Freightways Group (ASX: FRW) Lifts FY26 Profit 17.3% as Australia Expands

Major Australasian logistics company, Freightways Group lifted full-year profit and its dividend as Australian express delivery operations increased their contribution to the transport group.

Revenue rose 13.5% to NZ$1.46 billion for the year ended June 30, 2026. Net profit after tax increased 17.3% to NZ$94 million.

Non-GAAP EBITA climbed 14.6% to NZ$181.6 million. Its EBITA margin edged up to 12.4% from 12.3%.

Basic earnings per share advanced 17.2% to 52.4 cents. Cash generated from operations increased 14.9% to NZ$279.4 million.

The results show how Freightways’ earnings mix is shifting towards Australia. They also highlight the sensitivity of delivery volumes to fuel costs and consumer demand. Australia generated 39% of group revenue and 38% of EBITA in FY26. Both shares increased from the previous year.

Express Delivery Drives Growth

Express Package and Business Mail remained the main earnings engine. Divisional revenue increased 16.4% to NZ$1.24 billion, while EBITA rose 17.3% to NZ$168.1 million.

Growth came from existing customers, market-share gains, price increases and five months of VTFE ownership. VTFE contributed about NZ$40 million of revenue and NZ$1.7 million of net profit.

New Zealand express network items increased 5.1%. Market-share gains contributed 3.6 percentage points, although same-customer volumes fell 1.2% in the fourth quarter.

In Australia, Allied Express recorded 20% item growth. Same-customer volumes provided 18 percentage points of that increase. However, Freightways reported recent demand softening among larger consumer and construction customers.

Customers also continued moving towards lower-priced economy services. That shift came at the expense of premium overnight and point-to-point offerings.

Fuel Costs Cloud the Outlook

Activity improved during the second and third quarters before higher fuel prices weakened consumer demand. Freightways said the Middle East war abruptly halted the recovery.

Same-customer activity has been negative since April. Management expects volumes across both markets to remain soft until fuel prices fall sustainably.

The company described the coming year as another period of “softer for longer” conditions. Broader economic conditions will also determine the pace of recovery.

Meanwhile, Information Management and Waste Renewal revenue was broadly flat at NZ$234 million. EBITA increased 1% to NZ$31.6 million, but net profit declined 2.3% to NZ$16.9 million.

Lower Australian digitalisation revenue and weaker paper prices weighed on that division. The Shred-X operational reset was largely complete by year-end, with margins improving in the fourth quarter.

Dividend and Capital Deployment

Freightways declared a 24-cent final cash dividend, taking the full-year payout to 45 cents. That was 12.5% above FY25’s 40 cents.

The final dividend is fully imputed in New Zealand and 49% franked in Australia. It is payable October 1 to holders registered on September 11.

Net debt stood at 2.4 times EBITDA following the VTFE acquisition. Freightways said its balance sheet remained within the middle of its policy range.

The company expects to direct more capital towards Australia over the medium term. It has assessed more than 70 acquisition targets over the past three to four years.