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Results wrap: Transurban, Cochlear and IOOF report solid profit rises

Tuesday, 9 Aug 2016 12:03:09 | Stephen Letts

A car exits the Airport Link tunnel in Brisbane, July 2012. (ABC News: Giulio Saggin)

Toll road operator Transurban has swung back into the black, posting a $22 million full-year profit after last year's $373 million loss.

Importantly for the company and investors, the key metric of proportional revenue increased by 17.5 per cent to $1.95 billion, while average daily traffic was up 8 per cent.

Transurban chief executive Scott Charlton said the company would continue to invest in road networks and technology to build value.

Currently, Transurban has around $9 billion worth of development projects on its books in Melbourne, Sydney, Brisbane and Greater Washington in the US.

Over the year, traffic on Sydney toll roads grew by 7.4 per cent, with revenue up almost 14 per cent on the back of truck multipliers continuing to rise.

Melbourne revenue rose 7.3 per cent, despite interruptions from the CityLink -Tullamarine widening, while Brisbane was a standout performer with revenues up 18 per cent as Airport Link gained greater acceptance and operated at the upper level of expectations.

The recent investments in US assets are starting to pay off, with toll revenue in Washington more than doubling on the back of a full year's contribution from new express lanes.

The company paid a full-year dividend of 45.5 cents per security (cps), up from 40 cents previously, representing 103 per cent of free cash flow.

Mr Charlton said the company was expecting another double-digit increase in payout next year, guiding investors to a 50 cents per share distribution in 2017.

Investors took the announcement in their stride and, at 1:00pm (AEST), Transurban shares were flat at $12.06.

Mr Charlton will speak with Ticky Fullerton about Transurban's results on The Business at 4:30pm and 8:30pm (AEST) on News 24 and 11:00pm (your local time) on ABC.

Cochlear profit jumps 30pc to $189m

Bionic ear maker Cochlear has delivered a 30 per cent increase in profit to $188.9 million thanks to a strong increase in sales across all markets.

While the profit was at the upper end of the company's guidance, it was only in line with market expectations and shares slipped 1.7 per cent to $126.43 at 1:00pm (AEST).

Sales revenue rose 23 per cent to $1.2 billion - exceeding the $1 billion level for the first time - with the number of implant units sold up 12 per cent.

Cochlear chief executive Chris Smith said the company had benefited from a weaker Australian dollar and had taken the opportunity to accelerate marketing activities as well as research and development spending.

Cochlear also took a small $16 million non-cash write-off on old and obsolete parts as it moved to a new generation of products introduced over the past 18 months.

Mr Smith said net profit should rise another 10 to 20 per cent this year to a range of $210 to 215 million.

Full-year dividends rose 21 per cent to $2.30 per share.

IOOF shares tumble despite profit rise

Wealth manager IOOF received a hostile reception from investors, despite a 42 per cent increase in full-year net profit to $197 million.

However, underlying profit – excluding one-off gains and losses – was flat over the year at $173 million.

At 1:00pm (AEST) IOOF shares were down 6 per cent to $8.71.

IOOF chief executive Christopher Kelaher described the result as pleasing in the face of turbulent market conditions.

Mr Kelaher said the company will continue to simplify its wealth management operation and look to sell non-core businesses.

The consolidation in wealth management netted $66 million in after-tax profit and helped reduce net debt by $20 million.

Dividends edged up 3 per cent to 54.5 cents per share.

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