Toll restructure to combine vehicle distribution service with JV partner PrixCar
Wednesday, 16 May 2012 11:40
Wednesday 16 May 2012 - Toll Global Logistics, a division of Toll Group, has announced a restructure that will combine its finished vehicle distribution service with automotive storage, processing and rectification specialist, PrixCar, the 50-50 joint venture between Toll and K-Line Auto-Logistics Pty Limited.
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Toll is selling down its finished vehicle distribution service – part of its Toll Global Logistics, Automotive business (formerly Toll AutoLogistics) – to establish a more sustainable and competitive business model that will produce stronger outcomes for both companies.
The change will provide customers with a fully integrated, end-to-end supply chain management service, and comes in response to broader automotive industry trends, such as the decline in local manufacturing and the increase in vehicle imports.
PrixCar performs strongly in vehicle importing and commissioning, and the restructure will ensure it will be well positioned to continue its growth.
The net impact of the sale will be a $75 million after tax cash inflow to Toll, and a pre-tax gain of approximately $47 million ($37 million after tax). Toll will retain its 50 per cent interest in PrixCar.
For the 2012 financial year, Toll Global Logistics’ finished vehicle distribution service is expected to have revenues of around $158 million and earnings before interest and tax of more than $11 million. Following the restructure, Toll will account for its 50 per cent share of PrixCar’s earnings as associate earnings.
The transfer of Toll’s finished vehicle distribution service to PrixCar is expected to take place early in the new financial year and is subject to usual conditions.
Toll Global Logistics, Automotive will retain its parts logistics service in Australia and Asia, as well as its finished vehicle distribution service in Asia.
The PrixCar joint venture partner, K-Line Auto-Logistics, comprises of Kawasaki Australia Pty Limited and Qube Logistics.