Today, the road operating company, controller of urban toll developments and road networks across Australia, Canada, and the US, Transurban Group [ASX:TCL] hosted an investor presentation updating shareholders on strategies for driving long-term growth and value creation, while also describing projects and market insights.
The group also released, via a separate announcement, that it will be upping its distribution guidance to 58 cents on improved traffic reports, a 41.5% increase year-on-year.
TCL was moving up around 1% hours after the investor presentation was released, upping the group’s share price in the year so far to more than 16%, a gain of 5.5% over the last 12 months.
This morning, TCL was trading for around $15.14 a share:
Source: TradingView
Transurban ups distribution 58 cents a share
Roads and tolls development group Transurban updated its shareholders on a change in distribution, revealing it will be upping its distribution guidance to 58 cents per share for FY23.
The toll road systems operator said that the healthy share distribution will be given out in representation of a 41.5% increase from a year ago.
Reasons for the upgrade were due to better traffic momentum and higher-than-expected results for its funding packages more recently.
Transurban also said that the better-than-expected outcomes in financing costs more than offset higher investment in strategic development, again giving the company a balance sheet enrichment.
TCL explained that the underlying performance was supported by some positive elements in macro fundamentals, acceleration in net migration, fixed inflation benefits, and normalised cost growth, which followed a period volume uplift and investment in the business.
The group noted that the distribution guidance will be including 2–3 stapled security of capital releases.
Source: TCL
Transurban’s investor presentation
The group also sought to describe its move towards progressing strategies for driving long-term growth, value creation, and pipeline of projects, and touched on market insights transpiring across its business segments.
In Melbourne, 99% of tunnelling and portal excavation works are not complete, with 70% of the Footscray elevated dock deck finished.
In Sydney, Transurban said projects currently under construction are expected to lead to traffic uplift on the WestConnex, and once completed, the group will expect a positive impact on FY27 revenue.
The same was said of the company’s M5 West and M7-M12 projects.
Transurban expressed it is well positioned for the current trend of inflation and interest rate environment, with the benefit of short-term higher inflation compounding on its toll road assets and further supported by supply chain pressures continuing to ease.
Governments have been steadfast on increasing focus on investments in road and rail projects, and Transurban believes it’s in the best position and market to capitalise on these conditions and opportunities.
Source: TCL
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Regards,
Mahlia Stewart
For The Daily Reckoning Australia
