Toll warns of “softening conditions”

At the same time as announcing its purchase of Qantas’ Asian DPEX business, the Toll Group has warned that trading conditions are still challenging.

“While operating profit before interest and tax for the current half year is currently expected to be up 5-10% on the same period last year, trading conditions have recently softened across some parts of the business in Australia and continue to be challenging in New Zealand,” the company said in statement.

“Lower customer volumes are having an impact on the non-express parts of the business in particular.”

On the positive side, the Toll Global Logistics and Toll Global Resources businesses have made strong gains and Toll Global Forwarding is also beginning to see improving volumes and the benefits of recent acquisitions.

DPEX is the second major acquisition for Toll within the space of 30 days, having acquired the assets of Concord Park, a privately owned interstate transport company in May.

With revenue of around A$90 million, Concord Park offers distribution, third party logistics, timeslot deliveries into distribution centres, overnight express deliveries and bulk linehaul services across Australia.

In addition, Toll and Kmart Australia entered into an agreement with Toll in2store to manage Kmart’s new Victorian Distribution Centre last month.

The 76,000 sqm facility is currently being built in Leakes Road, Truganina, and is scheduled to open in April 2011. The distribution centre will warehouse and distribute apparel and general merchandise to 80 stores throughout Victoria, South Australia, Northern Territory, Tasmania and New Zealand.

Source: T and L News