This morning, Transurban (TCL), the Australian and North American toll road operator, delivered its first half 2026 results, which were another record result from this consistent performer. The HNW Portfolio has a 5.8% weight to TCL.

 Key Points:

  • Record Profits: Transurban reported profit of $1.55 billion for the half, up 6.4%, driven by a combination of a) two new assets, the 495 Northern Extension in Virginia and the West Gate Tunnel in Melbourne, b) toll increases with inflation and c) a 2.5% increase in daily traffic. Around TCL’s assets in Melbourne and North America showed the highest average daily traffic growth, with Sydney showing a smaller increase due to abnormally higher wet weather.  Overall, a very solid result.
  • NSW Toll Review: This issue that weighed on the stock in 2025 continues to dissipate. The issue that the government faces is that Transurban and its partners have invested $36 billion in NSW toll roads under strict concession contracts that the NSW government has acknowledged it will need to honour.  In December, the NSW government have extended the $60 a week toll rebate plan for motorists spending up to $400 a week on tolls, which offends me as a libertarian, but delights me as a TCL shareholder.
  • Record Distribution: Transurban delivered another record distribution of $0.34, reflecting a +6.3% increase from last year.
  • Robust Balance Sheet: Transurban maintains a strong balance sheet, with long-dated debt, an average debt-to-maturity ratio of 7 years, and 88% of the debt book interest rate hedged at an average cost of 4.4%. This has allowed TCL to benefit from a mismatch between inflation rising much faster than the company’s interest costs.
  • Guidance: TCL confirmed full-year distribution of $0.69 per share for FY26, representing a 6.2% increase over the FY25 distribution.  This equates to a yield of 5%.

Portfolio Strategy: Transurban is the world’s largest toll road concession operator. We are attracted to Transurban due to its high-quality, long-life, and monopolistic infrastructure assets. The company has demonstrated an ability to grow distributions ahead of inflation by both raising tolls and developing existing assets by adding extra lanes to accommodate the additional traffic. TCL’s revenues are generally linked to the greater of +4% or CPI, and trades on an attractive and growing dividend yield of 5%.

TCL finished down -2% to $13.88