The Transurban Group (ASX: TCL) share price is marching higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) toll road developer and operator closed yesterday trading for $14.31. In morning trade on Thursday, shares are changing hands for $14.50 apiece, up 1.3%.
For some context, the ASX 200 is down 0.2% at this same time.
This follows a business update released this morning. Here's what's grabbing investor interest today.
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Transurban share price gains on efficiency drive
Investors are bidding up the Transurban share price after the company announced changes intended to simplify its business and improve its growth outlook.
The company said that following a comprehensive one-year workforce review, it has identified areas where it can streamline operations without compromising the safety or the quality of its operations.
Transurban CEO Michelle Jablko noted that the cost-reducing operational changes would "regrettably" result in some 300 job cuts.
Commenting on the efficiency program that looks to be boosting the Transurban share price today, Jablko said, "Transurban aims to be a leader in helping people move more easily and safely around major cities."
She said, "To do this, we must be a more agile and efficient organisation and re-allocate our capital and resources in ways that best serve our stakeholders."
Jablko added:
Transurban remains focused on safety, strengthening government partnerships, investing in customer value and laying the foundations for long-term growth. Our immediate priority will be to manage this process as quickly and as sensitively as possible and provide support to those impacted by this decision.
Transurban said the efficiency changes will enable the company to better focus and invest in future growth areas.
According to Jablko:
Building on the work we have already commenced, there will be a continuation of investment in customer facing and operational technologies to improve the overall experiences of our customers and our operational effectiveness. This will be a core focus for us as we pursue our pipeline of growth opportunities.
What's the bottom line?
All told, the Transurban share price could get some support from streamlining its operations, with annualised cost savings estimated at more than $50 million.
Transurban said this did not impact its FY 2025 dividend guidance of 65 cents per share.
The company's underlying cost growth guidance of "targeting a below inflation cost outcome for FY 2025" was also unchanged.
With today's intraday boost factored in, the Transurban share price is up 12.0% since this time last year.
The ASX 200 toll road stock trades on an unfranked trailing dividend yield of 4.4%.
