In 1986, Toll was sold to a management buyout team, and in 1993 the company was listed on the Australian Stock Exchange (ASX). Since the listing, Toll has progressively grown into a leading ‘integrated total logistics provider’ locally and abroad.
Strong express growth
“The express and time sensitive operations of the company grew strongly throughout the year (ended 30 June, 2008), supported by investment in a new national air linehaul network and targeted operations,” says Paul Little, managing director of the Toll Group.
“These express operations represent approximately 35 per cent of divisional revenue and are pivotal in servicing increased volumes arising from Asian direct sourcing activities of Australian customers,” he says.
Top Priority, the group’s air express operator, also performed well and completed the acquisition of SkyNet, an international air express operator in the financial year ended 30 June, 2008. While the cost of additional investment in the air linehaul network impacted its results, the group expects revenue to improve as the potential integration with the developing international Asian air network is expected to drive additional profitable growth.
The Toll Dnata aviation logistics joint venture with Emirates, established early this year, continued to secure additional growth including the acquisition of the Skystar and Aerocare businesses.
PDL Toll, the group’s defence logistics operator, performed well and extended its capability in aviation services. PDL Toll is currently furthering its defence and United Nations footprint into developingcountries.
Despite increased interest rates, high fuel prices and currency volatility, Toll has continued to invest heavily in technology, infrastructure and new fleet, providing increased cost efficiency and capacity to facilitate future growth.
Decision on Virgin
Two years ago, Toll Holdings was involved in a US$4 billion takeover of stevedore Patrick Corp, which included securing a 62.7 per cent stake in Virgin Blue Australia. As Toll was unable to find a buyer for the Virgin stake, eff ective 30 June, 2008, it discontinued the operations and decided to distribute Virgin Blue shares to shareholders via a special in specie dividend.
Revenue for the year ended 30 June for Virgin Blue was A$2.35 billion (US$1.44 billion) compared to A$2.17 billion, while profit after tax was A$97.7 million compared to A$215.8 million previously. Earnings were impacted by high fuel costs, a competitive market place and investment in new operations.
The Toll Group, which generates annual consolidated revenue of A$5.6 billion, operates an extensive network of over 700 sites throughout more than 45 countries across the world. The group’s access to transport and infrastructure assets includes, among others, road fleets, warehousing and air freight capacity.
These assets, when combined with Toll’s operational expertise and technology solutions, are aimed at driving supply chain efficiencies for the group’s diverse customer base.
Toll global forwarding
The Toll Group, which has established Toll Global Forwarding to head its forwarding operations in Asia, as well as worldwide, will focus on three major areas.
Firstly, Toll will continue to develop its Australia-New Zealand domestic transport and logistics business – and secondly, its Asian logistics business developmentled by Singapore-headquartered Toll Asia, the rebranded name of SembCorp Logistics,which the Group acquired in 2006.
Thirdly, the Group will focus on freight forwarding and international supply chain services led by Toll Global Forwarding, which has its headquarters in Hong Kong, and headed by the newly named CEO Hugh Cushing who took up responsibilities eff ective 1 June, 2008.
Australia and New Zealand
Australia and New Zealand Integrated Transport and Logistics is the largest of the three divisions, contributing over 80 per cent of the Group’s revenue. Aside from the finalisation of the long-term domestic freight operations agreement with Virgin Blue, it also won signifi cant new contracts in retail, mining and automotive.
It also established Toll Dnata – the group’s aviation logistics joint venture with Emirates, transferral of the Jetcare maintenance facilities to Virgin Blue, and continuation of the integration and rationalisation of the former Patrick warehousing and logistics activities.
In Australia, the group acquired six businesses which have been integrated nicely into the group’s existing operations including: Victorian Express, Westrans, Extra Transport, Golden Riverland Express, SkyNet Worldwide Express and Western Australian-based Courier Australia.
The focus in New Zealand is firmly on contract logistics and road and rail forwarding, and the recent acquisition of United Carriers, one of Northland’s largest freight companies with annual sales of A$40 million, is an example of its ongoing commitment.
Toll Asia contract logistics
The group’s second division – Toll Asia Contract Logistics – is a result of the amalgamation of its 2006 acquisition of SembCorp Logistics, and its October 2007 takeover of Sembawang Kimtrans, the Singapore-based integrated logistics and marine transportation specialist.
With a new management restructure and the appointment of Wayne Hunt, a long-standing and senior Toll executive as CEO and investment in key assets, the division experienced excellent growth in off shore marine and mining logistics operations, government defence logistics, and major contract wins and renewals – a clear indication of Toll’s increasing momentum in Asia.
