By: Damon Kitney
6th December, 2011
PAUL Little spent 26 years of his life working to build an integrated logistics business providing a one stop-shop for customers.
Now the retiring Toll Holdings chief executive wants to do the same in his ‘private business empire, with ambitions to build his property group Little Project Developments (LPD) into a company offering a fully integrated range of services to clients in the industry.
LPD, run by Toll’s former head of industrial property Michael Fox, has more than $1 billion worth of housing and apartment projects planned or under way in Melbourne, including projects in Hawthorn and St Kilda.
It is the centrepiece of Little’s private business ’empire and win become the focus of his attention when he returns next year from a ski holiday in the US after stepping down as chief executive at Toll at the end of the month.
“Inside Toll we have learnt about the strength of going to a customer with a solution that covers everything,” Little tells The Australian in his farewell interview as Toll chief executive.
“We call it the integrated solution. In real estate there is also a demand for an integrated solution. People want to sell properties, buy properties, stick tenants in properties, they want maintenance. Do they want to deal with five or six different groups. No, they would prefer it from one.
“The fact there are not a lot of integrated solutions out there is one of the attractions of the property area. I don’t think anyone is doing it. That is the point I think to some extent we are but we could probably do it a bit better.”
In the Past 18months LPD has bought six businesses, including the LJ Hooker franchise in Melbourne city, South Melbourne and West Footscray.
More deals are on the radar. Little wouldn’t have it any other way.
At Toll, he did 100 acquisitions as chief executive.
While he will retain his 53 per cent shareholding in Toll and probably return to the board as a non-executive director in a year (even as chairman one day), his new private life will now be focused on property, philanthropy and potentially, board seats. Already he says he has received some “amazing” board position offers.
“That has been reassuring that others value who I am and what I can do,” Little says.
“Also, I have had quite a flurry of private equity-type investment opportunities. An amazing number. I have actually had to employ someone to sort through them. I am the sort of person who can’t say no. I have to understand what it is that is being offered.”
Little and wife Jane are also finalising the structure of a new philanthropic venture in conjunction with the Myer Family Office, which Is likely to be simply called the Little Family Philanthropic Trust.
“We have allocated the seed funding that we need for it that is not insignificant. It will be significant. Not by Myer family standards. But it will be something that is worthwhile,” he says.
The cause is still to be decided. “How do you say ‘I’ve got one idea and my wife has another’,” Little says with a smile.
However, he does confirm it is more likely to be for a cause in Australia.
“The task is to make a difference, which is a real determinant for us. We don’t want to just write out a cheque.” The Littles are working with Toll’s in-house chaplain, Ruth Oakden, who is co-ordinator of the company’s Second Step Employment Program, an employment initiative for people with a drug or criminal history looking for a fresh start.
At the other end of the spectrum, Little also plans to continue with his aviation charter business, Little Aviation, which owns a $35 million Gulfstream jet that has been chartered by Toll and other companies. It employs three pilots. But the chartering to Toll will cease upon Little’s departure. Little also wants to learn to fly it.
By contrast, his other private business, Paul Little Racing, is in transition to retirement.
For many years it was a motorsport team contesting the V8 Supercars championship. The team ceased operations at the end of 2005, but has continued sponsorships. “Nothing is forever,” says Little, who drove cars competitively for 10 years. “I have loved my association with motor racing. The money that has gone into Toll Racing has been all mine, 100 per cent mine. It hasn’t been the company’s. The company has had a free ride. And it is very expensive.
“I have justified it being the major shareholder in Toll. Indirectly by promoting the company, it works for me here. But with me no longer being there, it is harder for me to justify that”
Little will also keep his spot on the board of the Essendon Football Club and, given Toll chairman Ray Horsburgh is also Essendon chairman, Toll will continue to sponsor the AFL club. The sponsorship was worth just over $100,000 last year.
But most importantly, the 63-year-old Little says he now just wants to “spend a bit more time trying to be normal”.
“My life has been dominated by Toll,” he says. “Everyone suffers a bit. Personally I suffer. The family suffers. Actually, ‘suffers’ is the wrong word. This hasn’t been an ordeal. But you can’t be as committed to something as this without making sacrifices. So maybe it is time to square the ledger a bit with those.
“The mental energy I throw at it, it is all-consuming. People say, ‘Have you seen the latest movie or read the latest book, and I think, ‘Gee, how can people get time to do those things? I would like to find time to do some of those things.”
Horsburgh says Little displayed a work ethic he has seen in few executives. “His success has come from his great determination and courage to do things, overlayed by his great analytical ability,” he says.
Little says he leaves Toll with the satisfaction of building a business with a strong global footprint that “can become a global powerhouse in the logistics space”, having made acquisitions overseas “when most people thought that it was adding a risk profile that was unacceptable to many shareholders”.
But he has not escaped criticism from investors and analysts who have questioned the wisdom of some overseas deals and the rapid pace of the deal-making.
Toll’s share price and earnings have also been hit by the global economic slowdown. The slump prompted UBS analyst Simon Mitchell in July to speculate the logistics group could be forced to undertake a restructure and that it could be a target for private equity groups. This frustrated Little and his successor, fomer chief financial officer Brian Kruger.
Toll has since said trading conditions in its core markets are stabilising and the private equity rumours have gone away.
But Little’s frustration towards Mitchell was nothing compared with the anger he directed ‘at former Australian Competition & Consumer Commission boss Graeme Samuel during Toll’s bid for stevedoring business Patrick.
Toll was forced to spin out the debt-laden Asciano ports business in 2007, after it agreed to divest certain businesses in the wake of its 2006 takeover of Patrick.
Little admits part of the battle became personal, but he denies he and Samuel are enemies.
“Enemy is a word that I would choose very carefully. I wouldn’t regard him as an enemy. We still talk. Would I like to be in the middle of another deal with Graeme? I would probably struggle a bit,” he says.
Horsburg is more sanguine. “It is history now. It is like Collingwood beating Essendon in the 1990 grand final. You get annoyed at the time, but you get over it,” he says.
But certainly it was the most difficult time of Little’s corporate career. The battle over the Patrick acquisition lasted 18 months.
“It was a tough time. A tough time. It made me look very inwardly too far, to be honest with you. Because we had done everything we could possibly do. And it appeared it would not be enough to get this thing approved,” Little says.
“It wasn’t the end of the world for Toll, if it had been totally rejected. Life would have gone on. But there was this huge bet that had been placed on us getting there. Personally my reputation, and that of my senior team, was on the line.”
He survived and on the evening of November 25 celebrated his career in a black-tie function at the Park Hyatt in Melbourne with 150 guests including family, friends and businesses associates.
Attendees included the so-called Once Were Worriers, made up of the likes of federal MP Simon Crean, AFL football legend Ron Barassi, Lazard boss John Wylie and John Bertrand, the skipper of America’s Cup yacht Australia II who walked the Kokoda Trail with Little in 2006.
They famously had to carry fellow hiker and former football champion Robert “Dipper” DiPierdomenico down the track at one point. The exhausted Little then had to share a tent with Dipper and put up with his constant chatter through the night.
Dipper could not make it on Friday night, but Little has since forgiven him.
The night was an emotional occasion at times, funny at others (Wylie gave the traditional roast).
“I am an emotional person,” Little says. “Toll really has been a huge part of my life, the way I have been able to allow the company and individuals to grow around me. Taking people along for the ride, I call it, is a big part of what is important to me.”
But as the final day looms, he seems well prepared for the Toll afterlife.
“Am I going to go through some withdrawal symptoms?” he says. “I think it is obvious that I will. Will I be lost for a while? I think it is obvious that I will be. Will I sit around and mope? Not at all.”