Nau mai, haere mai, tēnā tātou katoa. Good morning, ladies and gentlemen. I'm Mark Cairns, the Chairman of Freightways. Welcome to today's annual shareholders meeting. It is great to be meeting in person again, and a very warm welcome to the people joining us online also. With us today are my fellow directors, Mark Rushworth, Peter Kean, Abby Foote, David Gibson, and Fiona Oliver. Mark and Peter are standing for re-election and will address the meeting later today. We'll shortly be hearing from our Chief Executive, Mark Troughear. Up on the stage, we also have our Chief Financial Officer, Stephan Deschamps, and our General Counsel and Company Secretary, Nicola Silke. Other members of our executive are also present in the room today, keen to have a chat with you over a sausage roll after the conclusion of the formal business.
Also here today are the company's auditors, PricewaterhouseCoopers, and the company's external legal advisors, Russell McVeagh. We have a quorum of shareholders, so I declare the meeting open. First, a few housekeeping matters. The bathrooms are located in the western foyer area, near where you entered. In the unlikely event of an emergency, you'll be required to evacuate and gather at the assembly point outside on Reimers Avenue. Should this occur, please exit the room through the rear doors and follow the directions of the Eden Park staff or security. Could I please request that you take this opportunity to switch your mobile phones to silent, please? As set out in your meeting guide, any shareholder or proxy attending this meeting or participating online is eligible to ask a question.
Can I please ask that shareholders give their name when speaking, asking questions, and to confirm if they are a shareholder or proxy holder. As usual, during question time, roving microphones will be available to ensure that your questions are conveyed to everyone present, including the online people. Please wait for the microphone prior to asking your question. If you're attending online, please select the Q&A tab on the right half of your screen anytime, then type your question into the field and press Send. Please note that while you can submit questions from now on, I will not address them until the relevant time in the meeting. We may amalgamate questions of a similar nature.
If at the end of the meeting you do not feel your question was addressed appropriately or you'd like to discuss it further, please contact us via the investor contact on our website. Should you require any assistance using the Computershare online platform, you can type your query in the Q&A tab in the same manner as typing a question, and one of the Computershare team will assist with the chat function and reply to your query. Alternatively, you can call Computershare on 0800 650 034. All of the resolutions put to shareholders today will be decided by way of a poll. The polls will be administered by our share registry, and the results of the polls will be announced via the stock exchanges after the close of the meeting.
If you're attending the meeting virtually, when asked at the relevant time that the resolutions are put, if you're eligible to vote at this meeting, you will be able to cast your vote under the Vote tab. Once the voting is opened, the resolutions will allow the votes to be submitted. To vote, simply select your voting direction from the options shown on the screen. You can vote for all resolutions at once or by each resolution. Your vote has been cast when the tick appears. To change your vote, simply select Change Your Vote. You have the ability to change your vote up until the time that I declare the voting closed. In order to provide you with enough time to vote, I will shortly open the voting for all resolutions.
Persons attending the meeting who are not shareholders, proxy holders, or corporate representatives of a shareholder may not vote. I now declare the voting open on all items of business. The resolutions will now be open in the Vote tab. Please submit your votes at any time. I'll give you a warning before I move to close the voting. I remind everyone again of these two processes when we come to vote on the resolutions later in the meeting. I'd like to now run through the structure of the meeting. The notice of meeting, which includes the explanatory notes, was circulated to all shareholders, and I intend to take this as read. I will begin with procedural matters and then summarize some of the company's highlights over the last financial year.
I'll then ask our Chief Executive, Mark Troughear, to provide an overview of the company, update on current trading performance, and give a commentary on the outlook for the remainder of the financial year. Following Mark's presentation and any questions relating to the management of the company, I will then introduce the formal resolutions as outlined in the notice of meeting. Proxies have been appointed for the purpose of this meeting in respect of approximately 73 million ordinary shares. As was indicated on the proxy form, where proxy discretion has been given, as chairman, I intend to vote these proxies in favor of the four resolutions set out in the notice of meeting. I also note that as set out in the proxy form, the directors standing for re-election will abstain from voting discretionary proxies in respect of their appointments.
As requested by the New Zealand Shareholders Association, we will not disclose the voting of proxies received ahead of the shareholders voting on them today. The financial statements for the year end of 30 June 2023 are set out in the company's annual report, released to shareholders in August. I would now like to speak briefly to some of the highlights on Freightways' 2023 year. Despite a more challenging economic environment, I'm proud to report that the business still managed to generate a significant revenue increase of 29% to more than NZD 1.1 billion. A strong contributor to this increase was our first major acquisition in the Australian parcel market with Allied Express. But even our existing businesses increased their revenues by more than 7% against these headwinds, reflecting both price increases and ongoing market share gains on the back of market-leading service levels....
As was the case last year, our bottom line growth was not as fast as our top line one. This mostly reflects the ongoing scarcity and cost of labor, largely experienced during the first half of the year. With many positions remaining vacant for extended periods of time, we had to increase the use of temporary workers at a higher cost in order to maintain our service levels. Additionally, productivity was impacted, requiring more staff than normal, increasing labor costs by 10%. Earnings before interest, tax, and amortization increased by 15% to NZD 145.3 million. The acquisition of Allied Express has increased our level of debt and hence our interest expense, so net profit after tax increased by almost 7% to NZD 75.3 million.
We're now seeing evidence that the labor pressure is easing, and we're focusing this year and the next on margin restoration. Freightways, we're pleased to announce a final dividend of NZD 0.19 per share, bringing the total annual dividend to NZD 0.37 per share, stable on the prior year. When setting the dividend, the board is mindful both of the expectations of our shareholders and of our balance sheet capacity. With debt currently close to the maximum level that we're comfortable with, the board decided to declare the dividend at 75% of our earnings. To wrap up, it's been another big, big year. I consider the business is in very good shape with many future opportunities. I'd like to thank our 6,000 strong crew, ably led by Mark and his leadership team, who've had an unwavering focus on moving you to a better place.
I'd like to thank my fellow directors and you, our investors, for your continued loyalty and support, particularly throughout the difficult COVID years. Ngā mihi nui. I'll now hand over to Mark.
Thank you, Mark, and welcome to everyone that's turned up today. It's, it's a great attendance. It's great to see a lot of very familiar faces, too, from previous AGMs. I think feedback from some of the AGMs around the place has been that there hasn't been as good an attendance in recent times, but, pleasantly surprised and really good to see you all here today. Welcome, too, to a number of the people out of the Freightways team. These are people who run business units, look after the IT services, run the finances, look after the legal functions, et cetera, and they're more than happy to have a chat with you over morning tea for any questions that you have in more detail. I'll talk to, Freightways' strategy, including a number of the ESG goals that we have within the business.
And I'll also give a trading update and give a view of the outlook for the firm. Freightways operates a specialist logistics business. We pick up, process, and deliver over 100 million items through the various business units that we operate. Those business units sit across Express Package and Business Mail, temperature control Information Management, and Waste Renewal. So those are the four key areas that we operate in. But the glue that holds it together is the fact that in every one of those businesses, you need to pick up efficiently, reliably, you need to love your customers and make sure you maintain them and understand their needs, and you need to be innovative and entrepreneurial. And so our strategy rests around those four key aspects, the four key capabilities of our business across the four business units.
We talk about three horizons within Freightways. The first horizon of our business is the original network or infrastructure that was established. So for the courier operations, which will be most familiar to many of you, that is the Line Haul network that was established, the branches around the country, the teams of people that occupy those branches, the air freight network that connects the two islands. There we go. Haven't had that in previous AGMs. So that's the first horizon, gives you a network on which you can operate, and so nationwide delivery for business to business deliveries, that was Horizon One for Express Courier. Horizon Two for us grew particularly through COVID, and that was business to consumer deliveries.
So delivering to people's homes, that grew, pretty significantly through COVID, and it's the area that we keep looking to scale and extend and defend for our business. The third horizon are those smaller, embryonic opportunities that, again, still leverage the networks and the infrastructure you have in Horizon One, and which we believe will be bigger businesses in five years' time. So that's the framework. We look at our business and the framework in which we look to grow what we do in each of those four revenue streams. I'll run through those briefly. They're on the screen, and I'll just touch on a few of the key points. So within Express Package Business Mail, our job is to keep our customers and gain market share.
We run sizable new business teams to go out and win business off other operators, and that helps keep the volumes up within our networks. We've also, this year, looked to strengthen the resilience of the air freight network. We run four 737-400s. One of those transitioned to a 737-800 this year, and there'll be a program to continue to roll out older aircraft and bring in more modern, fuel-efficient and reliable aircraft. But having resilience, particularly when you look at the state of the Cook Strait ferries, is really critical for us, really critical to have that resilience in the air. A third project, for us will be looking around local delivery. In Auckland, as an example, we perform local deliveries for an average of NZD 3 across town. Many of those delivered same day.
The reality is, with the congestion in cities like Auckland, but also Wellington, Christchurch, Tauranga, but the cost and the infrastructure you need to perform that service has grown. And so that's a key initiative for us to look at that, understand what we can do around pricing, around the cost structure, and around the service delivery. Horizon two is to really scale e-commerce. A lot of that e-commerce comes in from offshore. We have grown our presence in that market and tend to continue to do so. The key differentiating factor for us is maintaining a high level of service. If we can maintain the highest level of service in our market versus our competitors, it'll enable us to get a slightly higher price per item going through that channel. Third horizon for Express Package is targeting oversize, and oversize for us is 25-50 kilos.
So they're still items that we can manage properly with the right equipment through our network, but it's freight, which falls in a bit of a gap, and it never belongs in bulk freight nor courier traditionally. But there is an opportunity for us to use the capabilities we have and the networks we have to provide customers with a better service for those slightly heavier items. In terms of temperature-controlled delivery, it's very similar. We have a nationwide network with Big Chill. Our targets there are to keep pursuing market share and to grow as we have more trucks and equipment coming online. Horizon two is particularly exciting for us. We opened a 3PL center out in Highbrook a number of years ago. We filled it very quickly. That was through the very early stages of COVID.
A new center down in Ruakura, which is state-of-the-art, opened up a couple of weeks ago. We're excited about the interest we have in that 3PL center, and we're encouraged by the amount of freight that we will have coming in over the next six months. We'll target 50% utilization of that building by the end of this financial year. Horizon three in temperature controlled, leverages our Produce Pronto business, which was a smaller acquisition we made a number of years ago. What Produce Pronto do, primarily, is deliver to convenience outlets. So think of a service station, whether it pies, coffee, sandwiches, donuts, fresh fruit, fresh food. We deliver to those 365 days of the year. You can set your watch by the time that we arrive.
We see a great potential for that business bolted on to the 3PL we have in Hamilton and Auckland, and the nationwide network of Big Chill. The team have done a lot of work this year in combining those facilities, getting people together, and pitching for joint business. In terms of Information Management and the storage business, again, the key, key job is to extend and defend, keep the customers we have and keep growing market share. Market share in this particular business is harder one. It takes longer to come across, and through COVID, certainly, there was a bit of a hiatus of customers making decisions around where they held their offsite storage. But we're beginning to see momentum grow again there.
And in Australia, in particular, we have an opportunity to keep pushing up the utilization of the facilities we have to store records, in particular. The second horizon is digitization. We've completed a very large national project, in this past year in New Zealand, where we've effectively digitized forms, used software to lift the data off the form, and deliver that back to the customer. The same principle, pick up, process, deliver, do it efficiently, do it accurately, and do it to the customer's satisfaction. The team have done a fantastic job with that. It's growing our credibility in that space. And across New Zealand and Australia, digitization is a very fast-growing second horizon of growth for us. Digital revenues in Australia are up 39% for the year over the 2023 year.
Third horizon for growth, and it's a very small business, but what we're doing is leveraging the infrastructure we have, the facilities, the racking, the systems, the people, and we're providing services for smaller e-commerce players. So those e-commerce players that have maybe grown out of the garage or grown out of their own small warehouse, grown their business to a point where they need to find bigger premises, we take that on, we pick it, pack it, label it, and then inject it into our courier networks. It's a really natural fit to what we do, both on the transport side and what we do on the storage side. In Waste Renewal, document destruction was the first horizon of growth that enabled us to set up nationwide networks across New Zealand and Australia. It enabled us to become number one in each of those markets in document destruction.
That network we have used to establish a medical waste business in Australia. It started small, at NZD 3 million per annum back in FY 2018. It peaked at NZD 26 million of revenue during COVID, and in the last year was around NZD 20 million. As COVID eased, and you weren't doing as many collections from vaccination centers, testing centers, et cetera, we do see a real opportunity. Customers value what we do from a service point of view, and there is a significant opportunity to become a very fast-growing number two in that market in the short term. What we are waiting for in medical waste is an EPA license in Victoria. We expected that we would have had it by around about now, at the end of the first quarter. That looks to be delayed until early January.
We're at the mercy of the EPA over in Australia, and we have to wait for their rubber stamp. So we have a facility. We're ready to go. We have customers that are keen to use us, and we need that authority to get up and running. Horizon three in waste is really targeting new lines of business. It's quite an exciting part of the business. It's relatively small, but these are opportunities for us to pick up and collect items which can be recycled. This is the opportunity to take items that you can keep out of landfill and find another use for. There's a couple of examples of those, which I think are really good ones, and we've been pretty successful in finding collection markets for these. The first is packaging products.
So it's packaging products like Tetra Pak containers, your Up&Go milk containers, Nespresso capsules, soft plastics, like the courier bag that may have been used and is now no longer of any use to anyone. We can collect those items. We take them to two saveBOARD plants, one in New Zealand, one in Australia. It goes into the plant, four minutes later, you produce a building product, and it's effectively a substitute for GIB or for a rigid air barrier. Those businesses are in their embryonic early stages, but are showing really good signs of growth. And what we're encouraged by is the ability for us to go to our customers, pick up, process, and deliver the materials, which can be then turned into, added-value products. We do similar with textiles, with coffee cups, and with e-waste. So it's an area clearly that will grow over time.
They're small businesses at the moment, but we see big potential for them in five years' time, and they fundamentally use the same infrastructure we have for the shredding and medical waste businesses. Just touch on the high-level ESG goals for the company. From an ESG point of view, the approach we have taken is just to target those areas where we think we can move the dial. We don't attempt to do everything. We know that we have particular skills, and we can play a role in certain areas. We do a materiality test every year. We go out to our teams, we go to shareholders, we go to analysts, we go to a sample of all of our key stakeholders, and we ask them, what do they think is particularly important? And these are the four things that we have chosen to focus on.
Previously, it was five, and we pushed it down to four based on that feedback. The first one is good health and well-being. We put a huge amount of effort into the training, into the focus on health and safety, and into training around mental health and well-being through our people. We're fundamentally a people business. We have 6,000 people across New Zealand and Australia, and having them perform at their best, perform in a skilled way, and feel good about what they are doing is really critical for us. Our targets in this area are continually to reduce the number of injuries we have through our business, and pleased to say that we've made really good progress on that over the last five years, and we'll continue to do so. Decent work and economic growth.
Our commitment is to make sure that we improve our courier earnings year on year, in line with the cost structures they have in their businesses, and to lead the market. If we can lead the market, we will be assured that we have the best quality of contractors, we have the best retention rates, and fundamentally, that feeds into providing the best service to our customers. If we can maintain those service levels, it gives us the ability to get a premium on the rates our competitors charge, and we do get a premium on the rates our competitors charge. The second area there is really continual investment in learning and development. We put a huge amount of effort into leadership training, into understanding financials, and into upskilling our people.
Our goal is that 80% of the promotions within the business are filled by people within the business. A lot of the people that you might meet here today from Freightways have grown up from being sales reps, couriers, working on the floor in the business, and we're really proud of that. In terms of industry, innovation, and infrastructure, what is really key for us is maintain a very low churn rate of customers. Below 2% is world-class. We typically sit around 1.5, 1.6% churn of customers. That's no mean feat in industries where typically you don't have contracts with most of your customers.
You do with the larger ones, but many of the smaller ones, you're as good as your last delivery, and you will retain them as long as you provide a good service, as long as when errors occur, you fix them promptly and give them plenty of attention. In this area, we're also committed to growing those horizon two and three areas because they will be the future of Freightways in 5-10 years' time. They will be the bigger businesses that we have, I believe, as we go forward. The big one on that particular sheet is climate action, so SDG 13. Our goal there is to reduce our emissions, Scope 1, 2, and 3, by 50% by 2035.
If we can do that, that will ensure that we maintain our contribution to keeping global warming at no less than 1.5 degrees Celsius. This is something increasingly that is demanded by our customers. Our customers ask what our plans are in this particular area, as do our teams of people. I'll talk a little on the next slide at just some of the key areas where we think we can move the dial there. The other key initiative we have, as I referred to earlier, is through that Shred-X business, through the Waste Renewal business, finding ways to recycle and repurpose products that otherwise would have gone to landfill. I won't go through this in massive detail, but what this shows you is based on science-based targets that our team have worked in putting together to look at how we reduce our emissions.
For Freightways, 95% of our emissions are based around fossil fuels, petrol, diesel, aviation fuel. That's the reality. We run a lot of vehicles. Our contractors run a lot of vehicles. We run aircraft to connect the two islands. The plan we have, as you can see, take us through from now through to 2035. I think one of the key points to note is that as the technology comes on, we will look to adopt it. We will not invest in a hydrogen truck that cannot do the job that we need it to for a price that is three times as much because it looks good on the front page of the paper. So that's not our strategy, never will be our strategy. What we are looking to do is move the dial on the things we can.
So company cars, 20% of the company car fleet now are hybrid or EV, and that'll continue to transition till we get to 100% by 2029. The light vehicle fleet, if you think about couriers and vans and the smaller vans, there are bigger vans that will be more of a challenge. The smaller vans will be ones that we think by around 2028, but probably earlier, can probably start to transition to EVs in a sustainable way for the contractor, for the operation, and commercially. We do a lot of work on testing any of the new vehicles that come out. And the reality at the moment is those vehicles are limited by range by weight and by time, and it will get better. We have seen it getting better over the last few years.
It'll continue to do so, but it's not quite ready yet. The last thing you want is a contractor having to buy 2 EVs, take up 2 spaces, spend twice, 4 times as much money in reality, to try and do the job of one. So we're pragmatic about it. We recognize the issue, and we have a solid plan to deal with it. Turn now to the trading update for quarter one. I'll give you a few high-level points and then take you through the divisional numbers. In New Zealand, we've experienced a continuation of what we reported on at the end of the full year, which was a decline in same customer volume.
So the same customer, on average, is sending around 5, 5.5% less items with us, and it's really a symptom of demand through the economy. We have a really wide customer base that traverses just about every industry you can think of, from government departments through to manufacturing and wholesale. And on average, those customers are down. Some are down by much more than 5%, some have a little bit of growth, but on average, we're down around 5, 5.5%. More recently, we've seen that impact in Australia. So in Australia, our observation would be the Australian economy is probably trailing us by around about 6 months. I think in New Zealand, the Reserve Bank raised interest rates quicker and earlier, and we've seen that impact come through in Australia a little bit later and a bit lower.
But certainly, it is having some impact on our customers' demand for their products. What's pleasing is that both markets have picked up pretty appreciated market share gains. So we've worked really hard to win customers off the competition to help fill the gap of that same customer decline. And, you know, the numbers we are seeing from a new business point of view, and we've seen this over the last two years, are radically higher than what we would have done in our past. So it's a tribute to the quality of the sales teams, quality of the service they're selling to, and some very good pipelines of opportunity. Slightly brighter news, we're starting to see the labor market ease.
So we've no question, we've been through a period of a very tight labor market through the last 2 years, the demand for truck drivers. But even people working in warehouses, sorting freight, the cold storage facilities, has been incredible. You've had about a 12% lift in minimum wage over the last 2 years, 5% and 7%, respectively, and it's, it's just raised the bar. We pay above minimum wage, and you have to, to get quality people, but it's been a source of pretty, pretty significant inflation for the business. Over the last few months, we've seen that ease in New Zealand. So what we're seeing now is far more applications per advertised role than we would have seen even 6 months ago. I think that's a positive in terms of where we see wage inflation going in the future.
As I mentioned earlier, the Ruakura temperature-controlled facility has recently opened. It is a state-of-the-art facility. It's a stunning area, and it is attracting a lot of interest from customers. We have a first anchor customer coming in there, and as I said, we expect to get to 50% utilization, over the course of the next 9 months. The EPA license in Victoria, the delay there is, it's a shame. As I say, we've invested in the facility, we have it ready to go. You can't apply for the license until you have the facility and the building ready, and that has delayed our plans there by about 6 months. We're experiencing lower demand and lower pricing for the recycled paper that we pull out of our document destruction businesses.
Paper is a commodity, much like oil, and the demand for recycled paper will go up and down, predominantly based on economic conditions. As the demand for packaging decreases, when there's less goods being sent, the demand for recycled paper tends to follow that pattern. Prices have come off a bit over the last few months. The long-run average is around NZD 250 a ton. We're sitting slightly below that, so it's not a catastrophic GFC-type situation where the price of paper was literally zero. We expect that over time, as economies build again, that price will start to rise. What we have initiated is a cost-out and repricing program though at Shred-X, because that is the business that has both the medical waste and the impact of paper pricing.
We will look at everything we can do just to make ourselves as efficient as we possibly can, make sure we price up services that might not be at the right margins, and then we look forward to that EPA license in the new year. In terms of the consolidated numbers for the quarter, we saw revenue up 25.5% to NZD 298 million, EBITDA up 11.9% to NZD 55.4 million, and EBITA up 7.4% to NZD 36.5 million. NPAT was down on the PCP, and that's primarily due to a high level of debt in the business and higher interest rates, as well as an increase in amortization costs, mainly related to the acquisition of Allied Express.
Key features of the result, the higher revenue is driven by the addition of Allied Express in the first quarter. It's driven by market share gains and the price increases that we implemented in July. The EBIT is affected to a degree by those labor costs, which will continue to flow through until around the end of FY 2024, and that's in both New Zealand and Australia. For Epress Package and business mail, first quarter, FY 2023, for the factors I have mentioned, saw revenue up 33%. First quarter of 2024, sorry. Revenue up 33%, EBITDA up 10.6%, EBITA up 9% on the PCP. In Information Management, we saw a slight decline in revenue by 1.3%.
EBITDA down 13.4, and EBITA down 14.7 on the PCP, around about NZD 1.7 million. That 1.7 was exclusively related to the delay in opening the Victorian plant and the paper prices. The storage businesses have actually demonstrated quite solid growth in the first quarter. This graph here is one that we have tended to present in most of our announcements, and it just gives the market a bit of a feel for what's happening with the items flowing through the network. And when you look at the graph, actually, the picture is not too bad. What it shows is over the first quarter of this financial year, growth of approximately 2.3% in items.
One of the things that's important to note there is that around about 3% of that growth are smaller items, which come in from offshore through e-commerce channels, and are typically priced at lower prices because of the size. So they're a lower price point than the average we would have across our business. They average about 800 grams, whereas the average item in our network is closer to 5 kilograms. So certainly, you don't see volume falling off a cliff. You see a symptom of an economy which is continuing to operate pretty much at the same level, existing customers down around 5%-6%. Some market share gains to help prop that up, albeit at slightly lower pricing because of the profile of that freight.
In terms of the outlook, as I say, we see a continuation of customers trading at those levels, both in New Zealand and also in Australia. While new business will help close that gap, it won't make up all of the shortfall, and we typically expect to get a bit of growth, year-on-year through those businesses. We expect paper pricing also to continue its current soft trend in New Zealand and Australia in the short term, until signs of that economic recovery emerge. Would have to say that we think the economic environment just seems a bit worse than we were expecting, and I think higher for longer, which you've heard about interest rates, is probably something that will push through that New Zealand economy, where we expected a bit of growth, probably around March, April next year.
It may be that the stream continues on. I talked to a lot of customers and try and get a read from them as to what is happening in the market, and they're equally uncertain. On the positive side, we see that tight labor market easing, certainly in New Zealand over the last three months, slightly less so in Australia. There's still pretty good demand for workers in Australia. But we think this will have a moderating effect on future wage inflation with our business, with most of that impact occurring in FY 25. We will continue to assess a number of M&A opportunities for fit and value. We're very disciplined around that. We will make sure that we do not overpay if there is a suitable opportunity.
But what you would have noticed over the last years, we haven't executed any M&A opportunities during this period. Once again, I'd just like to thank the experienced team of people that we have across New Zealand and Australia. It's a big team. They work hard, they work diligently in all of the businesses and all of the territories we operate in. I'd like to thank our shareholders for your support over the last year, our board for their advice and guidance over the past year. We wish our people all the best. Our concern for their safety, their well-being, and their performance is paramount. Thank you.
Thank you, Mark. Are there any questions, comments, or discussion in relation to the financial statements, presentations, or management of the company? Nicola, do we have any online questions? Oh, sorry. Sir?
There was discussion earlier about margin erosion and what to do about it. Has that been due to specific one-off or a number of one-off events such as commissioning new facilities, in which case, you know, perhaps you could speak to the recovery of that? Or is it due to some other more long-term issue, in which case, what is it that can be done about that?
Yeah, I'll get Mark to answer that.
Yeah, look, good, good question. So fundamentally, the margin erosion has... The biggest cost we have within our business is labor, and labor at the lower end has probably gone up around about 10% year-on-year. If you think about freight sorters, truck drivers, the vast majority of the people we have in our business, the price increases we've managed to get over the last few years are probably the highest price increases we have ever got out of the market. We compete against New Zealand Post, who have a somewhat less commercial view on life. And so higher cost increases, price increases that are averaging around that 6%-7% mark.
What we think in the FY 25 year is that we think we should be able to get a price increase that's probably a percentage point above what the expected labor increases would be. So it's a reasonably unusual phenomenon to have demand down and labor markets still pretty tight and have that level of wage inflation. That's a slightly unusual recession. What we think with what we're seeing in applications coming through and what we think we can manage in terms of wage increases going forward is probably wage increases more on that 3.5%-4.5% range. We think that'll keep our people on the track, quality people, but a price increase that's probably a percentage point higher than that. So that will help me address the margin in the biggest area.
The new facilities probably have a smaller impact, and you're dead right. As we fill up Ruakura, it's a significant rent and power bill. It's around about NZD 4 million per year. But we know as we fill up that facility, you'll get to 50%-60%, cover the cost, and then you'll start to make margin on it. So those are the more steps you have through the business.
Thank you. Nicola, are there any online questions? Okay, well, as there are no further questions, I'll now move to the formal resolutions to be considered at this meeting. As mentioned earlier, all voting on resolutions will be conducted by way of poll. For online voting, please follow the instructions in the virtual meeting guide that was provided. A reminder of the voting process for those logged in as shareholders or proxies: the resolution and voting options will have appeared on your screen. You can vote for all resolutions at once or by each resolution. For each resolution, please select the appropriate box on screen to indicate your vote. Your vote has been cast when the green tick appears. To change your vote, select Change Your Vote. Again, a reminder that any eligible shareholder or proxy attending the meeting remotely is eligible to ask a question.
Please select the Q&A tab on the right-hand side of your screen anytime, then type your question and press Send. The results of the polls will be advised to the stock exchanges later today. The first resolution relates to the re-election of Mark Rushworth. Mark was appointed as a director of the company in 2015 and is retiring by rotation, offering himself for re-election. The board unanimously recommends that shareholders vote in favor of Mark's re-election. He is considered by the board to be an independent non-executive director. I now invite Mark to address the meeting.
Good morning. Thank you all for providing me the opportunity to address you today to seek re-election to the Freightways board. It's been a privilege to serve as a director for the past eight years, and I'm eager to continue contributing to the company's ongoing success. In addition to my role as a director, I currently serve as the Group Chief Executive of UP Education, a position I hold within the realm of private equity world. My professional journey has been dynamic, having held different leadership positions in diverse sectors, including infrastructure, financial services, telecommunications, startups, and now across into education. It's this experience that has equipped me with very broad perspective that I believe is highly relevant to the nuanced conversations that we engage around the Freightways board table every day.
My professional journey began about 33 years ago when I completed an electrical engineering degree down at Canterbury, and that's very much given me a technical lens, that's been integral to my contributions in each of the businesses that I have been involved in. Over the years, I have led various brands, incumbent businesses through significant change and disruption, particularly as consumer habits have transitioned towards online platforms. My leadership experience has extended across regions including New Zealand, Australia, and into Asia. Importantly, as a customer of Freightways, through the businesses I operate, I've gained insights into the areas that Freightways excels and those that warrant ongoing improvement. It's this unique perspective that positions me well to contribute meaningfully to the decisions and strategies that drive Freightways forward.
Throughout my eight years as a director of Freightways, I've witnessed and actively participated in the collective efforts that have shaped this company's success. I take pride in the achievements and am excited by the opportunities that lie ahead for the business. I'm sincerely honored to seek your ongoing support to continue serving on the Freightways board. With your backing, I am confident that Freightways will navigate the challenges and realize the promising opportunities ahead. Thank you very much.
Thank you, Mark. Are there any questions or matters for discussion concerning this resolution to re-elect Mark Rushworth as a director? Nicola, are there any online questions?
No.
Okay. As there are no questions on this matter from shareholders, I put the resolution to a vote. Please mark your vote. The second resolution relates to the re-election of Peter Kean. Peter was appointed as a director of the company in 2016 and is retiring by rotation, offering himself for re-election. The board unanimously recommends that shareholders vote in favor of Peter's re-election. He is considered by the board to be an independent, non-executive director. I now invite Peter to address the meeting.
Thank you, Mark. Kia ora koutou. Welcome, everyone, and thanks, everyone, for attending today. If you're in this room, you're a very important part of Freightways. My name is Peter Kean. I've been on the board for seven years. During that time, we've continued to achieve steady growth in both revenue and profitability. I believe the key areas that I can add particular value to Freightways are in sales, marketing, innovation, supply chain, and logistics. My previous experience in both Australia and New Zealand running companies have given me a strong focus on our consumers and, more importantly, our customers, who, of course, are at the heart of everything we do. As well as being an experienced company director, I'm also a business owner and have interests in both New Zealand and Australia.
I look forward to being part of the solution to our challenges and opportunities, which we will continue to face in the coming years. I do hope I can rely on your support for my re-election on the Freightways board, and I thank you all very much.
Thank you, Peter. Are there any questions or matters for discussion concerning this resolution to re-elect Peter Kean as the director? Nicola, are there any online questions? Right. As there are no questions on this matter from shareholders, I'll put the resolution to a vote. Please mark your vote. The third resolution relates to the increase of the annual directors' fee pool by NZD 107,855, from an aggregate of NZD 857,145 to NZD 965,000. Such aggregate amount to be divided amongst the directors as they deem appropriate. The board reviews fees annually to ensure the aggregate amount available for directors' remuneration is adequate to allow the directors' fees to remain aligned to the market.
The directors did not apply for an annual incremental adjustment to the aggregate pool of director fees last year, so the current fee levels have not been adjusted for the last two years. This year, the board obtained independent market advice from Ernst & Young. A summary of Ernst & Young's benchmarking report was attached to the notice of meeting, including an independence declaration from the EY engagement partner. The directors proposed to apply an increase this year, which allows non-executive directors to be paid at approximately the median level of peer group market data presented in the EY report. The proposed increase allows for members of board committees, in particular, the chairs of the board subcommittees, whose workload is higher, to be paid at approximately the median level of the peer group market data presented in the EY report.
In accordance with the New Zealand Stock Exchange main listing, Rule 6.3.1, the directors and their associated persons are restricted from voting on this resolution. The board unanimously recommends that shareholders vote in favor of this increase. Are there any questions or matters for discussion concerning this resolution? Sir?
Hi. Just wondering what's happening to undirected proxies regarding this resolution. Is the board going to vote those for the resolution or not vote them?
Actually, that is a technical... If it's undirected, we can't vote on this resolution, so that is correct. I'll just check with Russell today.
So you can't vote on it?
So, that's correct.
Yeah.
Are there any other questions from the floor? Nicola, are there any online questions?
No.
As there are no further questions on this matter from shareholders, I'll put the resolution to a vote. Please mark your vote. The only other resolution for consideration is to authorize the directors to fix the auditors' remuneration. The present auditors, PricewaterhouseCoopers, will continue in office under the Companies Act 1993. Are there any questions or matters for discussion concerning this resolution? Nicola, are there any online questions?
No.
As there are no questions on this matter from shareholders, I'll put the resolution to a vote. Please mark your vote. Thank you, ladies and gentlemen. That concludes our discussion on the items of business today. After a brief pause, I will close the voting system. Please ensure that you have cast your vote on all resolutions. I'll now pause to allow you time to finalize those votes. We've got somebody shouting the bar tonight. Okay, voting is now closed. Thank you for voting. Votes will be counted by Computershare, and the results will be advised to the stock exchanges later today. Ngā mihi nui, again, ladies and gentlemen, thank you for attending Freightways' Annual Shareholders Meeting and for your ongoing support of the company. I now declare the meeting closed and invite you to share some refreshments with the board and executive of your company. Thank you.