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Business Description: Transurban Group (TCL) is involved in the development, operation, and maintenance of toll roads business in Australia and North America.
Strategy Analysis: TCL's strategy is to diversify its portfolio of toll roads, drive operational efficiencies and upgrade roads as needed. The cost reduction program initiated in June 2008 is progressing well and further savings should negate inflation pressures and see costs remain well contained over the medium-term. TCL¬īs portfolio has grown from a single road - CityLink in Melbourne - to a diversified portfolio over the last decade. In Australia, it acquired Hills Motorway in 2005, Sydney Roads Group in mid-2007 and the Lane Cove Tunnel in mid-2010. It entered the US market in 2006, securing a 99 year concession to operate the Pocahontas Parkway in Virginia. It subsequently secured two HOT lanes projects - a 75 year concession on the Washington Capital Beltway and a 73 year concession on the adjoining I-95. US expansion has disappointed so far. The 50% owned Sydney Westlink M7 opened in late 2005 and continues to ramp-up. The Melbourne CityLink upgrade finished late 2010. The recent widening of the Hills M2 will benefit traffic volumes in coming years on the M2, and the LCT and M7 which connect to it. The M5 upgrade completes end-2014. Distributions are based on free cash flow without debt.
Transurban Group reported NPAT down 13.2% to $80.94m for the half-year ended 31 December 2012. Revenues from ordinary activities were $585.2m, up 2.5% from the same period last year. Toll revenue increased by 3.1% to $397.7m. The key driver behind the increase was the price escalation and traffic growth on CityLink, partially offset by the construction impact of the Hills M2 Upgrade works on traffic on the Hills M2 and Lane Cove Tunnel. Basic and Diluted EPS was 5.5 cents compared to 6.4 cents last year. Net operating cash flow was $181.01m compared to $182.81m last year. The interim dividend declared was 15.5 cents compared with 14.5 cents last year.
The Age 22/05/2013 |
A piece of broker research came out last week that described the budget as a sensible one but an almost suicidal one for a government four months out from an election. Instead of trying to buy votes, it seemed intent instead on putting as many noses out of joint as it possibly could.
The Age 22/05/2013 |
In last week's budget, the government missed what will probably be its last opportunity to make the superannuation system fairer and more sustainable. While the government made some tough decisions, such as reneging on promised tax cuts, one of the fastest-growing expenses is the tax concessions for superannuation.
The Age 22/05/2013 |
Last week's budget was a bit of aho-hum affair on many levels related to superannuation, because most of the changes to the system had been announced back in April. The transfer of the Baby Bonus into an extra (reduced) payment for families eligible for Family Tax Benefit Part A, has drawn the light fairly and squarely on the costs of bearing and raising children. The recent debate about the opposition's Paid Parental Scheme versus the government's less-generous scheme has added fuel to the fire.
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