Correct SOLD so they RECEIVED funds BUYER put the money on the table, large order without any discount ? Sellers maybe in trouble but everyone assumes otherwise.
Next few months will tell.
Printable View
Jetfuel bubble coming closer between aus/nz
bold plans... https://www.stuff.co.nz/business/124..._t-CCw4ZyyX7SA
Out my way Z station has 91 @ 2.22 and Pak'n' Save next door (also supplied by Z according to the pump) has it for $2.06 all before any discounts.
May be Pak'N'Save is taking the hit and trying to get more people in to the Supermarket with cheaper petrol??
P.S. The other 2 stations nearby, a Mobil and a GAS all at 2.22, however sort of between them and me ( a little closer) a Mobil and Caltex at $2.10
Another profit downgrade -- only small one
http://nzx-prod-s7fsd7f98s.s3-websit...948/342167.pdf
Where's it ll going to end
2019 EBITDAF 434m
2020 EBITDAF 366m
2021 EBITDAF 235m
Profits can't keep reducing forever can they?
ZEL is SKY 2.0. Currently worth $1.4b.
Going to be worth $300m (Sky capitalization) one day as the industry fades away into the sunset.
Share price hanging in there
Going below 270 (which has held several times over the last year) would be ominous
At least its making a profit. When the vaccinations start to work, and the Australian travel bubble is opened up, we will see some big gains.
Gull NFD and Waitomo building new stations all around the Manawatu....reducing larger margins wherever they are found.
Sanson for instance now has a new automated Gull right on corner of SH1
An ECL guy I was talkin to at a Z in Palmerston said NPD building a new station there and in Levin.
Their industry in the current form is certainly a sunset industry, even though not so long ago it was called a "consumer staple" on this thread (I had it in my divie portfolio), so they need to change direction. Jet fuel will come back but other parts of their business are in a downward trend. They certainly need to decide where they want to go in the future and come up with a clear plan to become an interesting investment opportunity again.
Do they need something radical like Kodak going from film development to pharmaceuticals or Nokia from gumboots to mobile phones !!
Unfortunately ICE cars will be with us for a long time. If a vehicle bought today has a 20 year lifespan and 99% of them are ICE there is another 20 years of fuel demand. Tourism restarting, economic growth and the refinery shutting down should help the ZEL bottom line. It will be interesting to see how sustainable the newcomers will be - Z always has the option of adding "no service" stations if that model is fiscally viable.
Investing in ZEL now, would be like investing in a company that made traction engines in 1935.
Eventually, they will run out of steam.
kinda is tho!!
I use enough of the stuff and there are a lot of ICE's still out there all whizzing around like bats outta hell. Apart from Jet its only marginally (pun) about demand and more about margins. Z have been and continue to obtain larger margins (based on prices) where ever they can as people dont travel to fill up so the prices are maxxed hard by location and location of competition. Essentially charging what they could but so much of this will get eaten and continue to get eaten - and the no frills approach started by Gull makes it even worse
https://www.investopedia.com/terms/c...merstaples.asp I have to buy fuel today or tomorrow whether I make money in the market today or continue to get a hiding, just like Mrs B has to go shopping for food and we have to pay our electricity, telephone, internet and rates bills whether we want to or not. Currently less than 1% of the national fleet is an EV and the speed of uptake is best described as extremely slow in my opinion.
The issue for ZEL is not whether what they sell is a consumer staple, there is no question it is, its about their very poor marketing, lack of investment in their sites, price gouging and the ever increasing number of unmanned sites that are being built by their competitors around the country. Jet will be very slow to come back in my opinion and Marsden Point is an unmitigated train wreck.
Fuel will be sold for decades to come, its about whether ZEL can adapt their business model for the gradually changing conditions. Under Bennett's "leadership" my bet is they will always be behind the eight ball and his lack of leadership or vision makes this ostensibly uninvestable in my opinion.
Our suburban Z is currently 3cpl more for 91 than the cluster of stations 10km away. Another suburban Z a few km from to me has the same 3cpl difference. That isn't enough to warrant traveling the distance to save the $1.20 on a full tank, or even sit in the queue at the slightly cheaper sites, but I accept other locations may have larger price discrepancies. What I have noticed however, is that these discrepancies are fleeting with prices raised or lowered regularly, but with some lag.
You're definitely right bottomfeeder, and as consumers we continue to feed this as we shop almost purely on price, and this has resulted in a race to the bottom (no pun intended) with service and quality being compromised. Changes to the supply chain and geopolitical conflict (such as the west v China) will no doubt have a profound effect on all consumer goods & services.
While we do take a cursory look at fuel prices when filling our hybrid vehicle, life is short so I'd rather spend that doing something enjoyable or upskilling which generates a higher income, than our neighbours who prodly announced a few weeks ago they were driving across town because they've found a service station that sells fuel a few cpl cheaper.
I suspect that for many its a similar experience to me and right here is the nub of the issue as I see it. Based on regular routes travelled I have a range of service station options and when my local Z is very consistently 5-7 cpl dearer after discounts than other brands I make a decision in principle that their pricing is excessive so I react by actively avoiding them as my way of making a statement about their market behavior. I would wager there are hundreds of thousands of other potential customers like me that as a result of Z's high pricing feel when Z market themselves as "being for New Zealand" they find that marketing such a a load of rubbish it really puts them off.
Consumer behaviour can be weird and I find sometimes the smallest things can influence my choices.
While I commute to / from work, the distance isn't significant and my choice to run a 1.0 litre ICE vehicle running on '91 means I don't really pay much attention to the actual pump prices. Given I fill up once every 1-2 weeks, and my tank is ~40l, @$0.06 cpl, or $2.40 total difference for a full tank means I'm not even prepared to spend an extra 5min finding a different station. It is simply not worth my time compared to almost anything else I could use that for.
So logically geographical convenience would make sense, however I too pass several options each way that would suit. I ended up sticking with Z for what are possibly some really petty reasons. 1. I prefer their pay at pump style machines over the apps / other offerings. 2. They are more consistent with having readily available window washing, oil/atf checking and tyre checking facilities - both available and currently working (as I like to DIY these).
I'm not sure I can claim many others have my experience, or other potential customers like me. Never attempted ad hoc or serious market research in this field.
Not sure how that interacts with my interest in ZEL. I have held in the past, and it is on some of my watchlists, but at the moment other prospects are attracting me more.
Z Electric - Another 'premium offering' that will appear good to those who don't do the numbers properly and are attracted by the fuel 'discount' or litres that will go into Sharetank, and are only redeemable at Z and therefore subject to the 'premium' pricing model.
I'm not with the cheapest power retailer I could be, but even so, at our current usage and the current Z pricing we'd be paying $13-16 more per month after the fuel incentive is taken into account. That's before factoring in the weekly 10c discount days offered by all major competitors.
you could have filled up the sharetank when fuel was cheap. I bought 3000 ltr, for my wife's car 91 1000ltr. for my car 2000ltr. 95
Filled up my wife's car today, saving atm 46 cents/liter on the discounted price. No, I fo not choose to go to the most expensive station, but always use the same local one.
Well done!
This shows that you can derive good value from Z, but as with so many other companies in other sectors (e.g. Powershop) you will need to be very actively engaged in your purchasing decisions & associated timing, as well as planning your consumption in advance.
Resumption of dividends following on FY results in May in the range of 12c-14c.
ZEL have massive debt and a very checkered track record of dividend payments and are a sunset industry. Any attempt to invest based on forecast yield is fundamentally flawed in my opinion due to the notorious unreliability of dividends and the companies inability to forecast them. Real caution is required here in my opinion.
I’m hoping for a bounce in the share price assuming the bubble with Aussie gets announced shortly. Has to be of benefit having extra planes needing the fuel??
Hasn’t responded very strongly to probable divi or likely bubble so far...
Am I missing something here. All I see is a sunset industry, Smaller players absolutely caning them on price and taking customers away. Z shares in the refinery are worth what... I can also see a large capital raise coming due to the large debt they have which will need to be at a big discount. Can’t understand why they would pay a dividend at all .
Came across this viewpoint from Chris Lee & Associates that I personally found quite encouraging:
"Z Energy might claim they had the worst possible year during 2020.
Regulators were stress testing their profit margins, oblivious it seems to the fact that natural competition was also doing this;
The government was jumping on the bully train, prodding ZEL, without being honest about the fact that more than half what we pay for fuel is tax to them;
Covid19 made us immobile by sending us all home, planes, trains and automobiles (and boats – Ed);
The world has 'suddenly' discovered electricity as an energy source. Seriously?!;
As sales volumes collapsed, and local storage of fuel was relatively full, Z Energy had to send back a tanker of fuel that we no longer required to a market that didn't want it (sales price near $0);
The temporary (months) drop in sales meant the banks and US Lenders stepped in and forced directors to raise new money from shareholders and to suspend dividends (the logical part);
The value of their major shareholding in NZ Refining was falling fast;
Sovereign investment funds were searching for investments in unethical or climate harming industries to sell from their portfolios; and
An important one from me, the Z Energy coffee was still no good!
It would have been hard to design a more difficult year for any company than that.
So, to the credit of all at Z Energy, they quickly recognised the truth of the changes occurring around them, the permanence of some, and set new strategies for what they thought their playing field would look like in the immediate future.
Aspects of the business were downsized. Costs were cut. Forward-looking developments introduced (Z Electric and dual fuel offering for vehicles).
ZEL remains a high cash flow business and sells an essential product, regardless of global debate. You can see how essential it is in the very high volumes of traffic back on our roads.
ZEL has been updating the market more frequently than required with its sales and financial performance and it has been tracking rather nicely for them. So nicely in fact that they opened negotiations with their bankers seeking permission to return to dividend payments sooner than defined in their 2020 agreement.
At that point ZEL agreed no dividends would be paid until after September 2021, one full financial year of stand down, however, the banks have agreed to amend the conditions and we expect a dividend to be declared and paid in May (estimated at 12-14 cents per share plus any imputation credits).
Clearly the company is in a stronger financial position than both they and their bankers anticipated. You cannot criticise either party for this inaccuracy; making any business predictions in the immediate aftermath of our first Covid19 lockdown was a fool's errand (witness the predictions of falling house prices!) so taking a conservative stance was entirely appropriate.
To not pay dividends is to store shareholders' money, which is a good behaviour either in the face of financial disruption (Covid19) or high-quality investment opportunities. Thereafter a director might consider paying dividends.
The additional capital raised from shareholders last year ($350m) settled the nerves of the banks (all lenders). They do not now need additional capital for the business, so paying a dividend is evidence that capital, sales and profit margins are all under good control by the company.
ZEL bondholders should also be pleased with the situation because the bond trustee exercised his/her discretion during the negotiations by demanding that the company set aside (hold with a bank) the $150 million required to repay the ZEL040 bond in November. They have done so.
Whichever way you look at this ZEL management deserve applause for their reactions to 2020's combination of negative pressures and their week-to-week business management that has delivered this early financial reward to shareholders.
Investors have experienced both how unexpected risks can emerge and negatively impact an investment's rewards and then the value of good governance and good management in setting a new path for success."
wrong quote posted
Can't buy a coffee, pie, ice, news paper etc from a unmanned station thou.
My limited understanding on EVs and the grid is that if everyone had an EV and went home each night and plugged in their car to charge there 1) wouldnt be enough power and 2) the grid wouldnt be able to handle the load even if we had the power.
Lot's more copper and other precious metals need to be mined to build the EV revolution.
Z is 100% in a sunset industry but that sun is setting very slowly
Thanks for the info, some valid comments. Will add to my watch list.
Sorry guys I bought more today which always means the price will drop.
looking at the charts doesnt inspire confidence , its been range bound between 2.65 - 3.30 for 1 year. yesterday was a push down under the bottom of the range. while needing a little while to confirm generally a break down in this type of pattern would suggest prices heading to 3.30 - 2.65 = .65 therefore 2.65 - .65 = 2 as the target area for pattern confirmation. lets see if it pans out. lots of fundamental reasons are around to support the pattern. people buying for div should read up on what a div value trap stock is.
Sorry, but have never fully trusted technical analysis (in the thin and easily manipulated NZ market especially). I trust in the quality of the ZEL management, and the integrity of the broker who wrote the fundamental analysis I copied and pasted in #2035 above. DYOR.
I read the Z Electricity offer and signed up this morning... ezy peasy and fast. Very good deal of free fuel for signup and ongoing discount imo. I am not usually one to change supplier but electricity rates seems comparable and am a shareholder. Will see how it goes and consider switching the bach
Who do we think the seller is selling over 250k Z? Probably for a big loss I'd imagine
very quiet this month, suppose some announcements like monthly and quartely operating data, full year results announcement date.
Lower low end of March 2020
Strong lift today on well above avg volume, tested but did not breach previous march 2020 2.50 low, F21 in one week will not be stellar though worth watching nevertheless, small divie coming
Brokerage firm Jarden reiterated its ‘buy’ recommendation, they are forecasting full year earnings of $243m at the high end of Z Energy’s guidance range which tops out at $245m.
Dividend will also be announced on 06 May for FY21 - 12-14 cents per share
Discl - bought recently
Thats damn near 5 percent after tax whoa. Question is, is the dividend already priced in or will SP adjust post ex-div. Maybe the shackles will be removed ftom SP next week, sell the rumour and buy the fact style (yes I know thats reverse of normal but everything upside down now)
Z Energy FY21 results announcement - NZX, New Zealand’s Exchange
Divvy back in.....14c
So at current prices this is a current dividend return of 5.26%, looking at the future FY 22 it will between 7.14% - 8.65%. Not a bad result and surely this must kick start a movement up in share price or am I missing something here?
terrible result , profits dont even cover dividends , cost savings made up most of the profit.
declining retail margins and i think there structural ,
jet fuel demand not going to recover for years. i really struggle to see how divs can be maintained.
good luck , div trap comes to mind good luck to those seduced
Yes. If profits will continue to decline long run yield will have to be way higher. I have seen royalties from petro fields trade at 20%+. Why? because you have to recover the capital and get a return. So a long run yield for ZEL would, IMO, be above 10%. Not good for share price. I am not saying that the long run future is a or b, just that if it is b the yield has to be higher.
Been a long year, fraught with lock downs, travel interruptions, but the future looks good. Not a bad result. Compare this to Air NZ, Quantas, Jetstar, AIA etc, and I know where I would like to have my money. So I am comfortable with my investment.
Appears CEO total remunaration was $1.8m
In the remuneration they also include this chart
Not only has volume declined, but market share is also in a steady decline.
Although the presentation states that "Z’s average sale price is highly competitive to the most relevant low price competitor", I certainly don't see or experience this across the wider Auckland area south of the harbour bridge. There's always a 1-2 cent saving at the lowest cost competitor after discounts are accounted for. Factor in a Gull discount day and the difference can swing as much as 8+ on the same day for the same fuel.
So long as that remains the case market share will continue to erode.
Market likes the result - yes share price goes up by about the amount of the divie
Just one of those observations over years for no logical reason - share prices increase by size of divie if there isn't any other compelling reason to drive the share price much higher
I'd say market not that impressed with result --- other wise we would have seen a 3 buck plus share price
Don't agree that it is realistic to expect a 3 buck plus share price regardless of the result. That would represent at least a 10% plus gain which would be out of the ballpark - not realistic at this point...
Agree that market share maintenance may be in dispute but only time will tell. Costs are well controlled going forward, jet fuel and diesel volumes can only go up at this point. They also have their own distribution terminals going forward, no longer needing to share wholesale margins with competitors so much.
Also not reliant on unmanned stations to compete with gull, can still make money on full service stations also pending good placement decisions. Works well with multiple payment options available also Z app, Sharetank, Pay by Plate etc - excellent market positioning always up for fine tuning.
This is a very well managed company, pays a good dividend with increasing div outlook going forward and a nice imputation credit.
Am very comfortable with result from a well managed company...
With all dues respect, it's only paying a good dividend if you invested recently.
When comparing the discounts, are you using the standard 6cpl figure* or have you accounted for the effect of stacking? The latter provided an almost unbeatable discount compared to the competitors, even when they were selling 5-7cpl lower (either owing to a sudden price increase by Z or a special discount by the competitors).
ie, the graph on slide 10 shows Board prices (ie no discounts) except the dashed line which includes Z's discounts only. IMO, including the Z dashed line is comparing apples and oranges since the others all discount (Gull discount day, fastlane etc; BP AA smart Fuel, etc) but only Z's discounts are included.
Exactly. Drop the other lines on the graph by 6cpl and the only real period of significant price differential was late April/early May '20 which was when Z offered more frequent 10cpl discount days. Also, the board price at Gull is the price, period, available to everyone on the day and not just those who have signed up to a loyalty/marketing scheme.
Still begs the question if 75% of customers are buying at a discounted price, how sustainable is that over the long term before the slow trickle of market share away to the competitors really starts to bite? Very little in terms of differentiation in the offer, a couple of apps or tweaks in that space from the competitors and that part of the playing field becomes completely level. NZ will lag a bit as usual, but global uptake of EV's is accelerating and so far the foray into electricity supply has yet to provide any upside. Another point to ponder, has the impact of the new terminal supplier in the South Island (Timaru) landed yet or is that to come?
If your strategy is to be the lowest cost provider, then you’re in a race to the unprofitable bottom.
While I do pass by a Gull station semi-regularly, it’s in a far less convenient location and I can’t be bothered with the queues. I don’t want to sit in the car for double or triple the time I would at other stations waiting for a pump, as it’s both time and money (in terms of fuel wastage) that I’d rather use elsewhere.
Gull also do not offer 95 at the local station, and instead offer the methanol blended 98 which while cheaper, does not contain the same specific energy per litre as pure petroleum. This means you get less Km for the same volume of fuel, assuming your vehicle is compatible with methanol.
For my needs, the local Z is more conveniently located, has lower queues although it is still busy, good food and if we use stacking it’s a lot cheaper.
Mobil is also very near our area, and there has been some significant pricing competition between the two of late.
In terms of the discount days, given barrier to entry for the customer loyalty programme is exceptionally low, my view is that the normal price of fuel is the discounted price. The only true discount day is then the regular Tuesday (Mobil) and Wednesday (the others) discount days, where they are offering a great queueing experience to a save a large 4cpl.
Consumers want these types of deals where prices are held artificially high and a discount is applied, boosting dopamine in the brain thereby providing a pleasure stimulus. It's a fundamental component of our retail culture now.
Surprise, surprise (from Mornningstar) - not really...Latest recommendation report
Valuation: $5.60
https://online.asb.co.nz/ost/Content...dation_Buy.png
Last updated:
07/05/21
No-moat Z Energy Surprises with Fiscal Second-Half Dividend. FVE Increased to NZD 5.60.
Investment rating
After Shell's exit in 2010, Z Energy successfully increased its gross fuels margin by 65%. However, New Zealand transport fuel consumption has stagnated for more than a decade and we think optimising the fuels margin can only go so far. Further, we have reservations in the owning of a stake in New Zealand's only refiner, comparatively modest though it is. Refineries are low-margin and capital-intensive, but Z Energy has many favourable attributes that make it an attractive investment at the right price. Management has made proven market inroads where Shell took its eye off the ball. Z Energy has driven returns on invested capital admirably back above its cost of capital, a key plank in a sustainable business model.
Event
Impact
Recommendation impact (last updated: 07/05/2021)
<br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />
Event analysis
No-moat Z Energy Surprises with Fiscal Second-Half Dividend. FVE Increased to NZD 5.60.
We increase our fair value estimate for no-moat Z Energy by 5% to NZD 5.60 (AUD 5.20) due largely to the time value of money. The Kiwi refined fuel retailer reported a 76% decline in underlying fiscal 2021 NPAT, our measure, to NZD 25 million. This was somewhat below our NZD 54 million forecast, but not materially so. Higher than expected depreciation was the key detractor. Otherwise, underlying EBITDAF of NZD 228 million was essentially in line with our NZD 222 million expectation and within the guidance range after adjusting for operating lease depreciation. We lower our fiscal 2022 EPS forecast by 20% to NZD 16.5 cents after upping depreciation going forward.
Z unexpectedly paid a NZD 14.0 cent final dividend, fully imputed for New Zealand residents. There was none declared in the fiscal first half and we'd conservatively assumed none in the second given the recent requirement for an equity top-up. Also, the company had previously stated return of dividends wasn't anticipated until after first half fiscal 2022. We reset our DPS forecast for fiscal 2022 at NZD 20 cents, within new guidance for NZD 19.0–NZD 23.0 cents. At the current NZD 2.70 share price, our forecast equates to a healthy fully imputed fiscal 2022 yield of 7.4%, not to be sneezed at.
Z Energy shares have recovered a modest 7.0% from April 2021 lows near NZD 2.50 but remain materially undervalued in 5-star territory. We continue to view Z's longer-term earnings potential as attractive including Retail margin improvement from a period of hyper-competition, even before COVID impacted. Catalysts for share price re-rate include volume recovery to pre-COVID 4.0 billion litre plus levels, and retail margin improvement. To lift group fuel volumes overall from current circa 80% capacity will require the return of international air travel. Our forecasts still have volumes recovering gradually to full capacity again by fiscal 2025.
Previous close Market cap $2.750 $1,430 Million 52 week high/low $3.420 - $2.530 Sector Energy
Intrinsic valuation
Moat rating None Business risk High Pricing risk -- Company beta 1.77 Sector beta 1.32
Year 03/20A 03/21A 03/22E 03/23E NPAT ($m) 106.8 25.3 83.4 122.4 EPS (c) 26.7 4.9 16.0 23.5 % change -40.0 -81.8 229.5 46.8 DPS (c) 16.5 14.0 20.1 24.5 Franking (%) 100.0 100.0 100.0 100.0 Yield (%) 3.0 4.8 7.3 8.9 PER (x) 20.3 60.3 17.2 11.7 Source: Aspect Huntley analyst estimates.
6 month price chart https://online.asb.co.nz/ost/1EF7A74...1e00e92d0b.png
Wow... thanks for the post!
You would think that Morningstar would have an unlimited BUY notice on ZEL. Double your money, must be better than all of their other investments put together. Dont trust Morningstar, they have an ulterior motive to promote the price so they can dump at $5.60. Having said that I believe current market value at $2.80 is a reasonable buy for the future.
I don't trust the SP target but I do appreciate their analysis
Probably. They all have an agenda of some sort. Where are the truly independent analysts.
Well, things are starting to look a little better and apart from all the financials etc I think Z needs to sack it's advertising agency. Most of their stations look aesthetically pleasing and some are quite inviting but their current TV ads with a geriatric biker and a couple of tradies doesn't spin my wheels at all. Bennetts has been there since 2010... Time for a change.
As I've mentioned before TV ads with bustling forecourts has far more appeal if they want to connect better to customers.
I've held since 2013 and topped up in 2018 & 2019. I'm down about 3K but up 7K in their bonds and pride makes me hold waiting for the magic to re-appear. I don't think it will happen with Bennetts or their current advertising agency. I must admit their website is great.
No one can predict.... after all it is share market.
$2.80 is way too cheap for a company that forecast at least 20c dividend
Bull...ahh...he is a trader...hot n cold.
https://imgur.com/RccABmu
Atleast the key metrics like TSR are improving, right Winner?
Might even break even next year if you're lucky :)
If tmw broke n hold above $2.90...then it breaks MA 100....sp will head above $3 in the coming week
Yeah buy now....ex dividend ...sp gives up 14c too...
So..buy at $2.80...ex dividend will be $2.70 .. possible lower...
It will take weeks or months to gain. Back your capital n your capital will be under water
Food for thought.
Is the dividend sustainable ?
What is ZEL's track record like with previous dividend forecasts ?
How fast is the tide going out with the switch to EV's ?
How fast are the minnows continuing to erode ZEL's market share ?
Is swimming in what appears to be a steadily outgoing tide worth the risk ?
Am not too worried about sp dropping on ex div day. have made 113k profit so far this financial year and would like to start my LTDS ( Loss To Div Swap) process to get my profit down for tax reasons. There must be plenty of sellers, because every time I buy more somebody keeps putting more to sell at $2.81c.
Currently all the money is sitting in conservative funds , would a conservative fund have something like ZEL in it , I doubt it, so shouldn't be selling pressure coming from
that direction. It obviously precludes the new providers from investing in them for their New "balanced" funds.
Had to drop into Z last week at Bombay while heading south. Got a top up of petrol and was very impressed with the clean toilets and the food presentation, and can now understand why lots of customers were eating pies as I was about to leave. Just couldn't resist, so went back in and bought one, it was a good pie, plenty of filling delicious, and it felt good being a customer in a company you are part owner of:t_up: