Forum Archive Index - May 2002

["Kerry Doson" <croca@ozemail.com.au>]

Further to some recent postings re TRH
- JackV
Australian 09/05 p21
Toll just keeps on the right track
Robin Bromby - Transport
        Shares in Toll Holdings, the country's second largest transport 
company, have managed only a modest rebound after the company unveiled early 
details about earnings from its Pacific National Rail business.
        Toll fell $3.62 on Tuesday to $32.25 because of market worries about 
future earnings. It managed to claw back only 30c of that yesterday to finish 
the day at $32.55.
        Chief executive, Paul Little confirmed thatToll and its partner Patrick 
expect their new Pacific National rail operation to produce earnings before 
interest, taxation, depreciation and amortization of about $180 million in the 
first year.
        Work has been under way for about 10 weeks on merging the operations of 
the former National Rail and Freightcorp freight train groups.
        "So far there has been no surprises," he said.
        The market was reassured by Mr Little's comments that the company was 
on track to post strong second half earnings.
        The stock turnaround also followed the positive recommendations from 
Salomon Smith Barney analyst Jason Smith who told his clients the share price 
was an excellent opportunity to enter or top up on what he called one of 
Australia's most successful companies of the past five years.
        "I've recommended it as a buy since the stock was $2.50," Mr Smith 
said. "And I never changed it once."
        The move into New Zealand came in the form of two deals.
        Under an agreement with BHP Billiton, Toll will take over the company's 
stevedoring and transport logistics operations at ports on both sides of the 
Tasman.
        At Port Kembla, Westernport, Bell Bay and Whyalla the Toll acquisition 
covers only BHP business.
        But in New Zealand, Toll will acquire business from third parties as 
well. This will cover three of New Zealand's large export ports, Napier and 
Tauranga in the North Island and Lyttelton in the South Island.
        Tauranga is an important log export port while Lyttelton handles most 
of New Zealand's export coal.
        Toll is also acquiring a 75 per cent interest in Christchurch-based 
Southern Distribution Centre. The two companies recently made a joint tender 
for warehousing and distribution for brewerLion Nathan throughout New Zealand.
        Mr Little said Toll had gone into New Zealand under pressure from 
Australian clients who did business there. "We had once decided not to take 
opportunities in New Zealand but it became more and more difficult not to do 
this," he said.
        Now that Toll's hand had been somewhat forced, it would look for other 
opportunities at a time when many New Zealand companies had been 
underperforming on the sharemarket there.
        "But it's not a major focus of the group," Mr Little said.
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