Transport and logistics operator Toll Group has announced a $12 million cost reduction and restructure that’s already seen the exit of two senior executives.
“From 1 July 2014, Toll will reduce its divisional reporting structure from six divisions to five, and change reporting lines for a number of business units to better align contract logistics and network-based businesses,” the company said in a statement to the stock exchange today.
The market reacted positively, shares were up 17 cents to $5.44 in early trade today.
Toll is a global freight company and is the largest transport and logistics provider in Australia.
“Regrettably, two long serving Divisional Directors, Paul Ebsworth and Wayne Hunt will be leaving Toll; Paul because of the divisional realignment and Wayne following his decision to return to Australia after seven years in Asia,” Toll Group Managing Director Brian Kruger said.
Toll Domestic Forwarding will gain Toll Express, Toll NQX and Toll Linehaul & Fleet Services.
Toll Liquids and Toll Transitions, due to the contract nature of their activities, will be moved into Toll Global Resources.
There are no changes to Toll Global Express and Toll Global Forwarding.
“Today’s restructure is expected to generate annual savings in the range of $10 to $12 million commencing in FY15,” Kruger said.
“Further details of the costs and benefits of this restructure, along with restructuring and other cost saving initiatives across the Group, will be outlined in the full year results to be announced on 19 August 2014.
“At this stage any one-off costs associated with our restructuring activities are expected to be offset by one-off gains from asset sales.
Stay informed, daily
“This is a logical outcome given the progress we have made in our One Toll program and from our ongoing focus on returns.
“We have strong businesses, particularly in Australia, but it is critical that in the current challenging market we reduce complexity and costs, improve our productivity and build on our strengths.
“This restructure will help mitigate near-term ongoing margin pressures as well as ensuring that we maximise the leverage that our company has to any improvements in the external environment.”
The company said it maintained its earnings guidance.
