Vector Limited (VCT)

[Jantar]

So who is wanting to buy Vector's pipeline? Genesis? Contact? Todd? Or some new player?
https://www.nzx.com/files/attachments/214230.pdf

[Markymarknz]

So who is wanting to buy Vector's pipeline? Genesis? Contact? Todd? Or some new player?
https://www.nzx.com/files/attachments/214230.pdf

I work for Powerco, we own the north islands other gas networks and I would think we would surely be sniffing around but haven't heard anything...could be interesting.

[macduffy]

A report in today's AFR reckons that Shell is seeking interest from buyers for its share in the Maui pipeline which is operated by Vector. Would they be interested? Who else?

[Harvey Specter]

A report in today's AFR reckons that Shell is seeking interest from buyers for its share in the Maui pipeline which is operated by Vector. Would they be interested? Who else?
Vectors selling its pipes so why would it be interested.

The Chinese will love it - regulated return far about their cost of debt.

[Jantar]

With both Otahuhu and Southdown power stations being shut down the amount of gas being carried will be greatly reduced. If the transport price of gas to Auckland is increased to maintain the same ROE then gas in Auckland will be so expensive that many people will switch back to electricity

[Harvey Specter]

$950m deal and no comments. i guess everyone whole holds is happy to continue to receive the guaranteed regulated return - oops they sold one of their regulated businesses.

Not sure why you would pay down debt when new debt can be issued at ~4% unless it is just to retire expensive debt to re-issue cheap debt.

[Crackity]

Seemed like a full price to me Harvey and a good result for shareholders. Share price since announcement does not seem to agree....

Interestingly I think the Vector chairman Mr Stiassny will probably be kicked off his first board at the NWF meeting in a couple of weeks time. This may make him very grumpy!

[Crackity]

[QUOTE=Crackity;597194
I think the Vector chairman Mr Stiassny will probably be kicked off his first board at the NWF meeting in a couple of weeks time. This may make him very grumpy![/QUOTE]

NZ Windfarms AGM tomorrow - I'm going to stand by the above prediction ;)

[Harvey Specter]

NZ Windfarms AGM tomorrow - I'm going to stand by the above prediction ;)Big call - I assume he will be voting VCT 20%+ holding in his favour. I assume a simple majority (50% of those that vote) is all that is needed?

[Crackity]

Big call - I assume he will be voting VCT 20%+ holding in his favour. I assume a simple majority (50% of those that vote) is all that is needed?

Yes - the question is like NCEA level 1 maths

X > 22%

calculate X

answers tomorrow Harvey ( and I trust you have voted the NWF shares I suspect you own!) ;)

[Jantar]

I hope he goes as well. Any director who is not doing all he can to protect the shareholders' investments does not deserve to be a director.

[blackcap]

I hope he goes as well. Any director who is not doing all he can to protect the shareholders' investments does not deserve to be a director.

looks like he is gone already.... https://www.anzsecurities.co.nz/DirectTrade/dynamic/announcement.aspx?id=4023153

[Crackity]

NZ Windfarms AGM tomorrow - I'm going to stand by the above prediction ;)


Arent you all lucky to get the good oil here first ;)

decided to limit any possible reputational damage by withdrawing before the meeting. Smart, eh but what happens next?

[Harvey Specter]

Arent you all lucky to get the good oil here first ;)

decided to limit any possible reputational damage by withdrawing before the meeting. Smart, eh but what happens next?You didn't call it 100% but they copped out so maybe you are right on the numbers. Will be interesting to see if VCT uses their votes to try and block the new directors, resulting in a smaller board (I wonder if there is a minimum number of directors in the constitution). VCT still has Simon on the board to represent their interests. Will move discussion t the NWF thread though.

Interesting still no comment on VCT selling part of their regulated business. It was only $950m I guess!

[Blendy]

I'll be at the Vector AGM today for my next live blog session - anyone have any questions you'd like me to ask?

[BlackPeter]

I'll be at the Vector AGM today for my next live blog session - anyone have any questions you'd like me to ask?

Hi Blendy, if you are happy to do a bit of stirring ... you could ask how their NWF investment is going (VCT owns roughly 27% of New Zealand Windfarms and de facto controls the company) ... and what their plans are with NWF from here ...

Note - Vector (as most other NWF investors) lost a significant part of their capital in NWF and didn't had so far any income from them. NWF is to a degree run like a Vector appendix (with NWF using e.g. the Vector business premises in AKL).

Obviously - I don't expect them to announce their strategy related to NWF at the AGM, but it might be very interesting to observe the body language of Simon Mackenzie (he is sitting as well on the NWF board) and Michael Stiassny (he used to sit on the NWF board) while you ask this question.

[Blendy]

Hi Blendy, if you are happy to do a bit of stirring ... you could ask how their NWF investment is going (VCT owns roughly 27% of New Zealand Windfarms and de facto controls the company) ... and what their plans are with NWF from here ...

Note - Vector (as most other NWF investors) lost a significant part of their capital in NWF and didn't had so far any income from them. NWF is to a degree run like a Vector appendix (with NWF using e.g. the Vector business premises in AKL).

Obviously - I don't expect them to announce their strategy related to NWF at the AGM, but it might be very interesting to observe the body language of Simon Mackenzie (he is sitting as well on the NWF board) and Michael Stiassny (he used to sit on the NWF board) while you ask this question.

Yes, very good - will do, as I also unfortunately have a historic NWF holding that I would like to see improved....

[Blendy]

Ugh, I had all my posts stored up to post in one message, but I guess the message reply timed out and I've lost it all.

Will post a summary after.

[Blendy]

Overall, a very nice and straightforward meeting, with a large attendance. There were electric vehicles parked outside to test drive.

It started with a presentation and video starring children about the future of energy in Auckland, and how change is so critical to our shared future. Focus on communities and businesses and how new tech will connect them. Glen Innes was selected as a community test location for electric hubs as its substation had a life of around 40 years and was due to need upgrading in the next year or two anyway.

Plenty of discussion about electric vehicles, how EV tech and charging units are the way of the future, and other renewable and sustainable energy. Interesting to note a relationship with an Australian company that offers peer to peer energy sharing via the Blockchain. I'd like to look into this further - I presume this could be useful for selling your stored solar energy to other people?

No questions about NWF, and due to a paperwork technicality, I wasn't allowed to ask questions.

Question about the white water park - Vector are very pleased to be a part of an international Olympic quality facility.

Question about why Vector are so against spending money on simply replacing substation transformers on the network, rather than the heavy focus on new technology. Answer was a discussion about changing technology is the way of the future, and NZ will be left behind when compared to many other parts of the world. Energy consumption has dropped 11% through consumer changes in the way energy is used (LED lights etc), and maintaining expensive transformers with a 40 year lifespan to try to gain an ROI is no longer the most viable option.

Simon McKenzie answered almost all of the questions - and all extremely thoroughly.

Voting went through with the two Board Members re-elected.

Shareholders Association had a display there, which was handy as I'd been meaning to join, so I've now done that.

The afternoon tea was very impressive! The most amount of mini pies I've ever seen, plus sandwiches, chocolate brownie and lamingtons, and fruit platters.

Nothing really controversial happened, so this summary has been very short!

[BlackPeter]

Thanks for that, Blendy - and welcome to the NZSA!

[peat]

Interesting .....
8543

[BlackPeter]

What on earth could be interesting about Vector;)?

Referring to these triangles ... yes, there was a bit of volume for the downsell in November (understandably), but hardly anything thereafter. What do you read into it?

[BlackPeter]

Oh dear ... share price dipped below the MA200. What happened?

The recent results actually looked better than analysts expected.

Maybe the markets just starting to realise that this is just a boring old line company with Zero Growth and a quite high PE? Who knows?

Discl: don't ...

[Jim]

Oh dear ... share price dipped below the MA200. What happened?

The recent results actually looked better than analysts expected.

Maybe the markets just starting to realise that this is just a boring old line company with Zero Growth and a quite high PE? Who knows?

Discl: don't ...
But with a consistant dividend growth every year. Good dividend yield company


Disl: Hold

[Jerry]

Keep meaning to sell them, but then there are the divs. Why did the shareprice start on the downward toboggan on the 19th Feb? Results not so flash today 28th Feb.

[Vagabond47]

Whats behind the share price move today? down 3.8% so far today.

[percy]

www.chrislee.co.nz in this week's taking stock shares his view.

[Vagabond47]

Thanks, didn't think it was enough to justify this sell off.. well, not just yet anyway.

[macduffy]

Vector fined over power outages.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12215296

So who gets the $3.5m? Auckland consumers or the Commerce Commission?

[horus1]

The govt. Nothing to the customers. A waste of time.

[JAYAY]

I see AGM coming up 23 Sept.
Director nominations - Election and Re-election of DirectorsEarlier in the year, the Board appointed Tony Carter,Dame Paula Rebstock and Bruce Turner as directors ofthe Company. In accordance with NZX Listing Rule 2.7.1Tony Carter, Dame Paula Rebstock and Bruce Turner willretire and, being eligible, offer themselves for election.The meeting will be asked to consider by ordinaryresolution:

Rebstock's got a nerve hasn't she. She displayed gross incompetence at ComCom as well as malice and vindictiveness towards Vector back in 2006.
Who wants her as a director?

[JAYAY]

I have been searching the internet for Mai Chen's open letter regarding the Rebstock debacle back in 2006.
I can't find it. I thought once something hits the internet it could never be deleted.
Does anyone know where to find it?

[stoploss]

I have been searching the internet for Mai Chen's open letter regarding the Rebstock debacle back in 2006.
I can't find it. I thought once something hits the internet it could never be deleted.
Does anyone know where to find it?

Maybe ask ...

info@chenpalmer.com

[JAYAY]

Maybe ask ...

info@chenpalmer.com

Thanks for that Stoploss. I will post it here if they send it to me.

[JAYAY]

Maybe ask ...

info@chenpalmer.com

Two emails to Chenpalmer, completely ignored. Some serious strings must have been pulled to get that letter purged from the internet.
Someone must have a copy of it.
I would love to see it posted here again.

[ananda77]

Just a question: what do people think of investing in Vector at current prices, please

[BlackPeter]

Just a question: what do people think of investing in Vector at current prices, please

Dropped them some time ago off my watch-list and marketscreener not working - i.e. I don't have my hand on their pulse, but from memory they have more directors on their board who made me loose money in the past than directors who made me gain money.

On the other hand - just looking at the chart, they well might bounce up if enough people see them as quasi bond, though I doubt that investors would see them in the AIA (and similar) league.

Analyst consensus (Reuters) is tending towards underperform and PE does not look that flash at above 30 ...

Others might have a better view on Vectors economic future and potential opportunities in the electricity industry - I don't.

Why would you consider them as a good potential investment?

[ananda77]

Dropped them some time ago off my watch-list and marketscreener not working - i.e. I don't have my hand on their pulse, but from memory they have more directors on their board who made me loose money in the past than directors who made me gain money.

On the other hand - just looking at the chart, they well might bounce up if enough people see them as quasi bond, though I doubt that investors would see them in the AIA (and similar) league.

Analyst consensus (Reuters) is tending towards underperform and PE does not look that flash at above 30 ...

Others might have a better view on Vectors economic future and potential opportunities in the electricity industry - I don't.

Why would you consider them as a good potential investment?

My interest would be more like seeing them as a bond like investment rather than for capital gain. I also like that they are a monopoly and heavily regulated already. Yes, the P/E is higher than those of other power companies, but I would consider their dividend payment discipline as solid with a 100% franking.
I can not bring myself to even consider other power companies at current elevated price levels to intrinsic valuations.

[BlackPeter]

My interest would be more like seeing them as a bond like investment rather than for capital gain. I also like that they are a monopoly and heavily regulated already. Yes, the P/E is higher than those of other power companies, but I would consider their dividend payment discipline as solid with a 100% franking.
I can not bring myself to even consider other power companies at current elevated price levels to intrinsic valuations.

I agree that Gentailers look pretty dear at the moment as well, but they are really quasi bond investments.

You can't really value Gentailers on PE, but you need to look at cashflow - their earnings is artificially reduced based on too high write offs (you might write off e.g. a hydro dam over 50 years, but you can use it for more than 100 years).

Vector however is in the main an electricity distribution company - and I suppose that most of their assets are worthless when written off. While I am not a specialist for electricity distribution, it is clearly a quite different industry like electricity generation.

[ananda77]

I agree that Gentailers look pretty dear at the moment as well, but they are really quasi bond investments.

You can't really value Gentailers on PE, but you need to look at cashflow - their earnings is artificially reduced based on too high write offs (you might write off e.g. a hydro dam over 50 years, but you can use it for more than 100 years).

Vector however is in the main an electricity distribution company - and I suppose that most of their assets are worthless when written off. While I am not a specialist for electricity distribution, it is clearly a quite different industry like electricity generation.

Actually, Vector's financials are not looking too good.

- VCT's debt to equity ratio = (117.5%)
- VCT's debt to equity ratio has increased from 107% to 117.5% over the past 5 years
- VCT's debt is not well covered by operating cash flow (12.6%)
- VCT's interest payments on its debt are not well covered by EBIT (2.4x coverage)

...so I think, at current prices, like the gentailers, Vector is trading substantially above fair value, estimated at 2.44 and expensive

[Lewylewylewy]

I read a while ago that they have a really big capex coming in a few years.

[JAYAY]

Just a question: what do people think of investing in Vector at current prices, please

I wouldn't invest in any company that has Rebstock as a director.

[Jim]

I have with VCT since they took over Natural Gas (which I was a shareholder.) They increase their dividend payout consistently every year and they more than 50% of their shares are Empower controlled. Good retirement shares to have

[bull....]

hitting fresh highs today

[bull....]

more highs , all part of the dash for gentailers income

[vmody]

I would like to ask someone if it is a good idea to invest in vector shares or is it too high

[Southern Lad]

Well done to Vector on voluntarily repaying $1.6m of COVID-19 wage subsidy previously claimed by its subsidiary Cristel Air International.

https://www.stuff.co.nz/business/industries/123038871/vector-plans-to-repay-16m-government-wage-subsidy-because-its-the-right-thing-to-do

While no doubt it qualified for the subsidy given this part of the business couldn’t trade during Level 4 lockdown, its great to see a large corporate building its social licence through taking the bad with the good when it comes to operating its business and not seeking a Government handout that every New Zealander needs to fund.

I’m assuming the $1.6m quoted is the gross amount, so after tax the net amount that they would have received was $1.15m.

[clown]

Whoa, net profit up $97.3 mil!!!

VECTOR DELIVERS STRONG FULL YEAR RESULTS

24/8/2021, 8:30 amFLLYR• Adjusted EBITDA of $513.5 million, up $23.5 million or 4.8% on last year.
• Group net profit after tax of $194.6 million, up $97.3 million from the prior year.
• Final dividend 8.50c, taking full year dividend to 16.75 cents per share; imputation at 10.5%
• Electricity network quality performance within regulatory SAIDI limits for regulatory year to 31 March 2021
• $529.5 million in gross capital expenditure, an increase of $40.8 million or 8.3%
• First product from AWS strategic alliance delivered, progress advances towards second

https://www.nzx.com/announcements/377759

[Southern Lad]

AFR Street Talk is reporting that Citi and Barenjoey have launched a process for the sale of a 50% stake in VCT’s smart meter business in Australia and New Zealand. AFR speculates that the enterprise value of the business could be NZ$3 billion. The business generates an EBITDA of NZ$172m.

Evidently VCT is seeking a partner to introduce funds into the venture to bankroll future growth.

A range of potential purchasers is mentioned including Morrison & Co.

[bull....]

good steady business this one up 16% so far this yr. been a fan of the stock for a while

[Sideshow Bob]

https://www.nzx.com/announcements/407034

VECTOR ANNOUNCES SOLID HALF YEAR RESULTS21/2/2023, 8:30 am HALFYR• Group net profit after tax of $100.3 million
• Adjusted EBITDA1 of $274.0 million(2), up 3.9%
• Total capital expenditure $316.8 million, up 17.2%
• Interim dividend 8.25 cents per share(3)
• Vector and Queensland Investment Corporation to finalise arrangements for metering joint venture.
• Key SAIDI and SAIFI network reliability measures tracking to target, prior to any impacts from January flooding or Cyclone Gabrielle(4)

[Sideshow Bob]

https://www.nzx.com/announcements/417030

25/8/2023, 8:30 am FLLYR• Sale of 50% interest in Vector Metering delivers one-off gain of $1,509.9 million
• Continuing operations deliver $112.6 million net profit, exclusive of metering business
• Proceeds from Vector Metering transaction used to repay debt, as required under banking arrangements
• Special dividend of 5.5 cents per share, bringing final dividend to 14.0 cents per share
• Adjusted EBITDA(1) of $523.3 million, including $335.1 million from continuing operations(2)
• Capital expenditure of $700.4 million, includes $512.7 million for continuing operations
• Financial results include reports covering Taskforce for Climate-related Financial Disclosures and Green-House Gas Emissions Inventory, with decarbonisation central to Vector strategy

[Norwest]

No imputation credits attached is a let down.