Toll to defy economic crisis by expanding reach

Toll Holdings has announced a more than 11 percent increase in net profit in its half-year results.

Toll Holdings has announced a more than 11 percent increase in net profit in its half-year results and says it is ideally positioned to expand despite the global economic crisis.

The transport and logistics giant announced an after-tax profit of $176.9 million, 11.5 percent higher than the previous year’s figure of $158.8 million.

Although it also announced an 18 percent profit increase before interest and tax, its gross and net figures do not include investment write downs of Brambles and Virgin Blue as well as the rise in earnings before acquisition amortisation charges.

Toll is upbeat about the announcement, with Managing Director Paul Little saying the result is strong due to the company’s ability to maintain margins and increase revenue growth despite slowing economic activity.

"Although freight volumes will be impacted by slowing economic growth and conditions will be challenging, the company is very well positioned to cope with any economic slowdown," Little says

"The diversity of Toll business, combined with a high variable cost base is expected to soften the impact of any global economic downturn."

Little also says the company expects to gain further control of the market in the future.

"Increases in market share achieved during the past six months are expected to continue as customers seek to outsource their non core supply chain activities," he says.

The organisations continuing operations revenue rose over 30 percent from the previous period to $3.5 billion, up from $2.7 billion one year ago.

This includes $533 million of new acquisitions, which were predominantly made up of the NALtrans attainment in April 2008.

Toll’s growth rate in Asia is almost double that of its operations in Australia, which the company attributes to slow economic growth in Australian shares.

Despite a net debt position of $715 million, Little says cash flow is strong due to a focus on cost and working capital management.

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