Industry Analysis & Industry Trends
Toll road operators charge motorists fees in exchange for providing high-quality roads that reduce travel times. Ideally, tolling revenue is sufficient to cover both operating costs and provide a return for investors after debt payments. The industry's revenue streams from specific toll roads are relatively stable, expanding over time as population growth and congestion result in increasing use. Given the nature of industry services, sharp expansions in revenue follow from increased capacity, and capital structures are a key factor behind the viability of industry participants.
These features of the industry have been amply demonstrated over the past five years, as the industry absorbed three new establishments and revenue expanded at a compound annual rate of 3.9%... purchase to read more
Industry Report - Industry Key Buyers Chapter
Concentration in the industry is high, with the top four companies forecast to account for an estimated 80.0% of revenue in 2013-14. In the next five years, the concentration of the industry is expected to increase as major player Transurban takes control of acquisitions. The company may also participate in new projects, such as the NorthConnex in Sydney.
Transurban's most substantial move has been the acquisition of Queensland Motorways limited, which will substantially increase Transurban's market share. The Australian Competition and Consumer Affairs Commission approved the acquisition, on the basis that effective substitutes exist to toll roads (i.e. the non-tolling network), limiting the pricing power of major players with consumers... purchase to read more