That's the one(Whoops I mean two) I hold both.
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What sort of BS post is that? What's the point of it....highlighting another investors supposed mistakes. You may well think about taking your own advice to "go well", however when you get to where ever you are going perhaps you could consider just keep going, preferably in the other direction than us, and refrain from making disparaging comments about other investors. And what's this about signing off with "cheers mate". PS if this gets me banned so be it but what a nasty little post that was.:mad ;: Where is your sense of common good manners?
I am not sure if this is good, bad, or just ok... Looks just ok for me, but unsure how the share price will react...
Thoughts?
https://www.nzx.com/companies/MRP/announcements/267129
1/ Significant Business Scale (Top 3 in chosen market)
Mighty River Power is one of the 'big five' gentailers in the New Zealand Electricity market. They are currently (31st December 2014 figures) number three in terms of customers with 19% market share (behind Genesis with 26% and Contact with 22%). They are also number three in terms of GWh of power sold with 18% market share (behind Meridian on 33% and Contact on 23%).
Following the decommissioning of the Southdown gas power station on 31-12-2015, MRP will have a strong line up of 5 geothermal power stations in the central North Island and 8 hydro stations on the Waikato River in the northern-cental North Island. The geothermal stations will run as base load, while the hydro stations, which used to be exclusively base load too, will assume the role of 'topping up the power' as Southdown once did. Consumate with this wholesale capacity, MRP, under the Mercury Energy brand, runs the largest power retail business in Auckland. MRP has a significant South Island custmer base too in Christchurch and Dunedin. These customers receive their power from a virtual asset swap deal that involves Meridian Energy doing their South Island generating.
Conclusion: Pass Test
SNOOPY
Mighty River Power currently has 1,400,012,517 shares on issue. Just prior to listing there were only 377,560,546 shares on issue, held by sole shareholder the NZ government.. The government decreed that more shares be issued just prior to listing to bring the total share count up to 1.4billion. For ease of comparison I have adjusted the eps figures before listing as though the 1.4b of shares currently on issue had been on issue throughout the entire comparison period. The financial year for MRP ends on 30th June.
'Earnings' used are normalised operational earnings, excluding one off gains/losses and asset revaluations.
FY2010: $115.3m/ 1,400m = 8.2cps
FY2011: $161.6m/ 1,400m = 11.5cps
FY2012: $148.1m/ 1,400m = 10.8cps
FY2013: $167.9m/ 1,400m = 12.0cps
FY2014: $186.5m/ 1,400m = 13.3cps
Conclusion: Pass Test
ROE = Net profit / EOFY Shareholder Equity
FY2010: $115.3m/ $2,689.0m = 4.3%
FY2011: $161.6m/ $2,906.5m = 5.6%
FY2012: $148.1m/ $3,104.2m = 4.9%
FY2013: $167.9m/ $3,181.7m = 5.3%
FY2014: $186.5m/ $3,219m = 5.8%
Conclusion: Fail Test
Margin = Normalised Net profit / Normalised Revenue
Note: all revenue figures are exclusive of line charges
FY2010: $115.3m/ $1,104.6m = 10.4%
FY2011: $161.6m/ $1,163.9m = 13.9%
FY2012: $148.1m/ $1,520.6m = 9.7%
FY2013: $167.9m/ $1,382.4m = 12.1%
FY2014: $186.5m/ ($1,705m -$431m)= 14.6%
While not increasing year on year every year, it is clear the ability to raise margin is there
Conclusion: Pass Test
This share should be valued over the long term on its ability to pay dividends only. The low ROE figure is not sufficient to be sure of growth given a ten year timeframe. The Warren Buffett style growth model won't fit as a result. Yet actually, there is something wrong with this analysis as I have presented it. It deserves a closer look. But that will have to wait until tomorrow!
SNOOPY
So in other words, MRP is a buy?