Transurban Shareholders To Collect Record Dividend
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Another gush of cash from Transurban, both actual and promised after the toll road giant confirmed it had had a great year in 2016-17.
The company said it would pay shareholders total dividends of a record 51.5 cents a security, up from 23 cents previously and gave guidance of 56 cents for 2017-18.
If paid out that will be a rise of 8.7%, considerably more than the expected inflation rate in the next year of just over 2%.
The company declared a final distribution totalling 26.5 cents, fully franked after reporting full year earnings of $239 million - a jump of 34% from the 2015-16 result which was cut by costs associated with acquiring the AirportM7 link toll road in Brisbane.
That was struck on a 10% rise in revenue, or $207 million, to $2.7 billion for the 2016-17 financial year. Toll revenue grew 9.2% to $872 million in Sydney, where Transurban operates the Lane Cove Tunnel, the M2 Motorway, the Cross City Tunnel and the M1 distributor.
Traffic on those Sydney toll roads, measured by average daily trips, grew 3.4% in the year to June 30.
In Melbourne, where it runs CityLink, Transurban saw a 4.1% rise in the take from tolls compared to the 2016 financial year, earning $687 million even as traffic fell 1%.
In Brisbane traffic on the company’s tolls roads, which include the Logan and Gateway motorways, jumped 15%, pushing toll revenue in that city up 22.9% to $385 million (helped as well by the new Airport link).
Tolls in the United States, which make up about 10% of Transurban’s earnings, rose nearly 24%
Earnings before interest, tax, depreciation and amortisation, and before costs associated with buying the AirportlinkM7 in Brisbane, rose 10% to $1.6 billion a better indicator of the company’s performance in 2016-17.
Transurban chief executive Scott Charlton said the company was working to improve efficiency of its networks, with road projects under way in Sydney, Melbourne, Brisbane and the US.
“In addition to developing our portfolio, we have invested in a number of sustainability, technology and safety initiatives to help position for future environments,” Mr Charlton said. “This includes the launch of our first live connected and automated vehicle trial on our Melbourne network this month which complements the upcoming trials on our Express Lanes in the US.”
Despite the promise of a higher distribution for 2017-18 Transurban securities lost ground, dipping 1.8% to $11.70.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.