Toll looking to plug its Defence gap
The transport and logistics company is hunting for new contracts to bolster its resources division, which is bearing the brunt of the mining sector slowdown.
Toll chief executive Brian Kruger said the company recently won a contract to help in the accommodation of refugees but the challenge would be to gain more work to offset the loss of the Defence contract.
Toll's remote logistics business has been involved in work on Manus Island in Papua New Guinea and Nauru, where Australia's main offshore detention centres are located.
The Melbourne company reported a rise of almost 4 per cent in earnings before interest and tax to $426 million for the year to June, slightly ahead of market expectations. Toll has adopted a cautious approach to the new financial year. It has not given guidance, but Mr Kruger conceded soft demand across many of its markets would put pressure on margins.
Mr Kruger said the company's focus would remain on gaining more value from existing businesses, emphasising that it had made only one small acquisition in the past year. His position contrasts with his predecessor, Paul Little, who pursued an aggressive acquisition strategy.
Toll posted a 29 per cent rise in net profit to $92 million for the year. Revenue was flat at $8.7 billion. The statutory profit had $191 million in one-off charges, including a write-down in the value of shipping vessels in its marine business in Asia.
Its global forwarding division had pre-tax earnings falling to $6.3 million from $20.6 million a year earlier.
Toll will pay a final dividend of 14.5¢ a share on October 21 - up from 13.5¢ previously - which takes the payout for the year to 27¢.
Toll also released its remuneration report on Thursday which revealed Mr Kruger received a total pay package of almost $4 million for the year, up from $2.6 million in 2011-12. It was his first full year as CEO.
Frequently Asked Questions about this Article…
Toll Holdings has recently won work helping with accommodation for asylum seekers, including logistics support related to Australia’s offshore detention centres on Manus Island (Papua New Guinea) and Nauru. The company says this new work is positive but not yet large enough to fully offset other contract losses.
Toll conceded that the end of a large Defence contract to assist Australian troops in East Timor has created a gap in revenue. While the company has won some asylum seeker-related work, management says it still needs to secure more contracts to replace the lost Defence work and support its resources division.
For the year to June, Toll reported earnings before interest and tax (EBIT) of $426 million, up almost 4% and slightly ahead of market expectations. Net profit rose 29% to $92 million, while revenue was flat at $8.7 billion.
Yes. Toll reported $191 million in one-off charges in the statutory result, including a write-down in the value of shipping vessels in its marine business in Asia, which affected the statutory profit figure.
Toll will pay a final dividend of 14.5 cents a share on October 21, up from 13.5 cents previously. That takes the total payout for the year to 27 cents per share.
Toll’s resources division is bearing the brunt of a mining sector slowdown, which has weakened demand across many markets. Management says soft demand could put pressure on margins and the company is hunting for new contracts to bolster the resources business.
Toll’s global forwarding division had weaker results: pre-tax earnings fell to $6.3 million from $20.6 million in the prior year, indicating a decline in profitability in that segment.
CEO Brian Kruger has taken a cautious approach, focusing on extracting more value from existing businesses and making only one small acquisition in the past year. This contrasts with his predecessor, Paul Little, who pursued a more aggressive acquisition strategy. Toll has not provided formal guidance for the new financial year.
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