Tolls prove fast route to healthy returns

Speaking of cash cows, National Toll Roads (NTR) continues to churn out the cash as if there was no tomorrow - the only problem is that NTR is finding it difficult to find projects to spend all its money on. All that is on the drawing board is a second bridge to boost capacity across the West-Link, but even this twin-bridge proposal has still to get the nod from the planners.

In its eagerness to find an alternative project to the two toll bridges in Dublin - one of which reverts to the State in 16 years time - NTR has proposed an east-west tunnel linking the port of Dublin with the road to the west. This was turned down by the planners who apparently prefer the prospect of digging up Fairview Park to sink a tunnel linking the port with the M1 motorway at Santry.

NTR has also proposed a landfill site at Mulhuddart; bid to build the peat-fired power station in the midlands and the proposed incinerator in north Dublin; - all to no avail. Richard Hooper tells his shareholders that NTR is looking for "viable project opportunities in the publicprivate partnership area" but does not specify exactly what the group has in mind.

NTR has said in the past that it would like to go public to give its institutional shareholders a market for their shares, but that a flotation would need to be tied into a new infrastructural project.

To compensate for the lack of activity on the project front, shareholders are being well rewarded for their patience with a 41 per cent increase in dividends to £9.5 million (€12.06 million). Conor Holdings - controlled by Tom Roche and his family - is the prime beneficiary here picking up a handy £3.6 million in dividends for its 38 per cent of NTR.

Big pension fund shareholders like BIAM, Standard Life, Scottish Provident, Norwich Union, Irish Life, UBIM and AIBIM are also no doubt happy with hefty dividend payments - at least for the moment until it becomes clearer what the future holds for NTR other than operating the two Dublin toll bridges.

To put the dividend payments into context, NTR paid £9.5 million to shareholders out of after-tax profits of £10.3 million, retaining just £800,000. No doubt Tom Roche and family would be happier to forego that phenomenal dividend rate if it meant having a new project which would allow NTR to diversify from two toll roads which ultimately pass out of NTR's ownership.