
Shred-X offers document
destruction, eDestruction and
product destruction services in
Australia. We also provide medical
waste collection and processing
services under the Med-X brand.
This year we continued to find new
ways to transform what would once
have been waste into new products.
8Freightways Group Limited and its subsidiariesfreightways.co.nz9Freightways Annual Report | Financial Year ended 30 June 2024
CHAIR & CEO'S REPORT
Going the
extra mile
pays off
In what was a challenging year
for many businesses, as both the
New Zealand and Australian
economies slowed down,
we are pleased with a resilient
result despite lower customer
activity – particularly across
Express Package and Temperature
Controlled transport.
The reality is that it has been a
tough year for our customers.
The declining macroeconomic
environment meant consumers
bought less on the back of higher
interest rates and living costs.
However, our ability to win market
share from strong service levels has been a
critical factor in mitigating the recession we
experienced in New Zealand, which means
our businesses have performed well in
these tough times.
Our diversification also helped. Being less reliant on solely
the New Zealand economy and with specialised logistics
services spanning several different sectors, including
Waste Renewal and Information Management, gave us
resilience and opportunities to grow.
Overall, operating revenue showed good growth,
increasing by 7. 8% from last year on the back of solid
performances from Allied Express and New Zealand
Couriers. Earnings before interest and tax was up 1.8%,
with net profit after tax down by 5.8% principally because
of a higher interest expense.
One macroeconomic factor we were pleased to see
reverse was the availability of quality labour in both
markets. In recent years, the tight market has made it
challenging to recover the total increase in labour costs.
But since the later half of 2023, we’ve seen more job
applicants and a lower turnover rate in our depots and
drivers' network. This trend will help us better manage
our margins with less pressure on wage rates.
7. 8
%
Increase in overall
operating revenue
for the Group
Decrease in net profit
after tax, due to higher
interest expense
Increase in earnings
before interest and
tax increase
5.8
%
1.8
%
10Freightways Group Limited and its subsidiariesfreightways.co.nz11Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiaries11
CHAIR & CEO'S REPORT
Keeping our
customers moving
to a better place
The year saw activity from our existing customers
reduce by 5% in New Zealand and a slightly higher rate in
Temperature Controlled transport. However, we were able
to mitigate a significant amount of that loss through new
business gained by our sales and account management
teams. Winning new customers through strong service
levels and relationships that customers valued made a
considerable difference and strengthened our positions in
various niches in which we operate. These wins enabled us
to keep our overall volume at a similar level to last year and
mitigate the worst impacts of the New Zealand recession.
Resilience in a
quieter market
In quieter times, the key to the Express Package
businesses is to maintain a largely variable cost structure.
A number of our costs flex up or down with an increase
or decrease in customer activity. This makes our network
courier and linehaul business resilient in challenging times
and, in the context of our portfolio of businesses, helps us
effectively balance our risks and exposures.
The hard yards we have put in over recent years to build
courier remuneration meant our contractors were well
paid for their work, and we were insulated against falling
volumes. As it happened, item volumes remained largely
constant, and our fleet size remained similar to last year
with high service levels. In fact, New Zealand Couriers
recorded their highest-ever Net Promoter Score this year.
In Australia, our Allied Express business’s second
year was again characterised by healthy revenue growth.
The automation sortation systems we have implemented
in NSW and Victoria, mean we now have one of the best
freight sorting automation in the country for big and bulky
freight, backed by loyal business relationships. These
new facilities in Sydney and Melbourne will enable Allied
Express to pick-up, process, and deliver greater quantities
with better efficiency. We can now move freight through
the depots much more quickly, weighing, cubing and
measuring every single item, reducing manual handling
and the likelihood of damage.
We’ve also increased the capacity for growth across
Allied Express through larger depots that give us
high-quality facilities across the five Australian states.
We’ve complemented that increase in capacity by
introducing sales capability in Australia to maximise
the opportunities from Allied's service proposition.
Business Mail
Despite structural decline in the wider
physical mail market in New Zealand, DX Mail have
continued to expand their network in FY24 by
adding new postie runs in Auckland, Waikato
and Wellington to meet the increase in volume
experienced during the year. This additional
volume combined with cost efficiencies
achieved through the new automated letter
sortation systems resulted in a strong year-
on-year improvement for DX Mail.
10
%
Express Package growth led
by market share gains and
greater capacity in the 25kg+
niche market
Freightways Group Limited and its subsidiariesfreightways.co.nz1312Freightways Annual Report | Financial Year ended 30 June 2024
CHAIR & CEO'S REPORT
Temperature Controlled
was subdued
It’s been a tougher year for the temperature-
controlled market as consumers switched
down their food choices, affecting demand for
higher-grade, chilled, and frozen food.
Same-customer volumes were down about 8%.
The Big Chill network is intrinsically fixed cost because the
business owns the trucks, leases the facilities, and employs
the team – meaning the impacts are higher when volumes
drop. Conversely, we can leverage that model quickly and
restore margins when volumes return.
In the meantime, we have continued to invest. Our Big Chill
facility in Ruakura is now open, offering us new capacity to
meet the demand for temperature-controlled logistics and
expand our nationwide delivery capability. The 13,000sqm
3PL cold store facility brings to ten the number of depots in
the nationwide network, increasing our links to the Port of
Tauranga, the Waikato and the Bay of Plenty, and our
same-day and overnight services to Auckland.
Despite the sector challenges, utilisation at Ruakura has built
up nicely, enabling us to achieve break-even by the end of the
year. While the pick/ pack activity level is down from what we
anticipated because of consumer demand, we are ahead of
our forecasts in storage. We’re confident inventory turnover
will pick up when the economy rebounds.
Meanwhile, our new ProducePronto facility in Auckland
enables us to grow our temperature-controlled, same-day
and 4PL offering in the convenience food markets. We’ve also
increased capacity in Wellington and Christchurch to make
space for growth. ProducePronto focuses on convenience
stores at the moment, but we are also looking at other
opportunities for time-sensitive delivery of frozen and chilled
food, at places that need on-time, reliable deliveries each day,
such as fast food chains and cafes.
8
%
Decrease in same-
customer volume due to
lower consumer demand
PHIL CLARKE
General Manager
Big Chill Distribution
14Freightways Group Limited and its subsidiariesfreightways.co.nz15Freightways Annual Report | Financial Year ended 30 June 2024
CHAIR & CEO'S REPORT
Good growth in
our horizons
Our Information Management business
is a steady and consistent asset to own in
tough times.
Earnings and revenue streams remain resilient because,
by document storage's very nature, things remain stable.
This year we've also seen good digital growth again,
with revenue up 17% in Australia on the back of greater
demand for scanning, lifting and reforming data. The team
have strong forward future commitments which will ensure
this growth continues into next year and beyond.
Stocka is one of our third horizon businesses that has
gone from strength to strength this year. Targeted at
an under-served niche, this brand works to supply
storage and pick/ pack services to small and mid-sized
eCommerce businesses with small packages to ship
into our courier network. While only small at this stage,
we expect to be able to use any spare document
storage capacity to provide this service to customers
in New Zealand and, in the future, Australia.
$
3
m
Stocka revenue
for FY24
14
%
Document
destruction
revenue growth
A mixed year for
Waste Renewal
Good market share and an ongoing
investment in the right equipment has
seen our Waste Renewal businesses
continue to do well, particularly with
document destruction.
While we have supposedly been moving towards an
increasingly paperless world since the late 1970s,
our teams have been gaining market share year-on
-year for the last decade.
By contrast, our Med-X team, who handle medical
waste, had a tough year as we suffered delays in getting
regulatory approval for our Victoria waste treatment
facility. Now that we have received it, we are confident
we can improve our processing efficiency and grow our
customer base.
Waste Renewal is an area of the Group where we have a
lot of third horizon activity, and our teams have worked
hard all year to find new products that align with our
pick-up, process and deliver philosophy. Textile recycling
and e-destruction have performed well this year,
enabling us to keep fabrics and computer parts out of
landfill. Our saveBOARD operations are also running in
Sydney and New Zealand and slowly building momentum.
16Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz17
CHAIR & CEO'S REPORT
Sustainable and feasible
We have been TOITŪ certified for ten years
now, and we remain committed to reducing
our emissions across Scope 1,2 and 3.
We will release our Climate-related
Disclosures ahead of our Annual
Shareholders' Meeting.
This year, our Climate-related Disclosures
will include emissions reporting for
Allied Express for the first time.
We have reviewed our Sustainable Development Goals
(SDGs) materiality, and decided to reduce our priority
SDGs to four to allow for a stronger focus on the
other Goals.
SDG 13 - Climate Action is a priority, and we have the
ambition to transition to alternative fuels through our
road and air fleets as and when the technology and
infrastructure to do so becomes available and feasible.
Capital expenditure steady
Debt and gearing remain stable although
near the top end of guidance. The range
established by our Capital Management
policy aims to maintain the company at
an investment-grade profile. We remain
committed to these guidelines and to
preserving our credit profile, while taking
into account the merger and acquisition
opportunities that can be accretive
for shareholders.
The current allocation for capital expenditure is
approximately 3% of revenue – and we will continue to
invest at that level over the year. The major project we are
about to start will consolidate how we can more flexibly
price our services and bill across the Express Package
business. The new system will also deliver efficiencies
and mitigate billing risks. For example, it will enable us to
be more flexible in how we charge for Pricing for Effort
and different levels of service. We expect the spend for
this project to be staggered over several years with $5m
in FY25 and $5m in FY26 and expect we will start to see
benefits in FY26, building into FY27.
Looking ahead
The economic climate has presented
challenges on both sides of the Tasman
and remains difficult across broad swathes
of the economy. In New Zealand we are
hopeful that we have seen the worst and
will see some improvement, supported by
lower interest rates, by the second half
of FY25. In Australia, the situation is slightly
more encouraging currently although the
challenges with inflation are comparable.
In New Zealand, the market gains in our Express Package
businesses, underpinned by the solid returns of our
Information Management services highlight the benefits
of our diversified approach. Our Temperature Controlled
businesses are well positioned for when volumes return,
and there is an opportunity at Ruakura to continue to
scale should we decide to do so.
In Australia, our investment in Allied Express has delivered
on our business case expectations. The business has
experienced strong revenue growth in the last year and has
a new capacity to grow into.
Meanwhile, we will continue to develop our third horizon
business and to grow our presence in niche markets
through 25kg+ courier, same-day temperature-controlled
transport, high-value waste opportunities and Stocka.
This year, our people were a decisive factor in
our ability to hold our own in softer market segments.
Our deepest thanks to all of you for stepping up and
doing so much to improve our performance.
Once again, our board has provided invaluable
guidance and strategic input, and we thank them for their
contributions. Finally, to our shareholders and customers,
thank you for continuing to support us.
"This year, our people were a
key factor in our ability to
hold our own in softer market
segments. Our deepest thanks
to all of you for stepping up
and doing so much to improve
our performance..."
– MARK TROUGHEAR
MARK TROUGHEAR
Chief Executive Officer
MARK CAIRNS
Chairman
18Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz19
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Our capabilities are our intangible, strategic assets that we
draw from to execute our business strategy, grow, get work
done and serve our customers. They do not exist alone,
but together create the Freightways' way of doing business.
This year, we have several stand-out examples of our
capabilities in action.
NEW ZEALAND COURIERS'
ANNUAL NETWORK
PRESSURE TESTING
SHOWED THEY DELIVERED
TWICE AS FAST AS THEIR
MAIN COMPETITOR.
OUR DIFOT (DELIVERY
ON TIME AND IN FULL)
MEASURES ARE AT THEIR
HIGHEST LEVELS IN THE
LAST FOUR YEARS.
OUR TEAMS ARE
STABLE WITH LOW
COURIER TURNOVER
AND FEW VACANCIES,
MEANING EXPERIENCED
PEOPLE ARE DELIVERING
FOR OUR CUSTOMERS.
WE EXPECT STRONG
EFFICIENCY GAINS
WITH OUR AUSTRALIAN
SORTATION SYSTEMS
AS VOLUMES INCREASE.
THE DATA WE COLLECT ON
EVERY PARCEL PROVIDES
THE BASIS FOR CONTINUOUS
IMPROVEMENT IN TERMS OF
MARGIN PER PARCEL.
THE CREATION OF
FREIGHTWAYS GLOBAL
MEANS WE NOW HAVE
END-TO-END CONTROL
OF THE IMPORT/ EXPORT
CUSTOMER EXPERIENCE.
WE CONTINUE TO PROVIDE
EASY ACCESS TO OUR
OPERATIONS THROUGH
DIGITAL AND PHONE BASED
LOCAL CHANNELS AS WELL
AS A LARGE ON-THE-ROAD
ACCOUNT MANAGEMENT
TEAM WHO WORK TO
BUILD STRONG CUSTOMER
RELATIONSHIPS.
WE STRIVE TO UNDERSTAND
OUR CUSTOMERS’ NEEDS
AND THE EXPECTATIONS
OF THEIR CUSTOMERS SO
THAT WE CAN POSITION
THE RIGHT BRANDS FOR
THE SERVICES OUR
CUSTOMERS REQUIRE.
WE ONLY GROW OUR
CUSTOMER BASE IF WE
KNOW OUR LOGISTICS CAN
HANDLE THE INCREASES
IN VOLUME. SACRIFICING
CUSTOMER SERVICE FOR
SHORT TERM FINANCIAL
REWARD IS NOT HOW WE
DO BUSINESS.
WE WILL CONTINUE TO
USE OUR PRICING FOR
EFFORT INITIATIVE TO
CREATE THE PLATFORM
FOR OUR CONTRACTORS
TO BE REMUNERATED
FAIRLY FOR THEIR EFFORT.
WE CONTINUE TO
ASSESS OUR HORIZON
THREE INITIATIVES TO
ENSURE THEY CAN SCALE
INTO THE FUTURE.
WE ARE CURRENTLY
MAPPING HOW WE CAN
ACCOMMODATE FUTURE
PROJECTED GROWTH
FOR OUR LARGEST
TEMPERATURE-CONTROLLED
CUSTOMERS.
Living our
capabilities in 2024
20Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz21
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STRIVE FOR EFFICIENCY
The ability to store, pick, pack and label
items for transport all from our new state-
of-the-art facility creates efficiencies for
our customers.
ACT LIKE AN ENTREPRENEUR
Convenience food is a strong,
growing market. The Big Chill network,
Ruakura, and ProducePronto are perfectly
positioned to capitalise on this segment.
Ruakura.
Our new
chilled
facility
CASE STUDY
After significant weather
challenges, we took possession of
our new Ruakura temperature
-controlled facility this year.
Built specifically for us by our
partner and landlord, Tainui
Group Holdings, the new Ruakura
super-hub is perfectly positioned
for our emerging needs.
22Freightways Group Limited and its subsidiariesfreightways.co.nz23Freightways Annual Report | Financial Year ended 30 June 2024
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Ruakura more
than proves
its worth
THE FACILITY
Four rooms
across three hectares
The facility is broken into four ‘rooms’:
two freezer rooms, where the product is
kept below negative 24 degrees, and two
chiller rooms, where the product is kept
at two degrees celsius.
The site also has a temperature-controlled loading zone,
with 12 different docks for trucks/ trailers/ containers
to back up to for loading. At the same time, our food-safe
capabilities ensure we have export eligibility for meat,
dairy and seafood so we can connect these products
directly to ports.
Movements are two-way. We receive incoming stock from
producers for bulk 3PL and imported food from both the
Auckland and Tauranga ports, which we can warehouse
and then pick/ pack as required for internal markets or
export. However, we also ship to others, redistributing food
products throughout the country using our temperature
-controlled network.
OUR CUSTOMERS
Feeding our revenues
Our customers tend to be dairy producers,
food importers, and those working with
meat products, seafood, pet food, poultry,
and bakery goods, particularly those
customers looking for long-term storage
of high volume and high stock turnover.
They come to us because we can handle the scale and the
complexity of their operations, we are export-capable,
we offer transport, warehousing and 3PL in one operation,
and our convenient location gives them greater access to
crucial ports and their Auckland customer bases.
In terms of how we add value within the Freightways
Group, Ruakura generates business for Freightways’
other temperature-controlled business, ProducePronto.
Combined, Big Chill and ProducePronto’s specialised
capabilities have allowed us to offer the market a unique
set of storage, national delivery and same day express
temperature-controlled services.
4
12
The number
of rooms
in the facility
Number of docks
available for trucks/
trailers for loading
The temperature
of our two
freezer rooms
The temperature
of our two
chiller rooms
-24
̊
2
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Connecting us via road and
rail with both Auckland and
Tauranga ports and very close
to the inland port at Ruakura,
our new three-hectare site is also
close to the country’s large dairy-
producing regions, to growers
and key manufacturers.
The motorway infrastructure in both directions makes for
cost-effective linehaul, helping us to decrease travel times
and relieve the pressure on our Auckland and Putaruru
depots, which were at capacity. It also enables us to cost
effectively service the wider Bay of Plenty region.
Freightways Group Limited and its subsidiariesfreightways.co.nz2524Freightways Annual Report | Financial Year ended 30 June 2024
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CAPACITY
Balancing capacity
across the region
The addition of the Ruakura facility has
enabled us to better service customers
in the golden triangle between Auckland,
Hamilton and Tauranga.
It has also allowed us to move some customers with
product stored in Auckland to Hamilton where it is
closer to either the port of origin (Port of Tauranga)
or the ultimate delivery destination.
Demand in a weaker economy has been pleasingly
strong with interest in Ruakura coming from both
importers of frozen and chilled foodstuff as well
as domestic manufacturers.
Balancing the demand across the Auckland and
Hamilton sites has boosted Ruakura’s utilisation
quickly and freed up some valuable space in
Auckland for new customers.
We have also made good efficiency gains
by using Ruakura as a cross-dock facility/
transition point between our south and north
linehaul to keep products moving on
their journey.
HEALTH AND SAFETY
Keeping our people safe
Work processes onsite emphasise safety.
We have acoustic fences for noise control,
and depot staff wear ‘work-alone alarms’
that will notify us should anything happen
to a staff member.
Our forklifts have freezer cabins where drivers can wear
less bulky attire and narrow aisle racking where forklifts are
guided so no collisions can occur. All staff also undergo our
standard health and safety training, along with specialised
training for manual handling and food safety.
SUSTAINABILITY
Ready for the future
Tainui Group Holdings and builder Apollo
Projects did a fantastic job with the
building. The property has a Green Star
Four rating and the structure has been
strengthened to hold solar panels.
Plans have incorporated electric chargers for when
battery technology is commercial-ready. We can
also harvest rainwater from the roof for cleaning and
irrigation purposes.
Looking ahead, we expect to extend our capabilities in
export logistics via container loading for our busy export
customers. This will allow our customers to focus on
their production while we handle all logistics.
Utilisation of Big Chill 3PL
site at Ruakura in-line with
expectation by year end
Freightways Group Limited and its subsidiariesfreightways.co.nz2726Freightways Annual Report | Financial Year ended 30 June 2024
Allied Express.
Auto-sortation
facility for
Sydney
CASE STUDY
In late September,
our Allied team in Sydney
kicked-off the use of our
brand-new sortation system
for oversized freight, a first
for us and for this part
of the world.
The project took around
16 months to build and
execute. Our sister system in
Melbourne came online at the
end of the financial year.
STRIVE FOR EFFICIENCY
Efficiency gains from our new sortation
systems will become evident as volumes
grow. They will make us faster, more
accurate and safer, and they will create the
room we need in our network to take on
more business.
LOVE OUR CUSTOMERS
The design of the new systems was all
about enhancing Allied Express's long
history of excellent customer service. Billing
accuracy, timeliness, responsiveness, and
the reduction of missorts helps the business
remain a compelling choice for customers.
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28Freightways Group Limited and its subsidiariesfreightways.co.nz29Freightways Annual Report | Financial Year ended 30 June 2024
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That's Sydney
re-sorted
The Sydney system stretches out to approximately the standard size
of a soccer field. It can sort objects ranging from a single A4-sized
envelope to a 50kg deadweight item up to 1.9 metres long and 900mm
wide. (That's about the size of a treadmill box.)
THE BENEFITS
Sizing up the benefits
The system incorporates three induction
points where freight is introduced:
two are for pallet breakdown sortation,
and one is for items picked up and
hand-loaded by delivery drivers.
Once inducted, the freight moves along the conveyor
until it reaches a dimensioner machine where every item
is weighed, measured and its cubic volume is checked
- all for accurate charging purposes. The dimensioner
machine also scans all six sides of the item to locate and
read the courier label, and assign the item a destination.
This significantly reduces the likelihood of misreads or
missorts, and helps with lowering double-handling and
enhancing accuracy. Also, a control system before the
dimensioner regulates freight flow by slowing down and
creating space between each item, ensuring every piece of
freight is separated and accurately measured.
Down the conveyor line from our dimensioner are vertical
diverters that are designed to redirect any freight that
is identified as exceeding the system's weight/ size
limitations. Once scanned, these items are sent to a
separate chute for manual sortation, minimising system
downtime, and maintaining the smooth flow of freight
through the system.
A substantial time-saving feature is that trucks can
reverse directly up to the depot/ conveyor for safer and
more efficient loading and unloading. This saves time
and improves health and safety by reducing manual lifting
and alleviating vehicle congestion.
FUNCTIONALITY
Sorting out the mistakes
Since the system was introduced,
misdirects and missorts have decreased
significantly. Misdirects can be costly
to the business because the distances
we cover are expansive.
If we send freight to Melbourne instead of Queensland, for
example, that's an expensive error, often requiring us to fly
freight to correct the mistake. Reducing missorts reduces
our operating costs and directly improves our bottom line.
To ensure everything goes where it should, the sortation
system has 85 chutes, each corresponding to a
destination. One chute per destination means no doubling
handling, a decrease in handling errors, an improvement in
operational efficiency and an enhancement of customer
reliability. All our intra-state, interstate, and local freight
can be sorted and dispatched immediately.
"Reducing missorts
reduces our operating costs
and directly affects our
bottom line."
30Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz31
EFFICIENCIES
Faster for our
customers
The key benefits for our
customers are faster delivery
times, better accuracy,
and enhanced track and trace.
More efficient sortation and packing means
linehaul can depart earlier from our larger
distribution hubs of Sydney and Melbourne
and the freight on arrival can be processed to
drivers earlier, enabling them to navigate the
larger metropolitan cities earlier in the day.
The dimensioner integrates with our back-end
system and provides more accurate information
for our customers, call centre teams and those
receiving the item.
The new-found efficiencies in our operations
mean we can now bring more customers on board,
knowing that we can provide them with a high level
of on-time delivery and reduce the chance of
damage and missorting of freight. The system will
enable us to process over double the current volume
– which comes in particularly useful in the peak
shopping periods each year when item counts can
increase by up to 40%.
More to come
Once we have systems up and running,
we will better understand how to use
those systems in tandem and separately to
achieve even better handling.
"The key benefits for our
customers are faster delivery
times, more accuracy,
and enhanced track and trace."
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32Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz33Freightways Annual Report | Financial Year ended 30 June 2024
Supporting a
deeper sense of
community
At Freightways,
we recognise the
importance of being
actively involved in
and supporting the
communities in
which we work.
Across the Group, we support some
16 charitable organisations and
not-for- profits at a national level and
many more at a local or regional level.
Our businesses are all encouraged
to support causes that resonate with
their people and customer base, be
they national initiatives like the NZRSA
or more grassroots support like local
sports teams, school or community
projects. We are very proud of our
people who take time out to support
others. The following is a list of the
organisations and causes we
formally support.
Beanies for Babies
Cancer Society New Zealand
Child Cancer Foundation
Clontarf Foundation
I Am Hope
Keep New Zealand Beautiful
KidsCan
Life Flight
NZ Breast Cancer Foundation
NZRSA
Prostate Cancer Foundation AUS
Ronald McDonald House
Rotary Club Newmarket
RSPCA Queensland
The Hearing House
Westpac Rescue Helicopter
KidsCan
• 893 schools and 206
low-decile early childhood
centres are supported
• 55,000 kids fed every day
• 6 million food items
distributed in the last
12 months
• 77 schools and 130
early childhood centres
await help
Our company's principal charity,
KidsCan, helps Kiwi kids have the
basics they need to learn and succeed
at school. KidsCan believes that
education is the ticket out of poverty.
By supporting kids experiencing
hardship with food, clothing, and
health products, they can participate
in learning and the opportunity for a
better future. Freightways is proud to
contribute financially to the great work
done by KidsCan.
This year, we helped raise funds for
Onehunga Primary's Year 5 and 6
camp at the end of Term 2. Various
Freightways volunteers prepared,
sold, and served meals as part of the
fundraising effort. The funds collected
went directly to cover the camp's
expenses for their senior students.
During the winter of 2023, KidsCan
ramped up its efforts to ensure Kiwi
Kids experiencing hardship remained
engaged in their learning through the
supply of warm clothing and food.
To help in distribution, our people
dedicated their time, hands-on
effort, and experience at the KidsCan
warehouse in Auckland to pick, pack,
and prepare packages to send to
schools and organisations in need.
kidscan.org.nz
Child Cancer
Foundation
We're proud of New Zealand Couriers'
long-standing support of the Child
Cancer Foundation (CCF) over the
past two decades. This organisation
supports kids living with cancer and
their families. This year, our people
found several ways to help.
New Zealand Couriers sponsored
CCF's annual Go for Gold Gala Dinner
and Quiz Fundraiser in Wellington.
A team from the Wellington branch
attended, helping to raise $85,000 that
evening. New Zealand Couriers also
sponsored the Auckland Go for Gold
Event in June 2024.
New Zealand Couriers annually
supports the CCF Annual Street
Appeal as the Official Transport
Partner. Our people also dressed up
in the colours of their favourite sports
teams, and contributions here helped
CCF reach its annual goal of $6 million.
New Zealand Couriers donated 30,000
packets of white daisy seeds to CCF
for volunteers to give seeds as tokens
of appreciation to donors. White
daisies symbolise hope and wellness
for children who have cancer.
New Zealand Couriers also supported
CCF's Whanau Connect 2023
Christmas parties. Whānau Connect,
run by volunteers, serves as a platform
for families living with cancer to
connect through shared experiences
and provide mutual support.
childcancer.org.nz
The Royal
New Zealand
Returned
and Services
Association
New Zealand Couriers is the RNZRSA's
Official Poppy Partner and is honoured
to support Poppy Day annually.
Donations to the RNZRSA benefit New
Zealand's military veterans and their
families with counselling, advocacy,
financial aid, mental health care
access, health issues, and support for
veterans and their families.
As the Official Poppy Partner,
New Zealand Couriers distributes
poppies and EFTPOS machines
nationwide to support the
Association's two significant
fundraising days, Poppy Day
and Anzac Day.
rsa.org.nz
16
Charitable
organisations and
not-for-profits
supported
34Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz35
Creating
Freightways
Global
CASE STUDY
First Global Logistics has
been a long-term partner
to Freightways, helping
brands overseas to quickly
and efficiently deliver
parcels to New Zealand
households and businesses.
This year, the company
became part of our Group.
ACT LIKE AN ENTREPRENEUR
Bringing First Global into the Freightways
fold has made us a large player in the ever-
growing eCommerce space. A vertically
integrated offering from pick-up to delivery
to the consumer means we can control the
experience, end-to-end.
LOVE OUR CUSTOMERS
eCommerce delivery in New Zealand is
inconsistent. Much depends on border
processing times and last-mile delivery
performance. We are here to be the
dependable choice for our customers.
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36Freightways Group Limited and its subsidiariesfreightways.co.nz37Freightways Annual Report | Financial Year ended 30 June 2024
Crossing borders
creating
opportunities
Rebranded as Freightways Global, our new addition has added scale,
capability and vertical integration to our international door-to-door
service, delivering better efficiencies and outcomes for customers
and businesses alike.
Freightways Global specialises in international cross-border
logistics. The team manages all the details needed to get a package
in and out of New Zealand, often while the package is still in the air.
The team is approved by MPI (Ministry for Primary Industries) and
Customs to transition air and sea freight, so once a parcel has been
cleared and the paperwork completed, it can be connected with our
courier brands in New Zealand.
OUR STRATEGY
Increased
vertical integration
“Acquiring First Global was the next step in our
eCommerce strategy. It has given us better control of
the customers’ cross-border experience from pick-up to
delivery. Their presence also gives us a firm pathway to
grow this vertical.”
Scott Hedgman – GM for Sales, Freightways
These deep connections enable vertical integration
that has not been previously available to our customers.
“We know speed and accuracy are so important in
eCommerce. When a shipment arrives, we have already
been working on the compliances needed to land the
goods while they’re in transit. When it lands, we clear
all items and get them into the delivery phase within
24 hours.”
Ruth Adin – GM, Freightways Global
SPECIALISATION
A specialist
in four areas
Based in Mangere, Auckland, and operating in Auckland,
Wellington, and Christchurch, Freightways Global clears
hundreds of thousands of items monthly. We specialise
in four areas of import/ export: eCommerce freight from
places like the UK, US, Australia, and Asia; traditional
freight; complex project-type international shipments
such as vehicles and componentry, and express
warehousing for pallet stock that needs to be held back
for short periods.
Freightways Global is a one-stop shop for all sorts of
international freight to/ from New Zealand. The team
can handle almost anything, so while the majority of items
flow directly into our Express Package brands we have
moved a jet engine recently, and a submarine. We also
manage the return logistics for customers when a receiver
decides to return something they have purchased. Above
all, Global prides itself on its robust systems expertise and
capability around the brokerage, categorising, compliance
and labelling of international freight.
60
%
Percentage of business
that is inbound freight
from eCommerce
businesses
2M
+
Total items Freightways
Global clears annually
"Acquiring First Global has given
us better control of our customers'
cross-border experience,
from pick-up to delivery..."
– SCOTT HEDGMAN
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38Freightways Group Limited and its subsidiariesfreightways.co.nz39Freightways Annual Report | Financial Year ended 30 June 2024
VALUE PROPOSITION
Adding value
for aggregators
When First Global joined Freightways,
their team brought deep industry
experience and relationships to the Group.
It created an opportunity for our teams to collaborate,
creating a high-performing platform from which we can
build the business further. “Our inbound customers are
eCommerce product aggregators/ wholesalers,” says
Scott Hedgman, “while outbound customers are mostly
business-to-consumer businesses.”
SPECIALISATION
Optimistic about growth
Looking ahead, the addition of Global to our
network increases potential run density for
our residential courier base, which in turn
increases courier remuneration.
The low-value, high-volume freight Global predominantly
receives is perfect for our courier network.
"Significant opportunity exists to grow eCommerce
as it continues to grow globally. And New Zealand is
no different," confirms Ruth Adin. "The growth of the
worldwide eCommerce merchants is a phenomenon
of our times. Leveraging Freightways' pick-up, process
and delivery capabilities will enable us to increase
efficiency, reliability, customer-centricity and grow
the business."
– RUTH ADIN
“Leveraging Freightways' pick-up,
process and delivery capabilities
will enable us to increase efficiency,
reliability, entrepreneurship,
and customer centricity
and grow the business...”
RUTH ADIN
GM, Freightways Global
SCOTT HEDGMAN
GM Sales, Freightways
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Freightways Group Limited and its subsidiariesfreightways.co.nz4140Freightways Annual Report | Financial Year ended 30 June 2024
SUSTAINABILITY
Strategies for
commitment
ENVIRONMENTAL STATEMENT:
We recognise that our core business
is reliant on transportation to service
our customers. As an emissions intense
organisation, our commitment to the TOITŪ
certification process encourages our people
and our partners to make environmentally
positive decisions every day.
GUIDING PRINCIPLES
• We recognise that protecting the environment today is essential to
creating a sustainable business future.
• We actively seek to minimise the environmental impact of
all our activities.
• We work in partnership with all stakeholders to promote good
environmental practice.
• We comply with relevant environmental legislation.
• We are a TOITŪ certified organisation. Our greenhouse gas emissions are
measured in accordance with ISO 14064-1:2018 and we are committed to
managing and reducing our relative emissions.
• We recognise that by gaining efficiencies for our core business model
we enable our services to be delivered with as low environmental impact
as possible.
• We regularly review our operational activities, systems and
training to ensure our business practices are aligned with these
guiding principles.
CLIMATE RISK DISCLOSURE
Ahead of our Annual Shareholders' meeting, in October 2024,
we will release our first Climate Risks Disclosure report, that
will consider the ways climate risk could impact our business
and provide targets for the reduction of greenhouse gases
associated with our operations.
01
Our responsible
growth strategy
Goal: To balance the commercial needs of our
business with our responsibility to protect the
environment in which we operate.
SUPPORTING POLICIES:
• When implementing our positioning, people,
performance and profit strategies, we will
incorporate tactics that support our
environmental approach.
• We will ensure development, growth and capital
projects align with our commitment to reduce
our carbon emissions and minimise our
environmental impact.
02
Our cleaner air strategy
Goal: To promote cleaner air by minimising
carbon emissions.
SUPPORTING POLICIES:
• Our vehicle fleet will not be leased for a period
longer than four years to ensure we are using
modern fuel efficient technology.
• As part of this transition, we are continuing to trial
hybrid and electric vehicles.
• Our contractors are strongly encouraged to use
later model, lower emission vehicles.
• Our hub & spoke network is segmented and
reviewed on a continuous basis to ensure
minimisation of kilometres.
• Our aviation business actively measures and
manages its performance to ensure minimisation of
fuel usage and emissions.
• We maintain TOITŪ certification by measuring our
carbon emissions on a business-by-business
basis and committing to managing and
reducing them.
03
Our conservation
& waste management
strategy
Goal: To implement actions that,
wherever practical, see us recycle, reuse
and minimise waste of the products and
resources we consume.
SUPPORTING POLICIES:
• Our range of recyclable courier satchels is
currently transitioning to contain no less than 80%
New Zealand sourced plastic waste.
• Wherever possible, our destruction businesses
utilise ‘best in class’ recycling technologies to
avoid resource waste and landfill solutions.
• We encourage our customers to receive
electronic invoices to minimise paper waste.
• We commit to identifying, measuring and
documenting our carbon emissions as part of our
TOITŪ certification. We will continue to develop
and refine systems to reduce emissions overtime.
04
Our education
& awareness strategy
Goal: To promote education and awareness of
better environmental practice among stakeholders.
SUPPORTING POLICIES:
• We promote our environmental approach among
staff and ensure individuals understand their role
with our environmental objectives.
• Our suppliers are actively encouraged to
demonstrate their environmental practices to
ensure they align with our objectives.
• We actively promote the benefits of good
environmental practice among our customer base.
• We endeavour to actively educate and
communicate with our staff, contractors,
customers and suppliers, our commitment to
emissions reduction, ensuring they understand
our objectives and the role they can play in
achieving these.
05
Our responsible
partnership strategy
Goal: To seek to partner and work with others who
can demonstrate a commitment to the environment.
SUPPORTING POLICIES:
• To make our business partners aware of our
environmental policy, our TOITŪ certification
commitment, and the expectations arising
from these.
• Where all other things are equal, to choose the
partners and contractors who can demonstrate
sound environmental policies.
Image Credit:
Douglas Bagg, Unsplash.
42Freightways Group Limited and its subsidiariesfreightways.co.nz43Freightways Annual Report | Financial Year ended 30 June 2024
SDG 9
Industry, innovation
and infrastructure
Areas of focus
• We aim to have a customer churn of less
than 2% of revenue.
• We are committed to continued growth
over three horizons.
SDG 13
Climate
action
Areas of focus
• GHG Emissions. We are committed to reduce
our emissions over time for Scope 1, 2 and 3.
• The average age of linehaul vehicles
within our direct control is four years or less.
• Committed to assist in the development of the
circular use of waste.
Our material
impacts for FY24
SDG 3
Good health
and wellbeing
Areas of focus
• Health and safety in employment.
• Injury reduction.
SDG 8
Decent work
and economic growth
Areas of focus
• Our commitment is to improve contractor
return year on year.
• Learning and development. We will continue to
invest in training our people so 80% or more of our
promotions come from within.
OUR ESG ACTIVITIES
Assessing our
material issues
We undertook an initial assessment of our
material issues for stakeholders more than
four years ago.
Last year, we signalled that we would review our materiality
this year to check the relevance of our ESG activities.
We have now completed that assessment and as a result,
we have identified the issues that continue to impact and
are most important to our business success and that
internal and external stakeholders most engage with.
MATERIALITY ASSESSMENT
A double approach
The assessment involved an external
party engaging with internal and external
stakeholders, including board members,
staff, executives, contractors, suppliers,
and investors to obtain their opinions.
The double materiality assessment approach was chosen
for its comprehensive nature, providing significant insights
and directly recognising that organisations like ours have
substantial financial and non-financial impacts that must
coexist. As the name suggests, double materiality adopts
different perspectives to gain a more holistic view:
• “Inside out” impacts – which look at the company’s
impacts on society and the environment by assessing
scale (impact on health, the environment and culture),
scope (how many people are affected)
and irremediability (the ability to fix issues or not).
• "Outside in” financial materiality impacts – which
examines size (the amount of economic impact)
and likelihood (the chances of an impact happening).
As we communicated last year, the assessment
made an essential adjustment to our reporting strategy.
We reduced the number of SDGs we consider from
five to four, removing SDG 16 (Peace justice and strong
institutions). This decision was made because, as a
NZX and ASX-listed business, stakeholders considered
other SDGs more critical in the Australasian context,
allowing us to focus more on impactful activities.
REVISED SDG FRAMEWORK
Our SDG priorities
This year, we will report on our revised
SDG framework as part of our non-financial
decision-making and reporting in FY24.
The SDGs will remain constant, but we will update each
‘Area of focus’ to reflect where we believe attention will
improve overall impact.
Minimal
Minimal
Informative
Important
Significant
Critical
ImportantSignificantCriticalInformative
Waste
renewal and
management
SDG13
Innovation
SDG9
Contractor
engagement
SDG8
GHG
emissions
SDG13
Customer
satisfaction
SDG8
Good
health and
wellbeing
SDG3
Employee
engagement
SDG8
Business
resilience
SDG9
44Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz45
SDG 3:
Good health
and wellbeing
HEALTH AND SAFETY INITIATIVES
We have several initiatives underway to help reduce harm
including a significant focus on the risks posed by forklifts
used through almost all of our businesses, as well as
training that targets functional safety and management
health and safety culture.
COMPREHENSIVE WORKPLACE
SAFETY AND SKILLS TRAINING
Across the Group, our essential health and safety training
programmes run to keep our people safe and our
workplaces efficient.
Training includes Dangerous Goods Awareness and
Handling, Manual Handling, Workplace Health and Safety,
Fire Safety, First Aid Training, Forklift Operation and
specialist equipment training.
In Australia, our Shred-X and Med-X businesses offer
more programmes to leaders and staff, including Modern
Slavery Refreshers, Mental Health First Aid, Cyber Security
Training, Bullying and Sexual Harassment and Financial
Management. Both businesses have an average target of
thirty minutes of training per employee per month.
FORKLIFT SAFETY
We offer comprehensive forklift safety programmes
across those parts of the Group that operate forklifts.
Our forklift simulator allows us to carry out the majority
of our training in-house. Through Worksafe, we are now
working towards full self-certification licencing. In addition,
businesses like TIMG and Stocka undertake hi-reach truck
training to train those operating high-access equipment.
In our depots, we’ve introduced AI tech that analyses our
video footage to find near-miss forklift incidents.
These enable us to address potential issues and hazards
well before they occur. This is proving very effective,
with no serious harm events involving forklifts in the
last 12 months.
Areas of focus
• Health and safety in
employment.
• Injury reduction.
1488
Employees
completed some form
of Workplace Safety
and Skills Training
DRIVING SAFETY CULTURE
An awareness programme that was
delivered to 32 of our operational
managers and supervisors in the last
12 months.
We received positive feedback from
recipients about building a proactive safety
culture at work. Managers who attended are
now recommending their team members
and colleagues to attend.
HANDBRAKE ALARMS AND IN-CAB CAMERAS
We’ve also installed handbrake alarms in our metro and
linehaul trucks that sound if the driver’s door is open, and
the handbrake hasn’t been applied.
In-cab cameras in our linehaul vehicles record road
activity and also face the interior to record driver
behaviour and check for drowsiness.
PSYCHOLOGICAL HEALTH AND SAFETY TRAINING
We began offering this training this year. The goal is to
encourage frank dialogue and to get people to speak up
with questions, thoughts, issues and ideas. We want to
become a safe workplace for expression.
EAP
We offer access to confidential external counselling
for those suffering from physical and mental issues.
The service, provided at no cost to our people,
also covers financial and partner counselling.
46Freightways Group Limited and its subsidiariesfreightways.co.nz47Freightways Annual Report | Financial Year ended 30 June 2024
SDG 8:
Decent work
and economic growth
LEADING CONTRACTOR EARNINGS MODEL
Many of our vehicle fleets run under a contractor model.
This means our contractors essentially run their own
businesses. The effort they put into their business has a
direct flow-on effect on the return they receive.
The model is a win/ win. For Freightways, there is a level
of variability and certainty as volumes rise or fall, keeping
with economic ups and downs. For our couriers they can
earn great incomes through their productivity and the
customer relationships they forge. Initiatives like Pricing for
Effort (PFE) ensures our customers' pricing directly reflects
the resources and efforts our contractors invest to make
each delivery. Our contractors lean heavily on the support
of our account management, sales, customer service,
and administration teams. Because our people work hard
to have commercial discussions with customers,
our contractors can focus on delivery.
Freightways and our contractors are assessing new
vehicle types to inform ourselves as to when we can
feasibly transition to alternative fuel cell technology for
our vehicles. It is important our couriers are remunerated
appropriately so that they can make a return on
investment when this time comes.
DEVELOPING OUR PEOPLE
We invest strongly in helping our people gain knowledge
and experience. Our learning programmes further develop
our people, which in turn enriches our internal capabilities.
Logistics lie at the heart of what we do, and much of
the knowledge around how our logistics work has grown
organically over time and is embedded with our senior
people. In fact, many of our executives, including our CEO,
are long-term employees. Our management ranks are
also filled with people who deeply understand the core
capabilities needed for success.
We offer comprehensive workplace training and
leadership courses across Freightways, which include a
wide range of programmes, from induction to business
fundamentals and people leadership.
Areas of focus
• Our commitment to
improving contractor
earnings year-on-year
• Learning and development.
We will continue to invest
in training our people so
that 80% or more of our
promotions come
from within.
BUSINESS-SPECIFIC PROGRAMMES
In addition each business will offer programmes specific
to their development needs, examples of these are;
• Post Haste Group offer a Grow Our People (30 attendees
in FY24) and an HR Management (22 ongoing attendees
in FY24) programme to promote rising stars into team
leader and people management roles.
• TIMG AU runs three programmes: HR101 (40 attendees
in FY24), the People Manager Training Programme,
and a Talent Development Programme to strengthen
leadership capabilities, promote a productive work
environment, and support career progression within
Freightways.
• New Zealand Couriers offer Driving Ahead, which is part
of the New Zealand Certificate in Business (Introduction
to Team Leadership) – Level 3. ( 59 attendees FY24.
68 graduates to date)
• Shred-X/ Med-X programmes include Customer
Engagement, Financial Software Training, Financial
Management run by Westpac, and MS Excel micro-
learning tutorials.
These investments not only build core skills, loyalty and a
strong culture, they also enable us to fill 80% of our vacant
positions internally. We also encourage mobility within
the business, with many of our people shifting between
various divisions and brands. This in turn broadens their
understanding of our wider business.
FREIGHTWAYS WIDE PROGRAMMES
Freightways Fundamentals starts our
people on their business leadership
journey, which includes leadership, financial
literacy, and sales acceleration.
• 170 attendees in FY24
Strengths Development leverages
CliftonStrengths to identify and cultivate
employees natural talents.
• 150 attendees in FY24
LEAD selects mid-career leaders for internal
and external leadership development.
• 12 attendees in FY24 and 60 in total
since 2018
The Cadet Programme selects university
and technical institute graduates to receive
comprehensive exposure to the Freightways
business over two years.
• The programme has been running for over 25
years with an average of 8 cadets each year
eLearning programmes include micro-modules
designed to nurture soft skills, teamwork building, and
advanced people leadership.
500
+
More than 500 people
received career
development training
from us in FY24
48Freightways Group Limited and its subsidiariesfreightways.co.nz49Freightways Annual Report | Financial Year ended 30 June 2024
SDG 9:
I ndu st r y,
innovation and
infrastructure
ACHIEVING LOW CUSTOMER CHURN
Retaining our customers is essential for us financially,
but it also speaks to our commitment to building loyal
and enduring relationships.
Our goal is to keep customer turnover under 2% of
revenue, and we can do that successfully through our
focus on account management, the overall customer
experience, and daily performance.
Reliability is critical. Every year, we have an independent
party run pressure tests comparing New Zealand Couriers'
performance against our competitors. New Zealand
Couriers is consistently the most reliable network in
the country.
This year, we achieved a 15% increase in address
validation for our New Zealand hub-and-spoke
Express Package businesses, which has significantly
improved our delivery accuracy, sorting efficiency
and successful first attempt deliveries.
We are customer-focused in how we bring new products
to market. All product development is built using direct
customer insight. For example, we launched two new
businesses last year: Stocka and Kiwi Oversize. Both meet
an under-served vital customer need and have exceeded
performance projections.
COMMITTED TO GROWTH IN HORIZONS TWO & THREE
Our growth strategy features continuing and scaled
innovation. We use a ‘three horizons’ growth model,
where Horizon One is our core business and Horizon
Two businesses utilise our fixed cost base and provide
additional strong growth prospects. Our Horizon Three
are the innovators, focusing on delivering long-term
revenue streams by identifying emerging niches with
revenue potential.
OUR EXPRESS PACKAGE HORIZONS
Horizon Two for our courier network is our business-to-
consumer (B2C) delivery market.
Over the last few years, our efforts have centred around
building runs that can deliver efficiently and reliably for
our customers as well as growing our presence among
eCommerce retailers.
Areas of focus
• We aim to have a customer
churn rate of less than 2%
of revenue.
• We are committed to
continued growth over
three horizons.
Our Pricing for Effort (PFE) initiative is
pivotal in linking our courier remuneration
to the mileage and density these
deliveries represent.
Horizon Three is our focus on the niche
25kg+—50kg market. In 2022, we launched
Kiwi Oversize in Auckland, Wellington,
and Christchurch. Our ability to use existing
resources meant Kiwi Oversize had a strong
service proposition, but low start-up costs.
In Australia, Allied Express specialises in
more than 22kg in the five key states. Recent
automation investment into our operations sets
the business up to accommodate new levels
of growth.
OUR WASTE RENEWAL HORIZONS
Horizon Two Waste Renewal business involves
shifting our paper waste collection and processing
capability to medical waste.
Some years back, we purchased a small Sydney
medical waste business and rebranded it as Med-X,
which is now located in NSW, QLD, and VIC. Med-X
offers waste management for medical, biosecurity,
and hygiene products.
Horizon Three finds value in high-value recyclables.
An example is saveBOARD, which recycles composite
packaging waste to re-enter the local building
products supply chain. Shred-X's eWaste facility also
disassembles electronics, extracts precious metals,
resells valuable components, and recycles everything
else. This year, we have also started recycling textiles.
OUR INFORMATION MANAGEMENT HORIZONS
Horizon Two for TIMG revolves around providing solutions
for digital conversion.
Over the last few years, TIMG has developed its digital
information management capabilities, including document,
book, and microfiche scanning, digital mailrooms,
eDiscovery, and online form processing. Digital products
currently account for a growing portion of TIMG's
revenue annually.
Horizon Three for this business focuses on delivering
efficient and cost-effective 3PL fulfilment services for
eCommerce customers, utilising available space across
our significant secure building footprint and express
delivery through our Freightways courier brands. The TIMG
Stocka business continues to enjoy compounding annual
growth, with increasing demand for end-to-end logistics
from customers across Australia and New Zealand.
TEMPERATURE CONTROLLED HORIZONS
Horizon Two for the temperature-controlled sector is
Big Chill's 3PL. Specifically, our new facility in Ruakura has
been developed to grow this opportunity for fast-moving
consumer goods clients.
Horizon Three provides same-day logistics to convenience
stores, cafes, and fast food. We purchased ProducePronto
in 2021. Today, that brand runs a fleet of vans out of
Auckland, Wellington, and Christchurch, delivering daily
temperature-controlled food to clients. Recent expansions
include a new hub in Auckland and larger shared facilities
with Big Chill in Wellington and Christchurch.
15
%
Increase in address validation
in FY24, significantly improving
our delivery accuracy and
sorting efficiency
50Freightways Group Limited and its subsidiariesfreightways.co.nz51Freightways Annual Report | Financial Year ended 30 June 2024
SDG 13:
Climate
action
Areas of focus
• The average age of linehaul
vehicles within our direct
control is four years or less.
• Committed to assist in the
development of circular use
of waste.
CASE STUDY: USING AN EV FOR COURIER DELIVERIES
Albert Padilla is a contractor driver at our North Harbour
branch in Auckland. In July 2023, he bought a Ford E
Transit 2023 vehicle for his business.
He did so because of the fuel savings, and because his run
is closer to the depot, so range isn’t an issue. Albert likes
the fact that the vehicle is quiet, that he’s not causing any
air pollution and that he can save money.
However, while his EV works well for his loads and range,
it would be more of an issue for those with longer runs.
Albert says he is fortunate to be set up with a charger
at home, so he can charge his EV each evening, which is
enough to get him through the next day.
“My EV works well for me and my circumstances,”
says Albert. “It’s good to be using a cleaner vehicle on my
run, and my customers like to see their packages being
delivered with an EV.”
EVs are still not without their challenges, he says.
The eight year battery warranty is meaningless for a
courier because drivers change their vehicles more
regularly than this. EVs are also not well suited to rural
areas because the battery is not supposed to be shaken,
and they cannot be driven in flooded areas. They also
typically cost more than conventional courier vehicles.
While the challenges of owning a commercial EV are still
very real, we celebrate Albert for being one of the first
contractors in our Group to own one.
VEHICLE LIFE CYCLE
A pre-requisite of being part of the Freightways network
is that drivers ensure all vehicles are modern and in
good condition.
The rates we charge include an allowance for vehicle
expenditure and capital outlay for our contractors and
also our non-contractor operated businesses.
Modern vehicles are also more fuel efficient and cleaner
burning because of advances in engine technology and
the use of catalytic converters, which infuse oxygen into
the exhaust.
The average age for our linehaul vehicles is around four
years old. That’s because of the distances they cover and
the need to retain reliability and a strong brand presence.
Our light commercial fleets accumulate mileage through
lots of short, urban trips, so the vehicles are a little older on
average because they take longer to accumulate miles.
Increasingly, our new vehicles meet the Euro 6 standard
which sets out the latest, reduced acceptable limits of
harmful pollutants that can be emitted by commercial
vehicles in the EU.
SUPPORTING THE CIRCULAR ECONOMY
In Australia, our Shred-X and Med-X
brands are actively driving the
development of a circular economy,
a system that minimises waste and
maximises the value of resources.
Med-X is making significant strides in
sustainability, particularly in the launch of
it’s SharpCYCLE™ brand - a range of 100%
recyclable single-use sharps containers and
development of accompanying recycling
system. This innovative system, whereby
collected single-use containers are decanted,
separated from their contents, treated and
then granulated for remanufacture into other
plastic products, is estimated to reduce sharps
container landfill volumes by over 28%.
Shred-X's commitment to recycling is not just a
statement but a significant action. By diverting
a staggering 45,000 tonnes of paper, including
confidential documents and intellectual property,
from landfills across Australia, Shred-X is making a
substantial and tangible impact on waste reduction.
Euro 6 standard vehicle count July 2024
2
PARCELINE
30
PRODUCEPRONTO
15
BIG CHILL
1
ALLIED EXPRESS
Image:
North Harbour,
Auckland contractor,
Albert Padilla and
Freightways CEO,
Mark Troughear.
Processing eWaste is also a core service for Shred-X,
which has full GCC certification to collect, decommission,
destroy data, recover value, and recycle materials.
Shred-X holds the highest industry certifications for its
eWaste disposal services, including NAID AAA and SERI
R2v3 certification which is the most widely adopted
sustainability standard for the reuse and recycling of
used electronics worldwide. In FY24, Shred-X collected
and recycled in excess of 750,000 kgs of eWaste and
repurposed over 80,000 kgs of IT assets and components
during the same period.
Textile recycling is the new edge for the circular economy,
and Shred-X has been a front runner in finding value in
repurposing textile waste. In FY24, Shred-X expanded
its collection, consolidation, and sortation services
and successfully diverted at least one million kilograms
of textiles from landfills. They have developed strong
relationships with Australian recyclers and joined
Seamless, Australia's product stewardship scheme for
textiles, which launched in July this year. Shred-X's role is
to drive circularity by connecting waste producers with
high-value recycling outcomes in the coming months.
52Freightways Group Limited and its subsidiariesfreightways.co.nz53Freightways Annual Report | Financial Year ended 30 June 2024
MARK CAIRNS
Chairman
BE (Hons), BBS, MMGT, FIPENZ,
CF Inst D
PETER KEAN
Director
PMD – Harvard
ABBY FOOTE
Director
LLB (Hons), BCA, CF Inst D,
INFINZ (Cert)
FIONA OLIVER
Director
LLB, BA. CF Inst D
MATTHEW COCKER
Chief Information Officer
PHD – Georgetown University
NEIL WILSON
General Manager
Freightways
AARON STUBBING
General Manager
Express Package Division
MARK RUSHWORTH
Director
BE (Hons), MEM
DAVID GIBSON
Director
BCom, LLB (Hons)
LEADERSHIP
Our
Board
MARK TROUGHEAR
Chief Executive Officer
BMS – University of Waikato
STEPHAN DESCHAMPS
Chief Financial Officer
MBA, Master in Finance, B Poli Sci,
M Fin - Institut d'Etudes Politique, Paris
NICOLA SILKE
General Counsel
and Company Secretary
LLB (Hons), BA – University of Canterbury
AMI VAN GILS
Head of People & Culture
BA – University of Auckland
Our
Leadership
54Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz55
DIRECTORS
The names and profiles of the Directors of the Company in office at the date of this report are:
INDEPENDENCE OF THE BOARD
The Board has determined for the purposes of the NZX Listing Rules that, as at
30 June 2024, Mark Cairns, Abby Foote, David Gibson, Peter Kean, Fiona Oliver
and Mark Rushworth are independent Directors.
The Board assessed each Director's independence with regard to the
NZX Listing Rules, the interests and relationships of each Director and by
considering each of the factors set out in Table 2.4 of the NZX Corporate
Governance Code. The Board is satisfied that none of the factors set out in
Table 2.4 apply to any of the Directors.
The Directors of Freightways Group Limited (Freightways) resolved to submit the following report with respect to the financial position of the Group as at
30 June 2024 and its financial performance and cash flows for the year ended on that date.
Mark Cairns | BE (Hons), BBS, MMGT, FEngNZ, CF Inst D
Mark was appointed a Director in April 2021. He was Chief Executive of Port
of Tauranga, New Zealand’s largest and most successful port, from 2005 until
his retirement in June 2021 to pursue a full-time governance career. Mark was
previously Chief Executive of Toll Owens Limited and Owens Cargo Company
Limited. Mark has extensive experience in logistics, infrastructure, contracting
and significant exposure to capital markets. Mark is also a director of
Auckland International Airport Limited.
Abby Foote | LLB (Hons), BCA, CF Inst D, INFINZ (cert)
Abby was appointed a Director in June 2018. She is a professional director
with over 15 years governance experience, with qualifications in both law
and accounting. Abby has experience in a range of senior management,
finance and legal roles, with a focus on corporate finance and commercial
transactions. Abby is currently a director of KMD Brands Limited.
David Gibson | B.Com, LLB (Hons)
David was appointed to the Board in April 2022. David is a professional
director and has a strong background in strategy and finance with over 20
years investment banking experience, including as Co-Head of Investment
Banking in New Zealand for Deutsche Bank and Deutsche Craigs. During his
finance career David has advised on many of New Zealand’s largest capital
market transactions. David is also a director of Contact Energy Limited, NZME
Limited, Goodman NZ and Rangatira Limited.
Peter Kean | PMD Harvard
Peter was appointed a Director in July 2016. He brings to Freightways many
years of senior executive experience with the Lion group of companies in
both New Zealand and Australia. Peter's last executive roles were as Managing
Director of Lion Nathan New Zealand and Managing Director of Lion Dairy
and Drinks, based in Melbourne. Peter retired from Lion in 2014 and has since
developed his career in governance. Peter is involved in a number of private
companies both in New Zealand and in Australia.
Fiona Oliver | LLB, BA, CF Inst D
Fiona was appointed a Director in July 2021. She is a professional director,
holding governance roles across a range of business sectors including
infrastructure, retirement villages, technology, and financial services. She
is a director of Summerset Group Limited, Gentrack Group Limited, Clarus
(previously the First Gas Group), Listed Investment Vehicles Marlin Global,
Barramundi and Kingfish and Wynyard Group Limited (in liquidation). Fiona’s
executive career was in financial services in New Zealand and overseas. In New
Zealand, she managed BT Funds Management, Westpac’s investment arm, and
AMP’s Wealth Management division. In Sydney and London, Fiona managed
the Risk and Operations function of AMP’s global private capital division.
Fiona has also practised as a senior corporate solicitor in New Zealand and
overseas, specialising in mergers and acquisitions.
Mark Rushworth | BE (Hons), MEM
Mark was appointed a Director in September 2015. He has extensive
experience in the technology sector, with a decade’s governance experience,
predominantly in the high tech and innovation space. An electrical engineer
by training, with widespread operations and marketing experience, he spent 4
years on the senior executive team of Vodafone NZ, where among other things
he had executive accountability for the fixed line business and as Director of
Marketing. Mark previously served as chief executive of Pacific Fibre, ihug and
financial services company, Paymark Limited. Mark is currently Chief Executive
Officer of private equity owned UP Education and a director of a number of
private companies.
Directors’ Report
Freightways Group Limited and its subsidiariesfreightways.co.nz5756Freightways Annual Report | Financial Year ended 30 June 2024
BOARD SKILLS MATRIX
The Board focuses on governance, strategy and the oversight of the performance of the different Freightways businesses and brands. The Directors bring both
proven experience in governance and a strong background in business to their decision making. Together, they provide the wide-ranging skills needed to ensure the
Board has the expertise to set and approve strategic direction, make senior management appointments, monitor performance, manage risk and oversee our many
stakeholder relationships. The Board Skills Matrix below sets out the skills of the Directors against the range of expertise Freightways requires to succeed.
PRINCIPAL ACTIVITIES
The principal activities of the Group during the year ended 30 June 2024 were the operation of express package & business mail services and information
management services.
Directors’ Report
Skills & Experience: AreaSkills & Experience: Description
H = High competency, knowledge and experience
P = Practised/direct experience
A = Awareness
GovernanceUnderstanding of legal and regulatory frameworks
underpinning corporate governance principles
6
New Zealand &
Australian Listed
Markets
Experience as a Non-Executive Director of a listed entity
(NZ or Australian)
51
Audit and RiskExperience in identifying, assessing and monitoring
systemic, existing and emerging financial and
non-financial risks
33
Business Operations
at Scale
Experience operating a large and/or complex company
or group of companies in multiple countries over a period
of time
312
International Transport,
Logistics, & Sector
Aligned Expertise
Experience and expertise in the international transport,
logistics, freight or associated sectors
123
Marketing, Brand, &
Sales
Experience in brand development, customer relationships
and supply chain
312
IT Platforms and Digital
Innovation
Experience in technology and innovation and the impact on
business operations and customer experience
132
Australian MarketExperience and understanding of the Australian market,
including the macro-political and economic environments
42
Health & SafetyExperience with the development and oversight of
frameworks focused on the identification, assessment and
assurance of operational workplace, health and safety risks
42
Environmental & Social Understanding the potential risks and opportunities from an
environmental and social perspective
24
EntrepreneurialExperience in starting, managing and scaling new
businesses and innovations
42
Group Fees (per annum)
Position
2024
$
2023
$
Board of DirectorsChair185,000180,000
Board of DirectorsMember100,000100,000
Audit & Risk CommitteeChair23,00020,000
Audit & Risk CommitteeMember14,000-
People & Safety CommitteeChair19,00015,000
People & Safety CommitteeMember10,000-
Committee work pool (if required)42,14542,145
Total annual fee pool limit965,0008 57, 1 4 5
DIRECTORS HOLDING OFFICE DURING THE YEAR WERE:
Parent:
Mark Cairns (Chairman)
Abby Foote
David Gibson
Peter Kean
Fiona Oliver
Mark Rushworth
Subsidiaries:
Mark Troughear
Stephan Deschamps
Stephen Micallef (Australian subsidiaries only)
2024
$000
2023
$000
Operating revenue1,209,1511,121,620
Operating profit before interest and income tax136,358133,962
Net interest and finance costs(35,062)(28,585)
Profit before income tax101,296105,377
Income tax(30,370)(30,080)
Profit for the year attributable to the shareholders70,92675,297
CONSOLIDATED RESULT FOR THE YEAR
Directors’ Report
APPROVED REMUNERATION OF DIRECTORS (EFFECTIVE 1 NOVEMBER 2023):
Director remuneration is paid from the total director fee pool that was last approved by shareholders at the Annual Shareholders Meeting on 26 October 2023.
58
Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz59
2024
$
2023
$
Directors of Freightways (Parent company)
Mark Cairns199,333180,000
Abby Foote122,000120,000
David Gibson109,333100,000
Peter Kean117, 6 67115,000
Fiona Oliver106,667100,000
Mark Rushworth106,667100,000
Total non-executive Directors761,667715,000
Directors of the Company’s subsidiaries do not receive any remuneration or other benefits in their capacity as a director of those companies, except
indemnity and insurance referred to in the Directors’ and Officers’ Liability Insurance section on page 16.
REMUNERATION RECEIVED BY DIRECTORS
2024
$
2023
$
CEO – Mark Troughear
Salary1,013,000945,000
Benefits41,00039,000
Subtotal1,054,000984,000
Pay for Performance
STI436,000511,000
LT I267,000298,000
Subtotal703,000809,000
Total remuneration1,757,0001,793,000
CHIEF EXECUTIVE'S REMUNERATION
Directors’ Report
Financial
Yea r
CEOTotal remuneration
($000)
% STI against
maximum
% vested LTI
against maximum
Span of LTI
performance period
2024Mark Troughear1,7577991FY21-FY23
2023Mark Troughear1,7939184FY20-FY22
2022Mark Troughear1,668100100N/A
2021Mark Troughear97088-N/A
2020Mark Troughear84372-N/A
The remuneration of the CEO in the remuneration tables above includes the STI and LTI incentive payments made during the year ended 30 June 2024 in
respect of the 2023 financial year performance. No amount is included above in respect of incentive payments for the 2024 financial year, as these were
paid in August 2024.
FIVE-YEAR SUMMARY – CHIEF EXECUTIVE’S REMUNERATION
DescriptionPerformance measuresAchieved (%)
STI55% of base salary. Based on a
combination of financial and non-financial
performance measures.
50% weighting on achievement of Board
approved earnings before interest, tax and
amortisation (EBITA).
75%
50% weighting on individual performance
comprising strategy development & delivery, health
& safety and carbon emissions reduction strategy.
100%
LT IConditional awards of shares under long-term
incentive scheme with a vesting period of 3 years
ending 30 June 2024.
Relative TSR (rTSR) - Based on Freightways’ TSR
compared to that of the constituents of the
NZX50 Index over the vesting period. 50% of the
rTSR Share Rights eligible for vesting will vest if
Freightways outperforms the NZX50 Index median,
pro-rated up to 100% for achieving the 75th
quartile of the Index constituents.
Not achieved
Absolute TSR (aTSR) - Up to 50% of Share Rights
will vest based on net operating profit after tax
(NOPAT) exceeding a cost of capital hurdle over
the vesting period.
75% achieved and will
be exercised in the first
half of FY25
BREAKDOWN OF CHIEF EXECUTIVE’S PAY FOR PERFORMANCE (RELATED TO FY24 OBJECTIVES)
Directors’ Report
60Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz61
01.07.202101.10.202101.01.202201.04.202201.07.202201.10.202201.01.202301.04.202301.07.202301.10.202301.01.202401.04.2024
75th PercentileFreightways Group Limited50th PercentileS&P NZX 50 Index
0%
80%
60%
40%
100%
120%
20%
140%
Fixed
-
400
600
200
800
1,000
1,200
1,400
1,600
1,800
2,000
Base Salary & BenefitsAnnual VariableLTI vested during the year
On-planMaximum
REMUNERATION OF OTHER OFFICERS
Fixed remuneration of other officers, not being Directors of the Company,
representing a range from 78.5% to 80.5% of their total remuneration, is
benchmarked to market and consists of base salary and matched KiwiSaver
contributions up to a maximum of 3%. The officers participate in an at-risk
short-term incentive (STI) scheme, representing a range from 19.5% to 21.5%
of their total remuneration, that reflects the achievement of predetermined
company profit levels and individual performance objectives aligned to
business strategy and goals. In addition, the officers receive a range from
1% to 2% of earnings before interest, tax and amortisation (EBITA) over a
Board approved EBITA target. The officers also participate in the Freightways
Senior Executive Performance Share Plan (the ‘Plan’) described in Note 22
of the Financial Statements by way of an annual allocation of Performance
Share Rights (PSRs). The PSRs have a 3-year vesting period and are subject
to the achievement of financial hurdles, as described in Note 22. Both the
STI scheme and Senior Executive Performance Share Plan are variable,
performance-based incentives and are only awarded if specific financial and
non-financial performance hurdles are met, and at the discretion of the Board.
REMUNERATION FRAMEWORK
The remuneration framework of the Company is detailed in the Company’s
Remuneration Policy (which can be found at https://www.freightways.co.nz/
about/corporate-governance/) and is overseen by the People & Safety
Committee. Further information on the Remuneration Policy and the People
& Safety Committee is set out within the Corporate Governance Statement
on page 68.
CHIEF EXECUTIVE’S REMUNERATION
PERFORMANCE PAY FOR FY24
$000
TSR %
THREE-YEAR SUMMARY: TSR PERFORMANCE
Directors’ Report
Group
2024202320242023
$100,000 – $109,99928136$340,000 – $349,99942
$110,000 – $119,99911296$350,000 – $359,999-4
$120,000 – $129,9999863$360,000 – $369,99921
$130,000 – $139,9996748$370,000 – $379,99922
$140,000 – $149,9992233$380,000 – $389,9992-
$150,000 – $159,9992724$390,000 – $399,9991-
$160,000 – $169,9993122$400,000 – $409,9992-
$170,000 – $179,9992324$410,000 – $419,99911
$190,000 – $199,9991913$440,000 – $449,999-1
$200,000 – $209,9991613$450,000 – $459,9991-
$210,000 – $219,999179$470,000 – $479,9991-
$220,000 – $229,999118$550,000 – $559,999-1
$230,000 – $239,99944$560,000 – $569,9991-
$240,000 – $249,99974$580,000 – $589,999-1
$250,000 – $259,99976$600,000 – $609,9991-
$260,000 – $269,99951$610,000 – $619,999-1
$270,000 – $279,99954$640,000 – $649,99911
$280,000 – $289,99921$650,000 – $659,999-1
$290,000 – $299,99924$840,000 – $849,99911
$300,000 – $309,99942$1,750,000 – $1,759,9991-
$310,000 – $319,99911$1,790,000 – $1,799,999-1
$320,000 – $329,99921Total Employees549550
$330,000 – $339,99931
REMUNERATION OF EMPLOYEES
The following table notes the number of employees or former employees, not being Directors of the Company, within the Group who, during the reporting period,
received remuneration and any other benefits in their capacity as employees, the value of which was or exceeded $100,000 per annum, in brackets of $10,000:
Directors’ Report
62Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz63
Number Acquired/
(Disposed)
Cost / (Sale)
$000
Abby Foote
Ordinary shares acquired on 2 October 2023 under the Freightways Dividend
Reinvestment Plan (DRP) 3023
Fiona Oliver
Ordinary shares acquired on 2 October 2023 under the Freightways DRP 591
Fully-paid ordinary shares
Director
Mark Cairns50,000
Abby Foote14,665
David Gibson20,812
Peter Kean51,500
Fiona Oliver2,859
Mark Rushworth28,000
The following table shows transactions recorded in respect of securities acquired or disposed of by Directors of Freightways Group Limited during the year ended
30 June 2024:
FREIGHTWAYS GROUP LIMITED SHARES
At 30 June 2024 Directors of Freightways Group Limited held the following number of equity securities in the Company:
ENTRIES IN THE REGISTER OF DIRECTORS’ INTERESTS
The Register of Directors’ Interests records that the following Directors of Freightways Group Limited have an equity interest in the Company.
Directors’ Report
NameName of company / entityNature of interest
Abby Foote Christchurch City Holdings LimitedDirector**
KMD Brands LimitedDirector
Sanford LimitedDirector**
David Gibson
Goodman Property Services group companies
(including GMT Bond Issuer Limited)Director
NZME LimitedDirector
Rangatira Limited Director
Contact Energy LimitedDirector*
Fiona OliverBarramundi LimitedDirector
Gentrack Group LimitedDirector
Clarus (previously First Gas group companies)Director
Kingfish LimitedDirector
Marlin Global LimitedDirector
Guardians of New Zealand SuperannuationDirector
Summerset Group Holdings LimitedDirector
Mark CairnsAuckland International Airport LimitedDirector
Meridian Energy LimitedDirector**
Ministerial Advisory Group on the Kiwirail Interisland
Ferry serviceIndependent expert advisor*
Mark RushworthUP EducationGroup Chief Executive
Peter KeenTrojan Holdings LimitedDirector
* Entry added by notice given by the Director during the year.
** Entry removed by notice given by the Director during the year.
OTHER INTERESTS
Listed below are details of the entries made in the Interests Register of the Company during the year, together with the existing entries as at 30 June 2024.
Directors’ Report
64Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz65
Financial
statements
68 Independent Auditors Report
74 Income Statement
75 Statement of Comprehensive Income
76 Statement of Changes in Equity
77 Balance Sheet
78 Statement of Cash Flows
79 Notes to the Financial Statements
122 Shareholder Information
124 Corporate Governance Statement
128 Directory
129 Company Particulars
DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE
Deeds of indemnity have been granted by the Company in favour of the Directors of the Company and its subsidiaries, to the fullest extent permitted by
the Companies Act 1993. In accordance with the deeds of indemnity, the Company has insured all its Directors and the Directors of its subsidiaries against
liabilities to other parties (except the Company or a related party of the Company) that may arise from their positions as Directors. Freightways’ liability
insurance also covers Officers of the Group. The insurance does not cover liabilities arising from criminal actions.
For and on behalf of the Board this 19
th
day of August 2024.
Abigail Foote
Director
Mark Cairns
Chairman
Directors’ Report
Freightways Group Limited and its subsidiariesfreightways.co.nz6766Freightways Annual Report | Financial Year ended 30 June 2024
Independent auditor’s report
To the shareholders of Freightways Group Limited
Our opinion
In our opinion, the accompanying financial statements of Freightways Group Limited (the Company),
including its subsidiaries (the Group), present fairly, in all material respects, the financial position of the
Group as at 30 June 2024, its financial performance and its cash flows for the year then ended in
accordance with New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS)
and International Financial Reporting Standards Accounting Standards (IFRS Accounting Standards).
What we have audited
The Group's financial statements comprise:
●the balance sheet as at 30 June 2024;
●the income statement for the year then ended;
●the statement of comprehensive income for the year then ended;
●the statement of changes in equity for the year then ended;
●the statement of cash flows for the year then ended; and
●the notes to the financial statements, comprising material accounting policy information and other
explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
(NZ)) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in theAuditor’s responsibilities for the audit of the financial statementssection of our
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with Professional and Ethical Standard 1International
Code of Ethics for Assurance Practitioners (including International Independence Standards) (New
Zealand)(PES 1) issued by the New Zealand Auditing and Assurance Standards Board and the
International Code of Ethics for Professional Accountants (including International Independence
Standards)issued by the International Ethics Standards Board for Accountants (IESBA Code), and we
have fulfilled our other ethical responsibilities in accordance with these requirements.
Our firm carries out other services for the Group in the areas of a greenhouse gas emissions
preconditions assessment in relation to climate reporting. In addition, certain partners and employees
of our firm may deal with the Group on normal terms within the ordinary course of trading activities of
the Group. The provision of these other services and relationships has not impaired our independence
as auditor of the Group.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current year. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
PricewaterhouseCoopers, 15 Customs Street West, Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz
Description of the key audit matterHow our audit addressed the key audit matter
Revenue recognition
The Group’s revenue of $1,209 million for
the current year primarily consisted of
express package and business mail –
courier, express freight, refrigerated
transport and storage, and postal
services, and information management –
storage, destruction and digital services,
as disclosed in Note 3 of the financial
statements.
The Group has deferred revenue of $14.5
million included in contract liabilities for
service obligations not yet performed as
at 30 June 2024.
Revenue recognition under NZ IFRS 15 is
a key audit matter due to the number of
revenue streams and information systems
used to record revenue. Management
judgement is also required to estimate the
contract liability for deferred revenue
based upon historical usage patterns as
disclosed in Note 19.
We obtained an understanding and evaluated the
Group’s processes and controls relating to revenue
recognition for each material revenue stream and
recognition of a contract liability for deferred revenue.
Our audit procedures in relation to revenue recognition
for each material revenue stream included:
●challenging the material judgements made by
management in applying the standard, including
assessing a sample of individual contracts against
the requirements of NZ IFRS 15, particularly the
determination of performance obligations;
●performing a test of controls to ensure the
controls in place are effective to prevent and
detect material misstatement at a transactional
level;
●performing substantive analytical procedures to
ensure the accuracy of revenue for specific
revenue streams, including considering the
reliability of the data used in the analytics;
●testing a sample of revenue transactions to
assess the completion of performance obligations;
●testing a sample of revenue transactions to
assess the accuracy of pricing to supporting
documentation;
●for a sample of transactions within accounts
receivable at balance date we obtained either
confirmation of the amount owing from the
customer, or evidence of the amount owing from
alternative procedures including testing of
subsequent receipts or shipping documentation;
and
●assessing the disclosures made against the
requirements of the accounting standards.
●Our audit procedures in relation to the contract
liability for deferred revenue included:
●testing the system reports from which the data
used in the contract liability calculation is derived;
and
●understanding the models used by management
to determine the release to revenue for estimated
unredeemed tickets based upon historical usage
patterns and testing them by utilising substantive
analytical procedures.
PwC
Independent Auditor's Report
To the shareholders of Freightways Group Limited
Independent Auditor's Report
To the shareholders of Freightways Group Limited
68Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz69
Description of the key audit matterHow our audit addressed the key audit matter
Impairment assessment of goodwill
and indefinite lived brand names
As disclosed in Note 14, the Group has
goodwill and indefinite lived brands with
carrying values of $411.1 million and
$157.4 million respectively (30 June 2023:
$406.7 million and $157.3 million).
Goodwill and brand names are allocated
to cash-generating units (CGUs) for the
purpose of impairment testing.
Management performed an annual
impairment assessment using value in
use (VIU) models to determine whether
the carrying value of assets held by each
CGU is recoverable.
The carrying value of goodwill and
indefinite lived brands is an area of focus
for the audit and a key audit matter as it is
a significant amount on the balance sheet
and involves estimation and judgement
about future business performance which
includes certain key assumptions such as
revenue growth, earnings before Interest,
tax, depreciation and amortisation
(EBITDA) margin, terminal year growth
rate, the pre-tax discount rate and the
likely impact of climate change.
For each CGU, the recoverable amount
based on the value in use calculation was
higher than the carrying value of the CGU
and as a result, no impairment charge
was recognised.
Based on the level of headroom and the sensitivity to
impairment of each CGU, our audit procedures
relating to the estimates and judgments in the VIU
models include the following:
●gaining an understanding of the business process
and controls applied by management in preparing
the impairment assessments;
●considering the appropriateness of the
determination of each CGU and recalculating the
carrying amounts of the CGU net assets;
●evaluating whether corporate costs had been
allocated appropriately and included in the cash
flows for each CGU;
●testing the mathematical accuracy of the models
used to determine the VIU of each CGU;
●reviewing historical years actual revenue and
EBITDA against the original budgeted
performance to determine the reliability of the
budgeting process and considering the impact on
forecast performance;
●obtaining an understanding of the current and
forecast outlook for the business and
management’s basis for determining the key
assumptions in preparing the forecast cash flows.
This included management's assessment of the
likely impact of climate change;
●agreeing forecast future performance included in
the impairment assessments to the budgets
approved by the Board of Directors, based on the
three year forecasts with a growth rate applied for
the future periods;
●with the assistance of our auditor’s valuation
expert, assessing the appropriateness of the
terminal growth and discount rates and assessing
these against industry trends and external market
forecasts; and
●performing a sensitivity analysis over key
assumptions to determine whether reasonably
possible changes would result in impairment of
goodwill.
●We also reviewed the financial statements for
appropriate identification and disclosure of key
assumptions, including the impact of reasonably
possible changes which would result in an
impairment.
PwC
Our audit approach
Overview
Overall group materiality: $5 million, which represents approximately
5% of profit before tax.
We chose profit before tax as the benchmark because, in our view, it
is the benchmark against which the performance of the Group is
most commonly measured by users, and is a generally accepted
benchmark.
Following our assessment of the risk of material misstatement
●Full scope audits were performed for four components of the
Group based on their financial significance
●Specified audit procedures and analytical review procedures
were performed on the remaining 18 entities.
As reported above, we have two key audit matters, being:
●Revenue recognition
●Impairment assessment of goodwill and indefinite lived brand
names
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the financial statements. In particular, we considered where management made
subjective judgements; for example, in respect of significant accounting estimates that involved
making assumptions and considering future events that are inherently uncertain. As in all of our audits,
we also addressed the risk of management override of internal controls, including among other
matters, consideration of whether there was evidence of bias that represented a risk of material
misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
Misstatements may arise due to fraud or error. They are considered material if, individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the financial statements as a whole as set out above. These,
together with qualitative considerations, helped us to determine the scope of our audit, the nature,
timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually
and in aggregate, on the financial statements as a whole.
How we tailored our group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion
on the financial statements as a whole, taking into account the structure of the Group, the accounting
processes and controls, and the industry in which the Group operates.
PwC
Independent Auditor's Report
To the shareholders of Freightways Group Limited
Independent Auditor's Report
To the shareholders of Freightways Group Limited
70Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz71
Other information
The Directors are responsible for the other information. The other information comprises the
information included in the Annual report, but does not include the financial statements and our
auditor's report thereon, and the Climate-related Disclosures to be published at a later date. Other
than the Climate-related Disclosures which we will receive at a later date, we received all other
information expected to be included in the annual report
Our opinion on the financial statements does not cover the other information and we do not and will
not express any form of audit opinion or assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed on the other information that we obtained prior to
the date of this auditor’s report, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
When we read the Climate-related Disclosures, if we conclude that there is a material misstatement
therein, we are required to communicate the matter to the Directors and use our professional
judgement to determine the appropriate action to take.
Responsibilities of the Directors for the financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the financial statements in accordance with NZ IFRS and IFRS Accounting Standards, and for such
internal control as the Directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements, as a whole,
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (NZ) and ISAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located at the
External Reporting Board’s website at:
https://www.xrb.govt.nz/assurance-standards/auditors-responsibilities/audit-report-1/
This description forms part of our auditor’s report.
PwC
Whowereportto
This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Keren Blakey.
For and on behalf of:
Chartered Accountants
19 August 2024
Auckland
PwC
Independent Auditor's Report
To the shareholders of Freightways Group Limited
Independent Auditor's Report
To the shareholders of Freightways Group Limited
72Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz73
Group
Note
2024
$000
2023
$000
Operating revenue2 & 31,209,1511,121,620
Transport and logistics expenses(523,892)(479,169)
Employee benefits expenses(338,679)(309,879)
Occupancy expenses(6,176)(6,935)
General and administration expenses(111,297)(110,754)
Depreciation and software amortisation4(80,121)(69,598)
Amortisation of intangibles4(12,628)(11,323)
Operating profit before interest and income tax136,358133,962
Net interest and finance costs4(35,062)(28,585)
Profit before income tax101,296105,377
Total income tax5(30,370)(30,080)
Profit for the year 70,92675,297
Profit for the year is attributable to:
Owners of the parent70,75975,144
Non-controlling interests167153
70,92675,297
Earnings per share25
Basic earnings per share (cents)39.8 43.1
Diluted earnings per share (cents)39.743.1
NB: All revenue and earnings are from continuing operations.
The above Income Statement should be read in conjunction with the accompanying notes.
Income Statement
For the year ended 30 June 2024
Group
Note
2024
$000
2023
$000
Profit for the year (NPAT)70,92675,297
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations211,862(5,796)
Cash flow hedges taken directly to equity, net of tax21(1,380)226
Total other comprehensive income after income tax482(5,570)
Total comprehensive income for the year 71,40869,727
Total comprehensive income for the year is attributable to:
Owners of the parent71,24169, 574
Non-controlling interests167153
71,40869,727
The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
Statement of Comprehensive Income
For the year ended 30 June 2024
The Board of Directors of Freightways Group Limited authorised these financial statements for issue on the date below.
For and on behalf of the Board this 19
th
day of August 2024.
Mark Cairns
Chairman
Abigail Foote
Director
74Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz75
Group
Note
Contributed
equity
$000
Retained
earnings
$000
Cash flow
hedge
reserve
$000
Foreign
currency
translation
reserve
$000
Non-
controlling
interests
$000
To t a l
equity
$000
Balance at 1 July 2022184,349173,9392,178(4 ,0 87)235356,614
Profit for the year-75,144--15375,297
Exchange differences on translation
of foreign operations---(5,796)-(5,796)
Cash flow hedges taken directly
to equity, net of tax--226--226
Total Comprehensive Income-75,144226(5,796)15369,727
Dividend payments6-(63,465)---(63,465)
Shares issued21113,726----113,726
Balance at 30 June 2023298,075185,6182,404(9,883)388476,602
Profit for the year-70,759--16770,926
Exchange differences on translation
of foreign operations---1,862-1,862
Cash flow hedges taken directly
to equity, net of tax--(1,380)--(1,380)
Total Comprehensive Income-70,759(1 , 3 8 0)1,86216771,408
Dividend payments6-(65,901)--(151)(66,052)
Shares issued2110,311----10,311
Balance at 30 June 2024308,386190,4761,024(8,021)404492,269
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Statement of Changes in Equity
For the year ended 30 June 2024
Group
Note
2024
$000
2023
$000
Current assets
Cash and cash equivalents735,65344,485
Trade and other receivables8160,610150,434
Inventories99, 4 479,650
Contract assets1 , 4731,875
Derivative financial instruments104911,126
Total current assets2 0 7, 6 742 0 7, 57 0
Non-current assets
Trade receivables and other non-current assets86,1945,999
Loans to related parties180-
Property, plant and equipment12160,677155,200
Right-of-use assets13336,083315,536
Intangible assets14668,94167 7, 6 39
Investment in associates and joint venture1513,33512,480
Derivative financial instruments109382,212
Total non-current assets1,186,3481,169,066
Total assets1,394,0221,376,636
Current liabilities
Trade and other payables17152,564138,602
Lease liabilities1351,40044 ,774
Income tax payable17, 29716,807
Provisions183,1453,552
Contract liability1914,49714,407
Total current liabilities238,903218,142
Non-current liabilities
Trade and other payables171,9204,159
Borrowings20265,674297,194
Deferred tax liability1652,19256,824
Provisions1811,39710,216
Lease liabilities13331,667313,499
Total non-current liabilities662,850681,892
Total liabilities901,753900,034
NET ASSETS492,269476,602
EQUITY
Contributed equity21308,386298,075
Retained earnings19 0 , 476185,618
Cash flow hedge reserve101,0242,404
Foreign currency translation reserve(8,021)(9,883)
21491,865476,214
Non-controlling interests404388
TOTAL EQUITY492,269476,602
The above Balance Sheet should be read in conjunction with the accompanying notes.
Balance Sheet
As at 30 June 2024
76Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz77
Group
Note
2024
$000
Inflows
(Outflows)
2023
$000
Inflows
(Outflows)
Cash flows from operating activities
Receipts from customers1,201,4791,119,913
Payments to suppliers and employees(976,160)(909,812)
Cash generated from operations225,319210,101
Interest received8791,003
Interest and other costs of finance paid(35,941)(29,589)
Income taxes paid(33,594)(25,707)
Net cash inflows from operating activities23156,663155,808
Cash flows from investing activities
Payments for property, plant and equipment(28,919)(34,190)
Payments for software (2,518)(3,061)
Proceeds from disposal of property, plant and equipment5892,296
Payments for businesses acquired (net of cash acquired) 30(858)(128,472)
Payments for investment in associates-(612)
Receipts from joint venture and associate1,1502,711
Net cash outflows from investing activities(30,556)(161 , 32 8)
Cash flows from financing activities
Dividends paid(57,181)(63,465)
(Decrease) increase in bank borrowings(26,993)128,088
Proceeds from issue of ordinary shares 601644
Principal elements of lease payments(50,204)(41,734)
Net cash (outflows) inflows from financing activities(133,777)23,533
Net (decrease) increase in cash and cash equivalents(7,670)18,013
Cash and cash equivalents at beginning of year44,48524,137
Exchange rate adjustments (1,162)2,335
Cash and cash equivalents at end of year735,65344,485
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
Statement of Cash Flows
For the year ended 30 June 2024
NOTE 1. MATERIAL ACCOUNTING POLICY INFORMATION
(a) Reporting entity and statutory base
Freightways Group Limited is a company registered under the Companies
Act 1993 and is an FMC reporting entity under Part 7 of the Financial Markets
Conduct Act 2013. The financial statements of the Group have been prepared
in accordance with the requirements of Part 7 of the Financial Markets
Conduct Act 2013 and the NZX Main Board Listing Rules. In accordance with
the Financial Markets Conduct Act 2013, Group financial statements are
prepared and presented for Freightways Group Limited and its subsidiaries.
Accordingly, separate financial statements for Freightways Group Limited are
not required to be prepared and presented.
The financial statements are stated in New Zealand dollars rounded to the
nearest thousand, unless otherwise indicated.
Basis of preparation
The financial statements of the Group have been prepared in accordance with
Generally Accepted Accounting Practice in New Zealand (NZ GAAP).
The Group is a for-profit entity for the purposes of complying with NZ GAAP.
The financial statements comply with New Zealand equivalents to International
Financial Reporting Standards (NZ IFRS), other New Zealand accounting
standards and authoritative notices that are applicable to entities that apply
NZ IFRS. The financial statements also comply with International Financial
Reporting Standards (IFRS).
The financial statements have been prepared on a historical cost basis, except
for derivative financial instruments and acquisition earn-out payables, which
have been measured at fair value.
The Group has negative working capital of $31.2 million. This is due partly
to contract liability for deferred revenue (prepaid ticket liability) which is
classified as a current liability. The Group has undrawn bank loan facilities as at
30 June 2024 totalling NZD101.4 million to fund short term cash requirements.
(2023: negative working capital of $10.6 million due to contract liability)
Critical accounting estimates and judgements
The preparation of financial statements in conformity with NZ IFRS requires
the use of certain critical accounting estimates, where necessary, and may
require management to exercise judgement in the process of applying the
Group’s accounting policies. Specific areas of critical accounting estimates and
assumptions used are as follows:
(i) Carrying value of indefinite life intangible assets
Impairment assessments are performed by management, annually or
where there is an indicator of impairment, to assess the carrying value of
indefinite life intangible assets, including goodwill and brand names. The
recoverable amounts of cash-generating units have been determined
based on the greater of value-in-use and fair value less cost of disposal
calculations. These calculations require the use of estimates. Refer to
Note 14.
(ii) Customer relationships
The estimation of the useful lives of customer relationships has been
based on historical experience. The useful lives are reviewed at least
once per year and adjustments to useful lives are made when considered
necessary. Refer Note 14.
(iii) Acquisition earn-out amounts payable
The valuation of the Group’s acquisition earn-out amounts payable are
based on the post-acquisition performance of the acquired businesses.
These fair value measurements require, among other things, significant
estimation of post-acquisition performance of the acquired business and
judgement on time value of money. Acquisition earn-out amounts payable
shall be remeasured at their fair value resulting from events or factors
that emerge after the acquisition date, with any resulting gain or loss
recognised in the income statement. Judgement is applied to determine
key assumptions (such as growth in sales and margins) adopted in the
estimate of post-acquisition performance of the acquired business.
Judgement is also applied to determine the appropriate discount rate
applied to calculate the present value of the amount payable. Changes to
key assumptions may impact the future payable amount. Refer to Note 30.
(iv) Purchase price allocation for acquisitions
During the year, the Group acquired businesses as described in Note
30. All identifiable assets and liabilities, including intangible assets, were
measured at fair value at acquisition date. In deriving a fair value for
identifiable intangibles, the Group used a variety of valuations methods
and key assumptions to reflect what a typical market participant would
apply if they were to buy or sell each asset on an individual basis.
Notes to the financial statements
For the year ended 30 June 2024
78Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz79
Notes to the financial statements
For the year ended 30 June 2024
(b) Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities that are controlled either directly by the Company
or where the substance of the relationship between the Company and
the entity indicates the Company controls it. The results of businesses
acquired or disposed of during the year are included in the income
statement from the date of acquisition or up to the date of disposal.
The financial statements include the Company and its subsidiaries
accounted for using the acquisition method. The cost of an acquisition
is measured as the fair value of the assets acquired, equity instruments
issued and liabilities incurred or assumed at the date of acquisition.
Costs directly attributable to the acquisition are expensed to the income
statement. Identifiable assets acquired, liabilities and contingent liabilities
assumed in a business combination are measured initially at their fair
values at acquisition date. The Group recognises any non-controlling
interest in an acquired entity on an acquisition-by-acquisition basis either
at fair value or as the non-controlling interest’s proportionate share of the
acquired entity’s net identifiable assets. The excess of the consideration
transferred over the fair value of the Group’s share of the identifiable net
assets acquired is recorded as goodwill.
All material transactions between subsidiaries or between the Company
and subsidiaries are eliminated on consolidation. Accounting policies of
subsidiaries are consistent with those adopted by the Group.
Any contingent consideration to be transferred by the Group is recognised
at fair value at the acquisition date. Subsequent changes to the fair value
of the contingent consideration that is deemed to be an asset or liability
is recognised in accordance with NZ IFRS 9 in the income statement.
Contingent consideration that is classified as equity is not remeasured,
and its subsequent settlement is accounted for within equity.
(ii) Joint arrangements and joint ventures
The Group applies NZ IFRS 11 to all joint arrangements. Under NZ IFRS 11
investments in joint arrangements are classified as either joint operations
or joint ventures depending on the contractual rights and obligations of
each investor. The Group has assessed the nature of its joint arrangements
and determined them to be joint ventures. Joint ventures are accounted
for using the equity method.
Under the equity method of accounting, interests in joint ventures are
initially recognised at cost and adjusted thereafter to recognise the
Group’s share of the post-acquisition profits or losses and movements in
other comprehensive income. When the Group’s share of losses in joint
venture equals or exceeds its interests in the joint venture (which includes
any long-term interests that, in substance, form part of the Group’s net
investment in the joint venture), the Group does not recognise further
losses, unless it has incurred obligations or made payments on behalf of
the joint venture.
Unrealised gains on transactions between the Group and its joint ventures
are eliminated to the extent of the Group’s interest in the joint ventures.
Unrealised losses are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred. Accounting policies
of joint ventures are changed where necessary to ensure consistency with
the policies adopted by the Group.
(c) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each entity in the Group are
measured using the currency that best reflects the primary economic
environment in which the entity operates (the “functional currency”). The
financial statements are presented in New Zealand Dollars, which is the
Company’s functional currency and the Group’s presentation currency.
(ii) Transactions and balances
Transactions in foreign currencies are translated into the functional
currency using the foreign exchange rate ruling at the date of the
transaction. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end
exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the income statement, except when deferred
in equity as qualifying cash flow hedges.
(iii) Foreign operations
The results and balance sheets of foreign operations (none of which has
the currency of a hyperinflationary economy) that have a functional
currency different from the presentation currency are translated into the
presentation currency as follows:
- assets and liabilities for the balance sheet presented are translated at
the closing rate at the date of the balance sheet;
- income and expenses for the income statement are translated at
average exchange rates (unless this is not a reasonable approximation
of the cumulative effect of the rates prevailing on the transaction dates,
in which case income and expenses are translated at the dates of the
transactions); and
- all resulting exchange differences are recognised as a separate
component of equity.
Goodwill and fair value adjustments arising on the acquisition of a foreign
operation are treated as assets and liabilities of the foreign operation and
translated at the closing rate.
(d) Impairment of non-financial assets
Assets that have an indefinite life are not subject to amortisation and are
tested annually for impairment. Assets that are subject to amortisation or
depreciation are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset’s carrying
amount exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value, less costs of disposal, and value-in-use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash flows (cash-generating units).
(e) Financial assets
(i) Classification
The Group classifies its financial assets in the following measurement
categories:
- those to be measured subsequently at fair value either through
other comprehensive income or through the income statement; and
- those to be measured at amortised cost.
The classification depends on the Group’s business model for managing
the financial assets and the contractual terms of the cash flows. For
assets measured at fair value, gains and losses will either be recorded in
the income statement or other comprehensive income.
(ii) Recognition and derecognition
Regular purchases and sales of financial assets are recognised on the
trade date, i.e. the date on which the Group commits to purchase or
sell the asset. Financial assets are derecognised when the rights to
receive cash flows from the investments have expired or the Group has
transferred substantially all the risks and rewards of ownership.
(iii) Measurement
At initial recognition, the Group measures a financial asset at its fair
value plus, in the case of a financial asset not at fair value through the
income statement, transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs of financial assets
carried at fair value through the income statement are expensed in the
income statement.
(f) Fair value estimation
The fair value of financial assets and financial liabilities is estimated for
recognition and measurement or for disclosure purposes. The fair value of
financial instruments that are not traded in an active market (for example, over
the counter derivatives) are determined using accepted treasury valuation
techniques, such as estimated discounted cash flows, by an external treasury
management system provider. The carrying value of trade receivables (less
provision for doubtful receivables) and payables approximate their fair values.
(g) Goods and services tax (GST)
The income statement and statement of cash flows have been prepared so
that all components are stated exclusive of GST. All items in the balance sheet
are stated net of GST, with the exception of trade receivables and payables,
which include GST invoiced.
(h) Changes in accounting policies
The accounting policies and methods of computation are consistent with
those used in the year ended 30 June 2023.
(i) New accounting standards issued but not yet effective
The new and amended standard and interpretation that has been issued, but
not yet effective, up to the date of issuance of the Group’s financial statements
is disclosed below. The Group intends to adopt the new and amended
standard and interpretation, if applicable, when they become effective.
IFRS 18 Presentation and Disclosure in Financial Statements was issued in
April 2024 as replacement for IAS 1 Presentation of Financial Statements
and becomes effective for reporting periods beginning on or after 1 January
2027. IFRS 18 introduces new requirements on presentation within the income
statement, including specified totals and subtotals. It also requires disclosure of
management-defined performance measures and includes new requirements
for the aggregation and disaggregation of financial information based on the
identified ‘roles’ of the primary financial statements and the notes.
Notes to the financial statements
For the year ended 30 June 2024
80Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz81
NOTE 2. SEGMENT REPORTING
A segment is a component of the Group that can be distinguished from other components of the Group by the products or services it sells, the primary market it
operates in and the risks and returns applicable to it. Operating segments are reported upon in a manner consistent with the internal reporting used by the Chief
Executive Officer, as the chief operating decision maker, and the Board for allocating resources, assessing performance and strategic decision making.
The Group is organised into the following reportable operating segments:
Express package and business mail
Comprises network (hub & spoke) courier, express freight, refrigerated transport, point-to-point courier and postal services.
Information management
Comprises secure paper-based and electronic business information management services. This segment also comprises secure handling, treatment and disposal
of clinical waste, waste renewal and related services.
Corporate and other
Comprises corporate, financing and property management services.
The Group has no individual customer that represents more than 4% of external sales revenue.
Express
Package &
Business Mail
$000
Information
Management
$000
Corporate
$000
Inter-
Segment
Elimination
$000
Consolidated
Operations
$000
Income statement
Sales to external customers995,080214,071--1,209,151
Inter-segment sales4,016 3165,943(10,275) -
To t a l r eve n u e999,096214,3875,943(10,275) 1,209,151
Operating profit (loss) before interest,
income tax, depreciation and software amortisation
and amortisation of intangibles181,861 57, 514(10,268)-229,107
Depreciation and software amortisation(53,437) (25,167) (1,517) -(80,121)
Operating profit (loss) before interest,
income tax and amortisation of intangibles128,42432, 347 (11,785) -148,986
Amortisation of intangibles(10,486)(2,142)--(12,628)
Profit (loss) before interest
and income tax117, 93830,205(11,785)-136,358
Net interest and finance costs(11,680)(5,161)(18,221)-(35,062)
Profit (loss) before income tax106,25825,044(30,006)-101,296
Income tax(29,685)(7,327)6,642-(30,370)
Profit (loss) for the year attributable to
the shareholders76,57317,717(23,364) -70,926
Balance sheet
Segment assets916,854363,388113,780-1,394,022
Segment liabilities441,797181,396278,560-901,753
As at and for the year ended 30 June 2024:
Notes to the financial statements
For the year ended 30 June 2024
Express
Package &
Business Mail
$000
Information
Management
$000
Corporate
$000
Inter-
Segment
Elimination
$000
Consolidated
Operations
$000
Income statement
Sales to external customers9 07, 6 37213,983--1,121,620
Inter-segment sales3,510 3158,125 (11,950) -
To t a l r eve n u e911,147214,2988,125(11 , 9 5 0) 1,121,620
Operating profit (loss) before interest,
income tax, depreciation and software amortisation
and amortisation of intangibles169,776 56,411(11,304)-214,883
Depreciation and software amortisation(44,329) (23,717) (1,552) -(69,598)
Operating profit (loss) before interest,
income tax and amortisation of intangibles125 , 4 4732,694(12,856)-145,285
Amortisation of intangibles(9,050)(2,273)--(11,323)
Profit (loss) before interest
and income tax116,39730,421(12,856)-133,962
Net interest and finance costs(8,606)(4,607)(15,372)-(28,585)
Profit (loss) before income tax107,79125,814(28,228)-105,377
Income tax(29,675)(7,777)7, 372-(30,080)
Profit (loss) for the year attributable to
the shareholders78,11618,037(20,856) -75,297
Balance sheet
Segment assets866,301350,506159,829-1,376,636
Segment liabilities411,652180,8823 07, 5 0 0-900,034
Segment assets and liabilities are disclosed net of inter-company balances.
For the year ended 30 June 2024, external revenue from customers in the Group's New Zealand and Australian operations was $782.9 million and $426.3
million, respectively (2023: $775.8 million and $345.8 million, respectively). As at 30 June 2024, non-current assets in respect of the New Zealand and
Australian operations (excluding deferred tax assets and financial assets) were $809.8 million and $376.5 million, respectively (2023: $779.3 million and
$389.8 million, respectively).
As at and for the year ended 30 June 2023:
Notes to the financial statements
For the year ended 30 June 2024
82Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz83
NOTE 3. REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue recognition
The majority of contracts the Group entered into with its customers contain
multiple performance obligations. The transaction price is allocated to each
performance obligation based on the stand-alone selling prices. As the
stand-alone selling prices of all goods and services provided are observable
and there is no implicit discount offered, transaction prices allocated to
individual performance obligations usually match with respective stand-
alone selling prices.
(i) Express package & business mail – courier, express freight,
refrigerated transport & storage and postal services
The Group operates network (hub & spoke) courier, express freight,
refrigerated transport and storage, point-to-point courier and postal
services. Revenue from these services is recognised over the time of
delivery, being from the time of acceptance of the goods to delivery to
the final destination. Revenue from sale of postal products is recognised
at the point the sale occurs. Income invoiced and received in advance
of a service being provided is recorded in the balance sheet as ‘Contract
Liability’. This income is brought to account in the year in which the service
is provided. Revenue from refrigerated storage is recognised over time in
the reporting period in which the service is provided.
(ii) Information management – storage and destruction revenue
The Group provides archive management services for documents and
computer media, including storage, retrieval and destruction services. The
Group also provides secure handling, treatment and disposal of clinical
waste, waste renewal and related services. Revenue from these services
is recognised over time in the reporting period in which the service is
provided. Revenue from sale of archive boxes, computer media and
products generated from destruction activities is recognised when control
of the products has transferred, being when the products are delivered to
the customer.
(iii) Information management – digital services
The Group provides digital information management services, including
imaging and document capture (scanning), data extraction, customised
digital workflow solutions and application (app) development, under fixed-
price and variable-price contracts. Revenue from providing these digital
information management services is recognised in the period in which the
services are rendered. For fixed-price contracts, revenue is recognised
based on the actual service provided to the end of the reporting period as
a proportion of the total service to be provided, because the service does
not create an asset with an alternative use to the Group and the Group
has an enforceable right to payment for performance completed. This
revenue is determined based on the efforts expended relative to the total
expected effort.
Estimates of revenues, costs or extent of progress towards completion are
revised if circumstances change. Any resulting increases or decreases in
estimated revenues or costs are reflected in the income statement in the
period in which the circumstances that give rise to the revision become
known by management.
In the case of fixed-price contracts, the customer pays the fixed amount
based on a payment schedule. If the services rendered by the Group
exceed the payment, a contract asset is recognised. If the payments
exceed the services rendered, a contract liability is recognised.
If the contract includes an hourly fee, revenue is recognised in the amount
to which the Group has a right to invoice.
(iv) Financing components
The Group does not expect to have any contracts where the period
between the transfer of the promised goods or services to the customer
and payment by the customer exceeds one year. As a consequence, the
Group does not adjust any of the transaction prices for the time value
of money.
(v) Interest income
Interest income is recognised on a time-proportionate basis using the
effective interest method, which takes into account the effective yield on
the relevant financial asset.
(vi) Dividend income
Dividend income from investments is recognised when the shareholder’s
right to receive payment is established.
Notes to the financial statements
For the year ended 30 June 2024
The Group derives revenue from the transfer of goods and services over time and at a point in time in the following major product lines:
2024
Express Package
and Refrigerated
Transport & Storage
$000
Postal
$000
Storage &
Handling
$000
Destruction
Activities
$000
Other including
Digital Services
$000
To t a l
$000
Revenue from external customers938,87156,20967, 51599,12547, 4 311,209,151
Timing of revenue
recognition:
At a point in time-3,082-28,8427,75539,679
Over time938,87153,12767, 51570,28339,6761 ,169, 472
938,87156,2096 7, 51 599,12547, 4 311,209,151
2023
Revenue from external customers855,63152,00564,39587,17562,4141,121,620
Timing of revenue
recognition:
At a point in time-2,794-27, 31118,32648,431
Over time855,63149,21164,39559,86444,0881,073,189
855,63152,00564,3958 7, 17562,4141,121,620
Notes to the financial statements
For the year ended 30 June 2024
84Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz85
Group
Note
2024
$000
2023
$000
Income
Interest income8781,003
Operating expenses
Net gain (loss) on disposal of property, plant and equipment469(137)
Depreciation of property, plant and equipment1221,39919,732
Depreciation of right-of-use assets1354,35745,423
Amortisation of intangible assets1412,62811,323
Amortisation of software144,3654,443
Auditor’s fees
Audit of annual financial statements and review of interim
financial statements
PwC New Zealand496561
PwC Australia341363
Total837924
Greenhouse gas emissions pre-conditions assessment48-
General treasury training-1
Costs of offering credit
Impairment gain on trade receivables(522)(650)
Interest and finance costs
Interest on bank borrowings17, 56215,827
Interest on leases1317, 35913,625
Other interest expense1,019136
Other
Directors’ fees762718
Donations172271
Net foreign exchange loss (gain)169(287)
NOTE 4. INCOME AND EXPENSES
Profit before income tax includes the following specific income and expenses:
Notes to the financial statements
For the year ended 30 June 2024
Group
2024
$000
2023
$000
Current tax
Current tax on net profit for the year34,42035,776
Deferred tax (Note 16):
Reversal of temporary differences(5,583) (5,696)
New Zealand tax legislation change in building depreciation1,533-
Total deferred tax(4,050) (5,696)
Income tax expense30,37030,080
Income tax applicable to the Group’s net profit before tax differs from the theoretical amount that would arise using the weighted average tax rate
applicable to the profits of the consolidated entities, as follows:
Group
2024
$000
2023
$000
Profit before income tax101,296105,377
Income tax calculated at domestic tax rates applicable to the
accounting profits in the respective countries29,007 30,040
Tax-effect of amounts which are treated differently when calculating
taxable income:
- (Non-assessable income) / Non-deductible expenses (27)(405)
- Reversal of deferred tax on building depreciation 1,533-
- Other(143)445
Income tax expense30,37030,080
The Group has no tax losses (2023: Nil).
There are no unrecognised temporary differences (2023: Nil).
NOTE 5. INCOME TAX EXPENSE
The income tax expense for the year is the tax payable on the current year’s taxable income based on the income tax rate for each jurisdiction adjusted by
changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts
in the financial statements.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are
settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of
deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from
the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose as a result of a
transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable income. No deferred tax liability
is recognised if it arises from initial recognition of goodwill from a business combination.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to
utilise those temporary differences and losses.
Current and deferred tax balances attributable to amounts that have been recognised in other comprehensive income or directly in equity, are also taken to other
comprehensive income or directly to equity, respectively.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the
deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities
where there is an intention to settle the balances on a net basis.
Notes to the financial statements
For the year ended 30 June 2024
86Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz87
NOTE 7. CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash balances and cash deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group’s
cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Bank overdrafts are shown within
borrowings in the current liabilities on the balance sheet to the extent they exceed the legal right of off-set against cash included in current assets.
Group
2024
$000
2023
$000
Recognised amounts
Fully imputed dividends declared and paid during the year:
Final dividend paid 2023 at 19 cents per share (2022: 19 cents)33,71231,527
Interim dividend for 2024 at 18 cents per share (2023: 18 cents)32,18931,938
65,90163,465
Unrecognised amounts
Final dividend for 2024 at 19 cents per share (2023: 19 cents)33,95533,712
Group
2024
$000
2023
$000
Cash at bank35,54444,376
Cash deposits109109
Cash and cash equivalents in statement of cash flows35,65344,485
NOTE 6. DIVIDENDS
Notes to the financial statements
For the year ended 30 June 2024
Group
2024
$000
2023
$000
Imputation credits account
Imputation credits available for use in subsequent reporting periods55,84358,266
The above amounts represent the balance of the imputation account as at the end of the reporting period, adjusted for:
(a) Imputation credits that will arise from the payment of the amount of the provision for income tax;
(b) Imputation debits that will arise from the payment of dividends recognised as a liability at the reporting date; and
(c) Imputation credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
2024
Before tax
$000
Ta x (c h a rge) /c r e d i t
$000
After tax
$000
Exchange difference on translation of foreign operations1,949(87)1,862
Cash flow hedges taken directly to equity (1,909)529(1,380)
Other comprehensive income40442482
Current tax(87)
Deferred tax 529
442
2023
Before tax
$000
Ta x (c h a rge) /c r e d i t
$000
After tax
$000
Exchange difference on translation of foreign operations(6,865)1,069(5,796)
Cash flow hedges taken directly to equity 314(88)226
Other comprehensive income(6,551)981(5,570)
Current tax-
Deferred tax 981
981
The tax (charge)/credit relating to components of other comprehensive income is as follows:
Notes to the financial statements
For the year ended 30 June 2024
88Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz89
Group
2024
$000
2023
$000
Finished goods5,0765,480
Ticket stocks, uniforms and consumables4,3714,170
9,4479,650
NOTE 10. DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial instruments, such as interest rate caps and collar contracts and interest rate swaps, are entered into from time to time to manage interest
rate exposure on borrowings. Forward exchange contracts are also entered into from time to time to manage foreign exchange exposures. Derivative financial
instruments are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the reporting
date. The method of recognising the resultant gain or loss depends on whether the derivative financial instrument is designated as a hedging instrument, and if so,
the nature of the item being hedged. The Group designates derivative financial instruments as either fair value hedges (hedges of the fair value of recognised assets
or liabilities or a firm commitment) or cash flow hedges (hedges of highly probable forecast transactions).
At the inception of the transaction, the Group documents the relationship between the hedging instrument and the hedged item, as well as its risk management
objective and strategy for undertaking the hedge transaction. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of
whether the derivative financial instruments that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair
values or cash flows of hedged items.
(i) Cash flow hedges
The effective portion of changes in the fair value of derivative financial instruments that are designated and qualify as cash flow hedges is recognised in equity
in the cash flow hedge reserve. The gain or loss relating to any ineffective portion is recognised immediately in the income statement.
Amounts taken to equity are transferred to the income statement when the hedged transaction affects profit or loss, such as when hedged income or
expenses are recognised or when a forecast sale or purchase occurs. When the hedged item is the cost of a non-financial asset or liability, the amounts taken
to equity are transferred to the initial carrying amount of the non-financial asset or liability.
If the forecast transaction is no longer expected to occur, amounts previously recognised in equity are immediately transferred to the income statement. If the
hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked, amounts previously
recognised in equity remain in equity until the forecast transaction occurs. If the related transaction is not expected to occur, the amount is taken immediately
to the income statement.
(ii) Derivatives that do not qualify for hedge accounting
Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting or where hedge accounting has not been adopted are
recognised immediately in the income statement.
NOTE 9. INVENTORIES
Inventories are stated at the lower of cost, determined on a first-in-first-out basis, and net realisable value. Full provision is made for obsolescence, where
applicable. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs
necessary to make the sale. The cost of inventories recognised as an expense and included in ‘general and administration expenses’ amounted to $7.0 million (2023:
$10.5 million).
Notes to the financial statements
For the year ended 30 June 2024
Group
2024
$000
2023
$000
Current
Trade receivables144,631129,254
Provision for doubtful receivables(3,480)(3,219)
141,151126,035
Accrued revenue5,9807, 918
Other debtors and prepayments13,00316,000
Share plan loans receivable from employee476481
160,610150,434
Non-current
Share plan loans receivable from employees383406
Other non-current assets5,8115,593
6,1945,999
Trade receivables are non-interest bearing and are generally on 7-30 day terms.
Recoverability of trade and other receivables is reviewed on an ongoing basis. Amounts that are known to be uncollectible are written-off when identified. The
Group applies a simplified approach in calculating expected credit losses, which uses a lifetime expected loss allowance for all trade receivables. To measure
the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due. For other receivables, an
allowance for doubtful receivables is raised when there is objective evidence that the Group will not be able to collect all amounts due according to the original
terms of the receivable.
The movements in the provision for doubtful receivables for the Group were as follows:
Group
2024
$000
2023
$000
Opening balance3,2192,124
Provision for doubtful receivables449589
Receivables written off during the year as uncollectible(196)(97)
Provisions added from acquired businesses-750
Unused amounts reversed-(104)
Exchange rate movement8(43)
Closing balance (Note 28.1(b))3,4803,219
NOTE 8. TRADE RECEIVABLES AND OTHER NON-CURRENT ASSETS
Trade and other receivables are recognised at their fair value and subsequently measured at amortised cost using the effective interest rate, less provision
for impairment.
Notes to the financial statements
For the year ended 30 June 2024
90Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz91
NZDAUD
2024
$000
2023
$000
2024
$000
2023
$000
Interest rate swaps:
Notional amount65,00052,00030,00015,000
Maturity date05/25 – 12/29 05/25 – 04/28 04/27 – 09/28 07/23 – 04/27
Hedge ratio1:11:11:11:1
Change in fair value of outstanding
hedging instrument1 ,1471,986283333
Change in value of hedge item used to
determine hedge effectiveness(1,147)(1,986)(283)(333)
Weighted average strike rate for the year3.0%2.4%3.4%2.7%
Forward foreign exchange contracts:
Notional amount-12,631--
Maturity date-07/23 – 06/24--
Hedge ratio-1:1--
Change in fair value of outstanding
hedging instrument-1,019--
Change in value of hedge item used to
determine hedge effectiveness-(1,019)--
Weighted average strike rate for the year-USD0.71: NZD1--
There was no derivative movement recognised in the income statement during the year (2023: nil).
Effects of hedge accounting on the financial position and performance are:
Notes to the financial statements
For the year ended 30 June 2024
Group
2024
$000
2023
$000
Asset (Liability)Asset (Liability)
Current
Interest rate swaps – cash flow hedge491107
Forward foreign exchange contracts – cash flow hedge-1,019
4911,126
Non-current
Interest rate swaps – cash flow hedge9382,212
9382,212
Cash flow hedge reserve
Intrinsic
value of
options
$000
Spot
component
of currency
forwards
$000
Interest
rate swaps
$000
To t a l h e d ge
reserve
$000
Balance at 1 July 2022-1,1979812,178
Change in fair value of hedging instrument
recognised in Other Comprehensive Income (OCI)-(641)955314
Less: Deferred tax-179(267)(88)
Balance at 30 June 2023-7351,6692,404
Change in fair value of hedging instrument
recognised in OCI-(1,019)(890)(1,909)
Less: Deferred tax-284245529
Balance at 30 June 2024--1,0241,024
The Group’s hedging reserves relate to the following hedging instruments:
Notes to the financial statements
For the year ended 30 June 2024
92Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz93
Name of entityPrincipal activitiesCountry of
Incorporation
Air Freight NZ LimitedExpress package linehaulNew Zealand
Allied Express Transport Pty LimitedExpress package servicesAustralia
Allied Overnight Express Pty LimitedExpress package servicesAustralia
Big Chill Distribution LimitedTemperature-controlled transport & facilitiesNew Zealand
Castle Parcels LimitedExpress package servicesNew Zealand
Fieldair Engineering LimitedGeneral & aviation engineering servicesNew Zealand
Fieldair Holdings LimitedAviation-related servicesNew Zealand
Freightways Finance LimitedGroup treasury managementNew Zealand
Freightways Information Services LimitedIT infrastructure support servicesNew Zealand
Freightways Properties LimitedProperty managementNew Zealand
Freightways Trustee Company LimitedTrustee of Freightways Employee Share PlanNew Zealand
Info Management Services Australia LPAustralian treasury servicesAustralia
LitSupport Pty LimitedInformation managementAustralia
Med-X Pty LimitedInformation managementAustralia
Messenger Services LimitedExpress package servicesNew Zealand
New Zealand Couriers LimitedExpress package servicesNew Zealand
New Zealand Document Exchange LimitedBusiness mailNew Zealand
NOW Couriers LimitedExpress package servicesNew Zealand
Parceline Express LimitedExpress package linehaulNew Zealand
Post Haste LimitedExpress package servicesNew Zealand
Shred-X Pty LimitedInformation managementAustralia
The Information Management Group (NZ) LimitedInformation managementNew Zealand
The Information Management Group Pty LimitedInformation managementAustralia
There has been no change in investments in subsidiaries during the year.
NOTE 11. INVESTMENTS IN SUBSIDIARIES
The Company’s investment in its only directly-owned subsidiary, Freightways Express Limited (FEL), comprises shares at cost. Listed below are all the significant
subsidiaries wholly-owned directly or indirectly by FEL. All subsidiaries have a balance date of 30 June.
Hedge effectiveness
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an
economic relationship exists between the hedged item and the hedging instrument.
For hedges of foreign currency purchases, the Group enters into hedge relationships where the critical terms of the hedging instrument match exactly with the
terms of the hedged item. The Group therefore performs a qualitative assessment of effectiveness. If changes in circumstances affect the terms of the hedged
item such that the critical terms no longer match exactly with the critical terms of the hedging instrument, the Group uses the hypothetical derivative method
to assess effectiveness.
In hedges of foreign currency purchases, ineffectiveness may arise if the timing of the forecast transaction changes from what was originally estimated, or if there
are changes in the credit risk of the Group or the derivative counterparty.
The Group enters into interest rate swaps that have similar critical terms as the hedged item, such as reference rate, reset dates, payment dates, maturities and
notional amount. The Group does not hedge 100% of its loans, therefore the hedged item is identified as a proportion of the outstanding loans up to the notional
amount of the swaps. As all critical terms matched during the year, the economic relationship was 100% effective.
Hedge ineffectiveness for interest rate swaps is assessed using the same principles as for hedges of foreign currency purchases. It may occur due to:
- The credit or debit value adjustment on the interest rate swaps not being matched by the loan; and
- Differences in critical terms between the interest rate swaps and loans.
Notes to the financial statements
For the year ended 30 June 2024
Group
Land
$000
Buildings
$000
Leasehold
Alterations
$000
Motor
Vehicles
$000
Equipment
$000
To t a l
$000
2024
Opening net book value15,827 15,56015,42229,41878,973155,200
Additions-1,7121,719 5,85817,110 26,399
Acquisitions through business
combinations (Note 30)--26914821,175
Depreciation expense-(1,262) (2,235) (5,124) (12,778) (21,399)
Disposals / Transfers--119(380)(805) (1,066)
Exchange rate movement1661364269368
Closing net book value15,843 16,01615,04030,52783,251160,677
As at end of year
Cost15,843 45,032 30,03471,132176,722338,763
Accumulated depreciation-(29,016) (14,994) (40,605) (93,471) (178,086)
Net book value15,84316,016 15,04030,52783,251160,677
NOTE 12. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes all
expenditure directly attributable to the acquisition or construction of the item, including interest.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic
benefits associated will flow to the Group and the cost of the asset can be measured reliably. Such cost includes the cost of replacing parts that are eligible for
capitalisation when the cost of replacing the parts is incurred. The carrying amount of the replaced part is derecognised. All other repairs and maintenance costs
are recognised in the income statement as incurred.
Depreciation is calculated on a straight-line basis on all tangible fixed assets, other than land and leasehold improvements, so as to expense the cost of the assets
to their estimated residual values over their estimated useful lives. Land is not depreciated. Leasehold improvements are depreciated over the shorter of the
unexpired period of the lease and the estimated useful life of the improvements. Estimated useful lives are as follows:
Estimated useful life
Buildings 25 to 50 years
Leasehold alterations Shorter of the period of the lease or estimated useful life
Motor vehicles 5 to 10 years
Equipment 3 to 20 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date.
Interest and finance costs incurred for the construction of a qualifying asset are capitalised during the period of time that is required to complete and prepare the
asset for its intended use. Other interest and finance costs are expensed.
Notes to the financial statements
For the year ended 30 June 2024
94Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz95
Group
Land
$000
Buildings
$000
Leasehold
Alterations
$000
Motor
Vehicles
$000
Equipment
$000
To t a l
$000
2023
Opening net book value15,88616,118 12,81432,20157,161134,180
Additions--3,975 3,037 27,178 34,190
Acquisitions through
business combinations--5143207, 8568,690
Depreciation expense-(1,328) (1,923) (5,247) (11,234) (19,732)
Disposals-79697(678)(1,255) (1,040)
Exchange rate movement(59) (26) (55) (215) (733) (1,088)
Closing net book value15,827 15,56015,42229,41878,973155,200
As at end of year
Cost15,827 43,309 28,46266,497 163,510317, 6 0 5
Accumulated depreciation-(27,749) (13,040) (37,079) (84,537) (162,405)
Net book value15,82715,560 15,42229,41878,973155,200
The cost of equipment in respect of assets under construction for which depreciation has not commenced as at 30 June 2024 is $16.2 million
(2023: $20.3 million).
The latest independent valuations of land and buildings (performed in June 2024) assess these assets to have a total fair value of $107.5 million. The fair values
have been derived using the direct capitalisation approach. The valuation technique uses significant unobservable inputs, namely capitalisation rate and
potential new market income of land and buildings. Therefore, these are considered level 3 valuations, as defined in Note 28.1(d).
NOTE 13. LEASES
This note provides information for leases where the Group is a lessee.
The Group’s leases predominantly relate to property, equipment and vehicles. Rental contracts are typically made for fixed periods of 3 to 12 years but may have
extension options. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not
impose covenants other than the leased assets may not be used as security for borrowing purposes. The right-of-use (ROU) asset is depreciated over the shorter
of the asset’s useful life and the expected lease term on a straight-line basis.
Lease liabilities have been measured at the present value of the remaining lease payments, discounted using a discount rate derived from the incremental
borrowing rate (IBR) when the interest rate implicit in the lease was not readily available. Factors taken into consideration when calculating the IBR for each asset
category included observable market rates, economic conditions and lease tenure. The incremental borrowing rates applied to lease liabilities range between 1.69%
to 7.82% (2023: 1.69% to 7.22%), with a weighted average rate of 4.94% (2023: 4.37%).
Some property leases contain an extension option exercisable by the Group. At the commencement of a lease, the Group assesses whether it is reasonably
certain an extension option will be exercised. The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this
assessment and that is within the control of the Group. The extension options are only exercisable by the Group and not the lessor. Where it is reasonably certain
the extension will be exercised, that extension period and related costs are recognised on the balance sheet.
Notes to the financial statements
For the year ended 30 June 2024
Group
2024
$000
2023
$000
Right-of-use assets
Opening net book value315,536271,020
Lease additions, modifications and terminations70,97679,073
Additions through business combinations3,53512,791
Depreciation for the year(54,357)(45,423)
Exchange rate movement393(1,925)
Closing net book value336,083315,536
Cost558,8434 97, 9 5 0
Accumulated depreciation(222,760)(182,414)
Closing net book value336,083315,536
Group
2024
$000
2023
$000
Right-of-use assets
Buildings300,686285,709
Equipment7, 5 356,271
Motor vehicles27, 86223,556
336,083315,536
The following tables show the movements and analysis in relation to the ROU assets and lease liabilities.
The balance sheet shows the following amounts relating to leases:
Group
2024
$000
2023
$000
Lease liabilities
Opening lease liabilities358,273310,125
Lease additions, modifications and terminations70,95979,298
Additions through business combinations3,53512,791
Interest for the year17, 35913,625
Lease repayments(67,715)(55,442)
Exchange rate movement656(2,124)
Closing lease liabilities383,067358,273
Notes to the financial statements
For the year ended 30 June 2024
96Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz97
Lease liabilities maturity analysis:
2024
Minimum lease
payments
$000
Interest
$000
Present value
$000
Within one year68,25416,85451,400
One to five years207, 0 5546,615160,440
Beyond five years218,00546,778171,227
To t a l493,314110,247383,067
2023
Within one year59,10814,20744,901
One to five years188,88639,557149,329
Beyond five years189,17025,127164,043
To t a l4 3 7, 1 6 478,891358,273
Lease related expenses included in the income statement:
Group
2024
$000
2023
$000
Depreciation charge for right-of-use assets
Buildings42,72636,153
Motor vehicles8,0686,104
Equipment3,5633,166
54,35745,423
Interest on leases17, 35913,625
Total cash outflow in relation to leases is $50.2 million (2023: $41.7 million).
Group
2024
$000
2023
$000
Analysis of lease liabilities:
Current51,40044 ,774
Non-current331,667313,499
383,067358,273
Notes to the financial statements
For the year ended 30 June 2024
NOTE 14. INTANGIBLE ASSETS
(i) Goodwill
Goodwill represents the excess of the consideration transferred in an acquisition over the fair value of the Group’s share of the net identifiable assets of the
acquired business at the date of acquisition. Goodwill is not amortised but is tested for impairment annually or whenever events or changes in circumstances
indicate that it might be impaired and is carried at cost less accumulated impairment losses. Goodwill is allocated to cash-generating units for the purpose of
impairment testing.
(ii) Brand names
Acquired brand names are recognised at cost, being their fair value at the date of acquisition if acquired in a business combination. Brand names with
indefinite useful lives are not subject to amortisation but are tested for impairment annually or whenever events or changes in circumstances indicate that they
might be impaired and are carried at cost less amortisation and impairment losses. Brand names with finite useful lives are amortised over their expected
useful lives. The useful lives and amortisation methods are reviewed and adjusted, if appropriate, at each balance sheet date.
Brand names are allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of
cash-generating units that are expected to benefit from the brand names.
(iii) Computer software
External software costs, together with payroll and related costs for employees directly associated with the development of software, are capitalised if the
development creates an intangible asset that the Group controls and the intangible asset meets the recognition criteria. Cloud-based software costs that do
not result in intangible assets are expensed as incurred, unless the costs are paid to the suppliers of the cloud-based software to significantly customise the
cloud-based software for the Group, in which case the costs paid upfront are recorded as prepayments for services and amortised over the expected terms of
the cloud computing arrangements. Amortisation is charged on a straight-line basis over the estimated useful life of the software which ranges between 3 and
10 years. There is no software work in progress for which amortisation has not commenced (2023: $0.4 million). Software under development not yet available
for use is tested annually for impairment.
(iv) Customer relationships
•Contractual
An intangible asset is recorded at fair value in respect of the amount of any contractual termination fees payable by customers of businesses acquired in
respect of their document holdings. As it is not known when permanent retrieval fees may arise, this asset is only amortised upon the actual retrieval fee
being charged to the respective customer.
•Other
Non-contractual customer relationships acquired in a business combination are recognised at fair value at the acquisition date. These customer
relationships have an estimated finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line
method over the expected useful life of the customer relationship which ranges between 10 and 20 years.
Notes to the financial statements
For the year ended 30 June 2024
98Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz99
Group
Goodwill
$000
Brand names
$000
Software
$000
Customer
relationships
$000
Other
$000
To t a l
$000
2024
Opening net book value406,650157,28313,70594,1915,8106 7 7, 6 3 9
Additions--2,518 -352,553
Acquisition through
business combinations (Note 30)3,468--893-4,361
Disposals / Transfers--(17)--(17)
Amortisation expense-(77)(4,365) (11,793) (758) (16,993)
Exchange rate movement9722293179151,398
Closing net book value411,0901 57, 4 3 511,84483,4705,102668,941
As at end of year
Cost411,116 157, 6 3936,439130,699 11,099 746,992
Accumulated amortisation
and impairment(26)(204)(24,595)(47,229)(5,997)(78,051)
Net book value411,0901 57, 4 3 511,84483,4705,102668,941
Group
Goodwill
$000
Brand names
$000
Software
$000
Customer
relationships
$000
Other
$000
To t a l
$000
2023
Opening net book value306,116 128,286 12,89650,8143,556501,668
Additions--3,030 -313,061
Acquisition through
business combinations106,60630,6542,16756,3293,141198,897
Disposals / Transfers--162--162
Amortisation expense-(77) (4,443) (10,501) (745) (15,766)
Exchange rate movement(6,072)(1,580)(107)(2,451)(173)(10,383)
Closing net book value406,650157,28313,70594,1915,8106 7 7, 6 3 9
As at end of year
Cost425,312 157, 41133,701129,458 11,031 756,913
Accumulated amortisation
and impairment(18,662)(128) (19,996) (35,267) (5,221) (79,274)
Net book value406,650157,28313,70594,1915,8106 7 7, 6 3 9
Notes to the financial statements
For the year ended 30 June 2024
(i) Key assumptions used for value-in-use calculations
On an annual basis, the recoverable amount of goodwill and brand names is determined based on the greater of value-in-use and fair value less costs of
disposal calculations specific to the CGU or group of CGUs associated with both goodwill and brand names.
The value-in-use calculations use pre-tax cash flow projections based on financial budget prepared by management and approved by the Board for the year
ended 30 June 2025 and financial projections for the years ended 30 June 2026 and 2027. Cash flows beyond June 2027 have been extrapolated using
growth rates which take into consideration current and forecast economic conditions for the relevant products and industries. A probabilistic approach was
also adopted where a number of different growth scenarios were considered and weighted by likelihood of achievement. In addition, the sensitivity of the main
financial variables was tested and considered in the final estimation. No adjustments have been made to forecast cash flows for the unknown impacts of future
climate change, as further disclosed in the note “Climate change” below.
Revenue growth rates and a consistent EBITDA margin assuming costs increase in line with revenue, reflecting both historical and expected growth, have been
applied to the value-in-use calculation with the same scenarios and sensitivities applied as described in Section (ii) Significant estimate – sensitive to changes
in assumptions below. Growth rates have been aligned with the observed long-term inflation for each geographic region and each CGU’s ability to increase
customer prices and grow with nominal GDP. Pre-tax discount rates, reflecting the current environment in financial markets and the countries each CGU or
group of CGUs operates in, have been used. The CGU or group of CGUs specific growth rates and pre-tax discount rates applied are:
20242023
Revenue
growth rate
FY25 – FY27
Pre-tax
discount rate
Revenue
growth rate
beyond FY24
Pre-tax
discount rate
Allied Express3.9% - 8.4%13.9%3.0%13.7%
Big Chill5.9% - 14.9%13.7%2.5%13.5%
Messenger Services0.6% - 6.0%14.9%2.5%15.8%
New Zealand Couriers6.8% - 7.0%13.2%2.5%14.1%
New Zealand Document Exchange and Dataprint1.8% - 10.0%14.7%2.5%16.9%
Post Haste, Castle Parcels and NOW Couriers2.0% - 7.7%14.8%2.5%14.6%
The Information Management Group (New Zealand)1.0% - 5.2%17.1%2.5%16.1%
The Information Management Group (Australia)3.1% - 5.5%15.8%3.0%14.0%
Shred-X6.7% - 10.8%15.7%3.0%14.0%
Goodwill Brand names
2024
$000
2023
$000
2024
$000
2023
$000
Allied Express100,436100,27129,53729,399
Big Chill85,18385,18314,56114,638
Messenger Services9,0168,7665,1005,100
New Zealand Couriers47,75247,75258,50058,500
New Zealand Document Exchange and Dataprint15,09215,0927, 3187, 318
Post Haste, Castle Parcels and NOW Couriers30,64627,15918,39518,395
Total Express Package & Business Mail288,125284,223133,411133,350
The Information Management Group (New Zealand)17, 57 717, 57 74,4004,400
The Information Management Group (Australia)57, 8 4 657, 52616,24416,168
Shred-X47, 5 4247, 3243,3803,365
Total Information Management122,965122,42724,02423,933
To t a l411,090406,6501 57, 4 3 5157,283
Impairment tests for indefinite life intangible assets
Goodwill and brand names are allocated to those cash-generating units (CGU) or groups of CGU that are expected to benefit from them.
The carrying amount of intangible assets allocated by CGU or group of CGU is outlined below:
Notes to the financial statements
For the year ended 30 June 2024
100Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz101
(ii) Significant estimate – Sensitivity to changes in assumptions
From the value-in-use assessment for all CGUs, management believes that no reasonably possible change in any of the above key assumptions would cause
the carrying values of goodwill and brand names to exceed their respective recoverable amounts.
The financial performance of Big Chill declined in 2024, impacted by the economic downturn in New Zealand and the company’s exposure to higher value food.
In addition, Big Chill’s 3rd party logistics site at Ruakura opened in October 2023, weighing on financial performance as utilisation built up through the year. The
site is now at near breakeven and growing, which is expected to improve Big Chill’s financial performance in the 2025 financial year.
Notes to the financial statements
For the year ended 30 June 2024
2024
From
%
To
%
Achievement of FY25-FY27 revenue100%75%
Terminal EBITDA growth rate3.0%(4.0%)
Pre-tax discount rate15.7%22.2%
Climate change
Freightways strongly believes that sustainable business practices are fundamental to our future. These include minimising the environmental impact of our daily
operations and actively seeking initiatives to protect the environment.
Most of Freightways’ emissions come from the combustion of transport fuel, including that of our contracted couriers. The most significant financial impact would
therefore be due to an increase to the cost of fuel and the cost of carbon credits linked to the volume of fuel used. Freightways would expect, however, to be able to
recoup most of that impact as mechanisms are already in place to adjust prices for movement of the price of fuel. The risk of disruption due to natural events linked
to climate change can be managed through the flexibility of our network across New Zealand. Finally, most of the vehicles used in the Express Packaging businesses
are owned by contractors and Freightways is exploring ways through which it will be able to facilitate the transition of the vehicles to electric or hydrogen.
The New Zealand External Reporting Board (XRB) published the Aotearoa New Zealand Climate Standards in December 2022. The new standards are effective
for annual reporting periods beginning on or after 1 January 2023. The Group has assessed the new standards and has adopted the new standards in the 2024
financial year. The Group has elected to use most of the first-year adoption provisions, but will report on the Group’s owner drivers’ emissions, which is a Scope 3
emission and the most material one for the Group.
Paper prices falling below long-term average and delays in getting regulatory approval for a Victorian waste treatment facility impacted Shred-X’s financial
performance. Approval to operate the facility was finally granted in May 2024 and it is expected that this will enable higher volumes of waste to be processed at
lower cost in the 2025 financial year, resulting in improving financial performance.
The recoverable amount of Shred-X would equal its carrying amount if any of the key assumptions were to change as follows:
2024
From
%
To
%
Achievement of FY25-FY27 revenue100%77%
Terminal EBITDA growth rate2%(2 . 2%)
Pre-tax discount rate13.7%18.2%
The recoverable amount of Big Chill would equal its carrying amount if any of the key assumptions were to change as follows:
GSS
2024
$000
2023
$000
Summarised Balance Sheet
Total current assets6,4134,449
Total non-current assets428430
Total current liabilities(2,569)(2,287)
Net Assets4,2722,592
Reconciliation to carrying amounts:
Opening net assets2,5924,114
Profit for the period5,1804,920
Dividend paid(3,500)(6,442)
Closing Net Assets4,2722,592
Group’s share in GSS33.3%33.3%
Group’s share in net assets1,422863
Goodwill6,9486,948
Carrying Amount8,3707, 811
GSS does not have any capital commitments and contingent liabilities as at 30 June 2024 (2023: Nil).
The carrying value of other individually immaterial investments in associates and joint ventures as at 30 June 2024 is $5.0 million (2023: $4.7 million).
GSS
2024
$000
2023
$000
Summarised Statement of Comprehensive Income
Revenue34,42632,298
Profit from continuing operations5,1804,920
Profit for the year5,1804,920
Other comprehensive income--
Total Comprehensive Income5,1804,920
NOTE 15. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
The Group has a 33.3% investment and voting rights in Sweetspot Group Limited (GSS), a company that provides freight brokerage service. The principal place of
business and country of incorporation of GSS is New Zealand.
GSS is the only material associate of the Group as at 30 June 2024. GSS has share capital consisting solely of ordinary shares, which are held directly by the Group.
GSS is accounted for using the equity method. The carrying value of the investment in GSS is $8.4 million (2023: $7.8 million). GSS is a private entity with no quoted
price available.
The tables below provide summarised financial information for GSS. The information disclosed reflects the amounts presented in the financial statements of GSS
and not Freightways Group Limited’s share of those amounts.
Notes to the financial statements
For the year ended 30 June 2024
102Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz103
Group
Proper t y,
plant and
equipment
$000
Employee
entitlements
$000
Accruals and
provisions
$000
Derivative
financial
instruments
$000
Intangible
assets
$000
Right-of-use
assets
$000
Leases
$000
To t a l
$000
2023
Balance at beginning of year(7,717)8,278 4,245(848)(50,612)(76,986)86,553(37,087)
Prior period adjustment(1,071)(217)(141)-39-105(1,285)
Transfer to income statement909416413-3,650(9,946)11,5396,981
Amounts relating to business
combinations (Note 30)(1,139)1,183871-(27,037)(3,742)3,742(26,122)
Adjustment for cash flow
hedge reserve---(88)---(88)
Other480-(468)142-(347)(292)
Exchange rate movement51(101)(56)-1,253-(78)1,069
Balance at end of year(8, 487)9,5594,864(935)(72,665)(9 0,674)101,514(5 6,824)
Group
Proper t y,
plant and
equipment
$000
Employee
entitlements
$000
Accruals and
provisions
$000
Derivative
financial
instruments
$000
Intangible
assets
$000
Right-of-use
assets
$000
Leases
$000
To t a l
$000
2024
Balance at beginning of year(8,487)9,5594,864(935)(72,665)(90,674)101,514(56,824)
Prior period adjustment1,402419(1,287)-(2,611)-1,435(642)
Transfer to income statement(1,125)(744)1,073-4,267(5,571)6,7924,692
Amounts relating to business
combinations (Note 30)3034144-(250)(990)990138
Adjustment for cash flow
hedge reserve---529---529
Exchange rate movement(21)247-(128)-33(85)
Balance at end of year(7, 9 2 8)9,2994,701(4 0 6)(71,387)(97, 2 3 5)110,764(52,192)
NOTE 16. DEFERRED TAX LIABILITY
The movement in deferred tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same jurisdiction,
is as follows:
Notes to the financial statements
For the year ended 30 June 2024
NOTE 18. PROVISIONS
A provision is recognised when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic
benefits will be required to settle the obligation and a reliable estimate of the obligation can be made. If the effect is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks
specific to the liability. The increase in the provision due only to the passage of time is recognised as an interest expense.
Explanation of provisions
Provision for customer claims relates to actual claims received from customers that are being considered for payment as at reporting date and are expected to be
resolved within the next two months.
Provision for long service leave relates to the potential leave obligation for employees who reach continuous employment milestones required under Australian
regulations. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.
Provision for lease obligations relates to estimated payments to reinstate leased buildings and equipment used to an appropriate condition upon the expiry of the
respective lease terms.
NOTE 17. TRADE AND OTHER PAYABLES
Trade and other payables are recognised when the Group becomes obligated to make future payments resulting from the purchase of goods or services. They are
initially recognised at fair value and subsequently measured at amortised cost using the effective interest rate method. Acquisition earn-out payables have been
measured at fair value. The amounts are unsecured.
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled within 12 months of the reporting date are recognised
in respect of employees' services rendered up to the reporting date. They are measured for recognition by assessing the amounts expected to be paid when the
liabilities are settled. Included in employee entitlements is an accrual of $1.6 million (2023: $2.8 million) for potential remediation for New Zealand Holidays Act non-
compliance.
Liability for long service leave is recognised and measured as the present value of expected future payments to be made in respect of services provided by the
employee. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.
Group
2024
$000
2023
$000
Current
Trade creditors56,71651,291
Employee entitlements31,06532,358
Acquisition earn-out payables4,161676
Other creditors and accruals60,62254,277
152,564138,602
Non-current
Acquisition earn-out payables1,9204,159
1,9204,159
Notes to the financial statements
For the year ended 30 June 2024
104Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz105
Group
Customer
claims
$000
Long service
leave
$000
Lease
obligations
$000
To t a l
$000
2024
Balance at beginning of year1,4176,6515,70013,768
Additions through business combinations--158158
Current year provision 1,3701,2234823,075
Amounts used during the year(1,317)(1,004) (183)(2,504)
Movement in exchange rate-331245
Balance at end of year1,4706,9036,16914,542
Group
Customer
claims
$000
Long service
leave
$000
Lease
obligations
$000
To t a l
$000
2023
Balance at beginning of year8734,3883,6718,932
Additions through business combinations2221,7737282,723
Current year provision 3841,3101,5983,292
Amounts used during the year(54)(517) (239)(810)
Movement in exchange rate(8)(303) (58)(369)
Balance at end of year1,4176,6515,70013,768
2024
$000
2023
$000
Analysis of total provisions
Current3,1453,552
Non-current11,397 10,216
To t a l14,54213,768
NOTE 19. CONTRACT LIABILITY
A contract liability of $14.5 million (2023: $14.4 million) is recorded in the balance sheet reflecting the future service obligation for courier and postal products that
have been sold in advance of their use. The balance is supported by reference to historical customer prepaid product usage patterns.
Revenue recognised during the year that was included in the contract liability balance at the beginning of the year was $9.2 million (2023: $9.4 million).
There are no other significant financing components in the Group’s revenue arrangement.
Notes to the financial statements
For the year ended 30 June 2024
Group
2024
$000
2023
$000
Bank borrowings
Non-current265,674297,194
265,6742 97, 1 9 4
(a) Bank borrowings
The bank borrowings agreement contains a negative pledge deed. The negative pledge includes a provision restricting the Group from granting security
interests and a cross-guarantee of all relevant indebtedness by majority of the Company’s subsidiaries.
(b) Finance facilities
The following finance facilities existed at the reporting date:
Facilities denominated in
New Zealand Dollars
Facilities denominated in
Australian Dollars
2024
$000
2023
$000
2024
$000
2023
$000
Bank overdraft
– total bank overdraft facilities available8,0008,000--
– amount of overdraft facilities unused8,0008,000--
Loan facilities
– total loan facilities available170,000170,000180,000180,000
– US Private Placement (USPP) maturing 11 July 2025--20,00020,000
– Bank loan maturing 15 March 2026 (*)-120,000--
– USPP maturing 15 December 202610,00010,00010,00010,000
– Bank loan maturing 15 March 2027 (*)30,00030,000-80,000
– USPP maturing 19 March 202810,00010,00020,00020,000
– Bank loan maturing 31 May 2028 (*)120,000---
– Bank loan maturing 31 May 2029 (*)--80,000-
– USPP maturing 14 December 2029--50,00050,000
– amount of loan facilities used125,000124,000128,450158,700
– amount of loan facilities unused45,00046,00051,55021,300
Effective interest rate at 30 June as
amended for interest rate hedges6.80%5.67%5.57%4.92%
* In June 2024, the Group negotiated a two-year extension of its NZ$120 million and A$80 million syndicated bank facilities that were maturing on 15 March
2026 and 15 March 2027. The extended facilities became effective from 14 June 2024. The NZ$30 million syndicated bank facility that matures on 15
March 2027 was extended by two years in July 2024 and became effective from 16 July 2024 (as disclosed in Note 31). The extended facilities have the
same banking covenants as the previous facilities.
NOTE 20. BORROWINGS
Interest-bearing bank loans and overdrafts are initially recognised at fair value and subsequently measured at amortised cost using the effective interest rate
method. Costs incurred in establishing finance facilities are amortised to the income statement over the term of the respective facilities.
Notes to the financial statements
For the year ended 30 June 2024
106Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz107
Liabilities from financing activities
Group
Cash
$000
Leases
$000
Bank borrowings
$000
To t a l
$000
Balance at 1 July 202224,137(310,125) (176, 210)(4 6 2 , 1 9 8)
Cashflow14,71341,734(124,788)(68,341)
Lease additions, modifications and terminations-(79,298)-(79,298)
Additions through business combinations-(12,791)-(12,791)
Other non-cash movements--(516)(516)
Exchange rate movement5,6352,2074,32012,162
Balance at 30 June 202344,485(358,273) (2 97, 1 9 4)(610,982)
Cashflow(7,670)50,20426,99369,527
Lease additions, modifications and terminations-(70,959)-(70,959)
Additions through business combinations-(3,535)-(3,535)
Other non-cash movements--(71)(71)
Exchange rate movement(1,162)(504)4,5982,932
Balance at 30 June 202435,653(383,067) (26 5,674)(613,0 88)
The fair values of borrowings are not materially different to their carrying amount, since the interest payable on those borrowings is either close to market rate or the
borrowings are of a short-term nature.
The Group has a US$160 million uncommitted finance facility with a US-based lender on the same terms as the syndicated bank facilities. Of this facility, the US
dollar equivalent of NZ$20 million and A$100 million was drawn as at 30 June 2024 (2023: NZ$20 million and A$100 million). The drawn amounts mature in July
2025, December 2026, March 2028 and December 2029, as detailed in the maturity table above.
Compliance with banking covenants
The Group was in compliance with all of its banking covenants throughout the year ended 30 June 2024. The Group’s banking covenants forecast indicates that
the Group will remain compliant with all of its banking covenants in the next twelve months. The forecast includes a sensitivity analysis of a 20% decline in forecast
earnings before interest, income tax, depreciation and amortisation.
Net debt reconciliation
An analysis of net debt and movements in net debt are as follows:
Notes to the financial statements
For the year ended 30 June 2024
Group
2024
Ordinary shares
2023
Ordinary shares
2024
$000
2023
$000
Balance at beginning of year17 7, 428 , 218165,795,056298,075184,349
Shares issued during the year:
- Share rights136,7131 27, 5658701,016
- Employee share plan90,00065,000617595
(Increase) decrease in employee share plan
unallocated shares(2,282)5,250(48)49
Issue of fully paid ordinary shares1,054,74811,435,3478,872112,066
Balance at end of year178,707,397177,428,218308,386298,075
Contributed Equity
(i) Fully paid ordinary shares
As at 30 June 2024, there were 178,712,819 shares issued and fully paid (2023: 177,431,358). All fully paid ordinary shares have equal voting rights and share
equally in dividends and surplus on winding up.
(ii) Share rights
Share rights are issued to certain senior executives under the rules of the Freightways Long Term Incentive (LTI) Scheme, with vesting determined at the
end of a 3-year vesting period. Vesting is subject to the achievement of certain financial hurdles set by the Board and included in the annual offer of
participation to executives. Each share right converts to one Freightways fully paid ordinary share upon vesting. Share rights do not carry a dividend
entitlement and are non-transferable.
On 20 October 2023, 136,713 share rights vested upon achievement of certain financial hurdles set by the Board and each of the share rights converted to
one Freightways fully paid ordinary share (2023: 127,565). The issue price per share was $7.38 (2023: $8.06).
On 20 October 2023, 13,717 share rights were redeemed and cancelled (2023: 35,227).
On 1 May 2024, 225,307 share rights were issued to certain senior executives under the rules of the Freightways LTI Scheme (2023: 152,160).
As at 30 June 2024, there were 466,883 share rights on issue (2023: 392,006).
(iii) Dividend Reinvestment Plan
On 2 October 2023, the Company issued 1,054,748 fully paid ordinary shares at $8.4115 under the Freightways dividend reinvestment plan (2023: Nil).
(iv) Employee Share Plan
On 1 December 2023, the Company issued 90,000 fully paid ordinary shares to Freightways Trustee Company Limited, as Trustee for the Freightways
Employee Share Plan, at $6.85 each, being a 10% discount on the weighted average market price on the NZX during the one week following Freightways’ Annual
Shareholders Meeting on 26 October 2023 (December 2022: 65,000 fully paid ordinary shares at $9.16 each). In total, participating employees were provided
with interest-free loans of $0.6 million to fund their purchase of the shares in the Share Plan (December 2022: $0.6 million). The loans are repayable over three
years and repayment commenced in December 2023.
As at 30 June 2024, the Trustee held 596,285 (2023: 579,717) fully paid ordinary shares representing 0.3% (2023: 0.3%) of all issued ordinary shares of which
5,422 (2023: 3,140) were unallocated. These shares are held for allocation in the future.
The Employee Share Plan operates in accordance with section CW 26C of the New Zealand Income Tax Act 2007 and the Trustees are appointed by the
Freightways Group Limited Board of Directors.
NOTE 21. EQUITY
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a reduction in the amount of
proceeds arising from the issue of shares.
Notes to the financial statements
For the year ended 30 June 2024
108Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz109
Nature and Purpose of Reserves
(i) Cash flow hedge reserve
The cash flow hedge reserve is used to record gains or losses on a hedging instrument within a cash flow hedge. The amounts are recognised in the income
statement when the associated hedged transactions affect profit or loss, as described in Note 10(i).
(ii) Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations
into New Zealand dollars, as described in Note 1(c).
Notes to the financial statements
For the year ended 30 June 2024
NOTE 22. SHARE-BASED PAYMENTS
The Group operates equity-settled, share-based compensation arrangements for senior executives, under which the Group receives services from employees as
consideration for share rights in the Company. The fair value of the employee services received in exchange for the share rights is recognised as an expense. The
total amount to be expensed is determined at grant date by reference to the fair value of the share rights allotted, taking into account market vesting conditions
(for example, total shareholder return measures such as outperforming the median of the NZX50 Index), but excluding the impact of any non-market service and
performance vesting conditions (for example, compound growth rates for earnings per share, expected profit target against the capital employed and remaining
an employee of the Group over a specified time period). Non-market vesting conditions are included in assumptions about the number of share rights that are
expected to vest. The total amount expensed is recognised over the relevant vesting period, which is the period over which all of the specified vesting conditions are
to be satisfied. At each balance sheet date, the Group revises its estimates of the number of share rights that are expected to vest based on the non-market vesting
conditions. It recognises the impact of the revision to original estimates, if any, in the income statement.
a) Description of share-based payment arrangements
Freightways Long-term Incentive Scheme (the ‘Scheme’)
The Group operates a Board approved long-term incentive scheme for certain Freightways senior executives. Under this Scheme, share rights are issued at ‘Nil’
consideration which entitles participants to receive ordinary shares in Freightways within three years of vesting period. The total contractual life of share rights
is 3 years.
Share rights will vest if the participant remains employed by Freightways for the duration of the vesting period and the following performance hurdles are met
over the assessment period. They will vest in the following proportions:
- Total Shareholder’s Return (TSR) class of rights (50% of share rights)
This will vest over the assessment period on a progressive vesting scale based on the Group’s TSR relative to the TSR of other constituents of the NZX50 Index.
- Cost of Capital class of rights (50% of share rights)
This will vest based on net operating profit after tax (NOPAT) exceeding a cost of capital hurdle (determined by the Board) over the assessment period.
On vesting date, subject to meeting service and performance conditions, each share right can be exercised to receive one ordinary share. The senior executives are
liable for tax on the shares received at this point.
Number of share rights
20242023
Balance at beginning of the year392,006402,638
Issued during the year225,307152,160
Cancelled during the year(13,717)(35,227)
Fully paid-up or exercised during the year(136,713)(127,565)
Balance at end of the year466,883392,006
Exercisable at end of the year89,416166,352
2024
$000
2023
$000
Total amount expensed during the year8861,016
c) Effect of share-based payment arrangements on profit or loss, financial position and equity
Share rights
Grant date:28 Oct 202124 Nov 202225 Oct 2023
Fair value at grant date
$7.28 - TSR
class of rights
$11.73 – NOPAT
class of rights
$6.51 - TSR
class of rights
$9.13 – NOPAT
class of rights
$3.70 - TSR
class of rights
$7.04 – NOPAT
class of rights
Exercise priceNilNilNil
Share price at grant date$12.71$9.99$8.05
Expected dividends2.5%2.5%4.5%
Expected volatility 26.8%29.9%20.8%
Expected life 0.2 years1.2 years2.2 years
Risk free interest rate (based on government bonds)1.82%4.48%5.45%
Fair value measurement of share-based payment arrangements
The fair value of share rights has been measured using Monte Carlo simulation. The fair value measurement also considers the terms and conditions upon
which partly-paid shares and share rights were issued. Service and non-market performance conditions attached to the arrangements were not considered in
measuring fair value.
The inputs used in the measurement of fair values at grant date of share rights issued during the year were as follows:
Expected volatility has been based on an evaluation of the historical volatility of the Freightways’ share price, particularly over the historical period commensurate
with the expected term. The expected term of share rights has been based on historical experience and general option holder behaviour.
Notes to the financial statements
For the year ended 30 June 2024
b) Reconciliation of outstanding share rights
110
Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz111
Group
Note
2024
$000
2023
$000
Profit for the year70,92675,297
Add non-cash items:
Depreciation and amortisation492,74980,921
Movement in provision for doubtful debts522650
Movement in deferred income tax(2,774)(2,595)
Net loss (gain) on disposal of property, plant and equipment 469(137)
Net foreign exchange (gain) loss169(287)
Share of profits of associates(2,005)(3,173)
Movement in working capital, net of effects of acquisitions of businesses:
(Decrease) in trade and other receivables(8,449) (3,385)
Decrease (increase) in inventories 622(1,556)
Increase in trade and other payables4,8843,106
(Decrease) increase in income taxes payable(450)6,967
Net cash inflows from operating activities156,663155,808
NOTE 23. RECONCILIATION OF PROFIT FOR THE YEAR
WITH CASH FLOWS FROM OPERATING ACTIVITIES
NOTE 24. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
The Group had made capital commitments to purchase or construct buildings and equipment for $13.5 million at 30 June 2024 (2023: $9.3 million), principally
relating to the completion of operating facilities and purchase of replacement equipment throughout the Group.
As at 30 June 2024, the Group had outstanding letters of credit and bank guarantees issued by its lenders totalling approximately $13.6 million (2023: $9.9 million).
The letters of credit relate predominantly to support for regular payroll payments. The bank guarantees relate to security given to various landlords in respect of
leased operating facilities.
Freightways is subject to a Commerce Commission investigation and is cooperating with the Commerce Commission. Freightways does not consider that this
process will have a material financial or operational impact on the Group.
Group
20242023
Profit for the year attributable to shareholders ($000)70,92675,297
Weighted average number of ordinary shares (‘000)178,366174 , 525
Basic earnings per share (cents)39.843.1
NOTE 25. EARNINGS PER SHARE
Basic earnings per share
Basic earnings per share is calculated by dividing the profit for the year attributable to shareholders by the weighted average number of ordinary shares outstanding
during the year:
Notes to the financial statements
For the year ended 30 June 2024
NOTE 26. NET TANGIBLE ASSETS PER SECURITY
Net tangible assets (liabilities) per security at 30 June 2024 was ($0.92) (2023: ($1.06)). Net tangible assets exclude intangible assets but includes software. There
were 178,712,819 shares issued and fully paid as at 30 June 2024 (2023: 177,431,358).
Group
20242023
Profit for the year attributable to shareholders ($000)70,92675,297
Weighted average number of ordinary shares (‘000)178,366174 , 525
Effect of dilution (‘000)467392
Diluted weighted average number of ordinary shares (‘000)178,833174,917
Diluted earnings per share (cents)39.743.1
Diluted earnings per share
Diluted earnings per share is calculated by dividing the profit for the year attributable to shareholders by the weighted average number of ordinary shares
outstanding during the year, adjusted to include all dilutive potential ordinary shares (for example, share rights on issue) as if they had been converted to ordinary
shares at the beginning of the year:
Notes to the financial statements
For the year ended 30 June 2024
Group
2024
$000
2023
$000
Sale of courier services to GSS12,25613,304
Purchase of goods and services from GSS1,6611,463
Receivables from GSS at end of year1,3551,290
Payables to GSS at end of year8982
NOTE 27. TRANSACTIONS WITH RELATED PARTIES
Trading with related parties
The Group has not entered into any material external related party transactions which require disclosure. The Group does trade, on normal commercial terms, with
certain companies in which there are common directorships.
Purchases from entities controlled by key management personnel
The Group leases a property, on normal commercial terms, from an entity that is controlled by a member of the Group’s key management personnel.
Payments to associates
During the year, the following transactions occurred with Sweetspot Group Limited (GSS), an entity incorporated in New Zealand and is 33.3% owned by the Group:
112
Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz113
Notes to the financial statements
For the year ended 30 June 2024
Group
2024
$000
2023
$000
Short term employee benefits 11,82710,668
Share-based payments (Note 22)8861,016
Payments to joint venture
During the year, the Group paid Parcelair Limited $14.3 million (2023: $16.3 million) for the provision of airfreight linehaul services on normal commercial terms.
Parcelair Limited is incorporated in New Zealand and is half-owned by the Group.
Intercompany loan
An intercompany promissory note of $14.5 million (2023: $14.5 million) and intercompany receivable which arose on the acquisition of Allied Express Transport
Pty Limited (AEX), exists between IMS Group Australia Pty Ltd (IMS) and AEX. The receivable and promissory note are eliminated in the consolidated financial
statements of Freightways.
Key management compensation
Compensation paid during the year (or payable as at year end in respect of the year) to key management, which includes senior executives of the Group and non-
executive independent directors, is as follows:
Group
Less than
6 months
$000
6 -12
months
$000
1-2
years
$000
2-5
years
$000
More than
5 years
$000
To t a l
$000
2024
Bank borrowings7, 94 67, 87013,631242,39556,219328,061
Trade and other payables128,841 32,830-1,920 -163,591
Lease liabilities34,75433,50063,903143,152218,005493,314
2023
Bank borrowings9,2439,252 18,238 283,21759,306379,256
Trade and other payables117, 4 9 9 33,0084,159 - -154,666
Lease liabilities29,95529,150 55,228133,659189,1714 37,16 3
The amounts expected to be payable in relation to the interest rate swaps have been estimated using forward interest rates applicable at the reporting date.
NOTE 28. FINANCIAL RISK MANAGEMENT
28.1 Financial Risk Factors
The Group’s activities expose it to various financial risks, including liquidity risk, credit risk and market risk (which includes currency risk and cash flow interest rate
risk). The Group’s overall risk management programme focuses on the uncertainty of financial markets and seeks to minimise potential adverse effects on the
Group’s financial performance. The Group uses derivative financial instruments to hedge certain risk exposures.
Treasury activities are performed centrally by the Group’s corporate team, supplemented by external financial advice and the use of derivative financial instruments
is governed by a Group Treasury Policy approved by the Company’s Board of Directors.
The Group does not engage in speculative transactions or hold derivative financial instruments for trading purposes.
(a) Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as and when they fall due. The Group’s approach to liquidity risk management
includes maintaining sufficient cash reserves and ensuring adequate committed finance facilities are available. In assessing its exposure to liquidity risk, the Group
regularly monitors rolling 3, 6 and 12 months cash requirement forecasts.
The table below analyses the Group’s financial liabilities into relevant maturity groupings, based on the remaining period from the reporting date to the contractual
maturity date.
The amounts disclosed below are contractual, undiscounted cash flows.
Group
2024
$000
2023
$000
Cash and cash equivalents35,653 44,485
Trade and other receivables146,794137,510
182,447181,995
Cash and cash equivalents are held with banks with Standard & Poor’s rating of AA-.
(b) Credit Risk
Credit risk refers to the risk of a counterparty failing to discharge its obligation. Financial instruments which potentially subject the Group to credit risk principally
consist of bank balances, accounts receivable and derivative financial instruments.
The Group has credit policies that are used to manage the exposure to credit risk. As part of these policies, exposures with counterparties are monitored on a
regular basis. The Group performs credit evaluations on all customers requiring credit and generally does not require collateral.
A default in a financial asset is when the counterparty fails to make contractual payments when debt recovery processes have been exhausted and/or the
counterparty is declared bankrupt or in the case of companies, placed in administration, receivership or liquidation.
The Group’s Treasury Policy ensures due consideration is given to the financial standing of the counterparty banks with which the Group holds cash reserves and
transacts derivative financial instruments. A minimum Standard & Poor’s long-term credit rating of A/A- is required to qualify as an approved counterparty, with
the exception that a maximum of 1% of total debt exposure may be with counterparty with BBB credit rating. The quantum of transactions entered into with the
Group’s various financial lenders is also balanced to mitigate exposure to concentrated counterparty credit risk with any one financial provider.
The Group does not have any significant concentrations of credit risk.
For counterparties to trade receivables that are neither past due nor impaired, payments have historically been received regularly and on time.
The Group considers its maximum exposure to credit risk to be as follows:
20242023
Group
Gross
carrying
amount
$000
Expected
loss rate
%
Loss
allowance
$000
Gross
carrying
amount
$000
Expected
loss rate
%
Loss
allowance
$000
Current115,9040.8%927105,3821.0%1,053
31-60 days over standard terms22,8543.5%80020,0814.5%900
60-90 days over standard terms2,42722.5%5462,20225.0%551
91+ days over standard terms3,44635.0%1,2071,58945.0%715
144,6313,480129,2543,219
Trade receivables analysis
At 30 June aging analysis of trade receivables is as follows:
The Group has $25.2 million (2023: $20.7 million) of financial assets that are overdue and not impaired.
Notes to the financial statements
For the year ended 30 June 2024
114Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz115
(c) Market Risk
Foreign exchange risk
Exposure to foreign exchange risk arises when (i) a transaction is denominated in a foreign currency and any movement in foreign exchange rates will affect
the value of that transaction when translated into the functional currency of the Company or a subsidiary; and (ii) the value of assets and liabilities of overseas
subsidiaries are required to be translated into the Group’s reporting currency.
The Group’s Treasury Policy is used to assist in managing foreign exchange risk. In accordance with Treasury Policy guidelines, foreign exchange hedging is used as
soon as a defined exposure to foreign exchange risk arises and exceeds certain thresholds.
As disclosed in Note 20, at 30 June 2024 the Group had Australian dollar denominated bank borrowings of AUD128,450,000 (2023: AUD158,700,000). Of these
borrowings, AUD14,200,000 (2023: AUD14,200,000) were borrowed by a New Zealand subsidiary and have been translated at the prevailing foreign currency rate as
at balance date. The rest of the Australian dollar denominated bank borrowings have been borrowed by an Australian subsidiary and are translated as part of the
consolidation of the Group for reporting purposes. The Group has no other outstanding foreign currency denominated monetary items.
The table on the following page details the Group’s sensitivity to the increase and decrease in the New Zealand dollar (NZD) against the Australian dollar (AUD)
in respect of the Australian dollar denominated bank borrowings, borrowed in New Zealand. The sensitivity analysis only includes outstanding foreign currency
denominated monetary items at the reporting date and adjusts their translation as at that date for the change in foreign currency rates. A positive number indicates
a decrease in liabilities (bank borrowings) where the NZD strengthens against the AUD.
Interest rate risk
Exposure to cash flow interest rate risk arises in borrowings of the Group that are at the prevailing market interest rate current at the time of drawdown and are re-
priced at intervals not exceeding 180 days.
Interest rate risk is identified by forecasting short and long-term cash flow requirements.
The Group’s Treasury Policy is used to assist in managing interest rate risk. Treasury Policy requires projected annual core debt to be effectively hedged within
interest rate risk control limits against adverse fluctuations in market interest rates.
The following table demonstrates the sensitivity of the Group’s equity and profit after tax to a potential change in interest rates by plus or minus 100 basis points,
with all other variables held constant and in relation only to that portion of the Group’s borrowings that are subject to floating interest rates.
Significant assumptions used in the interest rate sensitivity analysis include:
(i) reasonably possible movements in interest rates were determined based on the Group’s current mix of debt in New Zealand and Australia, the level of debt that
is expected to be renewed and a review of the last two year’s historical movements; and
(ii) price sensitivity of derivatives has been based on a reasonably possible movement of interest rates at balance dates by applying the change as a parallel shift
in the forward curve.
Notes to the financial statements
For the year ended 30 June 2024
Sensitivity Analysis
Interest rate
Movement
N Z D/AU D
Movement
Impact on profit
Impact on other
components of equity
Impact on
liabilities & equity
Carrying
amounts
$000
+10 0
basis points
$000
-10 0
basis points
$000
+10 0
basis points
$000
-10 0
basis points
$000
+ or –
10% in value of NZD
$000
2024
Financial assets
Cash and cash equivalents35,653257(257)257(257)-
Trade and other receivables152,988-----
Derivative financial instruments1,429--1,299(1,352)-
Financial liabilities
Borrowings265,674(1,218) 1,218(1,218) 1,2181,413/(1,726)
2023
Financial assets
Cash and cash equivalents44,485320(320)320(320)-
Trade and other receivables143,510-----
Derivative financial instruments3,338453(453)1,652(1,864)-
Financial liabilities
Borrowings297,194(2,140) 2,140(2,140) 2,1401,406/(1,718)
Notes to the financial statements
For the year ended 30 June 2024
116Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz117
(d) Fair Value Estimation
The carrying value less impairment provision of trade receivables and payables is a reasonable approximation of their fair values due to the short-term nature of
trade receivables and payables. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the
current market interest rate that is available to the Group for similar financial instruments.
The fair values of financial instruments are estimated using discounted cash flows. The fair value of interest rate swaps and foreign exchange hedges are calculated
as the present value of the estimated future cash flows.
Unless otherwise stated, all other carrying amounts are assumed to equal or approximate fair value.
The Group uses various methods in estimating the fair value of a financial instrument. The methods comprise:
Level 1 – Quoted prices (adjusted) in active markets for identical assets or liabilities at the reporting date. A market is regarded as active if quoted prices are
readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly
occurring market transactions on an arm’s length basis.
Level 2 – Inputs that are observable for the asset or liability, either directly (i.e., as prices; other than quoted prices referred to in Level 1 above) or indirectly (i.e.,
derived from prices). The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives and US Private
Placement (USPP)) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and
rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the fair value of an instrument is
included in Level 2.
Level 3 – Inputs for the asset or liability that are not based on observable market data (i.e., unobservable inputs). In these cases, the fair value of an instrument
would be included in Level 3.
Specific valuation techniques used to value financial instruments include:
•In respect of interest rate swaps, the fair value is calculated as the present value of the estimated future cash flows based on observable yield curves;
•In respect of forward foreign exchange contracts, the fair value is calculated using forward exchange rates at the balance sheet date, with the resulting value
discounted back to present value;
•In respect of USPP, the fair value is calculated on a discounted cash flow basis using the USD Bloomberg curve and applying discount factors to the future USD
interest payment and principal payment cash flows; and
•Discounted cash flow analysis for other financial instruments.
Specific valuation techniques used to value contingent consideration in a business combination and estimated purchase price adjustments include:
•fair value is calculated as the present value of the estimated future cash flows based on management’s assessment of future performance; and
•management’s knowledge of the business and the industry it operates in.
Notes to the financial statements
For the year ended 30 June 2024
Notes to the financial statements
For the year ended 30 June 2024
The following table shows the valuation technique used in measuring Level 3 contingent consideration in a business combination and estimated purchase price
adjustments:
DescriptionFair value as at 30
June 2024
Fair value as at 30
June 2023
Unobservable
Input
Range of
inputs 2024
Range of
inputs 2023
Relationship of
unobservable inputs to
fair value (sensitivity)
Contingent
Consideration
6,0814,835Achievement of
Annual Budget
92.5% - 107.5%92.5% - 107.5%A change in the
achievement of the
annual budget by 250
bps would increase/
decrease the FV of the
consideration by $0.1
million (2023: $0.1 million)
Probability
weighted average
of achieving
Annual Budget
99%99%A change in the
achievement of the
annual budget by 250
bps would increase/
decrease the FV of the
consideration by $0.1
million (2023: $0.1 million)
Discount Rate6.8%4.0%A change in the discount
rate by 100 bps would
increase/decrease the
FV of the consideration
by $0.1 million (2023:
$0.1 million)
Level 1
$000
Level 2
$000
Level 3
$000
To t a l
$000
2024
Assets
Derivative financial instruments-1,429-1,429
Total assets-1,429-1,429
Liabilities
USPP-129,421-129,421
Contingent consideration in a
business combination--6,0816,081
Total liabilities-129,4216,081135,502
2023
Assets
Derivative financial instruments-3,338-3,338
Total assets-3,338-3,338
Liabilities
USPP-128,909-128,909
Contingent consideration in a
business combination--4,8354,835
Total liabilities-128,9094,835133,744
(d) Fair Value Estimation (continued)
The amounts below are for the derivative financial instruments, USPP and contingent consideration in a business combination. There were no transfers
between levels during the year.
118
Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz119
Contingent consideration in a business combination
2024
$000
2023
$000
Opening balance4,83559,892
Acquisition of businesses2,0001,126
Settlement(754)(56,183)
Closing balance6,0814,835
28.2 Capital Risk Management
Group capital (Shareholders Funds) consists of share capital, other reserves and retained earnings. To maintain or alter the capital structure, the Group has the
ability to vary the level of dividends paid to shareholders, return capital to shareholders or issue new shares, reduce or increase bank borrowings or sell assets. The
Group does not have any externally imposed capital requirements.
The Group’s long term debt facilities impose a number of banking covenants. These covenants are calculated monthly and are reported to the banks half-yearly on
a rolling 12-months basis. The most significant covenant relating to capital management is a requirement for the Group to maintain its operating leverage (net debt
divided by profit before interest, tax, depreciation and amortisation) below a maximum level. There have been no breaches of banking covenants or events of review
during the current or prior year.
The following table presents the changes in Level 3 instruments, which are carried at fair value through profit or loss.
Notes to the financial statements
For the year ended 30 June 2024
Financial assets at
amortised cost
Derivatives used
for hedgingTo t a l
2024
$000
2023
$000
2024
$000
2023
$000
2024
$000
2023
$000
Group
Trade and other receivables
(excluding prepayments)152,988137,510-- 152,988137,510
Cash and cash equivalents35,65344,485-- 35,65344,485
Derivative financial instruments--1,4303,3381,4303,338
To t a l188,641181,9951,4303,338190,071185,333
Derivatives used
for hedging
Other financial liabilities at
amortised cost
Other financial liabilities
held at fair valueTotal
2024
$000
2023
$000
2024
$000
2023
$000
2024
$000
2023
$000
2024
$000
2023
$000
Group
Borrowings
(excluding lease liabilities)--265,674297,194--265,674297,194
Lease liabilities--383,067358,273--383,067358,273
Trade and other payables --115,229100,6676,0814,835121,310105,502
To t a l--763,970756,1346,0814,835770,051760,969
(b) Liabilities, as per balance sheet
NOTE 29. FINANCIAL INSTRUMENTS BY CATEGORY
(a) Assets, as per balance sheet
Notes to the financial statements
For the year ended 30 June 2024
Reconciliation of payments for businesses acquired$000
Cash paid for completion adjustment for the acquisition of AEX671
Cash paid for acquisition960
Cash acquired from acquisition(773)
Payments for businesses acquired, net of cash acquired858
NOTE 30. BUSINESS COMBINATIONS
Acquisitions during the year
Effective 1 November 2023, the Group acquired the business and assets of First Global Logistics, an end-to-end international e-commerce logistics business in
New Zealand for total consideration of $5.9 million. The consideration comprises a $3.9 million non-cash settlement of trade payables between the Group and
the acquiree and a future earn-out of up to $2 million payable at the end of the 2025 financial year. The acquired business expands the Group’s international
e-commerce logistics know-how and operates within the Group’s express package division.
Effective 15 April 2024, the Group acquired the business and assets of OnSend, a courier services provider in New Zealand for total cash consideration of $1 million.
The acquired business expands the Group’s oversized courier services and operates within the Group’s express package division.
Prior period acquisition – Allied Express Transport Pty Ltd (AEX)
Effective 30 September 2022, the Group acquired 100% of AEX, a company operating in Australia in the courier and express freight market for total consideration
of $215.3 million. The consideration comprises a cash payment of $88.1 million, issue of Freightways shares of $112.1 million, promissory note of $14.5 million
and a completion adjustment of $0.7 million. A$50 million of the shares issued to the vendors are subject to an escrow on sale for a period of 12 months from
30 September 2022 and A$25 million of those shares will then remain subject to an escrow on sale for a further period of 12 months thereafter. The completion
adjustment of $0.7 million was paid during the year ended 30 June 2024.
The fair value of certain assets and liabilities arising from the acquisition had previously been determined on a provisional basis, pending confirmation of certain
determinants and finalisation of independent valuations. The fair value of assets acquired and liabilities assumed were subsequently finalised within 12 months from
the acquisition date. There was a minor adjustment to deferred tax recognised in the current year.
Prior period acquisition – ProducePronto (“PP”)
Effective 1 November 2021, the Group acquired the business and assets of PP for an initial consideration of approximately $12.1 million and future earn-out of up
to $3.8 million over 3 years. PP operates fourth party logistics (4PL) services with 365 days per year, same-day fresh and frozen delivery to convenience outlets in
New Zealand and businesses across Auckland. This acquired business operates within the Group’s express package & business mail operating segment.
As at 30 June 2024, the estimated discounted future earn-out payment for the acquisition of PP was $3.7 million (2023: $3.7 million). This represents no change
in the estimated undiscounted future earn-out payment from the last balance date. The Group has forecast several scenarios and probability-weighted each
to determine an updated fair value for this contingent payment arrangement. The actual contingent payment is in the process of being finalised. The liability is
presented within current trade and other payables in the balance sheet and is expected to be settled in the first half of the 2025 financial year.
NOTE 31. SIGNIFICANT EVENTS AFTER BALANCE DATE
Dividend declared
On 19 August 2024, the Directors declared a fully imputed final dividend of 19 cents per share (approximately $34 million) in respect of the year ended 30 June
2024. The dividend will be paid on 1 October 2024. The record date for determination of entitlements to the dividend is 13 September 2024. The Freightways
Dividend Reinvestment Plan will not be offered for this dividend.
Debt facility
The Group has negotiated a two-year extension to its existing syndicated bank facility of NZ$30 million that was maturing on 15 March 2027. The extension is
effective from 16 July 2024.
At the date of this report, there have been no other significant events subsequent to the reporting date.
120
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Shareholder information
Number
of holders
Number
of shares held
% of issued
capital
Size of shareholding
1 to 1,9993,8483,347,6311.87
2,000 to 4,9992,3337,030,3073.93
5,000 to 9,9991,0456,833,4873.82
10,000 to 49,99969411,914,2166.67
50,000 to 99,999261,635,9520.92
100,000 to 499,999326,604,1523.70
500,000 to 999,99996,559,1163.67
1,000,000 and over23134,787,95875.42
Total shareholders8,010178,712,819100.00
Geographic distribution
New Zealand7,634142,332,51879.64
Australia30536,118,58620.21
Other71261,7150.15
8,010178,712,819100.00
Substantial product holders as at 31 July 2024
Based upon notices received, the following persons are deemed to be substantial product holders in accordance with Section 293 of the Financial Markets
Conduct Act 2013:
Voting securities
Number%
Colin McDowell11,282,3826.31
FirstCape Group Limited9,698,7625.43
ANZ New Zealand Investments Limited,
ANZ Bank New Zealand Limited
and ANZ Custodial Services New Zealand Limited9,053,0235.07
The total number of issued voting securities of the Company as at 31 July 2024 was 178,712,819.
Stock exchange listing
The Company’s fully paid ordinary shares are listed on NZX (the New Zealand Stock Exchange) and ASX (Australian Securities Exchange) as a foreign exempt listing.
The Foreign Exempt Listing means that the Company is expected to comply primarily with the Listing Rules of the NZX Main Board (being the rules of its home
exchange) and is exempt from complying with most of ASX’s Listing Rules.
For the purpose of ASX Listing Rule 1.15.3, the Company confirms that it has complied with the NZX Listing Rules during the year ended 30 June 2024.
The Company has not been granted or relied on any waiver published by NZX during the year ended 30 June 2024. Neither NZX nor ASX has taken any disciplinary
action against the Company during the financial year ended 30 June 2024. In particular, there was no other exercise of powers by NZX under NZX Listing Rule 9.9.3.
Distribution of shareholders and shareholdings as at 31 July 2024
Shareholder information
Number of
Shares held
% of issued
capital
Custodial Services Limited <A/C 4>23,278,02513.03
BNP Paribas Nominees (NZ) Limited <BPSS40> *12,713,6627.11
Colin McDowell < Low Cost Base A/C>10,989,2946.15
FNZ Custodians Limited9,172,1835.13
Forsyth Barr Custodians Limited <1-Custody>8,365,6454.68
TEA Custodians Limited <TEAC40> *8,099,6294.53
JPMorgan Chase Bank <CHAM24> *7,727, 8264.32
Citibank Nominees (New Zealand) Limited <CNOM90> *6,642,5963.72
HSBC Nominees (New Zealand) Limited <HKBN90> *6,315,0023.53
Accident Compensation Corporation <ACCI40> *4,603,1502.58
ANZ Wholesale Australasian Share Fund <PNAS90> *4,396,1662.46
ANZ Custodial Services New Zealand Limited <PBNK90> *4,142,4562.32
HSBC Nominees A/C NZ Superannuation Fund Nominees Limited <SUPR40> *4,115,0682.30
HSBC Nominees (New Zealand) Limited <HKBN45> *3,991,6122.23
New Zealand Depository Nominee Limited <A/C 1 Cash Account>3,892,9782.18
JBWere (NZ) Nominees Limited <NZ Resident A/C>3,114,0801.74
PTJR Pty Limited3,006,5711.68
Generate Kiwisaver Public Trust Nominees Limited <NZPT44> *2,443,1331.37
Dean John Bracewell & Phillipa Anne Bracewell & Bracewell Trustee Company Limited <Bracewell
Family A/C>1,753,7330.98
Simplicity Nominees Limited *1,722,9060.96
130,485,71573.00
* held through NZ Central Securities Depository Limited
Top twenty registered shareholders of listed shares as at 31 July 2024
122
Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz123
Corporate Governance Statement
This statement is an overview of the Group’s main corporate governance policies, practices and processes adopted or followed by the Board of Directors of
Freightways Group Limited (the Board). The Group’s corporate governance processes do not materially differ from the principles set out in the NZX Corporate
Governance Code, except as set out within this statement. In preparing this statement, Freightways has reported against the NZX Corporate Governance Code
dated 1 April 2023.
This statement has been approved by the Board and is current as at 30 June 2024.
The role of the Board of Directors
The Board is committed to the highest standards of corporate governance and ethical behaviour, both in form and substance, amongst its Directors and the people
of the Company and its subsidiaries (Freightways).
Board responsibilities
The Board’s corporate governance responsibilities include overseeing the management of Freightways to ensure proper direction and control of Freightways’ activities.
In particular, the Board will establish corporate objectives and monitor management’s implementation of strategies to achieve those objectives. It will approve budgets
and monitor performance against budget (including Financial Reporting and any applicable Non-Financial Reporting). The Board will ensure adequate risk management
strategies are in place and monitor the integrity of management information and the timeliness of reporting to shareholders and other stakeholder groups.
The Board will follow the NZX Corporate Governance Code and Directors will act in accordance with their fiduciary duties in the best interests of the Company.
A formal Board Charter, which can be found at https://www.freightways.co.nz/about/corporate-governance/, has been adopted by the Board that elaborates on
Directors’ responsibilities. The Board will internally evaluate its performance and the performance of its committees annually. Any recommendations flowing from
this review will be implemented promptly. The Board will review its Corporate Governance practice against current best practice and continue to develop company
policies and procedures, as deemed necessary.
Board composition, appointment and performance
In accordance with the NZX Listing Rules, the Board will comprise not less than three Directors. The Board will be comprised of a mix of persons with complementary
skills appropriate to the Company’s objectives and strategies, having regard to the Diversity & Inclusion Policy and any measurable objectives set by the Board.
The Board must include not less than two persons (or if there are eight or more Directors, three persons or one third rounded down to the nearest whole number of
Directors) who are deemed to be independent. The majority of the Board must be independent Directors, including the Chairman. The Chairman and the CEO must
be different people.
Freightways’ Board currently comprises six Directors: the non-executive Chairman and five non-executive Directors. All Freightways’ Directors are independent. Key
executives attend board meetings by invitation.
The procedures for the nomination and appointment of Directors are administered by the Board and detailed in the Board Charter. The Board is responsible for
making Director nominations available in accordance with the procedure set out in the NZX Listing Rules, reviewing the suitability of a Director nominee in respect
of that nominee's proposed appointment, procuring appropriate checks to confirm that a Director nominee is fit and proper to be appointed a Director, ensuring
effective induction programmes are in place for the Directors and confirming the status of Directors’ independence for external reporting purposes.
Each Director must enter into a written agreement with the Company on appointment that outlines the terms of the Director’s appointment.
The Directors all undertake appropriate training to remain current on how to best perform their duties as Directors of the Company. The Board Charter requires
an annual review of the Board and Committee composition, structure and succession to ensure its members are performing in line with their obligations and the
Company’s values and strategy. The Board assesses its own performance, and the Board Chair continually monitors the dynamic of the Directors to ensure it is
always working optimally. This will include an assessment by an external consultant in the 2025 financial year.
Please see Director’s Report section of this Annual Report for further disclosures relating to the Board.
Diversity & inclusion
The Company has a formal diversity & inclusion policy which can be found at https://www.freightways.co.nz/about/corporate-governance/. The Company is
committed to encouraging diversity throughout all levels of its operations and by ensuring all employees have an equal opportunity to realise their career ambitions
within Freightways. As required to be reported by the NZX Listing Rules, the Company advises that from a gender diversity perspective, as at 30 June 2024, the
gender balance of the Company’s Directors and Officers is as below:
OfficersDirectors
June 2024June 2023*June 2024June 2023*
Female1122
Male7744
To t a l8866
*Updated from the 2023 annual report to reflect the Company’s revised view that there are 8 (rather than 5) officers of the Company for the purposes of the
diversity reporting obligations.
Meetings HeldMeetings Attended
Director
Mark Cairns88
Abby Foote88
David Gibson88
Peter Kean88
Fiona Oliver88
Mark Rushworth88
Meetings HeldMeetings Attended
Director
Abby Foote77
Mark Cairns76
David Gibson77
Board committees
Standing committees have been established to assist in the execution of the Board’s responsibilities. These committees utilise their access to management
and external advisors at a suitably detailed level, as deemed necessary and report back to the full Board. Each of these committees has a charter outlining its
composition, responsibilities and objectives. The committees are as follows:
Audit & risk committee:
The Audit & Risk Committee is responsible for overseeing risk management, accounting and audit activities and reviewing the adequacy and effectiveness
of internal controls, meeting with and reviewing the performance of external auditors, reviewing the Annual Report and Half Year Results Release, making
recommendations on financial and accounting policies, and, in relation to the Company’s climate-related risks and opportunities, reviewing: their inclusion in the
development of the Company’s strategy, the proposed metrics and targets for their management and the climate-related disclosures for the Company. The
Company’s Audit & Risk Committee Charter can be found at https://www.freightways.co.nz/about/corporate-governance/.
The Audit & Risk Committee oversees the Company’s engagement and communications with its external auditors, which includes meetings between members of
the Audit & Risk Committee and the external auditors (both with and without management present). Services provided by the external audit firm to the Company
outside of its statutory audit role are monitored by the Audit & Risk Committee to ensure that the independence of its auditors is maintained.
The external auditor is invited to attend meetings when it is considered appropriate by the Audit & Risk Committee. The Company’s external auditor also attends
the annual meetings and is available to answer shareholder questions relating to the audit.
The Group has an established internal audit function for financial controls and draws on external expertise where required to perform complementary internal
audits of non-financial control related areas of the Group. The internal audit programme covers a broad spectrum of risks and findings are presented to the Audit &
Risk Committee.
The members are Abby Foote (Chair), Mark Cairns and David Gibson. All members are independent non-executive Directors. Meetings were held and attended,
as follows:
Corporate Governance Statement
Board meetings
The following table outlines the number of board meetings attended by Directors during the course of the 2024 financial year:
The Company has committed to promoting diversity and inclusion in the workplace through the development and advancement of under-represented groups in the
Group with career opportunities, professional development courses and training. The Company has set an objective of having 40% of the Executive, Leadership Teams
and Freightways Board to be composed of representatives of currently under-represented groups (women, ethnic groups and employees under 43 years-old) by 2030.
As at 30 June 2024, these under-represented groups make up 47% of the Executive, Leadership Teams and Freightways Board, exceeding the 40% objective.
124
Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz125
Corporate Governance StatementCorporate Governance Statement
Meetings HeldMeetings Attended
Director
Peter Kean33
Mark Cairns33
Fiona Oliver33
Mark Rushworth33
People & safety committee:
The People & Safety Committee (previously the People & Remuneration Committee) is responsible for overseeing the Freightways human resource practices,
providing for a remuneration policy for Directors and executives, reviewing the remuneration and benefits of the senior management, reviewing and recommending
the remuneration of Board members, making recommendations to the Board in respect of succession planning, and reviewing and making recommendations to
the Board in respect of health & safety standards and practices. The Company’s People & Safety Committee Charter and the Company’s Remuneration Policy can
be found at https://www.freightways.co.nz/about/corporate-governance/. The Company’s Remuneration Policy does not prescribe specific relative weightings to
remuneration and relevant performance criteria as the Board has determined that it is more appropriate for the People & Safety Committee to consider and adopt
relevant weightings and performance criteria on a case-by-case basis in respect of each applicable officer.
The members of the People & Safety Committee are Peter Kean (Chair), Mark Cairns, Fiona Oliver and Mark Rushworth. All members are independent non-executive
Directors and members of management attend only at the invitation of the People & Safety Committee. Meetings were held and attended, as follows:
Disclosure committee:
The Disclosure Committee is responsible for ensuring that adequate processes and controls are in place for the identification of material information and the
release of material information when required, reviewing disclosure obligations (including reviewing announcements and assessing whether trading halts may be
required) and engaging with the Board as required on such obligations and overseeing compliance with continuous and periodic disclosure requirements.
The members of the Disclosure Committee are Mark Cairns, Abby Foote, the Chief Executive Officer, the Chief Financial Officer and the General Counsel. Meetings
are held as required to ensure that the Company’s disclosure obligations are met in an accurate and timely manner.
Code of ethics
Freightways expects its Directors and employees to maintain high ethical standards that are consistent with Freightways’ core values, business objectives and legal
and policy obligations. A formal Code of Ethics has been adopted by the Board and can be found at https://www.freightways.co.nz/about/corporate-governance/.
Freightways’ people are expected to continue to lead according to this Code. New and existing employees will be required to complete training on the Code of
Ethics in FY25, then subsequently as required by the Code. The Code deals specifically with conflicts of interest, proper use of information, proper use of assets and
property, conduct and compliance with applicable laws, regulations, rules and policies and the other matters set out in recommendation 1.1 of the NZX Corporate
Governance Code.
Breaches of the Code of Ethics are required to be notified in accordance with the Company's Protected Disclosures (Whistleblower) Policy or via other channels
made available from time to time.
Protected disclosures (whistleblower)
The Company is committed to encouraging, supporting and respecting open and honest accountable work practices. The Company believes all employees have
a responsibility to eliminate serious wrongdoing in the workplace and has adopted a formal whistleblowing policy that provides employees with access to a
confidential third-party agency. The Company’s Protected Disclosures (Whistleblower) Policy can be found at https://www.freightways.co.nz/about/corporate-
governance/.
Delegation of authority
The Board delegates its authority where appropriate to the Chief Executive Officer for the day-to-day affairs of Freightways. Formal policies and procedures exist
that detail the parameters that the Chief Executive Officer and in turn his direct reports are able to operate within.
Share trading by directors and management
The Board has adopted a policy that ensures compliance with applicable securities trading laws. This policy requires prior consent by the Chief Financial Officer
and General Counsel in relation to any trading by executive management, and in the case of Directors of the Company and its subsidiaries, prior consent by the
Chairman of the Board, Chief Financial Officer and General Counsel. Any trading by the Chairman of the Board requires prior consent by the Chair of the Audit
& Risk Committee, Chief Financial Officer and General Counsel. The Company’s Securities Trading Policy can be found at https://www.freightways.co.nz/about/
corporate-governance/.
Treasury policy
Exposure to foreign exchange and interest rate risks is managed in accordance with the Group’s Treasury Policy that sets limits of management authority. Derivative
financial instruments are used by the Group to manage its business risks; they are not used for speculative purposes.
Reporting and disclosure
The Company is committed to promoting investor confidence by providing timely, accurate and full disclosure of information in accordance with the NZX Listing
Rules and ASX Listing Rules applicable to the Company as a foreign-exempt entity. The Company has appointed its Chief Financial Officer as its Disclosure Officer.
The Disclosure Officer is responsible for monitoring Freightways’ business to ensure it complies with its disclosure obligations. The Disclosure Officer has access
to all necessary information provided by the direct reports of Freightways’ Chief Executive Officer in respect of their areas of responsibility. The Disclosure Officer
will regularly request certification from the Chief Executive Officer’s direct reports that all reasonable enquiries have been made to ensure all relevant material
information has been disclosed to the Disclosure Officer. The Company’s Disclosure & Communications Policy can be found at https://www.freightways.co.nz/about/
corporate-governance/.
Copies of other key governance documents, including the Code of Ethics, Securities Trading Policy and Guidelines, Board and Committee Charters, Diversity and
Inclusion Policy and Remuneration Policy, and are all available on the Company’s website at https://www.freightways.co.nz/about/corporate-governance/.
Copies of the Company's Annual Report from prior years can be found at https://www.freightways.co.nz/investor-relations/annual-reports/.
In accordance with the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021, the Company will be required to meet climate-
related disclosure obligations set out in the External Reporting Board's reporting standards in respect of its financial reporting period commencing on 1 July 2023.
The Company will release this report not later than Wednesday 23 October 2024 and once released it will be available on the Company’s website at https://www.
freightways.co.nz/investor-relations/annual-reports/ (noting the name of the page may be updated to reflect such additional content).
Risk management
The Company operates in an environment that contains a number of operational and strategic risks. It actively manages risk to ensure it operates a safe workplace
and is able to sustain the achievement of its business objectives. Risk management techniques and capability assist managers to focus on uncertainties and
vulnerabilities associated with the future, thereby improving the likelihood of meeting business objectives.
The management of risk is a core management responsibility. All managers and employees are accountable to employ risk management processes within their area
of control to aid in the achievement of business objectives. A process to ensure risk has been adequately identified, considered and can be managed, is evident in
all key decision-making processes. The Chief Executive Officer, Chief Financial Officer and subsidiary management ensure that risks to the business are identified,
evaluated and, where necessary, reported to the Board, that effective responses and control activities are developed and that appropriate monitoring and timely
re-evaluation is conducted. The Company reports externally on key risks which it considers are relevant to shareholders and other external stakeholders, including
climate related risks and health and safety risks, but does not report generally on all material risks which may apply to the Group. All risks to the Group are included
within a detailed internal risk reporting regime where risks relevant to specific business units are identified and mitigating actions are recorded.
The Board and its Audit & Risk Committee are responsible for setting policy, assessing and monitoring strategic risks and ensuring management maintains an
effective risk management framework.
The Company draws on external expertise where required to perform internal audit on areas assessed to be highest risk for the business and these areas are
reviewed on a regular basis, including IT project management, payroll processing and managing business continuity.
The Company’s Risk Management Policy can be found at https://www.freightways.co.nz/about/corporate-governance/.
Donations
In accordance with section 211 (1) (h) of the Companies Act 1993, the Freightways Group made donations totalling $0.2 million during the year. No political
contributions were made during the year.
Health, safety & wellbeing risks
Under the Board and its People & Safety Committee’s oversight, the Company’s management team and Health & Safety Committee are responsible for oversight
of the Company’s health, safety and wellbeing risks. The prevention of accidents and injuries is of vital importance and no task is regarded to be so important that
it may be done in an unsafe manner. The Company has developed and maintains a Health & Safety Manual that details the procedures required of all managers,
employees and contractors to maintain a healthy and safe working environment.
The Company is subject to internal and external audit and review, including external audit as part of the Accident Compensation Corporation’s Accredited
Employers Programme and also New Zealand’s Civil Aviation Authority audit of the Group’s Fieldair operations.
The Company has a mental health and wellbeing programme that includes Freightways’ The Movement online portal available to all employees to provide them with
support and information. Employees can also access EAP (Employee Assistance Programme) which is an external professional counselling helpline.
The Board and People & Safety Committee monitor, support and complete their own due diligence on the health, safety and wellbeing practices of the Company.
Health, safety and wellbeing is a standing Board agenda item that is discussed at all scheduled Board meetings.
Takeover response plan
The Board has a Takeover Response Plan to assist the Directors and management with the response to unexpected takeover activity. The Plan summarises key
aspects of takeover preparation, and sets out, governance, conflict and communications protocols for takeover response. This Plan provides that in the event of a
takeover offer, the Board would establish an Independent Takeover Response committee to manage its takeover response obligations.
126
Freightways Annual Report | Financial Year ended 30 June 2024Freightways Group Limited and its subsidiariesfreightways.co.nz127
ALLIED EXPRESS
TRANSPORT PTY LIMITED
3 Murray Jones Drive
Bankstown Aerodrome
New South Wales 2200
Australia
Telephone: +61 13 13 73
www.alliedexpress.com.au
BIG CHILL
DISTRIBUTION LIMITED
28 Pukekiwiriki Place
Highbrook
Auckland
Telephone: +64 9 272 7440
www.bigchill.co.nz
CASTLE PARCELS
LIMITED
163 Station Road
Penrose
DX CX10245
Auckland
Telephone: +64 9 525 5999
www.castleparcels.co.nz
FIELDAIR HOLDINGS
LIMITED
Palmerston North International Airport
Palmerston North
DX PX10029
Palmerston North
Telephone: +64 6 357 1149
www.fieldair.co.nz
FOR INQUIRIES IN RELATION TO FREIGHTWAYS’ SERVICES AND PRODUCTS
CONTACT THE OFFICES LISTED ABOVE OR REFER TO FREIGHTWAYS’ WEBSITE AT:
WWW.FREIGHTWAYS.CO.NZ
FREIGHTWAYS GROUP LIMITED AND ITS SUBSIDIARIES
Directory
MESSENGER SERVICES
LIMITED
32 Botha Road
Penrose
DX EX10911
Auckland
Telephone: +64 9 526 3680
www.sub60.co.nz
www.kiwiexpress.co.nz
www.stuck.co.nz
www.securityexpress.co.nz
NEW ZEALAND
COURIERS LIMITED
32 Botha Road
Penrose
DX CX10119
Auckland
Telephone: +64 9 571 9600
www.nzcouriers.co.nz
NEW ZEALAND DOCUMENT
EXCHANGE LIMITED
20 Fairfax Avenue
Penrose
DX CR59901
Auckland
Telephone: +64 9 526 3150
www.dxmail.co.nz
www.dataprint.co.nz
N O W C O U R I E R S
LIMITED
161 Station Road
Penrose
Auckland
Telephone: +64 9 526 9170
www.nowcouriers.co.nz
POST HASTE
LIMITED
32 Botha Road
Penrose
DX EX10978
Auckland
Telephone: +64 9 579 5650
www.posthaste.co.nz
www.passtheparcel.co.nz
PRODUCEPRONTO
10 Te Apunga Place
Mt Wellington
Auckland
Telephone: +64 800 12 34 55
www.producepronto.co.nz
SHRED-X PTY
LIMITED
PO Box 1184
Oxenford
Queensland 4210
Australia
Telephone: +61 1 300 747 339
www.shred-x.com.au
www.med-xsolutions.com.au
THE INFORMATION MANAGEMENT
GROUP (NZ) LIMITED
33 Botha Road
Penrose
DX EX10975
Auckland
Telephone: +64 9 580 4360
www.timg.co.nz
www.stocka.co.nz
THE INFORMATION MANAGEMENT
GROUP PTY LIMITED
PO Box 21
Enfield
New South Wales 2136
Australia
Telephone: +61 2 9882 0600
www.timg.com
www.filesaver.com.au
www.litsupport.com.au
BOARD OF DIRECTORS
Mark Cairns (Chairman)
Abby Foote
David Gibson
Peter Kean
Fiona Oliver
Mark Rushworth
REGISTERED OFFICE
32 Botha Road
Penrose
DX CX10120
Auckland
Telephone: (09) 571 9670
www.freightways.co.nz
AUDITORS
PricewaterhouseCoopers
15 Customs Street West
Auckland CBD
Auckland 1010
SHARE REGISTRAR
Computershare Investor
Services Limited
159 Hurstmere Road
Takapuna
North Shore City 0622
DX CX10247
STOCK EXCHANGE
The fully paid ordinary shares
of Freightways Group Limited are
listed on the New Zealand Stock
Exchange (NZX) and Australian
Securities Exchange (ASX).
Company
particulars
128Freightways Annual Report | Financial Year ended 30 June 2024
BOARD OF DIRECTORS
Mark Cairns (Chairman)
Abby Foote
David Gibson
Peter Kean
Fiona Oliver
Mark Rushworth
REGISTERED OFFICE
32 Botha Road
Penrose
DX CX10120
Auckland
Telephone: (09) 571 9670
www.freightways.co.nz
AUDITORS
PricewaterhouseCoopers
15 Customs Street West
Auckland CBD
Auckland 1010
SHARE REGISTRAR
Computershare Investor
Services Limited
159 Hurstmere Road
Takapuna
North Shore City 0622
DX CX10247
STOCK EXCHANGE
The fully paid ordinary
shares of Freightways Group
Limited are listed on NZX
Limited (the New Zealand
Stock Exchange) and the
ASX Limited (The Australian
Stock Exchange).
Company
particulars
Image:
Big Chill's newly opened
chilled facility in Ruakura
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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