Toll sets sights on acquisitions

TOLL GROUP        LOGISTICS        RECESSION

Australia - The Toll Group is scoffing in the face of the recession. It posted a 14% increase in net profit after tax, and outlined an acquisition plan that will grow its global freight forwarding business from A$1 billion to A$3 billion in three years.

Toll said revenue grew 16% to A$6,492 million in 2009, while EBIT went up 9% on strong performance in the Australian business.

"This strong profit growth combined with a very strong balance sheet perfectly places the Toll Group for further M&A activity in the months and years ahead, said Toll Group MD Paul Little. "We are continuing to see real opportunities for acquisitions which match our long term strategic vision. We see some very interesting future growth options both here in the region and around the world."

Little told local reporters that the acquisition plan involves takeovers and mergers, including buying debt-heavy businesses that private equity acquired at the height of the boom and are now keen to sell at relatively low prices.

The company is well-placed to acquire what with its little debt - gearing has been reduced from 37.6% to just 12.2% in the past year.

"Our sourcing opportunities exist at record levels and some very good prospects are being pursued by the company," said Little.

The company's Asia arm managed a 19.7% increase in revenue and 20.6% increase in EBIT on contract wins including Coca Cola in China, Nestle in Singapore and Indorama in Thailand. "Toll Asia's high level of involvement with the fast moving consumer goods market cushioned the impact of the global economic crisis, particularly in the major markets of India, China, Singapore and Vietnam. However, significant volume reductions were experienced in the consumer electronics, automotive and industrial sectors," he said.

Toll predicts that trading conditions in the short term will remain generally flat, with some improvement in Australia and Asia. It plans to keep on the lookout for acquisitions, Little said.

"Significant investment is being made for future growth in projects such as the TOPS Loyang offshore supply base and continued investment in fleet and technology."

"The acquisition outlook remains very positive with opportunities in most sectors, particularly global forwarding. Our strong balance sheet position leaves us well placed to take advantage of opportunities as they arise," Little said.

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