ZEL - Z Energy.

[JoeGrogan]

Nice finish at the end of the day today. Anticipating the results announcement this month. The short term chart is looking good, will be interesting to see if it can pass $7.67

Discl: hold

Seems to have broken through to new highs, short term chart looking good.

[Joshuatree]

Re $8.87 is the high ,but looking good atm, just cutting 200DMA on increasing vol.

[JoeGrogan]

Re $8.87 is the high ,but looking good atm, just cutting 200DMA on increasing vol.

Yeah of course $8.87, should of said it broke the previous level of resistance. Looking like a double bottom.

[Joshuatree]

AA snippett fromm craigss FWIWW T/P $8.500

Z Energy: Result expected at top end of range
FY17 ends well, with FY18 on track for a good performance
ZEL will be reporting FY17 results on the 11 May 2017We forecast EBITDA before merger costs of NZ$414m, at the top end of ZEL’s guidance range of NZ$385m-415m. This is as while the group has seen some headwinds during the year, particularlythe GRM rebate from NZR and volume falls that have resulted from divestments and thechangeover from supermarket dockets, we expect that this will be more than mitigated bymargin expansion.

[hamish]

Thanks JT for the info. It's a fair summary and re-itterates the margin expansion story...

Sentiment is similar in ForsythBarr commentary (per their free app)....
Our rating is outperform. ZELs acquisition of Caltex provides it with significant opportunity to deliver further material earnings growth. We are positive on the transaction and believe ZEL will be able to deliver synergy benefits greater than it's guidance. In addition an ZEL's underlying operational performance continues to be strong.

Look forward to next week results.

[bull....]

nice bounce from 7 support

[hamish]

Happy Holder with this result. Exceeded EBITDA top-end guidance by 1%, significant increased eps, increase divvy to 29.9dps for full FY, measured reduction in leverage. Tick.

What strikes me most from this report is how keenly their sense of purpose"Solving for a moving world" comes through and how they value leadership, environment, safety and then the results follow. The sense of 'one' is further amplified by the integration of Caltex.


Great quote to start with - "Standing in the future of what can be and working backwards from there informs how you do things now"... so many Orgs focus on the now and try to micro-step forward. This sets the tone.


The visuals on how they create value and their supply chain really resonate - Simple, elegant. IMO - There's also some clever subtext in here I'm sure they'll use as reference for the MBIE review.


CEO Summary on page 12 is insightful on the culture they desire
- "we were able to meet our obligations and stay true to Z’s values: be straight up; have the passion; back people; share everything; be bold."
- "In a world where big companies are often seen as bad companies, Z will not be a big bad company. We are committed to remaining a good corporate citizen"
- The next iteration of our strategy will be capability led
- At Z, everyone’s a leader whether they’re a leader of self or a leader of people.


and Innovation - "Towards the end of the year, we established an innovation team that will build a certain type of capability: a willingness to experiment, operate on limited information, and not be afraid of failure." Good to see the hire of Chief Innovation Officer

They have their eye on the future and are looking to be ahead of the curve...... polar opposite it seems to the likes of SKT, WHS.

Great quote about the role of the Board - The Board is a thought partner, not approver.

Towards the end, their 3.0 Strategy will be presented at their investor day in Sept. Based on how they seem to be thinking ahead and acting now, should be interesting to see how EV, direct importing, sites and logistics, loyalty & building customer relationships, etc plays forward

[Joshuatree]

Thanks hamish just seen this now ,lots to like and another $40 million in synergies($17 mill so far) to save from the CTX deal
BUT competition alive and well and healthy

"Z’s volume and margin on a cent per litre basis were down over the year as competition in themarket continues and reflecting Z’s diversification of its retail business model. Z’s fuel grossmargin decreased to 17.6 cents per litre (cpl), down 17 per cent, from the previous year.
“We think fuel margins are top of cycle and expect some softening over the coming year as aresult of the multitude of new participants in the industry fighting for a share of the market.
“The Caltex acquisition gives us the scale and a portfolio of options to deliver distinctive valuewithout an undue reliance on fuel margin."


“For example there are now 21 different brands operating in the New Zealand market and 43per cent of all retail service stations, representing 20 per cent of all retail fuel sales, are now inthe hands of independent brands. This number has grown and continues to grow rapidly.
“Additionally, 70 per cent of all service stations, regardless of the brand, are owned andoperated by independent ‘mum and dad’ business owners who run their own business and settheir own price.”

Biodiesel plant a year behind schedule

Outlook and guidance
Mike Bennetts said Z was forecasting RC Operating EBITDAF of between $445 - $475 million andcapital expenditure up to $90 million for the 2018 financial year. The capex guidance coversboth the ERP and card replacement projects

[hamish]

Yup, Great comment. They're eyes wide open on their risks it seems and open about communicating these.

Side note for some light relief - doing my bit to increase shareholder value... been using the Z App, Air NZ App as examples of building customer relationships and getting clients I influence to download different Apps to explore various 'stages' and approaches (Z App formative & 'MVP', Air NZ App/experience maturing & deepening engagements, Powershop App - great UX and self-serve)..

So, maybe 500 people by now for Z.... Anything to help lift sales..!

[JoeGrogan]

stellar result, will go through it properly when i get some more time, but also a happy holder.