Toll Holdings

Since Toll Holdings launched its overseas growth ambitions with the acquisition of a controlling stake in Singaporean logistics company SembCorp in 2006, revenue has more than doubled while earnings per share has retreated to 2003 levels. The company rarely produces any free cashflow, and $4bn spent on acquisitions since 2006 has led to write-offs, the dividend falling from 31 cents to 26 cents and underlying return on equity halving from around 20% to 10%. Reported return on equity has frequently been much lower. Toll is the direct opposite of the type of high quality, high free cashflow business that...

Since Toll Holdings launched its overseas growth ambitions with the acquisition of a controlling stake in Singaporean logistics company SembCorp in 2006, revenue has more than doubled while earnings per share has retreated to 2003 levels. The company rarely produces any free cashflow, and $4bn spent on acquisitions since 2006 has led to write-offs, the dividend falling from 31 cents to 26 cents and underlying return on equity halving from around 20% to 10%. Reported return on equity has frequently been much lower.

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