Contact Energy - CEN Chart

[Snoopy]

Agree Snoopy on the special divvy part, it won't be repeated.

However, beg to differ on the final divvy for this FY. My guestimate is that it'll be at least 15c, based on the assumption that they've now adopted 100% distributable profits as dividends from their recent update, up from 80% previously.

From my post 935. eps for FY2015 is estimated at 24.1c. 11c already paid out as the interim divvie, leaves 13c left for the final divvie. This is based on dps for the year equal to eps for the year. The imputation credit account was cleaned out during the year by the special dividend. I am sure the CEN balance sheet could handle a final dividend of 15c. But without 15c worth of imputation credits to tag onto it, such a dividend wouldn't be fully imputed.

SNOOPY

[sb9]

Fair enough Snoopy.

[Harvey Specter]

But without 15c worth of imputation credits to tag onto it, such a dividend wouldn't be fully imputed.

That's never stopped anyone. ICA only has to be in a credit at 31 March. They will just forecast that position and also consider prepaying tax based on a forecast of future years too. If they plan on changing their imputation policy they should really announce the change as it is a material factor.

[sb9]

Contact index weighting increased to 100% - index funds are going to have to buy stock to maintain weighting.

Balance, do you know if any more index changes are taking place, heard there are some changes expected today to index weighting.

[xafalcon]

https://nzx.com/companies/CEN/announcements/268472

15cps, non-imputed, share buy-back first half F16, profit way down, not good

[Harvey Specter]

https://nzx.com/companies/CEN/announcements/268472

15cps, non-imputed, share buy-back first half F16, profit way down, not good

Unimputed dividend is planed to be a one off and profits were expected to fall (by that much??). Free cash flow is up which is what this share is all about now isn't it?

[horus1]

watch the retail competition and margins. Flick electric has cut 20-30% of my bill and read what Phil Pryke said this morning

[Snoopy]

Time to update my FY2015 earnings forecast, given today's news release from Contact.

1/ Take EBITDAF.

$525m

2/ Remove one off profit items.

$0m (nothing material declared)

3/ Remove Depreciation and Amortization

2x $101m = $202m (twice half year figure)

4/ Take off annual interest charge.

$77m (assume same as FY2014)

5/ Calculate tax payable at 28%

$69m

6/ Calculate NPAT (normalised estimate).

=$177m

From this the foreacst earnings per share are:

$177m / 733m = 24.1cps

An 11c interim dividend has already been paid. So it looks like the final dividend will be 13cps, down 2cps on last year.

1/ Take EBITDAF.

$525m (Check)

2/ Remove one off profit items.

$0m (nothing material declared- Check)

3/ Remove Depreciation and Amortization

$204m (+$2m on twice half year figure prediction)

4/ Take off annual interest charge.

$98m (+$21m FY2014)

Explanation: No interest being capitalised ($37 million in FY14) following the commissioning of major projects. This is offset partially by lower interest costs on debt due to lower average interest rates as a result of debt refinancing completed over the past 2 years

5/ Calculate tax payable at 28%

$62m (lower ,reflecting higher business costs than anticipated)

6/ Calculate NPAT (normalised estimate).

=$161m ($16m lower than anticipated)

From this the foreacst earnings per share are:

$161m / 733m = 22.0cps

Fully imputed dividend of 11cps already paid.
Actual dividend 15cps, with no imputation credits at all! Not impressed. Contact are just giving me 15c of my own capital back , but with a tax bill. They should have canned the final dividend IMO. The long term income investors shouldn't complain. We have just received a 50c fully imputed bonus dividend after all!

SNOOPY

[huxley]

What do people make of the Otahuhu closure?

[Snoopy]

https://nzx.com/companies/CEN/announcements/268472

15cps, non-imputed, share buy-back first half F16, profit way down, not good

The Otahuhu B gas station out of Auckland is to close with immediate effect! (OK six weeks notice).

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"I'd like to acknowledge the work our team at Otahuhu have done in recent years to adapt the operation of the station to better meet the changing needs of the market while we've considered the future of the plant. Our decision to close is no reflection on the team's professionalism, which has seen the safe operation of the site through a three-year period of uncertainty. We have rewarded our team's commitment and supported them through this time and will continue to do so during the closure process, including redeployment opportunities where suitable roles are available," said Mr Barnes.

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I really didn't expect that! Big redundancy bill coming up for shareholders? On the convesrse side, suddenly all of those geothermal stations, not just Te Mihi that Contact owns, are looking more valuable?

SNOOPY