Z Energy IPO prospectus
https://www.nzx.com/companies/IFT/announcements/238968
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Z Energy IPO prospectus
https://www.nzx.com/companies/IFT/announcements/238968
The few bits I have read so far:
New shares to be issued to repay shareholder loans of $400m
IFT/Superfund will sell down 50 or 60%. Will retain ownership through joint holding company so they will retain equal ownership (ie. one is not selling more than the other)
8.1%+ Gross yeild.
The yeild is a lot more than I was expecting so I might have to have a look under the covers a bit more.
Flat revenue, very slim margins and run by lawyers and accountants. Dont expect this to grow like Ryman.
I didnt find out what the yield is but there is a reason why Shell sold out-the return on capital is a fraction of oil exploration.
That is my concern. Definately not a growth stock but may qualify as a good yeild stock??
Both articles are same from what I can tell:
http://www.nbr.co.nz/article/z-energ...ment-bd-143324
http://www.nzherald.co.nz/business/n...ectid=10903095
Assuming their valuation of the business is correct. How was the original business valued?
If you are looking for a yield stock then you will have to be confident they can hold their margins to maintain the payments. Might be tough with declining fuel volumes, although they expect it to rise 5% this year. I would be looking at the longer term trends however.
Interesting that fuel makes up 95% of revenues so this is what I would be focusing on. If they can grow their other categories outside of fuel this could be attractive. I am not sure they can with the team they have in place...
This is the story from that time: http://www.stuff.co.nz/business/indu...-to-branch-out
Hmmm was that the reason for the recent run up in NZR....?
A little on-market buying to fluff up a more attractive transfer price of the holding across to Z Energy Ltd (as per today's NZR SSH notices)
;-)
Why are so many service stations in West Auckland closing down. Maybe they intend to be the last man standing?
Shoeshine in NBR had an interesting piece a week or so headed [B] Z Energy vamps its numbers but do they add up?[\b]
Think he was saying the accounting was all too confusing ....and was interested if z could increase the number of coffees from 30000 a week to the 170000 a week that bp sell
The CEO did tell him that share is back to where it was when they took over from shell
Confusion reigns ...
CJ. " Having said that, they have turned a $700m investment into an estimated $1.5B so will effectively hold their 40-50% at zero cost. "
CJ " Did Shell really sell that cheap as I dont see the changes that have been made justify a doubling in value. "
percy " You may have hit a "bullseye" with that comment "
peat " they have completely rebranded. and increased market share. They've definitely added value. "
winner69 " The CEO did tell him that share is back to where it was when they took over from shell ".
Essentially a private equity sell down ....and after they paid themselves a decent divie as well
How often have these sort of IPOs ended up in tears?
At least they don't seem to be using the 'iconic' story to lure the moms and dads into parting with their money
Here's what was said. See bennetts on to the ipo bit ...share ain't anything if it costs shareholders. A large, chunk of z sales are 'commercial' but some of that info is commercial sensitive stuff.
Excerpt from shoeshine
Market share of all products has been declining since about mid 2011 and at about 28% is back where it was when the company rebranded.
However, Mr Bennetts is not concerned about that because the company concentrates on being within a certain band and as long as it has economies of scale it makes money.
“We believe that we are comfortably in that band right now. If we wanted to increase market share we could do that. But we think it would have an economic consequence that would destroy shareholder value.”
Sort of says no growth aspirations from fuel except what the market delivers
So it's all about more coffee and muffins and chocolate bars
How have they managed to lose that much market share when they are virtually the only player building new service stations while others close them down?? There is more here than we are being told.
Yes good points. Is their present management team capable of selling more coffees, chocolate bars and muffins? Based on performance since the acquisition, I would say no...
Exactly.With smaller cars using less petrol,there is no growth in the fuel market.
Just another retailer fighting in a tough market.
I must admit to finding it rather a waste of time when I go to the counter to pay for my petrol, to be asked if I want a coffee or overpriced chocolate bars.
No.!
BP's 6c discount through the AA card wouldn't have helped Z compete at the retail end, despite their refurbished stations/service. Interesting though that BP appear to have come into line by reducing their discount recently to 4c.
Z is certainly not a growth stock, whichever way anyone tries to spin it. But at a prospective gross yield of 8%+ it warrants consideration for the income side of portfolios. Should be plenty of takers in today's environment.
Interestingly, the CEO Mr Bennett, has written to all bondholders in Z Energy. He thanks them for having faith and investing in the business before it had established its credentials. However he stops short of offering bondholders a firm allocation of shares. He does say bondholders can apply to a "NZX firm" for an allocation then lists some selected brokers.
It is disappointing that the company has not set aside some shares as a pool for its existing bondholders. Mr Bennett must be confident he can unload all the shares without the bondholders help.
Fuel sales declining across industry so shop sales only growth part of business but even that under pressure.
I think BP would be the clear leader in shop sales because of their cafe an coffee offering , mobil tried it and have backed away except for the coffee which is comparable to bp offering , shell and caltex dont have the same offerings as far as coffee an cafe type offerings.
So maybe shell have room to grow coffee sales but they would need to invest in better coffee machines over say 100 high margin stores at 20k a coffee machine thats a 2mil investment so not cheap.
And with the fast food chains offering cheap under $5 deals how many people buy pies now? super markets opening in every subburb competition is fierce for the retail dollar
I go with previous posters it a income story only and if the market stays as a cosy 4 some income should be steady ( as ceo say going for market share would never work in this market as all players have deep pockets)
Winner,
You are spot on. I had 24 years with BP. Retail margins got tighter and tighter after deregulation. Deregulation was needed. NZ had 1 service station per 3000 people which was 3 times the requirement. The dogs have died and are still dying. It has become a coffee/muffins and chocolate business. If you invest in this IPO then you can look forward to a pretty stable but boring return With a little bit of long term downside.....The fat in Service Station retailing has been well and truly removed.
Better opportunities elsewhere.
Tripled their money, not doubled:
http://www.nbr.co.nz/article/infrati...ment-bd-143411
Will shareholders get discounted fuel?
I very much doubt it - if margins on retailing motor fuels are as slim as we're told they are!
The days of shareholder discounts belong to another era - most companies these days are giving priority to attracting the big institutions to their share registers. Loyalty card schemes are used to "reward" customers. OK, WHS offers shareholders a special discount on occasions but they seem to be the exception and it's not a 365 days a year arrangement. So, no.
That's probably no different to what they are allowed to negotiate anyway.
I have a big discount off my floating mortgage and didnt need to be a shareholder to get that. Having said that, it would be nice to get it automatically rather than have to negotiate/threaten to leave to get it.
Anyone have any idea how easy it is to get a firm allocation of these? Are they in short supply, or are brokers struggling to find homes for them?