Mark Troughear: Freightways CEO on the company's revenue going up despite economic downturn

One of our largest freight companies says it's yet to see economic green shoots.

Freightways is reporting a 6.5 percent increase in profit in the six months to December.

But it's dealing with lower volumes per customer in New Zealand.

CEO Mark Troughear explained the result is down to winning new customers, and its Australian arm's performance.

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Episode Transcript

Speaker 1 (00:00):
Bryan Bridge career.

Speaker 2 (00:01):
Anagistics company, Freightways has reported an increase in revenue and
profit despite the tough economic environment that they're operating in.
At the moment, the business has posted a half your
net profit forty four point seven million. That's up eleven
and a half percent. Unfortunately for US, most of that
growth has come from Freightways operations in Australia. Mark trow
here is the chief executives with me tonight.

Speaker 1 (00:21):
Ho Mark, Good day, Ryan, How are you really good?

Speaker 2 (00:25):
You must be pretty happy with that given the environment
you're in.

Speaker 1 (00:30):
Yeah, Look, I think our team's done a really good job.
It's Look, it's certainly tough out there. I think I've
been through three recessions in this business over the years. Yeah,
team has done a great job to win a bit
of market share and help produce that result for us.

Speaker 2 (00:45):
What are you seeing on the ground here versus Australia.

Speaker 1 (00:49):
Look, it's definitely a bit more buoyant over there, There's
no question about that. So customers over here for US
are still trading at lower levels. We're not hearing a
whole lot of customers talking about a short, quick turnaround
anytime soon. That's why we've said we think it'll be
a bit of a grind. Reality is an Aussie it's
just a little bit more buoyant customers over there, Probably

(01:11):
half of them are growing, half of them are steady
rather than gone backwards. And just whenever you're over there,
when you're out and about, you know, there are people
out spending in the restaurants and the shops and the
restaurants are busy. So yeah, it's kind of night and day.
I think as we see it.

Speaker 2 (01:26):
How for how long do you envisit you know, based
on the conversations you have having with your customers, and
obviously that is a pretty good indication because you're delivering
presumably the stuff that they're selling, right, So how long
is this sluggish behavior going to continue?

Speaker 1 (01:42):
To know? Look, I think each recession we've come out
with over the year, come out of over the years,
has been slightly different. This one here has just been
a longer grind into it, and I suspect a longer
grind out it'll be as probably those mortgage rates come down,
there's a bit of that interest money back in people's
pocket and they still have to spend it. I think
that'll just happen steadily and gradually. We're hoping second half

(02:04):
of the year for us, maybe around May June we
start to get a little bit of signs of life,
but it'll just be slow. I don't think it'll happen dramatically.

Speaker 2 (02:12):
In the meantime. Do you try and go after more
business in Australia? Do you try and expand there more?

Speaker 1 (02:19):
Well, if we try and expand everywhere, so everywhere we
are we try and grow. We have plans for our
teams to grow in every business we're in, so they
won't change regardless of the country, but certainly Australia there
there's a lot of opportunity to acquire businesses as well.
Still a pretty fragmented market, a lot of operators in
that express transport market in Australia, and the market is

(02:42):
realistically eight to nine times bigger than ours here in
New Zealand because of higher pricing, greater distances. So yeah,
there's a heap of opportunities over there, more than there
are in New Zealand.

Speaker 2 (02:53):
To be fair, government here mark very open, at least
they tell us they're very open to ideas for growth.
Changes that could be made to legislation, to operating environment,
anything on your wish list.

Speaker 1 (03:07):
Well, look, I think some of the stuff they've announced
about infrastructure getting going on, that's that's really important stuff.
Getting performance out of the government's balance sheet is really important.
They own a bunch of companies state owned enterprises, some
of which compete with us. Get some performance out of them,
I reckon that would help you. If I contrast with Australia,

(03:28):
I think they have a pretty good habit of spending
the way out of recessions. And let's face it, they
generate a lot of wealth out of mining, so that
they splash the money around a bit and they do
spend their way out to some extent. But I think
our government, you know, probably doing the right things. It's
just how can we do it a bit harder, bit faster.

Speaker 2 (03:44):
What do you think they should do with nz Post?

Speaker 1 (03:48):
I think they should for a sad demand performance equivalent
of the nearest competitor, which is US, which is what
they're obliged to do under the State Owned Enterprises Act.

Speaker 2 (03:57):
But they're not.

Speaker 1 (04:00):
Well, I think that's where i'd start.

Speaker 2 (04:03):
Thanks so much, Mark, great to have you on the show,
and congratulations on what is a you know, a pretty
reasonable result given the environment that you're in. Nice to
have you on the show. That's Mark trow here. He's
the Freightways Chief Executive.

Speaker 1 (04:17):
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