Toll Road Operators in Australia Industry Market Research Report Now Updated by IBISWorld

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The rates of entries, exits and acquisitions have been high over the past five years, in a tumultuous period for toll road operation. For this reason, industry research firm IBISWorld has updated its report on the Toll Road Operators industry in Australia.

IBISWorld Market Research

IBISWorld Market Research

A number of toll road projects have been built, but failed to achieve revenue targets, leading to asset sales and industry exits

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. Congestion growth and market acceptance increase toll road use and allow operators to raise prices and expand. Total industry revenue can be variable, 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.

Over the past five years, industry revenue has expanded at a compound annual rate of 6.1%. The ownership of new tolling concessions has been unstable, as traffic volumes failed to meet initial operation projections. Consequently, highly leveraged new entrants went into administration, sparking a series of asset sales, and industry profitability was volatile between 2009-10 and 2013-14. These difficulties are in contrast with the performance of established roads in mature markets such as Victoria and New South Wales. Their operators have benefited over the past five years, as public roads and transport have become more crowded. This has supported industry revenue growth of 6.5% in 2014-15, to reach $2.1 billion. Currently, the industry is comprised of only five enterprises and 15 establishments, a reduction from the nine enterprises that operated in 2009-10. According to IBISWorld industry analyst Caroline Finch, “the rates of entries, exits and acquisitions have been high over the past five years.” The succession of bankruptcies and ownership transfers of toll road projects is likely to cast a shadow over industry capacity expansion in the next five years, as the private sector is now more cautious of taking on risk.

Concentration in the Toll Road Operators industry is high, with the top four companies accounting for the majority 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, but failed to achieve revenue targets, leading to asset sales and industry exits,” says Finch. Transurban, the industry’s most established player, has been able to expand significantly within the industry by purchasing these assets at more conservative valuations.

For more information, visit IBISWorld’s Toll Road Operators industry in Australia report page.

Players in this industry operate toll roads and bridges.

Follow IBISWorld on Twitter: http://twitter.com/#!/ibisworldau

IBISWorld industry Report Key Topics

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.

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Gavin Smith
IBISWorld
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