Toll announces Board of Directors appointment

Logistics company, Toll Group, has appointed Geoff Wilson to its Board of Directors, effective 1 October 2017.
According to Toll, Wilson has over 35 years of executive leadership experience with professional service company, KPMG, in Australia, Hong Kong and the US.
“We are delighted to welcome Geoff to the Toll Board. His deep knowledge and experience across multiple markets, including Japan, and his leadership of large, dynamic workforces will be invaluable to Toll’s transformation, governance and future growth agenda,” said Toll Group Executive Chairman, John Mullen.
“We welcome the skills and knowledge Geoff will bring to our board, and we look forward to his contribution to the future of our business,” he said.
Wilson will reportedly assume the role of Chairman of the Audit Committee with the commencement of his directorship.
Toll has said that Wilson will become the last of eight directors to have been appointed to Toll following the rebuilding of the board this year.
With Wilson’s appointment, the Toll Board now comprises eight Directors: Chairman John Mullen, Managing Director, Michael Byrne, Geoff Wilson, Kunio Yokoyama, Tomohiro Yonezawa, Taneki Ono, Noboru Ichikura and Norio Wakasa.

Toll acquisition ‘failure’ to affect Japan Post stock sale

A $15 billion sale of Japan Post stock could be negatively affected by its purchase of Toll Holdings, with fund managers saying the company ‘lacks growth potential’.
According to Reuters, Japan’s government said it will sell US$12 billion ($15 billion) worth of Japan Post Holdings stock in an announcement that fund managers reportedly gave a lukewarm reception.
“The company lacks growth potential appeal,” Kazuo Okabe, General Manager, Fukoku Capital Management, told Reuters. “I don’t think there will be strong demand from actively managed funds.”
Even after the ¥400.3 billion ($4.8 billion) writedown, a ruling-party lawmaker told Reuters that Japan Post needs to make more acquisitions in order to grow.
“Japan Post cannot expect to realise strong growth on its own, it needs to pursue acquisitions. Management should not be timid about them even after the failure of the Toll deal,” Reuters quoted the source.
According to Reuters, Japan Post’s chief executive has said the firm can achieve growth through organic means alone.

Toll up 18 per cent, eyes Asia for expansion

 
Paul Little continues to defy worsening market conditions, bringing in a much-improved earnings result for Toll and declaring his intention to aggressively expand the company’s forwarding activities in Asia.
 
Toll Holdings has announced an EBIT for the group, before acquisition amortisation charges and investment write-downs relating to Brambles and Virgin Blue, of $266.4 million compared to $226.4 million in the previous corresponding period, an increase of 18%.
 
Toll managing director, Paul Little said “this is a strong result, given that the company managed to maintain margins and achieve revenue growth entering into a period of slowing economic activity.”
 
Revenue for the six months was $3.5 billion, an increase of 30% over the previous period of $2.7 billion for continuing operations. Revenue growth included $533 million relating to new acquisitions, principally relating to the BALtrans acquisition which was completed in April, 2008.
 
The company achieved solid ongoing organic revenue and EBIT growth. This was largely driven by continued trends in market share gains and the benefit of past acquisitions. The underlying revenue growth in Australia was $79 million or 4 %, and 7.8% in Toll Asia. While the lower organic growth rate in Australia reflected a slow-down in economic activity the benefits of prior acquisitions improved overall revenue growth.
 
Asian EBIT margins at 11% continued to exceed Australian margins, however, new revenue growth outside of the higher-yielding defence and resources sectors resulted in some overall dilution.
 
TGF recorded an improved EBIT margin of 3.4% as business development and integration activities are being implemented.
 
Profit after tax for the six months to 31 December, 2008 from continuing businesses before investment write-downs for Brambles and Virgin Blue and final Virgin Blue demerger costs was $176.9 million, an 11.5% increase over the previous corresponding period of $158.8 million.
 
EBIT margins continued to be resilient with margins in the Australian business being maintained at 8.0%.
 
The company has a strong balance sheet with a net debt position of $715 million at 31 December 2008. An intense focus on cost and working capital management has delivered a strong cashflow result.
 
During the past six months the company successfully refinanced and increased its Singapore-based syndicated debt facility and extended the maturity out to November 2011. In addition, the Reset Preference Shares were converted to equity in November 2008.
 
The company currently has a gearing ratio of 21% and interest cover exceeding 19 times. The company has maintained high levels of cash balances and committed undrawn facilities in  order to ensure that growth opportunities can be pursued actively.
 
Earnings per share, fully diluted from continuing operations, was 28.2 cents per share pre-acquisition amortisation charges, investment write-downs and one-off costs. This represents a 10% increase on a continuing business basis, compared to 25.8 cents per share in the previous corresponding period.
 
Directors have declared an ordinary share interim dividend of 11.5 cents per share payable fully-franked and the dividend payout ratio is consistent with prior periods.
 
Mr Paul Little said that “although freight volumes will be impacted by slowing economic growth and conditions will be challenging, the company is very well positioned to cope with any economic slowdown. The diversity of the Toll business, combined with a high variable cost base is expected to soften the impact of any global economic downturn. Increases in market share achieved during the past six months are expected to continue as customers seek to outsource their non-core supply chain activities.
 
“The company is very well positioned to maintain strong results and take advantage of opportunities as they occur.
 
“For the remainder of the 2009 financial year allowing for reduced activity levels, but at the same time benefiting from the strength of the Toll integrated model, we consider that results of continuing operations in the second half of the financial year to June 2009 will exceed those of the previous corresponding period, subject to no further material deterioration in key markets of the group,” he said.
 

Toll profit jumps 24%

Toll Holdings.

Toll…"very optimistic" about the future growh.

Transport and logistics group Toll Holdings says it is in “excellent shape” and is “insulated” against the global economic meltdown.

In its 2008 annual report released today, the company has posted annual revenue of $5.60 billion, an increase of 15 per cent, with its net profit after tax for continuing operations jumping 24 per cent to $258 million.

The company said while fluctuating global economic factors would present significant challenges for some businesses, its strong balance sheet, cash reserves, available undrawn facilities and little net debt would safeguard the company’s future growth.

“Certainly future economic conditions are not easy to predict, but Toll is in great shape and excited by the opportunities ahead.

“The in-specie dividend of Virgin Blue shares to shareholders, and strengthening of our balance sheet, have positioned the company to manage any significant downturn in economic conditions should it arise.

“At the same time, the strength of our ongoing cash flows and debt capacity will enable the company to pursue growth opportunities, both in Australia and in support of our global forwarding and Asian contract logistics businesses,” it said.

Over the last 12 months, the company restructured its business, establishing three operating divisions, which are Australia and New Zealand integrated transport and logistics, Toll Asia contract logistics and Toll global forwarding.

Toll reported an annual net loss of $695 million in the year, after paying a net adverse charge of $952 million, which mainly resulted from the $1.2 billion Virgin divestment and the sale of New Zealand rail and ferry operations.

The company said its core Australian business was “extremely sound”, its Asian businesses were growing, organic growth remained strong, and was consistently winning new businesses. 

It also said Toll was “insulated against rising fuel costs”, by structuring most contracts around effective fuel recovery surcharges to minimise increasing costs.

“The company is financially strong, underpinned by consistent organic growth and in a very powerful position to take advantage of any new strategic opportunities.

“We’re in excellent shape and remain very optimistic about the future of our company,” it said. 

Toll finally bails out of NZ rail

Logistics solutions provider Toll Holdings has announced the completion of the sale of its New Zealand rail and ferry operations to the New Zealand Crown.

Toll managing director Paul little said the transaction, which was announced in May this year, has now been finalised and the transition arrangements were well progressed.

“We remain absolutely committed to the development of our remaining logistics operations in New Zealand, which have recently been enhanced by the acquisition of United Carriers,” he said.

The company is seeking additional New Zealand-based acquisitions to extend the scale and reach of the ongoing operations, with one of its focuses put on rail.  

Mr Little said the company believes rail can be a long-term sustainable business with the Government aiming at increasing the use of rail as freight flows continue to grow.

“We recognise the efforts of the entire workforce in significantly improving the business over the past four years, and positioning rail as the most efficient modal alternative for future transport demand throughout the country,” he said.

According to Mr Little, cash proceed from the sale of equity in the operation of NZD 690 million will be used to retire debt as well as increasing the company’s cash reserves.

Toll takes to Somerton

The Somerton Logistics Centre.

The Somerton Logistics Centre.

Toll Holdings is set to become the anchor tenant of the $135 million Somerton Logistics Centre (SLC) in Melbourne.

The transport and logistics giant has signed a short-term lease contract with the centre at an annual cost of $1.7 million. Under the contract, which is one of the largest leases in the region this year, the company will rent units 1 and 2 on the property, reportedly to service Coles supermarkets.

The SLC, one of the biggest industrial property projects in Australia, occupies an area of around 125,000 sqm featuring eight warehouses.

SLC director Nigel Hunt said it was the second time that the centre worked with Toll and its anchoring at the site would have a positive impact on prospective tenants. 

“Having a big name gives other tenants confidence, and it also puts us in an active position in the industrial property sector. There’s nothing negative about it,” Mr Hunt said.

The Somerton Logistics Centre.

The 22-hectare site sits on the corner of Cooper Street and Hume Freeway, and has direct access to Melbourne’s airports and ports. 

Mr Hunt said there were three or four potential businesses currently negotiating lease agreements with the centre.

He said the centre had a small management team who could directly interact with tenants, which enabled it to provide properties at a cheaper price.

“We don’t charge for administration or management services, which results in a cost saving of $7-9 per sqm. When you think about the size of the space that they use, that’s a significant amount of saving,” he said. 

Toll’s contract with the SLC follows the announcement that it had rented a 27,000 sqm site at ING Industrial Fund’s warehouse facility in Sydney. 

Toll, Scotts eye off FreightLink

FreightLink

South Australian transport entrepreneur Allan Scott is eyeing the Adelaide-Darwin rail line, which has been put up for sale by FreightLink, with Paul Little’s Toll Holdings expected to join the party.

According to an ABC report, founder of Scott’s Transport has expressed his interest in operating the rail freight service, adding the rail corridor needs improvement in infrastructure to hand heavy freight.

“I think it’s an investment – we’re the biggest users of it and Toll [Holdings] are next, so what do we do?” he said.

“You know we can’t afford to lose it, we can’t afford to have it closed down and the banks are starting to call up the money, so something has to be done.”

While Freightlink has recently increased the number of weekly freight services to Darwin, the operator has been making losses.

Mr Scott, however, stressed the rail service should continue to operate to sustain a number of industries.

“A lot of our industry and a lot of our produce goes up on that rail and a lot of stuff from Melbourne goes on that rail, so it’s very important that it be kept going.”

SA agriculture minister Rory McEwen welcomed Mr Scott’s interest, saying it would provide the state’s industry with a significant boost.

“Mr Scott’s obviously a very experienced and successful freight operator in all its forms. He’s proved that around Australia and built a magnificent transport industry…based in Mt Gambier,” he said.

“To add a railway line to that would be a great part of his vision.”

Toll Holdings would partner Scott Group in a bid to buy FreightLink, a Toll spokesman also confirmed today.

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