Bridget Carter wriites - to be in 'The Oz' in print on Tuesday 8 August 2023:
(let's hope "sources" are incorrect about AZJ wanting to buy Team Global Express. I don't like the chances of turning TGE into a consistently profitable business with an acceptable return on capital. Companies ought stick to their knitting!):
Almost two years on from the acquisition by Allegro Funds of the Toll Global Express unit from Japan Post, the company is still struggling to turn a profit, reporting a loss of more than $130m for the 2023 financial year.
It compares to a loss of about $95m in the previous corresponding year.
Some are now questioning whether the private equity owner could be gearing up once again for a sale of the business, but Allegro declined to comment.
Sources say one buyer of the group could be its intermodal customer Aurizon.
According to the accounts of Team Global Express for the year to March 31, the unit that Allegro renamed from Toll Express when it purchased the company, generated $2.8bn revenue, up 17 per cent, while its underlying earnings before interest, tax, depreciation and amortisation was $120m, up from the 2022 result when it was $82.8m.
But the group still delivered a $123m equity loss with loan repayments increasing and administration expenses increasing to $160.6m from $96m and consumables increasing to $179m from $75.5m and with $101m worth of impairments compared to $67m in the previous year.
Its pretax loss was $149m and its post tax loss was $131m.
Allegro bought Toll Global Express in 2021 from Japan Post for $US10m, with the private equity firm securing $500m of debt and equity funding to finance a turnaround.
The unit had been suffering from losses when it was picked up from Toll and is now run by former Australian Post boss Christine Holgate.
Sources say that the company has complex systems, which has been the challenge in the past.
Team Global Express provides express parcel, freight delivery and domestic forwarding services in Australia, and transport and contract logistics services in New Zealand.
Freight and logistics companies experienced booming conditions in the wake of the global pandemic, with soaring demand and high prices, but costs have also increased and securing staff has been challenging.
Demand for such services has since eased.
(20min delay)