Fliway warns loss of major customer will hurt 2017 earnings
The unnamed customer contributes between 4-5% of Fliway's total revenue.
Listed transport and logistics group Fliway [NZX: FLI] expects the loss of a major customer will hurt revenue and earnings next financial year.
The unnamed customer contributes between 4-5% of Fliway's total revenue and is likely to account for about 10% of the company's earnings before interest, tax, depreciation and amortisation in the year ending June.
The major revenue earner for Fliway is consolidating its transport and logistics business with a rival following a competitive tender process. The work is expected to transition from August 2016.
"This is a material customer for Fliway and, while there will be no impact on the FY16 results for the 12 months ended June, at this stage there is expected to be a significant impact on the FY17 revenue and earnings as a result of this customer loss," the company says.
"Targeted areas of cost reduction will be considered in order to minimise the financial impact of this customer loss, but only where there is no impact to service for our clients."
The company says it is "very disappointed" to have not retained the business, and will continue seeking to win contracts with new customers.
Fliway transports and warehouses freight throughout New Zealand and coordinates freight movements internationally, including customs clearance. It has 400 staff, 170 vehicles in its fleet, and 15 sites nationwide. It also owns half of UPS-Fliway, a joint venture its had for the past 17 years with UPS, one of the world's largest package delivery companies.
It will publish earnings for the year through June in late August.
Its stock last traded at $1.08 after being sold at $1.20 in an initial public offering in April last year.
(BusinessDesk)
Tina Morrison
Mon, 13 Jun 2016
Mon, 13 Jun 2016
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Fliway warns loss of major customer will hurt 2017 earnings
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