The current state of the economy will not stop logistics leader Toll Holdings from expanding its operations and pouncing on
The current state of the economy will not stop logistics leader Toll Holdings from expanding its operations and pouncing on “distressed competitors”.
Managing Director Paul Little has told the company’s annual general meeting in Melbourne he is “continuing to critically evaluate a number of opportunities” while “mindful of prevailing economic conditions”.
In fact, Little says the current business climate will create “distressed competitors” the company could pounce on.
The tightening economy will also drive demand for streamlined national and international supply chains to speed deliveries and reduce costs, Little says.
Meanwhile, the company expects the trend to outsource supply chain functions will also increase as business looks for further efficiencies.
“When and if customers’ inventory levels are reduced as economies slow, greater emphasis will be placed on speed to market and supply chain efficiency,” he says.
“Toll has positioned its business to capitalise on these market dynamics.
“We believe that our strategic direction will continue to deliver positive results through any economic softness, and at the same time position the company to perform very well as the strong economic cycle returns,” Little says.
He says Toll – “and the industry generally” – is managing the volatility of fuel prices well.
The company reports increased revenue of some 15 percent in the last financial year (after eliminating discounted operations) to $5.6 billion, with EBIT rising 18 percent to $429 million.
Little credits the market-leading position of the company, the efficiency of operational and technological service offerings and “sound financial discipline” to control costs.
AUSTRALIAN OPERATIONS STRONG
The company made over $4.4 billion from Australia and New Zealand operations, up 7.5 percent, which Little says shows customers want integrated service offerings and appreciate the investments made in new fleet and technology systems.
Meanwhile, Little says the year saw “outstanding progress” towards the company’s vision of being the premier integrated logistics group in the Asian region.
He highlights the formation of the company’s global forwarding division, which brought together its international operations with the Hong Kong-based BALtrans acquisition in March.
The further purchase of Australian-based forwarder Gluck – part of more than $800 million worth of acquisitions in the financial year – values global forwarding operations at over $1 billion, Little says.
The Melbourne-based conglomerate acquired an additional 88 entities during the year while disposing, liquidating or having commenced liquidation on 104 entities.
“As an aggressively growing company, our ongoing process involves a streamlining of the corporate structure, with continued rationalisation of obsolete entities and the integration of corporate activities,” Little says.