Investors loved the way Toll road operator Transurban (TCL) upgraded its full-year dividend guidance off the back of a jump in revenue and profit in the six months to December.
Transurban said yesterday it will pay a partially franked interim distribution of 25 cent a security, up 2.5 cents, or 11.1% from the prior corresponding period.
As a result full year dividend guidance is now set at 51.5 cents a security, up 13.2%.
The news saw the toll road giant’s securities climb more than 6% to $11.02 on the ASX yesterday. That’s the highest price for more than four months.
The company said revenue in the half year to December 31 jumped 26% to $1.33 billion, with profit from ordinary activities after tax up 42% to $88 million.
“Our balance sheet has capacity to fund our development pipeline, with the Western Distributor (in Melbourne) the only project in out current pipeline potentially requiring additional equity post financial close,” the company said in the ASX release.
Average daily traffic on Transurban’s Sydney roads – the Lane Cove Tunnel, the M2, M1, M5, the Cross City Tunnel, and Westlink – grew 3.4%, which reflected “capital investment into that network in recent years”, CEO Scott Charlton said in yesterday’s release.
All up Sydney motorists tipped $434 million into the company’s coffers in the last six months of 2016, up 8.8% on the same period in 2015.
In Melbourne, Transurban saw a more sedate 27% rise in revenue from CityLink drivers compared to a year earlier (at $340 million), despite average daily traffic falling 0.7%. Car traffic fell 3.5% and large vehicles grew 14.4% in the most recent quarter, which helped offset the slight dip in revenues from private cars.
"Transurban’s works on the CityLink Tulla Widening are now approximately 66 per cent complete and we continue to focus on minimising disruptions for drivers," Mr Charlton said.
Toll revenue in Brisbane jumped 31%, with average daily traffic up 20%. And in the United States, revenue from toll roads in the Greater Washington Area jumped 21%.
Transurban said Traffic across its entire network grew 4.8% during the six months.
Transurban said it continued to work towards an agreement with the Victorian government to build and run the Western Distributor in Melbourne, and expected financial close by late 2017.
The new toll road will widen the West Gate Freeway and connect it to the Port of Melbourne, Transurban’s own CityLink and the CBD.
The company is also currently widening Melbourne’s Tullamarine Freeway and CityLink.
Other projects include a new toll road in Sydney, the NorthConnex, which is due to be finished in 2019, while it says it might bid to manage part of the city’s new WestConnex toll road.
