Transport and logistics operator, Toll Group saw its shares jump 7% at one stage yesterday after it revealed a 3% rise in 2010 earnings after one off items and reported improving volumes and profit margins in its global businesses in the early weeks of 2011.
A lower second half tax bill helped provide much of the apparent improvement in profit.
But before one offs, profit was down to $292.9 million, (a decrease of $5.2 million) compared to $298.1 million last year
Toll said yesterday in its ASX filing full-year net earnings rose to $279 million from $270 million a year earlier.
The better than expected profit reversed a first half weakness in profits. At the halfway mark they were down 16% on a 6% fall in revenue
Revenue for the year rose 7% to $6.9 billion, from the previous period’s $6.5 billion.
"Revenue across the Group was stronger in the second half of the year despite ongoing challenging conditions in the Australian economy," the company said yesterday.
"This was as a result of both acquisitions and contract wins, partly offset by the impact of the stronger Australian dollar on the translation of revenues denominated in other currencies," the company told the market.
Toll released its full year figures before the market opened yesterday and the shares jumped sharply in early trading to peak at $6.24, up 7%.
They retraced to $5.99 by the close which was up 167c, or 2.7% on the day.
Yesterday’s intra-day high was the highest the shares have been since May.
Net profit before non-recurring items was $292.9 million, down from $298.1 million in the previous corresponding period.
Toll declared a fully franked final dividend of 13.5 cents per share, taking the full year dividend to 25 cents, the same as in 2009.
"Trading conditions in Australia stabilised in the second half of the year and economic conditions are expected to remain generally flat," Toll said in its report.
"However, cost savings initiatives undertaken through the year have Toll well positioned to benefit from any improvement in economic activity, particularly in the Australian retail sector.’
Toll expects to see improving margins from its global express business as it sees operational improvements in the recently acquired Footwork Express business.
"Our ongoing investments in technology and fleet, together with new contract opportunities such as the Toll Energy Gorgon contract and the Toll Transitions Defence contract position us well to deliver a strong result in fiscal 2011," the company said.
Boom time for Virgin Blue yesterday, or so it seemed from the market reaction to the group’s 2010 result and announcement of the second phase of its strategic review.
The airline reported a return to profitability in the year to June 30 and announced further alliances with international partners and the introduction of Airbus to the domestic fleet (which is all Boeing 737s at the moment).
Virgin Blue said net profit for the 12 months to June 30, 2010, was $21.3 million, compared with a loss of $160 million the prior corresponding period (much of it due to write-downs).
The shares jumped, ending the day up 12.5% (well, only 3.5c) at 31.5c.
In terms of the airline’s preferred measure, Virgin Blue said underlying net profit before tax and exceptional items was $31 million in 2009-10, which was within its wide guidance of between $20 million and $40 million and above market consensus of $28.1 million.
Revenue was up 13.1% to $2.98 billion.
New CEO John Borghetti said the result was influenced by the deterioration in the operating environment for all airlines during the fourth quarter of 2009-10.
"Achieving a $34 million net profit before tax in the current environment demonstrates that Virgin Blue’s domestic business has the capability to ride through market and economic volatility, and remain well-positioned to extend its reach in key markets,’’ he said in the statement.
Mr Borghetti also announced further details of the airline’s network review.
Among the new changes, Virgin Blue will introduce two wide-body Airbus A330-200 aircraft to fly mainly between Perth and Australia’s east coast by early 2011.
Mr Borghetti said the new aircraft would "dramatically enhance both our leisure, corporate and government offering’’ to and from Western Australia.
And there are also more changes to Virgin Blue’s international network after the group pulled out of the NZ domestic market earlier this month and repositioned some of the planes on international routes in and around the Pacific, Asia and moved to streamline services elsewhere.
Yesterday it said its long-haul arm; V Australia will stop flying to Johannesburg and Phuket next February. V Australia has also entered into a commercial partnership with the Abu Dhabi-based Etihad Airways from October 1.
The deal will see V A
