Earnings before interest, tax, depreciation and amortisation increased 8.3% to $36.3 million in the six months to December 31 compared with the previous corresponding period (pcp).
Total revenue was up 9.1% to $192.2 million, and the reported profit for the period was up 20.1% to $19 million. Earnings per share rose 20% to 19c and the 8.5c dividend was a 17.2% increase on the pcp.
Forsyth Barr broker Peter Young said Freightways' strong operating performance was being mainly driven by ongoing organic growth from both the company's core express package and information management businesses in a trading environment that remained "relatively subdued".
That pointed to an attractive profit outlook as New Zealand entered a period of stronger economic growth, he said.
"Freightways is beginning to see a broad recovery across its business, and this has increased our confidence in the earnings outlook for the company. We will be increasing our 2012 full-year and outer year earnings forecast. Our $4.45 DCF [discounted cash flow] valuation is likely to increase by around 20c."
Freightways had performed well in the past year and its share price had increased to a level that had reduced the discount to its valuation back towards its long-term average discount of around 13%.
There was scope for the discount to narrow further, particularly as consensus earnings got revised higher.
Forsyth Barr's "buy" recommendation was under review, Mr Young said.
Freightways chairwoman Sue Sheldon said based on experiences in the first half of the financial year, the directors expected to see continued gradual improvement in the market segments in which the company operated.
"While Freightways expects it will benefit from this improvement, it will also complement any natural growth by continuing to actively manage its cost base by striving to further improve its service quality and by continuing to execute growth initiatives wherever possible."
In recent years, Freightways had strengthened its earnings profile by diversifying its activities both geographically and deeper into the information management market, Mrs Sheldon said.
The company would continue to seek and develop growth opportunities to support that strategy and would also explore other opportunities that complemented its core capabilities.
The strong half-year result demonstrated the resilience of the group, the positive feature of the markets it operated in and the high quality of its subsidiary businesses and teams of people, she said.
