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12-09-2019, 11:32 AM
#1041
So all the happy yield hunters who have been buying in at $6.50 odd have just become long term holders?
Maybe they did look at it as a 5 year term deposit.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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12-09-2019, 11:48 AM
#1042
Originally Posted by Beagle
I have noticed with the change in loyalty scheme that Caltex went through that Z has also had to move, (for the very first time), to accepting that fuel discounts can be "accumulated", they call it "stacking".
This process whereby canny motorists can buy just $40 of fuel but accumulate as much as 10 cents per liter discount for later purchase of 50 liters, ($5 discount per time) effectively can be worked, (if one works it hard enough on 10 cent discount days), to give a $5 discount on each $40 fuel purchase = 12.5% discount which with fuel at say $2.15 = 26.9 cents per liter discount.
I expect this new (across the board) accumulation feature to hurt Z's margins permanently going forward as cumulative discounts was previously only available at Caltex branded fuel station's. I expect EBITDAF to come in right at the bottom of the range.
Just adding a bit more. Thing is, the company expects increased competition due to, among other things, the changes to discount and loyalty schemes (read increasing discount pressure from Gull and the other minnows), to affect EBITDAF by $50m this year and half of that has been brought to account in the five months to 31 August.
But its interesting to note that the discount scheme change only came into effect on 1 July so we've only had 2 months of that increased loyalty scheme discounting and there's potentially another 7 months disruption from that to go. While they, I, or anyone else can't be sure how long this additional discounting will continue the risk here is something I think they could be understating but is probably encapsulated within their EBITDAF range. Then there's the regulatory risk which they're obviously not factoring into their forecast at all, at this stage anyway.
Thanks to Winston as a Gold Card holder I receive 15 cents off a litre at both NPD,and Challenge.
At Christmas time I buy $200 worth of Pak'Save specials and receive 40 cents off a litre.
Z and Flybuys sending me emails with 6 cents and 10 cents off,get deleted straight away.
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12-09-2019, 12:01 PM
#1043
Originally Posted by percy
Thanks to Winston as a Gold Card holder I receive 15 cents off a litre at both NPD,and Challenge.
At Christmas time I buy $200 worth of Pak'Save specials and receive 40 cents off a litre.
Z and Flybuys sending me emails with 6 cents and 10 cents off,get deleted straight away.
That's great Percy but the discount may not necessarily be as much as face value, something for you to look into ?. I can't comment on your area, obviously, but the only Challenge around here is a very old style garage that's consistently about 5-10 cents per liter more than service stations within a 2 km radius. I do think the minnows will very very slowly eat into Z's market share and keep the pressure on retail margins, then there's possible regulatory headwinds as well as long term very gradually increasing electric vehicle headwinds. Plenty of possible headwinds there...
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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12-09-2019, 12:34 PM
#1044
All the service stations in my area ,have the same prices,so the savings are genuine.
Am noticing more Nissan Leafs on the road.
My car should be good for the next 5 to 10 years,so have not given a thought about a replacement.
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12-09-2019, 12:52 PM
#1045
Originally Posted by percy
All the service stations in my area ,have the same prices,so the savings are genuine.
Am noticing more Nissan Leafs on the road.
My car should be good for the next 5 to 10 years,so have not given a thought about a replacement.
That's good then isn't it ! I think EV's are at their best relative to other vehicles in very, very hilly area's like we live in, (as they can recapture some energy going downhill through regenerative braking). I am also noticing increasing numbers of Nissan Leaf's and quite a few Tesla's around here too.
Although I remain of the view that EV vehicle uptake will be at a very "glacial" pace, nevertheless it is a very gradually building headwind that cannot be ignored completely. I think Z would be very wise to start rapidly rolling out fast charging stations at many of their forecourt's so people would be spending on coffee and other in store refreshments while they wait for their EV's to be charged. Best to get ahead of the curve and milk it with increased in store sales eh
Wonder if this has crossed Z Management's minds ?
Really this downgrade highlights what a very low margin business this is.
Last edited by Beagle; 12-09-2019 at 01:04 PM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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12-09-2019, 12:57 PM
#1046
Not looking like a good year profit wise for Z
Their preferred profit measure is RC EBITDAF
FY19 this was $434m ....which was $15m less than FY18
Revised guidance is a low of $$390m but includes $25m of IFRS16 things (no rental expense but shows a depreciation)
So on a like for like basis EBITDAF F20 going to be $365m ....a whopping 16% less than F19
Reading all the presentations with all the talk about synergies, restructuring, digitalisation and heaps of other stuff this years performance is rather pathetic.
Lot of hype ...no delivery
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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12-09-2019, 01:06 PM
#1047
Steady downtrend there eh Winner. Might only net 3-4 cents per liter of fuel sold this year. Govt's total take incl GST over $1 per liter but Jascinda tells us the fuel companies are fleecing us. Is it too early for a Tui ?
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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12-09-2019, 02:09 PM
#1048
Originally Posted by Beagle
Steady downtrend there eh Winner. Might only net 3-4 cents per liter of fuel sold this year. Govt's total take incl GST over $1 per liter but Jascinda tells us the fuel companies are fleecing us. Is it too early for a Tui ?
Z have a real high return on invested capital ......some might say excessive ....and greedy along with it.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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12-09-2019, 02:21 PM
#1049
Wow, glad I got all out last week at 6.57
and I was thinking that you’d unnecessarily shaken your self out of the tree, Beagle.
For clarity, nothing I say is advice....
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12-09-2019, 02:30 PM
#1050
Originally Posted by Beagle
I am in this purely for yield so have I have decided to exit my stake at this stage and will reevaluate my position in due course.
That was Aug 22 — share price 620/630
A lot can happen in a few weeks eh
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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