What: Leading freight and logistics operator Toll Holdings Limited (ASX: TOL) has updated the market on its restructuring program and reaffirmed full year profit guidance for EBIT to be ahead of last year's $426 million, sending its share price up around 4% to a three-month high.
So what: Toll's share price is down 22% over the past five years as the company has struggled to gain momentum in the face of soft market conditions and poor business strategy decisions. Today's announcement that further restructuring initiatives should generate annual savings in FY 2015 of $10 million to $12 million is welcome news for shareholders.
Now what: Toll has been a laggard both compared to the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) which has gained 47% and amongst its transport industry peers over the past five years. For example Asciano Limited (ASX: AIO) which was spun-out of Toll is up 35%, while logistics operator Qube Holdings Ltd (ASX: QUB) has soared nearly 300%. While some of Toll's underperformance is due to industry headwinds, much of the weakness is self-inflicted. If management can turn around its internal issues, shareholders can expect better times ahead.
