Forum Archive Index - May 2001

["Andrew Smith" <smith5@free.net.nz>]

Recieved in mail & just finished reading. A very compehensive coverage of the power industy of NZ. well worth the read if you are interested in where Contact fits within it. My personal feelings are, as a long term invester, CEN is worth holding onto. This is based on

 

1.CEN mix of fuel sources and geographic locations means that CEN is strategically well placed to react to the various fuel and weather scenarios, compared to its compeditors. In particular CEN enjoys less exposure to dry-year hydro risk than its principle compeditors Meridian & Mighty River. (Page 14)

 

2. CEN has a 24% share of the Wholesale market by generation but sells 60% to its own retail customers leaving the abilty to sell the other 40% to the spot market which has resulted in record revenue levels for April. (page 16)

 

3. Currenty 36% of the shares are held my minory share holders.(Page 25) I expect this figure to reduce after CEN purchase the 7-8% they require and hopefully there will be a situation similar to Trustpower, shortage of script, resulting in higher share price. (my own ramblings based on info page 32).

 

4. Good Dividend.

 

Andrew