Yes thanks. There's a time to be brave, (factors affecting last half's result in November 2018 appeared to be quite clearly one-off events at the time), but there's a time to accept that the underlying fundamental's have deteriorated materially. My view is $4.50 today, (excluding regulatory risk) is where the share price needs to be to reflect today's underlying business performance that would make it the same value as $5.20 a year ago. Then we need to factor in the unknown extra regulatory risk and how you do that at this point is anyone's guess.
Last edited by Beagle; 25-11-2019 at 12:38 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
Been talk of Z losing market share so had a look at their quarterly data reports
Yes share is going down....and quite markedly
It’s probably even worse than it looks because in the last 2 or 3 quarters Gull volumes have not been included in Industry Volumes.
Means Z share on an apples for apples basis (allowing for Gull) is lower than reported. It does not appear they have (notionally) adjusted for the change in reporting. Might be wrong but that seems the case.
Image is how I see it
How low can Z share go?
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Looks like an accurate depiction of the fairly grim state of affairs.
Your last point is the $64,000 question ?
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
Been talk of Z losing market share so had a look at their quarterly data reports
Yes share is going down....and quite markedly
It’s probably even worse than it looks because in the last 2 or 3 quarters Gull volumes have not been included in Industry Volumes.
Means Z share on an apples for apples basis (allowing for Gull) is lower than reported. It does not appear they have (notionally) adjusted for the change in reporting. Might be wrong but that seems the case.
Image is how I see it
How low can Z share go?
Are they including MGP and NPD? Both discounters are extending their network pretty aggressively in the South Island and either built or took over petrol stations along the main arteries.
On our "home run" (SH73 west of Christchurch) just recently two brand new NPD petrol stations popped out of the ground (one in Yaldhurst, the other one in Darfield) and both have big signs "opening soon". Earlier this year we noticed on a Southwards trip into the McKenzie country that MGP placed cheap 24/7 petrol stations along the Inland route. Some more new NPD petrol stations at the big roads at various places in Christchurch.
Ideal for truckies and anybody else travelling a lot ...
I recon the huge margins of the big four have been just too tempting for a number of smaller players to ignore ... but hey - nothing better than a nice little price war (well, for consumers this is).
BTW: I wouldn't even know where to find these days around our place a Z petrol station. The last one I can remember has been taken over more than a year ago by Mobil ...
Last edited by BlackPeter; 25-11-2019 at 02:44 PM.
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"Prediction is very difficult, especially about the future" (Niels Bohr)
This is the problem that ZEL management appear to be in a "state of denial" about. Huge cumbersome organisation with thousands of staff that keeps adding to its costs when the market is saying they should do the exact opposite and streamline their head office costs down.
I know Kingfish used to have a shareholding and are known to often meet with the management of the companies they invest in. They got out last year.
The other thing that makes me wonder is overseas many fuel companies are investing in the roll out of fast charging stations to offset the decline in fuel volume through EV adoption.
It would be nice for EV owners to sip their coffee and nibble on their pies and snacks at a Z station while they wait for their cars to be charged up wouldn't it ?
You'd think ZEL would be proactive in this regard but obviously that's expecting too much of management who appear to be behind the ball, not trying to get ahead of it.
Industry standard leases that run for 15 years to align with fuel tank replacement cycles usually have annual or bi-annual ratchet clauses of the inflation rate or 2% per annum, whichever is the greater increase. This could eventually be very problematic for ZEL if fuel volumes and margins continue to decline year on year.
Last edited by Beagle; 25-11-2019 at 02:55 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
Are they including MGP and NPD? Both discounters are extending their network pretty aggressively in the South Island and either built or took over petrol stations along the main arteries.
Who are MGP, did a google search and cannot find them.
McKeowns would be the biggest discounter around here (Southland) and I think they might be supplied by Z. The Z logo is on the card and the fine print says that Z own the card.
Who are MGP, did a google search and cannot find them.
McKeowns would be the biggest discounter around here (Southland) and I think they might be supplied by Z. The Z logo is on the card and the fine print says that Z own the card.
Fair enough - I meant to write "MGL" ... and I noticed that on Google Earth some of the MGL stations I remember are called "McKeown". Actually MGL seems to be used synonymous for McKeown (https://mckeown.co.nz/) given that the McKeown site offers a login for MGL staff ...
Would be surprised though if they are owned by Z and no Z logo on the card depicted on their site ... but they might accept each others payment cards.
Last edited by BlackPeter; 25-11-2019 at 04:30 PM.
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"Prediction is very difficult, especially about the future" (Niels Bohr)
Who are MGP, did a google search and cannot find them.
McKeowns would be the biggest discounter around here (Southland) and I think they might be supplied by Z. The Z logo is on the card and the fine print says that Z own the card.
I think MGP is your McKeowns .....McKeown Group
Last edited by winner69; 25-11-2019 at 04:27 PM.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Fair enough - I meant to write "MGL" ... and I noticed that on Google Earth some of the MGL stations I remember are called "McKeown". Actually MGL seems to be used synonymous for McKeown (https://mckeown.co.nz/) given that the McKeown site offers a login for MGL staff ...
Would be surprised though if they are owned by Z and no Z logo on the card depicted on their site ... but they might accept each others payment cards.
Thanks for clearing that up.
It is my new card that has just arrived that has the Z logo and the claim that the card is owned by Z. The old card still on their website image.
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Originally Posted by winner69
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