FINSTATE.DOC

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FINSTATE.DOC

  1. 1. Discussion and analysis of Profit and Loss Statement Revenue Up $463 million to $1.3 billion Total revenue increased by 53% to $1.3 billion, mainly due to the full year impact of the businesses acquired from TNT in December 1997 and the revenue increase from the IPEC acquisition in October 1998. Profits Up $20.3 million to $37.4 million Operating profit before tax and abnormals increased by 119% to $37.4 million. This increase was due largely to the full year impact and synergy benefits arising from acquisitions during the past 19 months. Abnormals $0.95 million 1999 included a net abnormal gain of $0.95 million (1998: $1.0 million). It comprised the following: Amount Tax $ million Applicable $ million Gain on sale of property 1.582 0.021 Write-back of excess discount on IPEC acquisition 3.500 - Write-off of goodwill balances (4.131) - 0.951 0.021 The abnormal gain in 1998 related to the sale of a property, with no tax applicable. Income tax Up $4.7 million to $7.8 million Income tax expense increased by 148% to $7.8 million due mainly to the underlying tax applicable to increased profits. The effective income tax rate increased from 17.4% to 20.5%. Dividends Up $6.9 million to $14.9 million Ordinary dividends increased to 22 cents per share, up 57% from last year’s 14 cents per share. Preference dividends paid or provided for during the year totalled $3.2 million. Earnings per share Up 92% to 51.41 cents per share Diluted earnings per share increased 92% to 51.41 cents per share. Basic earnings per share increased 93% to 59.16 cents per share. Both increases were due to the 104% increase in profits attributable to members.
  2. 2. Profit and Loss Statement for the year ended 30 June 1999 Consolidated 1999 1998 $’000 $’000 Revenue from operating activities 1,295,855 854,440 Revenue from outside operating activities 32,780 11,256 Revenue 1,328,635 865,696 Operating profit before abnormal items and income tax 37,400 17,092 Abnormal items before income tax 951 1,003 Operating profit before income tax 38,351 18,095 Income tax attributable to operating profit 7,841 3,157 Operating profit after income tax 30,510 14,938 Outside equity interest in operating profit 370 193 Operating profit after income tax attributable to members of the Company 30,140 14,745 Retained profits at the beginning of the financial year 20,810 14,011 Total available for appropriation 50,950 28,756 Dividends provided for or paid 14,876 7,946 Retained profits at the end of the financial year 36,074 20,810 Basic earnings per share 59.16¢ 30.65¢ Diluted earnings per share 51.41¢ 26.76¢ The above profit and loss statement is to be read in conjunction with the accompanying discussion and analysis on page 38 and the notes to the financial statements set out on pages 44 to 45.
  3. 3. Discussion and analysis of Balance Sheet Net assets Up $16.4 million to $126.4 million Total assets Up $3.7 million to $346.4 million Total assets increased by 1.1%. Major factors for the increase were as follows: a $2.6 million improvement in cash a $7.1 million increase in receivables due mainly to the inclusion of Toll IPEC during the year a $4.9 million increase in prepayments due mainly to the inclusion of Toll IPEC during the year a $6.7 million decrease in property, plant and equipment due to the net combination of asset sales, depreciation charges and capital expenditure during the year a $4.6 million decrease in the value of goodwill due to amortisation of $0.5 million during the year and the balance of the asset being written off at year end. Total liabilities Down $12.7 million to $220.0 million Total liabilities decreased by 5.5% to $220.0 million due mainly to: an $11.5 million decrease in accounts payable due mainly to the payment or clearance of the $19.9 million deferred settlement due to TNT a $9.3 million decrease in borrowings due mainly to repayment of commercial bills, hire purchase and lease liability amounts an $8.1 million increase in provisions due to a combination of: – an increase in the restructure provision due to the acquisition of IPEC – an increase in the provision for ordinary share dividends following increased earnings and the conversion of preference shares by 30 June 1999 – an increase in employee entitlements due mainly to the acquisition of IPEC – a decrease in other provisions following ongoing restructure and other expenditure relating to the TNT acquisitions. Shareholders’ equity Up $16.4 million to $126.4 million Changes in the Company Law Review Act saw the concept of share par values abolished and required the remaining balance of the share premium reserve to be transferred to the Company’s share capital. The year also saw all converting preference shares convert to ordinary shares on a one for one basis, 120,000 ordinary shares issued following exercise of Executive Options and 816,478 ordinary shares issued under the Company’s Dividend Reinvestment Plan.
  4. 4. Balance Sheet for the year ended 30 June 1999 Consolidated 1999 1998 $’000 $’000 Current Assets Cas 22,919 20,323 Receivables 127,027 119,713 Inventories 3,796 3,921 Other 13,441 8,567 Total Current Assets 167,183 152,524 Non-Current Assets Receivables 184 375 Investments 6,326 6,331 Property, plant and equipment 163,663 170,379 Intangibles 4,606 Other 9,043 8,470 Total Non-Current Assets 179,216 190,161 Total Assets 346,399 342,685 Current Liabilities Accounts payable 86,319 97,817 Borrowings 1,774 6,133 Provisions 63,288 47,077 Total Current Liabilities 151,381 151,027 Non-Current Liabilities Borrowings 48,540 53,528 Provisions 20,107 28,198 Total Non-Current Liabilities 68,647 81,726 Total Liabilities 220,028 232,753 Net Assets 126,371 109,932 Shareholders’ Equity Share capital 90,233 11,613 Reserves 75,663 Retained profits 36,074 20,810 Shareholders’ Equity Attributable to Members of the Company 126,307 108,086 Outside equity interests in controlled entities 64 1,846 Total Shareholders’ Equity 126,371 109,932 The above balance sheet is to be read in conjunction with the accompanying discussion and analysis on page 40 and the notes to the financial statements set out on pages 44 to 45.
  5. 5. Discussion and analysis of consolidated Statement of Cash Flows Operating activities Down $0.8 million before restructure costs Net cash inflows from operating activities reduced by $12.4 million in 1999 due mainly to an increase in restructure expenditure of $11.6 million. Cash receipts and payments in the course of operations increased considerably, reflecting the full year effect of the businesses acquired from TNT and the IPEC acquisition, which occurred in October 1998. Investing activities Improved $86.8 million The increase in capital expenditure on non-current assets of $20.1 million and payment of deferred settlement monies relating to TNT of $17.2 million were more than offset by the combination of monies received by Toll relating to the IPEC acquisition, an additional $21.7 million in proceeds on sale of non-current assets and the fact that $97.5 million was outlaid in the previous year for the TNT and John Nash Transport acquisition. Financing activities Down $85.5 million The net increase in borrowings during the previous year of $35.4 million reflected the increase in debt funding required to assist in the TNT acquisition. The previous year also included $37.3 million in net proceeds from the issue of preference shares and the placement of ordinary shares. In contrast, the current year saw a net repayment of borrowings of some $9.5 million and an increase in dividends paid of $3.6 million. Overall A net surplus of $2.6 million. An excellent result which has seen the Company’s gearing (net debt to equity ratio) reduce from 36.4% to 21.7%.
  6. 6. Statement of Cash Flows for the year ended 30 June 1999 Consolidated 1999 1998 $’000 $’000 Cash Flows from operating activities Cash receipts in the course of operations 1,307,959 810,172 Cash payments in the course of operations (1,233,376) (734,103) Amount spent on restructure (19,483) (7,918) Interest received 1,176 1,112 Interest and other costs of finance paid (4,761) (4,549) Income taxes paid (4,629) (5,472) Net cash inflow from operating activities 46,886 59,242 Cash Flows from investing activities Proceeds from acquisition of business 4,968 Payment for entities and businesses, net of cash acquired (97,494) Payment for property, plant and equipment (46,255) (26,150) Proceeds from sale of property, plant and equipment 31,864 10,144 Repayment of loans by other entities/persons 20 Payment of deferred settlement monies (17,243) Net cash (outflow) from investing activities (26,666) (113,480) Cash Flows from financing activities Proceeds from borrowings 35,356 64,600 Repayment of borrowings (44,813) (29,204) Dividends paid (8,388) (4,778) Proceeds from share issue 221 37,260 Net cash inflow/(outflow) from financing activities (17,624) 67,878 Net increase in cash held 2,596 13,640 Cash at the beginning of the financial year 20,323 6,683 Cash at the end of the financial year 22,919 20,323 The above statement of cash flows is to be read in conjunction with the accompanying discussion and analysis on page 42 and the notes to the financial statements set out on pages 44 to 45.
  7. 7. Notes to the cosolidated financial statements 1. Basis of preparation of concise financial report The concise financial report has been prepared in accordance with the Corporations Law, Accounting Standard AASB1039 ‘Concise Financial Reports’ and applicable Urgent Issues Group Consensus Views. The financial statements and specific disclosures required by AASB1039 have been derived from the consolidated entity’s full financial report for the financial year. Other information included in the concise financial report is consistent with the consolidated entity’s full financial report. The concise financial report does not, and cannot be expected to, provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report. It has been prepared on the basis of historical costs and, except where stated, does not take into account changing money values or current valuations of non-current assets. These accounting policies have been consistently applied by each entity in the consolidated entity and are consistent with those of the previous year. Where necessary, comparative information has been reclassified to achieve consistency in disclosure with current financial year amounts and other disclosures. 2. Dividends paid and declared Dividends provided for or paid by the Company are: Cents per Total Date of Franked Percentage Share Share Payment Tax Rate Franked 1999 Under-provision 1998** 8 11 30 September 1998 36% (Class C) 65 Ordinary – Interim 10 4,545 31 March 1999 36% (Class C) 35 Ordinary – Final 12 7,080 30 September 1999 36% (Class C) 50 Preference – Half-yearly * 1,550 1 December 1998 36% (Class C) 100 Preference – Half-yearly * 1,470 1 June 1999 36% (Class C) 100 Preference – Final * 220 14 July 1999 36% (Class C) 100 14,876 1998 Ordinary – Interim 6 2,663 6 October 1997 36% (Class C) 75 Ordinary – Final 8 3,578 30 September 1998 36% (Class C) 65 Preference – Half-yearly * 355 15 January 1998 36% (Class C) 100 Preference – Half-yearly * 1,350 1 June 1998 36% (Class C) 100 7,946 * Dividends on preference shares are at 7.75% based on $3 per share (8% on dividend paid 15 January 1998). ** Additional shares were issued subsequent to the declaration of the final 1998 ordinary dividend as a result of Executive Share Options being exercised on 15 September 1998. The franked dividend declared as at 30 June 1999 will be franked out of existing credits, franking credits arising from the payment of income tax or out of receipt of franked dividends from controlled entities in the year ending 30 June 2000.
  8. 8. 3. Share capital Consolidated 1999 1998 $’000 $’000 Issued and Paid Up Capital (i) 58,999,489 ordinary shares fully paid (1998 – 44,729,677) 90,233 8,946 (ii) Nil non-redeemable 7.75% non-cumulative convertible preference shares, fully paid (1998 – 13,333,334) – 2,667 90,233 11,613 Abolition of par value shares The Company Law Review Act 1998 (‘The Act’) came into effect on 1 July 1998. The Act abolished par value shares, and any amount standing to the credit of the share premium reserve became part of the Company’s share capital on 1 July 1998. As a result, the balance of the share premium reserve amounting to $75.7 million was transferred to the share capital account on 1 July 1998 increasing the share capital on that date to $87.3 million. From 1 July 1998 share capital does not have a nominal (par) value. The non-redeemable 7.75% non-cumulative convertible preference shares were all converted to ordinary shares during the year ended 30 June 1999 on a 1 for 1 basis. 4. Segment information The Group derives revenue from the provision of the total logistics solution through use of economy and express freight forwarding services, storage, warehousing and distribution of freight nationally by road, rail and sea, rail linehaul operations, international forwarding, ports management and time sensitive freight distribution services. Geographical Segments The consolidated entity operates predominantly in Australia, and all material revenue, operating profit before income tax and segment assets relate to operations within Australia. 5. Event subsequent to balance date There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in future financial years. 6. Full financial report Further financial information can be obtained from the full financial report, which is available, free of charge, on request from the Company at Level 8, 380 St Kilda Rd, Melbourne Vic 3004. Alternatively, both the full financial report and the concise financial report can be accessed via the Internet at: http://www.toll.com.au
  9. 9. Directors’ declaration In the opinion of the Directors of Toll Holdings Limited the accompanying concise financial report of the consolidated entity, comprising Toll Holdings Limited and its controlled entities for the year ended 30 June 1999, as set out on pages 38 to 45: (a) has been derived from, or is consistent with, the full financial report for the financial year; and (b) complies with Accounting Standard AASB1039 ‘Concise Financial Reports’. Signed in accordance with a resolution of the Directors: P Rowsthorn Director P A Little Director Dated at Melbourne this 1st day of September 1999.
  10. 10. Independent Audit report on the concise financial report To the members of Toll Holdings Limited Scope We have audited the concise financial report of Toll Holdings Limited and its controlled entities for the financial year ended 30 June 1999 as set out on pages 38 to 46 in order to express an opinion on it to the members of the Company. The Company’s Directors are responsible for the concise financial report. Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the concise financial report is free of material misstatement. We have also performed an independent audit of the full financial report of Toll Holdings Limited and its controlled entities for the year ended 30 June 1999. Our audit report on the full financial report was signed on 1st September 1999, and was not subject to any qualification. Our procedures in respect of the audit of the concise financial report included testing that the information in the concise financial report is consistent with the full financial report and examination, on a test basis, of evidence supporting the amounts, discussion and analysis, and other disclosures which were not directly derived from the full financial report. These procedures have been undertaken to form an opinion whether, in all material respects, the concise financial report is presented fairly in accordance with Accounting Standard AASB1039 ‘Concise Financial Reports’. The audit opinion expressed in this report has been formed on the above basis. Audit opinion In our opinion the concise financial report of Toll Holdings Limited and its controlled entities for the year ended 30 June 1999 complied with AASB1039 ‘Concise Financial Reports’. KPMG Chartered Accountants J.J. O’Connell Partner 1st September 1999

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