Toll to pay millions for anchoring acquisitions

Toll New Zealand is planning acquisitions in the tens of millions of dollars in the logistics and stevedoring sector.

Speaking to reporters after its annual general meeting, chairman Mark Rowsthorn said its stevedoring business Toll Owens - the joint venture between Toll and Port of Tauranga - would seek to purchase companies.

He ruled out Toll making any bid for ports in New Zealand, labelling them as "closed shops" because most are majority owned by regional councils.

Toll reported a flat profit for the year to June of $56 million, down from $59 million in the previous period, hurt by high fuel prices and a Government track-access price rise of 28 per cent.

Rowsthorn said Toll was still locked in negotiations over track-access fees with the Government rail organisation Ontrack but hoped to secure a deal in the next few months.

If Toll did not reach an agreement with the Government it would be forced to "systematically cut" the "non-economic railway lines", he said.

"We recognised some time ago that, on a purely commercial basis, a reduction of services on the network would be the only course of action for our businesses," Rowsthorn said.

The lines that would be targeted first included the Napier-to-Gisborne line and all the lines north of Auckland, he said.

Also, the Overlander passenger service was not out of trouble yet and would be cut if it was not "resuscitated by some sort of funding".

Toll had continued to operate the train on an interim basis as a show of good faith during negotiations with the Government over access fees, he said.

"The end of a national rail network" was inevitable if rail had to pay all the additional costs of investment in its infrastructure, said Rowsthorn.

Ontrack was proposing to pass on a 20 per cent increase in network charges in the coming year, on top of the 28 per cent in the last year.

Toll did not pay a dividend this year and instead funnelled $88 million of investment back into the business, said Rowsthorn.

A dividend was not looking possible for shareholders in the coming year, he said, because the company would continue to invest heavy capital into locomotives.

The company was "tracking to its budget" despite increased costs and a slowing economic environment.