Powerco all fired up

By Phil Boeyen, ShareChat Business News Editor

Friday 20th July 2001

Electricity and gas network company Powerco (NZSE: PWC) is picking a tax-paid profit of $36.1 million for the current year with increased dividend payouts.

Speaking at the company's AGM, chairman Barry Upson told shareholders that along with the revised profit forecast, the directors expect to increase both half and full-year dividend payouts by a total of around 5% on the previous period.

Mr Upson is bullish on the company's future and told the meeting that the merger between Powerco and CentralPower has been a roaring success.

"The costs of the merger were $1 million less than forecast and future annual savings are now estimated at approximately $5 million - $2 million ahead of the forecast figure.

"Significantly, this improved result has been achieved in the absence of any electricity price rises."

The merger between the two power businesses has made Powerco the third largest electricity and gas network company in New Zealand.

Mr Upson says the company is committed to further growth both through acquisition and diversification of its business.

"International and local trends indicate potential indicate potential disaggregation of network businesses into three core areas - network ownership, asset management and contract construction and maintenance.

"Powerco has a strong track record in all three areas and will continue to pursue opportunities to acquire or manage new electricity and gas networks, as well as opportunities to manage and service other networks such as water or telecommunications."

Powerco will follow UnitedNetworks (NZSE: UNL) if it moves down the diversification path. UNL moved into the telecommunications sector last year.

Mr Upson says Powerco already has a number of growth opportunities under consideration.

"The evaluation of these opportunities and their prioritisation is a time consuming affair but the board is insistent that the result must increase the overall value of the company.

"We have always had a strong vision of expanding our electricity and gas pipe networks in order to build business scale which results in more efficient management of total operating and capital costs.

"Powerco wants to be clearly recognised as a premier player in the sector."

Powerco has a shareholder base of some 17,000 with more than 200,000 consumer connections. It has assets of around $875 million, concentrated in the middle and lower North Island.

The company's shares were listed on the main board last December and it says it is close to being included in the NZSE40 index.

Comments from our readers

No comments yet