New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Freightways NZ Post Result Highlights Parcel Growth and Margin Progression &nbsp;</h2>
NZ Post’s FY21 result highlights strong parcel business revenues (+16% year on year) and EBIT margin expansion. Parcels now represent 60% of NZ Post’s revenue given a further -11% fall in letter revenues.
In recent years NZ Post’s leading market share in the higher growth B2C (residential deliveries) market has meant meaningful revenue share gains. These share gains appear to have slowed through FY21 as its revenue growth of +16% is comparable to our estimate of FRE’s (pure) parcel revenue growth of +15%.
However more importantly, NZ Post’s volume growth and pricing moves are lifting its parcel margins, which increased +70 bps to 4.0% during the year. This translates to a +40% increase in EBIT, albeit from a low base. NZ Post has grown its share of the industry profit pool, which historically FRE has dominated. Margins are still well below what we expect NZ Post is targeting over the medium term and therefore its underlying level of profitability&nbsp;remains positive for the favourable industry pricing dynamic.
At this stage NZ Post has published its Financial Report for the year. Further useful information will become available when it publishes its FY21 Integrated Report in due course. &nbsp;

Freightways NZ Post Result Highlights Parcel Growth and Margin Progression &nbsp;
NZ Post’s FY21 result highlights strong parcel business revenues (+16% year on year) and EBIT margin expansion. Parcels now represent 60% of NZ Post’s revenue given a further -11% fall in letter revenues.
In recent years NZ Post’s leading market share in the higher growth B2C (residential deliveries) market has meant meaningful revenue share gains. These share gains appear to have slowed through FY21 as its revenue growth of +16% is comparable to our estimate of FRE’s (pure) parcel revenue growth of +15%.
However more importantly, NZ Post’s volume growth and pricing moves are lifting its parcel margins, which increased +70 bps to 4.0% during the year. This translates to a +40% increase in EBIT, albeit from a low base. NZ Post has grown its share of the industry profit pool, which historically FRE has dominated. Margins are still well below what we expect NZ Post is targeting over the medium term and therefore its underlying level of profitability&nbsp;remains positive for the favourable industry pricing dynamic.
At this stage NZ Post has published its Financial Report for the year. Further useful information will become available when it publishes its FY21 Integrated Report in due course. &nbsp;

Freightways: NZ Post Result Highlights Parcel Growth and Margin Progression

Freightways Ltd

Freightways: NZ Post Result Highlights Parcel Growth and Margin Progression