Challenging conditions confront Toll, but its new managing director says the business is well-placed to prosper and continue acquisition drive
By Brad Gardner | October 26, 2011
Toll is bracing for challenging domestic conditions to continue, but soon-to-be Managing Director Brian Kruger says the business is well-placed to prosper.
During his address at Toll’s annual general meeting today, Kruger told attendees it was likely a lack of demand in the retail and industrial sectors would drag on for some time.
Kruger, who will replace Paul Little next year, says discretionary retail makes up about 10 percent of Toll’s domestic revenue and conditions in the lead-up to Christmas will have a strong bearing on the company’s half-year results.
While saying it “is still very difficult to predict” how the Christmas trade will pan out, Kruger believes Toll’s involvement in the domestic resources industry will help offset any declines in the retail and industrial sectors.
“This strength in the resources sector will support the performance of our global resources division, and also flow through to a number of our general freight businesses such as Toll NQX and Toll Express,” Kruger says.
The former BHP Billiton and BlueScope Steel executive is also bullish on more acquisitions in the global forwarding sector.
He says conditions are challenging for the entire sector but adds that Toll expects benefits to flow from internal productivity improvements and organic growth.
“Interestingly, the tough trading conditions in the global forwarding sector may actually present some attractive acquisition opportunities,” he says.
“All in all, our strategy…has us positioned very well to manage our way through what are generally tough economic conditions both her in Australia and in some of our overseas markets.”
Toll in August announced a $294.8 million net profit for the 2010-2011 financial year. Its domestic and international operations were hampered by storms, earthquakes and floods, but Toll’s global forwarding division landed new retail contracts in the US and Europe.
LITTLE BOWS OUT
In his final address as Toll’s managing director, Little cited weather events and slow economic growth in major markets for affecting Toll’s full-year results.
He listed strong returns from Toll’s work in the oil and gas sectors as a key highlight of the year, along with its global logistics division securing a new batch of contracts.
Along with championing Kruger as his ideal replacement, Little thanked Toll shareholders for their support.
“It has been an incredible journey for me and I am so grateful to have had the support and loyalty from employees, customers and shareholders,” he says.
“Together we have achieved a lot and it gives me great pride that we have built an international logistics company from humble beginnings here in Australia.”
Chairman Ray Horsburgh says Little has made a significant contribution to Toll and “will go down in history as one of our country’s most outstanding entrepreneurs”.
“His drive and determination to be the best and to operate Australia’s leading transport company has been realised in a glittering career spanning more than 25 years.”
