Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Toll takes $22.9M provision for tax case, widens 2013 loss

Toll Holdings takes $22.9 mln provision for tax case, widens 2013 loss on write-down

By Paul McBeth

Jan. 8 (BusinessDesk) - Toll Holdings’ New Zealand unit recognized a provision of almost $22.9 million in its dispute with the Inland Revenue Department over its use of convertible notes in 2013, a year that saw its annual loss widen by 69 percent as it wrote down the value of its Express Logistics acquisition.

The Australian logistics group, which competes locally with NZX-listed Mainfreight, is one of a group of companies being chased by the New Zealand tax department for claiming deductions on interest on convertible notes. IRD claims the securities, which let companies juggle debt and equity to provide a tax advantage, were used simply as a means to minimise tax.

Local subsidiary Toll Group (NZ) flagged the dispute as a $19 million contingent liability in its 2012 accounts, only recognising it as a provision in its latest accounts. Provisions are recognised when the group has a legal or constructive obligation as a result of past events; it is more likely that an outflow of resources will be needed to settle the obligation; and the amount can be reliably estimated, the statements say.

The notes were used to fund local investments between 2002 and 2005, with the disputed deductions on interest ranging from 2002 and 2012, the statements said. The $242.8 million of notes were converted to shares in 2012, meaning the Toll unit didn’t have any finance expenses in the latest period, compared to interest costs of $25.5 million a year earlier.

The tax department has previously won in the High Court and Court of Appeal in favour of its assessment of the notes against Western Australia’s Alesco Corp, and the Supreme Court will hear the case next month.

Toll’s New Zealand unit widened its loss to $60.8 million in the 12 months ended June 30, from $35.9 million a year earlier, writing down the value of goodwill by $42.6 million. Revenue edged down to $379.5 million from $383 million a year earlier, and excluding the charge on goodwill, operating earnings dropped by a quarter to $5.3 million.

The impairment charge was on its Express Logistics freight forwarding unit, which Toll bought in 2009 for some A$50 million.

The ASX-listed group wrote down its goodwill on its global forwarding unit by A$204 million in the year ended June 30, and took an $11.4 million impairment charge on that unit’s customer relationships.

Toll bought what is now the state-owned KiwiRail from American investors who had acquired the national rail service in a privatisation deal in the mid-1990s. Toll resold the rail part of the business back to the New Zealand government in 2008, while retaining the TranzLink trucking and freight logistics operations.

The group’s shares slipped 0.5 percent to A$5.65 on the ASX yesterday. The stock is rated an average ‘hold’ based on 14 analyst recommendations compiled by Reuters, with a median stock price A$5.55.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Housing Policy: Auckland Densification As Popular As Ebola, English Says

Finance Minister Bill English said calls by the Reserve Bank Governor for more densification in Auckland’s housing were “about as popular in parts of Auckland as Ebola” would be. More>>

ALSO:

Crown Accounts: NZ Government Deficit Smaller Than Expected In First Half

The New Zealand government's operating deficit was smaller than expected in the first six months of the financial year, as the consumption and corporate tax take rose ahead of forecast in December, having lagged estimates in previous months. More>>

ALSO:

Fruit & Veg Crackdown: Auckland Fruit Fly Find Under Investigation

The Ministry for Primary Industries (MPI) is investigating a find of a single male Queensland fruit fly in a surveillance trap in the Auckland suburb of Grey Lynn... MPI has placed legal controls on the movement of fruit and some vegetables outside of a defined circular area which extends 1.5km from where the fly was trapped in Grey Lynn. More>>

ALSO:

Scoop Business: Westpac NZ Reaches $2.97M Swaps Settlement

Westpac Banking Corp’s New Zealand unit has agreed to pay $2.97 million in a settlement with the Commerce Commission over the way the bank sold interest rate swaps to farmers between 2005 and 2012. More>>

ALSO:

Going Dutch: Fonterra Kicks Off $144M Partnership With Dutch Cheese Maker

Fonterra Co-operative Group, the world’s largest dairy exporter, has commissioned a new dairy ingredients plant in Heerenveen, in the north of the Netherlands, its first wholly-owned and operated ingredients plant in Europe. More>>

ALSO:

Scoop Business: NZ Retail Sales Beat Estimates

New Zealand retail sales rose more than expected in the fourth quarter, led by vehicle-related transactions, food and beverages, adding to evidence that cheap credit and a growing jobs market are encouraging consumers to spend. More>>

ALSO:

Delivery Cuts Go Ahead: 'Government Money Grab' From NZ Post

"It's a money grab by the Government as the shareholder of New Zealand Post" says Postal Workers Union advocate Graeme Clarke about the changes announced by NZ Post. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news