WOODSTOCK, Ont. — Contrans Income Fund, who enjoyed a record year in 2005, was able to achieve yet another new record in 2006, with an increase of more than 18% in total revenue. Total revenue for 2006 was $455.2 million compared with $385.5 million in 2005.
“After achieving another record year in 2005, I would have been quite pleased to have matched those results in 2006. Instead, we surpassed those results and had yet another record year in 2006,” said Stan Dunford, CEO Contrans Income Fund. We continued to grow our business by making some key, strategic acquisitions. In addition, and far more importantly, we also managed to improve upon one of the highest profit margins in our history. And this was achieved in spite of some significant challenges in our markets. To say that I am pleased would be an understatement.”
The company adopted a business as usual mindset for the year, despite uncertainty over the tax status of income trusts. The Canadian government’s new Tax Fairness Plan was unleashed on Oct. 31 with the intention of restoring balance and fairness to the federal tax system by installing a Distribution Tax on distributions from publicly traded income trusts by 2011. The effect on income trusts in the Toronto stock market was initially devastating for investors, but many trusts, including Contrans, were able to quickly bounce back.
“We believe that the uncertainty over the tax status of income trusts has not only had a negative impact on the entire sector and investors, but on the economy in general, Dunford said. The new limits on the amount of equity that a trust can raise have compounded this effect by further restricting growth. We intend to continue to operate our business the way we always have in spite of these burdens and constraints. Our focus will remain on operating intelligently. Our growth will continue to be measured and selective. Our goal will always be set on increasing unitholder value.”
Over the past 10 years, Contrans has made 30 acquisitions and with annual revenues approaching $500 million, the company stands as one of the leading freight transportation companies in Canada.