Industry Analysis & Industry Trends
Toll road operators charge motorists for the right to access high-quality roads that reduce travel times. The industry's revenue comes from specific toll roads and is relatively stable. Individual assets build in popularity with motorists over their lifetime, while congestion growth and market acceptance increase toll road use and allow operators to raise prices and expand. Total industry revenue can be lumpy, increasing when new roads enter operation. The industry is capital-intensive, as tunnels and other expensive design features are often built on toll roads to save motorists time on their commutes. Ideally, tolling revenue is sufficient to cover both operating costs and provide a return for investors after debt payments... 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 over 85.0% of revenue in 2014-15. In the past five years, the concentration of the industry has increased. A number of toll road projects have been built and then failed to achieve revenue targets, leading to asset sales and industry exits. Transurban, the industries most established player, has been able to expand significantly within the industry by purchasing these assets at more conservative valuations. Transurban's most substantial move has been the acquisition of Queensland Motorways Limited as part of a consortium in 2013-14, which substantially increased Transurban's market share.
The ACCC approved the acquisition, due to the strength of competition in the provision of road services... purchase to read more