Well at least IFT aren't thinking of taking ENE over. I hope not!
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Well at least IFT aren't thinking of taking ENE over. I hope not!
I'm not sure what the game here is. Reading between the lines maybe IFT has initiated the exercise (being the major SH) with the end goal of ending up with the cream of ENE's generating assets.
Or, someone has come to IFT with a deal. Signing off saying that you are not going to sell your holding before 18 August may well mean that IFT has already lined up a buyer?
Has anyone out there had experience/or seen this kind of deal (strategic review) before?
I don't have any answers but the ENE story is a bit sad really. It was very successful several years ago, pioneering electricity from landfill gas in Australia, at a time when energy was much less valuable ( or at least, much less valued ) and building and operating remote power systems, some of them from coal seam methane, some diesel powered, for mines etc.
It was also a very good investment with a regular stream of heavily discounted cash issues and share purchase plans. One of my better investments!
The company started to go astray when it tried to develop a more sophisticated system for large scale gas from trash.
The name of the system escapes me now but suffice to say that ENE poured many millions into it before giving it up as a bad job. IFT became involved during this time so has never benefitted from ENE's golden period.
I wouldn't write ENE off entirely. It may be that IFT see some of the generation assets as attractive, although quite small scale, but as an IFT shareholder I'd rather they didn't make a big investment by taking over the entire company.
It was positive in terms of the potential of their investments, with frustration at the way the shareprice is being marked down in the current environment.
There was a good example of how the value of Trustpower's generation capabilities is determined and a local example of how it was considered that the Dunedin City Council made an error in keeping the 'lines' business while flogging off the Waipori generation assets.
It was noted that the bus investments were still struggling due to 'red tape', but the potential was still there to be extracted.
Airport assets were discussed with regards to Wellington Airport, and there were questions from the floor regarding the lack of returns from the overseas airport investments. They missed out on bringing a freight distribution contract to one of the overseas airports, which would have released a huge increase in value for the airport if it had been successful.
No mention was made of this weeks announcement regarding the Aussie energy assets...
Trustpower expects 15 pct earnings growth
Reuters | Friday, 11 July 2008
New Zealand electricity generator and retailer TrustPower says its 2008/09 earnings may grow around 15 percent, despite a dry and mild period hitting its electricity generation.
The country's second largest listed power company generates all its power through renewable sources -- wind and hydro -- making it vulnerable to drought.
Chief executive Keith Tempest said the company still expects growth in earnings before interest, tax depreciation, amortisation and financial instruments (ebitda) in the year to March 2009, despite the impact of the "one in a hundred year" dry and windless spell.
"Most analysts are looking in the $240 million region, which I'd put as achievable," he told Reuters in an interview.
Ebitda for the year to March 2008 was $208 million, with net profit of $98 million. Shares in TrustPower, 50.5 percent owned by utilities investor Infratil Ltd and 33 percent owned by a consumer electricity trust, last traded up 1.3 percent at $7.70. The stock has fallen 11 percent so far this year, compared to a 24 percent decline in the benchmark top 50 index.
TrustPower plans to almost double its renewable generation through new wind and hydro plants, which it expects to fund through debt.
yes I wouldn't write off ENE, check out the chart, looks like someone seems to think there's
about to be some value unlocked.
It's interesting in the annual report, they talk about the series of one off issues that ENE has had, so recent developments could be a reflection of looking past these issues.
The question is who initiated this?
Trustpower will be in profit clawback mode now. Earlier than predicted when they gave the profit downgrade.
Electricity industry relaxes
http://www.stuff.co.nz/4618378a13.html
Possum, got any stats to back your comment up.
According to the latest IFT email, Aucklanders love the new bus services.
NZ Bus Patronage
NZ Bus has seen an increase in year-on-year patronage as more Aucklanders and
Wellingtonians recognise and utilise the benefits of the cost effective
public transport system available to them. The reasons for increased
patronage are attributed to a number of factors and vary from route to route.
"We have seen significant growth in the number of customers using the Mt Eden
service" says Bruce Emson, CEO. "As a result of increasing service and
providing more buses more often, we have seen an increase in patronage of
approximately 17%."
"Community events also impact patronage. An example of this is that a number
of our Orakei routes have seen increases in the vicinity of 20%, largely as a
result of people travelling to and from the Sylvia Park retail complex" says
Mr Emson. Traffic infrastructure improvement has driven other increases -
for example, the installation of the Northern Expressway has driven increases
of up to 60% on some express services.
In Wellington, there has been noticeable growth on the Seatoun express
service (11%) and the Wainuiomata-Wellington commuter service (33%), which
has recently had extra capacity added. Improvements to the Airport Flyer
service have also increased patronage on that route by 15%.
"Naturally, travelling during peak times you can expect a degree of
congestion" says Mr Emson. "What we are seeing is that passengers who have
flexibility in their schedule are making decisions to travel off-peak."
"It is inevitable that as petrol prices continue to climb that people will
start to make smart choices with their disposable income. Catching the bus
is clearly one of those."
Auckland patronage June 2008 June 2007
Passengers 2,751,267 2,541,107
Adjusted for comparable days 2,718,487 2,541.107
Percentage increase 7.0%
Average passengers per day 90,616 84,704
Bus load equivalents per day 1,510 1,412
Wellington patronage June 2008 June 2007
Passengers 1,615,571 1,530,027
Adjusted for comparable days 1,592,926 1,530.027
Percentage increase 4.1%
Average passengers per day 53,098 51,001
Bus load equivalents per day 885 850
Toddy read your own post re Wellington city council increasing fares
I find the statistics from their Kent and Lubeck airports very underwhelming. Maybe they should just sell off the land in Kent. I'd have thought an airport there would be doing well by now.
I can tell you that the off peak train fares from Wellington - Johnsonville are due for an increase from 1 September.
As someone who uses both the rail & bus system several times a week, the small increase from $2 to $2.50 for the train is quite acceptable.
(Im assuming the peak rates will go from $3.50 - $4.00)
You can get from the Railway Station to Courtney Place for $1 on the bus.
No wonder i've noticed a big increase in passengers on both, it's so cheap.
Parking is expensive, even ignoring the rising price of oil.
No wonder i sold my car 4 years ago & moved into the City!
Agree, very frustrating.
Only consolation is that IFT management do have a medium term plan.
Lubeck Airport has just had a train station commissioned recently. My understanding is that Lubeck is still not a done deal until the planning consent has been successful for the runway extension, i.e IFT have an out clause where the council would buy back IFT's investment if the planning consent is not successful.
Kent. In theory the freight business should be doing significantly better. We should not be seeing seasonal dips, only growth. So far, most attempts to get passenger flights going have ended in tears for a number of reasons. It is a good piece of dirt and very modern. I'm sure that it would be a great asset to own in say, 20 years time.
I'll ask some questions at the IFT investor presentation. However, the answer would be along the lines that the assets are insignificant and offer IFT optionality in a growing industry. Budget air travel when I lived in London was super affordable to every level of society. Put it this way, it is cheaper to fly to Europe for the weekend than take the car for a Sunday drive.
The bus story is starting to take shape despite the red tape from Local and Central Govt.
Recently booked one of these so called cheap flights with a discount outfit called flybe.
Return amsterdam to exeter for two people . Was advertised as ten pounds (27 dollars)
Total cost turned out to be 180 (apx 500 dollars)
10 pounds per bag
10 pounds to book seat
50 pound taxes
etc etc
Turned out to be not much cheaper than british airways, unless they too had hidden extras
Picked up a 1m warrants today.
Hmmm. That's a good sign!
The sale process is underway.
July 20 (Bloomberg) -- Energy Developments Ltd. hired RBC Capital Markets to auction a 200-million-pound ($400 million) business generating landfill-gas power in the U.K., France and Greece, the Sunday Times reported today without citing anyone.
Likely bidders include Infinis, the renewable energy group owned by Guy Hands' buyout group Terra Firma Capital Partners Ltd, and Macquarie Group Ltd, the Australian infrastructure group, the newspaper said. Landfill-gas power produces electricity by burning methane created by decomposing waste.
Also, check out todays wholesale spot market ELECTRICITY prices. Any electricity crises is well and truely yesterdays news.
http://www.electricityinfo.co.nz/comitFta/ftapage.main
The B warrants up 25% two days in a row. Down days at that.
Confirmation at last that IFT has been severely over-sold!!!
I'm no expert in TA but the chart certainly looks very healthly having well and truly broken the long trend down that started in January.
Interesting to compare to TPW chart too but no conclusions on that one. The improved situation in the lakes will certainly have been great for TPW
The directors that bought the warrants last week have made a killing.
might start moving soon. Wasn't today the last day for trading the partly paid ones. I stocked up on "Bs" last week.
Annanz
Talk about complicating a business plan. The only plan from here should be doing the big sell on a decent budget airline with decent capital backing. How do you convince a Ryanair or Easyjet to add services to Kent.
The local community cannot use the airport if there are no planes.
I always take those types of surveys with a grain of proverbial salt. Locals will invariably say that they will use the service (perhaps due to the 'prestige' of having an international airport servicing the public), but the numbers never materialise at those levels in the end.
Monday 28th July 2008
TrustPower, the power station operator controlled by Infratil, said a decline in the New Zealand dollar may reduce the economics of wind farms.
The company typically buys its turbines in euros and its towers in US dollars, which have both weakened against the kiwi.
The company is gearing up to expand its wind farms in Australia, where it is to install about 140 MW of generators, and in New Zealand, where it has consents for more turbines.
The kiwi's decline "may make wind farm economics more challenging," the company said in slides for a presentation in Sydney.
This is code for............ if the Govt wants to get anywhere near its renewable energy target then the electricity prices in New Zealand are going to have to hike alot sooner and higher than has been forecast in the past.
IFT
29/07/2008
ALLOT
REL: 1642 HRS Infratil Limited
ALLOT: IFT: Allotment Notice
The following information is provided in accordance with
Listing Rules 7.12
Class of security: Ordinary Shares
ISIN: NZIFTE0003S3
Number of Ordinary Shares issued: 8,726,534
Issue Price: $2.00
Payment: Final instalment $1.00, in cash
Amount paid up: Partly paid Ordinary Shares fully paid to $2.00
Percentage of the total class of securities issued (after the issue): 1.93%
Reason for the issue: Partly Paid shares converted (IFTCB).
Specific authority for the issue: Terms and conditions of the issue of the
Partly paid shares prospectus dated 29 August 2007. Board resolution dated 27
August 2007.
Terms or conditions of the issue: Partly paid shareholders have the right to
subscribe for Ordinary Shares, credited as fully paid, at the final
instalment price of $1.00
Total number of Ordinary Shares in existence after the issue: 452,150,088
Total number of Partly paid shares o
n issue after the above are converted:
79,281,527
K M Baker
End CA:00167955 For:IFT Type:ALLOT Time:2008-07-29:16:42:38
Looking good for the final investment decision to be made within weeks.
TrustPower asked to look again at project
The Environment Court wants TrustPower to look again at its $400 million Mahinerangi wind farm project, saying it is not confident 100 turbines can be accommodated on the 1723ha site.
In its interim decision released yesterday, the court rejected the appeal against the project by the Upland Landscape Protection Society but asked TrustPower to do more homework on how many turbines it needs and where they should go.
However, the court said it accepted the wind farm would benefit the district, the region and also the nation.
A significant advantage, it said in its 73-page decision, is that wind generation does not produce any greenhouse gases, while the court also accepted the prospects of work for local people, both during and after construction.
It has yet to decide on how costs should be awarded.
TrustPower now has 40 working days to review its site plan and consider whether it wants to stick to its plan of erecting 100 145m turbines on the site.
In a brief statement, it said it welcomed the decision.
"This is a positive step towards increasing New Zealand's renewable electricity supply and for continued growth of TrustPower's renewable asset base.
"We are still reviewing the details of the decision and will look to progress any actions required to secure a final decision over the coming weeks."
But the court has told TrustPower to have a re-think on exactly where the turbines should go.
A revamped design would need to avoid rows of turbines or give the visual appearance of a "wall" from certain angles.
"We are confident the site can accommodate more than 66 turbines but are not so confident that the 100 turbines envisaged can be accommodated.
"However, we consider that if significant cuts, fills and batters can be avoided, the site may be able to accommodate up to 100 turbines if placed and sited appropriately."
Because of this view, the court said it was giving TrustPower the opportunity to reconsider both the number and location of turbines "and to provide modified conditions to meet the concerns of the court."
Its revised plan must be given to the Clutha District Council, Otago Regional Council and society for comment and, if possible, signed agreement.
But there were several key positive benefits to be gained from the development, the court said.
These were the creation of jobs during and after construction, the provision of a renewable energy power source to meet New Zealand's energy needs, and a new energy source in the southern South Island which could enable community and business activities.
Society spokesman Richard Reeve said he and other members had yet to read the decision and could not comment yet.
A statement may be issued later today.
Major benefits
• Minimum irreversible long-term modification of
landformMajor visual effect of the activity will stop, if the activity
stops, with turbines removed..
• Existing farming can continue
• Improvement to ecological values of Scrappy Pines area.
Source: Environment Court
Key conditions
• TrustPower must prepare a site plan showing the number and
position of turbines, areas to be excluded from works, access roads,
cut and fill batters, surplus soil disposal areas and cut and fill
calculations in each area.
• Site plan to be prepared and circulated within 40 working days and talks with other parties within 30 working days thereafter.
• If all parties cannot agree, a further pre-hearing conference and hearing may be needed.
This is very good news for TPW and IFT. 2008 is going to end up being the biggest year for them both in terms of getting the go ahead on a number of projects, investing hundreds of millions of dollars.
GENERAL: TPW: TPW Resource Consents Granted for 72 MW Wairau Valley Hydro
Media Statement from TrustPower Limited
5 August 2008
The Marlborough District Council has advised TrustPower that it has been
granted the resource consents required to build its proposed 72MW hydro
scheme in the Wairau Valley in Marlborough.
The proposed $275 million scheme will take water from the Wairau River, and
pass it though six power stations, including the existing Branch River hydro
scheme, before returning the water to the river some 50km downstream.
The full resource consents follow interim consents issued in June 2007 after
six months of hearings by a panel of independent commissioners, and a
subsequent hearing to determine a wide range of conditions designed to ensure
there is minimal adverse impact upon the environment.
TrustPower Chief Executive Keith Tempest says the issuing of the full suite
of resource consents and conditions has justified the time, effort and
expense TrustPower has put in to the proposal since it was first mooted in
2002.
"The proposed scheme will provide direct benefits to upper South Island
communities and indirect benefits to the rest of New Zealand through the
freeing up of electricity currently imported into that region for more
efficient use elsewhere. At the same time it will assist New Zealand to meets
its targets of increased sustainable generation using local natural
resources, with minimal impact on the environment.".
Its good to see that the monthly updates now include more than just the airports.
Victoria Electricity
At the end of July, billable customer numbers reached 350,000 (up from
286,000 at the end of 2007/08 financial year). This figure includes a
significant number of Queensland customers acquired over the course of this
calendar year. However, growth was curtailed in Queensland at the beginning
of June shortly after retail benchmark price caps were set at levels well
below those required to recognise the significant increases in wholesale
energy and network charges. Customer numbers in South Australia have also
remained steady due to elevated wholesale energy prices. Growth efforts are
currently focused on Victoria where the conditions for profitable competition
are best, albeit that growth is harder in this market due to the maturity of
competition and efforts of other retailers to acquire and retain customers.
The Federal Government recently released a Green Paper on its proposed Carbon
Pollution Reduction Scheme (a cap and trade system). While there are many
details to be worked through, there has been initial recognition that retail
price caps will need to be addressed as part of the implementation of the
scheme.
I couldn't make it down to windy Wellington this year for the a.g.m.
Did anyone attend?
Here's an interesting piece on the The Public Transport Management Act, that will have a significant impact on the operations of NZ Bus.
Might spark some interesting debate.
http://www.nzherald.co.nz/section/st...ectid=10531029
The original PDF copy of the bill can be viewed here
http://legislation.govt.nz/bill/gove...t/viewpdf.aspx
Toddy You believe in competition they just stop subsidizing private operators and buy new busses or buy the bankrupt businesses off the receiver. They have no need to buy private operators out. They will be just trying to rescue as much as they can from the mess. The Ownership of Bus companies makes me forget about buying Infratil Shares
Bankrupting PT providers by removing subsidies would create one giant shambles for local authorities both legally and logistically.
What would you propose as the most efficient and effective ownership/operation model?
Possum, the Local Govt sold the bus business because they were inefficient at running it. Now they want the law changed so that they do not have to be involved in the day to day operations but want to be able to make all of the business decisions.
Infratil is like a good landlord who offers renovated properties. They have plenty of room to offer cheap budget services. The only loser would be the people that actually use the service (thats not you Possum).
Push the right buttons and I'm sure that Infratil can provide New Zealand standard services as opposed to International standard services.
If thats what Aucklanders want, then who am I to argue.
Toddy when a 25min journey in a car takes over 90mins by bus only the desperate use bus. No the bookeeping makes it looklike they are inefficient at running it. Apparantly Infratil are not very efficient at running it either as they admit it is not performing to expectations. I also look at walking as it is quite often quicker and definately cheaper than catching bus.
Maybe the timing is right to head up to Auckland and start a petition.
Buy back our bus company from those money hungry capitalists. We give them 90mil a year. That will be a 90mil savings if we, the rate payers, owned it.
I know it would be a dangerous strategy as people get elected onto councils saying such things. And I would have to front on that socialist tv program called 'Close up' to explain.
It looks like the bus subsidies will be increased to cater for fuel efficient, disability friendly buses and increased red tape. This means that the cheap bus providers will be pushed out.
Legislation giving regional councils greater control over public transport services has passed into law as Parliament sits under urgency.
Previously councils could set standards for public transport it contracts.
The bill will also allow councils to:
* require services to be disability-friendly, such as super-low floor buses and public address systems;
* require information about demand and cost;
* allow councils to require providers to give 90 days notice instead of 21 days for changes such as to timetables;
* require different operators to use the same tickets in some cases, for example, where different providers work the same route;
* allow regions to insist on low emission buses.
The legislation follows a review of public transport law by a working group made up of central and local government as well as public transport operators.
Transport Minister Annette King said the bill did not tell regional councils how to run their public transport systems, just gave them the tools to run them effectively
The National Party did not vote against the bill, but transport spokesman Maurice Williamson said he had reservations about it as it created needless red tape for operators.
Unsubsidised public transport services should be able to operate without regional council interference as long as they followed Land Transport rules, he said.
That's the same rather questionable logic that was used to justify the re-purchase of the rail network.
If local authorities can operate the PT services more effectively, and at the same or lower cost, then perhaps it should be considered. History thus far does not support this argument, and I think that rate payers would revolt at the thought of the Cap Ex required to re-establish PT under rate-payer ownership.
Zaphod They Can buy for pittance there are no other willing buyers
And that's exactly what happened when the Government bought back the rail assets off Toll, didn't it?
Zaphod trains do not run on public roads and parts were very profitable but busses are only profitable twice a day for short time and with just those times to produce revenue the fares would be astronomical so it would only take about a fortnight to have them begging to be bought out.
The trains were running on publicly-owned rail tracks, so the analogy is still relevant. I also suspect the courts would not look too favourably upon the plan you have outlined for re-nationalisation of NZBus, neither would IRD.
Even if the business was picked up "for a song", would ratepayers be willing to suddenly bear the brunt of operating the PT business? Remember that a fair percentage of the total cost of the bus purchase price of $350,000+ is paid for by investors of NZ Bus. In a totally public system, this would be paid by the ratepayers.
But this whole discussion is hypothetical. I have not seen any indication by either the local authority or central government that they intend to re-nationalise the PT industry.
What we are seeing is the industry and councils "feeling out" the best mix of public/private interests.
When the industry was privatised in 1991, the intention was that buses would be run completely privately and would provide services without public subsidies. Obviously this did not work, and we subsequently moved to a model that was somewhere in the centre between complete private ownership and complete public ownership.
IMO this bill moves the positioning of the PPP slightly more favourably to the public side. Whether this will result (as NZ Bus claim) in lower investment rates by the private operators remains to be seen.
Infratil hoping to land UK airport
By NICK SMITH - The Independent | Friday, 19 September 2008
Listed infrastructure investor Infratil is on the hunt for airports in Britain if the competition regulator forces London airport group BAA, owner of Heathrow and Gatwick, to sell some of its assets, Lloyd Morrison confirms.
The Infratil boss said there are a number of interesting smaller assets such as Southampton and larger ones in Glasgow and Edinburgh, although the Scottish airports might present ``competition issues'' as Infratil already owns Glasgow Prestwick Airport.
Infratil also owns airports in Kent and Hamburg Lubick, Germany. The potential acquisition comes as New Zealand analysts finally begin to warm to the company's European assets.
ABN Amro's Rob Foster said BAA's recent sale of Belfast City showed Infratil's ``unloved'' airports contained more value than previously thought.
``They've not been great performers and consequently have received little attention from analysts and the market has struggled to recognise value in the assets,'' Foster said.
Belfast sold for 133 million, while Leeds Bradford yielded a transaction valuation of 146m.
This implied a trade sale valuation for Glasgow Prestwick of 108.5m, Foster said, more than double its previous valuation of 44.5m.
Morrison said analysts made the mistake of treating its airports as mature assets, rather than the start-up or developing airports they actually are. ``There's another [sale] coming up called Southend, which is in the Thames estuary and that's a very small airport,'' Morrison said.
``That is more our scale.
``The sale of Belfast is an example of an asset the equivalent of Glasgow Prestwick and the sale of Southend will give an idea of what an airport like Kent might do.'' Analysts had valued Kent at only 27m but Foster has now upped that to 74m.
Morrison rates his company's ability to find ``asset opportunities'' in ways that avoid competition. Companies tend to pay full value at airport tenders, whereas ``we bought Kent out of receivership''.
``We're still active in that part of the market,'' Morrison said. ``If one of the Scottish airports came along it would be interesting but the issue for us is whether we would be allowed to bid from a competition perspective. Edinburgh would fit very well with Prestwick.''
The UK Competition Commission is recommending BAA, owned by Spanish infrastructure company Ferrovial, be forced to sell at least three of its UK airports Gatwick or Stansted in London and possibly Edinburgh or Glasgow, British media report.
``They haven't announced anything around Southampton, which is a small airport [and] they might sell that,'' Morrison added.
Despite the credit crunch, market interest in airports ``is as strong as it was 12 months'', he said.
Analysts have for years been telling Infratil to divest its European assets but Morrison backed his ability to extract further value.
``When you sell that's when you think there's a peak of demand that isn't sustainable,'' he said. ``It's quite clear that all of our assets have further value to be added to them.
``The level of interest in the sector is still high and there's no sign of it abating.''
This implied a trade sale valuation for Glasgow Prestwick of 108.5m, Foster said, more than double its previous valuation of 44.5m.
Analysts had valued Kent at only 27m but Foster has now upped that to 74m.
On those valuations Glasgow & Kent are worth nearly a dollar a share to IFT
I'd like to see more visibility from IFT of the airports story before they invest more in that sector.
It would be nice if IFT prepared a GPG like score card of their assets per share at market value less debt broken down by investment so we could see how much of a discount they are trading at. AMRO's once had a valuation at $5.50 but don't know how they arrive at that.
Infratil should make an on market announcement on this one. What a waste of everyones time. No wonder the Comcom is so busy.
4:00AM Monday Sep 22, 2008
The Supreme Court has declined to grant the Commerce Commission leave to appeal against a lower court's finding that Infratil was not liable as an accessory in a bus business takeover case.
And one for Possum The Cat.
NZ Bus Overview - August 2008
Aucklanders continue to make the move to public transport.
August saw an increase of 6 % across the board with over 3.4 million
passengers making their journey by bus. The reasons for increased patronage
are attributed to a number of factors and vary from route to route.
Highest growth in passenger numbers occurred in the central isthmus with an
increase of 9.1 %.
South Auckland and Eastern Isthmus shared increases of 5.6% and travel within
the inner city grew by 5.5%. Western Bays grew by 10.3% on last year,
reflecting the cessation of Queen Street roadworks that took place in 2007.
West Auckland & North shore shared increases of 4.6%, the Northshore being
largely the result of timetabling changes to accommodate the Northern
Express.
In the Wellington region, taking into account the difference in
school/working days between August 2007 and August 2008, patronage rose 5.9%.
Not specifially related to IFT, however this is a further example of the bus industry consolidation that I've taked about before.
----
Go Bus Wins Urban Bus Service Tender
"Hamilton bus company, Go Bus, has won the tender from Hawke's Bay Regional Council for the supply of urban bus services in Napier and Hastings.
The new services will commence on 2 February 2009 and 9 new buses will be brought in for this."
http://www.hbrc.govt.nz/Home/tabid/3...8/Default.aspx
----
NZ Bus are also on the prowl. There's one more juicy target in the North island that will come up for tender in the not so distant future.
No Wellington buses tomorrow unless deal reached
Bus drivers will be at the picket line - and not on the capital's roads - from tomorrow morning, as commuter chaos looms.
http://www.stuff.co.nz/4703894a11.html
Ooooo if the share price keeps going like this IFT will be worth next to nothing.
Romer it has not been worth more than next to nothing for last few years
Nice move by Lloyd to pick up a stake in Fisher Funds.
ANNA NAUM But it does not add anything to value of IFT. Inmy opinion it devalues it as he will have less time to devote to IFT.
Lloyd has a very good track record of adding value over time. I would have thought buying into a funds management operation a year after the market has peaked shows an appreciation of value. Is it the sort of business sector that IFT has invested in previously? No. I would back Lloyd, history suggests he will probably be right.
Anna Naum he did not buy it for IFT but for himself so how is this good for IFT
I thought the stake was purchased by IFT, but you are right, he has kept it for himself, just another reason why it must be a good deal.
The business overall is in ok shape given the 'crises'. I'm not too sure what the 'market' was looking for. This sums it up for IFT.
'Infratil remains well placed to ride out the current economic conditions, its businesses are in sectors which offer structural advantages as opposed to those where consumption is more discretionary or where suppliers with over-capacity will come under greater pricing pressure.'
Infratil Result for the Six Months ended 30 September 2008
For the six months to 30 September 2008 Infratil's consolidated earnings before interest, tax, depreciation, amortisation and revaluations were $203 million, up from $166 million for the same period last year.
The operating surplus (earnings after interest, depreciation and amortisation) was
$67 million, up from $59 million and the net surplus after tax was $7.3 million, down from $14.5 million for the same period a year ago primarily due to a $13.4 million reduction in derivative valuations.
Net operating cashflows were $42 million up from $21 million in 2007. Discretionary growth capital outlays (excluding working capital) amounted to $235 million with going concern capex of $26 million.
A fully imputed dividend of 2.5 cents per share is to be paid on 15 December 2008 to all shareholders on the register as at 5 December 2008.
BUSINESS RESULTS
CONTRIBUTIONS TO EBITDAF
$ million 6 months to
30 September 2008
6 months to
30 September 2007
Year to
31 March 2008
TrustPower 136.7 116.2 208.0
IEA Group 28.1 7.8 12.0
Wellington Airport 32.2 27.7 60.0
IAE (6.0) 0.0 1.2
NZ Bus 17.8 20.8 41.9
Other, Eliminations, etc. (5.8) (6.8) (7.2)
Total 203.0 165.7 315.9
Infratil's 23% increase in EBITDAF reflected the financial and operating performances at Infratil's core businesses.
TRUSTPOWER delivered record half-year earnings despite facing very difficult generation and spot market conditions over the first quarter. TrustPower's diversity of generation catchments and risk management practices again showed their worth. The contract and spot markets were both effective over the period with price signals influencing the operation of hydro and thermal plants and price-exposed consumers.
WELLINGTON AIRPORT also produced record earnings and cash contribution to Infratil. The Airport's efforts to attract and develop services paid off during the period with continued growth despite the emerging weak economic picture.
INFRATIL ENERGY AUSTRALIA delivered a strong earnings contribution. The result included non-recurring gains but also reflected good risk management, responsiveness to changing market conditions and the increasing scale of the retail operations. However, increasing customer numbers has also increased the seasonality of retail earnings which are heavily weighted towards winter, while in the case of electricity, unit costs are highest over the summer period.
NEW ZEALAND BUS experienced a decline in earnings due to increases in maintenance expenditure required to improve service reliability. Otherwise, increased patronage, fares and regional council contract payments balanced-out higher costs. Notably NZ Bus's road user charges were over $5 million for the period due to a 14% increase in this Government levy.
Snapper, the new ticket and payment system was warmly received in Wellington. Over 30,000 cards were issued and are now being used over 16,000 times a day for transport and merchandise transactions.
INFRATIL AIRPORTS EUROPE recorded an earnings loss of $6 million for the half. This reflected the loss of major freight services at Glasgow and Kent. While the suddenness of the reduction of services meant that the airports have incurred adjustment costs (including bad debts) it is likely that the full year outcome will be consistent with the first half trend.
CAPITAL & RISK MANAGEMENT
The world's capital markets are undergoing their most stressful and difficult period for two generations. Fluctuating asset values and financial system failures have created damage and uncertainty and the economy now faces a potentially prolonged period of recession. Like most listed entities, Infratil's share price has been affected, but the impact, both as regards immediate financial circumstances and the strategic positions of its businesses has been modest. Infratil's goal of delivering good returns to its shareholders is based on:
*Positioning in infrastructure sectors which offer growth and investment outperformance over the long run.
*Proactive management of risk.
On both criteria Infratil's performance over the half year was satisfactory. The return to shareholders was not satisfactory at negative 4%, but global developments were clearly at play in determining Infratil's share price.
Infratil's commitment to risk management is one of its key defining characteristics. Through proactive measures taken in past years Infratil remains comfortably positioned despite the weak economic conditions.
Cashflow Management
Over the six-month period Infratil's consolidated net operating cashflows (that is cash operating income after all expenses including interest and tax) were $42 million.
Discretionary growth capital outlays (excluding working capital) amounted to
$235 million with going concern capex of $26 million.
Funding was provided by $77 million of new equity, $95 million of additional borrowing and a $96 million reduction in cash holdings.
Looking forward, the new realities of the capital markets will impact the group's future growth investment in two ways. The availability of funds will restrict absolute investment while market prices for other utility companies will create benchmarks for the attractiveness of investment in new plant and facilities (whether terminals, turbines or buses).
Capital Management
Over the half year Infratil received $90 million from the second instalment receipt on the shares issued last year and the exercise of warrants, while $14 million was outlaid buying back shares. The buyback reflects the view that of all the investments Infratil has recently reviewed, none has been as attractive as its own shares.
Debt
During the period $140 million of debt facilities were renewed to 2011. Infratil has $174 million of its bank facilities falling due in 2009, being the annual roll of one third of its core banking facilities. IEA also has $54 million of working capital facilities for renewal in 2009.
As at 30 September Infratil had undrawn bank lines and cash deposits amounting to $254 million.
Financial Market Insurance
During the period Infratil recorded a cash gain of $16 million from put options purchased against the S&P500 index. This is as an unusual arrangement for an infrastructure company but it reflects the concern management and directors held for the health of the global capital markets. The insurance was taken against the US share market because it acts as a bellwether, Infratil has no exposure to shares listed outside of New Zealand or Australia. This insurance arrangement was terminated in October and resulted in further cash gains of $17 million which will be recorded in the second half of the 2009 financial year. The total gain from this hedge amounted to $45 million.
BUSINESS CONDITIONS, PLANS, PROSPECTS
All existing businesses and investments are subject to ongoing scrutiny as to their ability to release capital and their long-term growth and return prospects. The outcome of these reviews is likely to influence whether Infratil can be more active with new investment in the near future.
Infratil remains well placed to ride out the current economic conditions, its businesses are in sectors which offer structural advantages as opposed to those where consumption is more discretionary or where suppliers with over-capacity will come under greater pricing pressure. As with past recessions and financial crises, there will be a recovery.
REGULATORY CONDITIONS
The period under review contained a mixed bag of regulatory developments. In its last days, the Labour Government drove several pieces of legislation into law which are likely to be subject to improvement once more thoughtful, less urgent, consideration is brought to bear.
A late change to the Public Transport Management Bill resulted in legislation which allows regional councils to effectively ban all privately provided public transport. Unless the law is corrected, it will stifle development, investment and new services.
New Zealand airports also slipped into being regulated during the final burst of the last Government's legislative activity, notwithstanding official analysis indicating that the airports were the best performing parts of New Zealand's transport infrastructure.
One positive from the late flurry of law making came in the form of the Emission Trading Scheme. While the National led Government has signalled that it will be amended, there is likely to be retention of core features which mean that an international price will be placed on New Zealand's carbon emissions. For the electricity sector the law confirms what has been anticipated and will ensure that the focus of new development continues to be on renewable generation.
Infratil's businesses were also subject to regulatory developments in the Australian retail energy sector relating to carbon reduction and control of retail energy prices. Price caps are a feature of each State's regulation with only Victoria rapidly moving to their removal. The other States face challenges in getting their retail prices to levels that fully reflect costs, which is necessary if investment in new capacity is to occur. It will be even more challenging when carbon is priced into wholesale electricity prices from 2010.
SECTOR TRENDS
The value of Infratil's businesses are driven by underlying trends in urban mobility, renewable energy, air travel and the restructuring Australian energy market.
With the enormous shock the world's finance sector and now real economy is undergoing, it is necessary to ask questions such as "will air traffic grow?", "will people be willing to pay more for energy to reduce greenhouse gas emissions?" and "will better public transport be a preferred solution to urban mobility?".
There will definitely be setbacks. "Edge of city" European airports will increase in value as existing facilities become congested. A slump in aviation growth means congestion is postponed. Generally, however, the factors which led Infratil to its existing sectors continue to pertain. In addition Infratil's businesses exhibit the key attribute of having robust cashflows despite the wider economic circumstances.
Over the medium term Infratil's businesses are well placed to weather current events and to continue their growth programmes. Society wants good infrastructure and governments are encouraging investment in these sectors because of social pressure and to balance declining consumer spending. Infratil's record, expertise and credibility make it a natural partner in such developments. It is also the case that investors remain strongly interested in infrastructure and stabilisation of the credit and capital markets will in due course result in greater confidence in valuations.
PEOPLE & COMMUNITIES
While the immediate priority of management is to conserve financial resources, this does not mean neglecting either the users of Infratil's facilities and services or the people who make them work.
In particular, the New Zealand Bus team deserve special note. This industry is beset with change and our management team are also fundamentally changing the nature of their business. It is no surprise that not all these changes are smoothly implemented and unfortunately some critics see only the glitches. There was one unfortunate brief interlude of industrial action, but in the main our drivers are working with the changes and their support is appreciated.
Wishing Lloyd good luck with his treatment.
19/01/2009
DIRECTOR
REL: 0831 HRS Infratil Limited
DIRECTOR: IFT: Chief Executive Announcement
Monday 19 January 2009
Chief Executive Announcement
The Chairman of Infratil Limited, Mr. David Newman, today announced that
Chief Executive, Lloyd Morrison, will step down from the business for a
period of medical leave. Mr. Morrison has been diagnosed with a form of
leukaemia and has started treatment.
Mr. Morrison will also take leave of absence from his positions as director
of Infratil, TrustPower and Auckland International Airport.
Chief Operating Officer, Marko Bogoievski, has with immediate effect been
appointed as Chief Executive for the period of the medical leave. Mr.
Bogoievski has also been appointed with immediate effect as a director of
Infratil (and determined, for the purposes of the NZX Listing Rules, to be a
non-Independent Director).
Mr. Newman commented: "It is important for Lloyd to focus on his health and
family. Infratil is very well placed with the strength of its businesses and
the depth in the management team. Our thoughts are with Lloyd and his family
and I am sure he will fight this illness with the same determination and
passion he has shown in the business."
Here's hoping for a swift recovery for Lloyd.
Wonder what exercising the put option would do to the results and balance sheet? Lots of leverage being used to get the necessary outcomes required or they will bail out.
GENERAL: IFT: Luebeck Airport Update
Infratil has concluded a variation to its shareholders' agreement with the
City of Luebeck with respect to Luebeck Airport. Infratil owns 90% of Luebeck
Airport and the City the balance of 10%.
The shareholders' agreement, signed in 2005 when Infratil acquired its
majority stake from the City, gave Infratil a put option under which it can
require the City to reacquire its 90% shareholding if there were less than
1.2 million passengers at Luebeck Airport during 2008. There were 540,000
passengers in 2008.
The key put option terms are now:
1. The put option may be exercised up until 31 January 2010.
2. Infratil has agreed not to exercise the put option prior to 23 October
2009.
3. If exercised between 23 October and 31 October 2009, the put option price
will be Euro23.5 million plus compensation for approved operating losses at
the Airport incurred during 2009 (up to a maximum of Euro 1.6 million) plus
interest.
4. The City has a call option over Infratil's 90% shareholding exercisable
until 31 October 2009 at the same price and terms as the put option.
Infratil has made no decision on whether to exercise the put option.
In the meantime, Infratil and the Airport continue to await the planning
approval decision that, if successful, would encourage aircraft to be based
at the Airport and allow for significant passenger growth. The planning
decision is expected in the first quarter of 2009.
The Airport is also pleased to note Ryanair's increased services over the
northern summer period. The most significant is the introduction of a daily
Palma (Majorca) service. Majorca is the single most popular holiday
destination for Germans.
Taken a bit of a beating last two days , and now they are putting out lots of announcements about investor roadshows.
Are they about to ask for some money?
Ratty, they do a roadshow this time each year....well...this is the second one anyway.....
Take a look at their website for details.
[QUOTE=ratkin;244894]Taken a bit of a beating last two days , and now they are putting out lots of announcements about investor roadshows.
Are they about to ask for some money?[/QUOT
If they can get people to pay up on the B warrants which expire around July, that should bring in a decent sum. They need to get the share price comfortably above $1.62.
http://www.nzx.com/markets/NZSX/IFT/...ements/4867724
Great to see Infratil buying back shares at these low prices.
on how much Infratil will pay to repurchase some of their perpetual bonds. I'd love to get rid of some. Smart move by them to buy them back if they only have to pay somewhere near the recent buy prices. Not that they will get mine at that price.
Can anyone post the todays update that Ift has released?
Rif,,,,, thank yoiu 4 that, we can see now that Ift is on the move at last after a long slide, lets hope that it continues!
IFT up up and away today, the IFTWB"S up 100% in a week, more to come B4 the exercise date in July 09, good hunting.
Yes, the update was very good reading and puts to bed some perspective on short term negatives in the context of greater macro trends.
Key investments doing well with just the european airports being the problem. Looks like they will offload Lubeck
Looking at the charts it might be just about to break out too.
At $1.62 this morning the warrants are about to get back in the money so may well convert.
Why the heavy volumn during the last hour of trading today???
Charts look pretty positive and with todays close of 165 just over the warrant strike price. Warrants may convert yet which would bring in $150m
At the moment it is a bit touch and go as whether and how many IFTWB's are converted at $1.62 each.
I was busy selling out of Infratil (amongst others) when the IFTWC were being issued and ended up with 180 of the things (currently worth $7.38!).
Although they have until end of June 2012 for the Infratil heads to get above the $4.12 strike price it seems a fairly unlikely scenario at the current time.
However I do like the look of IFT at the moment from both a fundamental and technical point of view.
regards
Paper Tiger
It's sure going to be to Infratil's advantage to have as many of the B warrants as possible converted on the 10th of July, - - (remember that date?) so I'm sure management will be doing lots in the meantime to emphasise the fact that these shares are currently hugely undervalued.
Infratil Results For The Year Ended 31 March 2009
18 May 2009
Infratil's operational, investment and financing activities delivered good results and were testament to the robustness of Infratil's activities and its financing arrangements. The bottom line reflected accounting treatment of non-cash write downs of listed investments, while overall revaluation of assets were actually positive.
For the year ended 31 March 2009 Infratil’s consolidated earnings (EBITDAF) were $356 million, up 13% from $316 million for the previous year. The operating surplus (earnings after interest, depreciation and amortisation) was $77 million, from $88 million and operating cash flows adjusted for movements in working capital increased to $144 million from $134 million. Investment and capital spending amounted to $300 million, down from $507 million in 2008.
Infratil’s core businesses, TrustPower, Wellington Airport and Infratil Energy Australia delivered improved results while NZ Bus was slightly down. Infratil’s European Airports performed poorly. Higher interest and depreciation charges were due to recent capital spending on enhanced and expanded facilities. Lower investment outflows occurred as new investments were curtailed and discretionary capital spending programmes wound down.
Infratil’s net loss after tax and minority interests rose to $191 million compared with a loss of $2 million in 2008, largely due to $179 million of non-cash write downs associated with listed investments. Overall revaluations were positive, but were mainly taken to Reserves rather than through the Profit and Loss Account.
Infratil’s liquidity and funding position withstood the difficult financial market due to good risk management and proactive positioning.
A fully imputed dividend of 3.75 cents per share is to be paid in July. The dividend is unchanged from last year.
Infratil’s outlook for the 2009/2010 year is for increasing earnings, lower financing costs and reduced net investment.
Infratil operational immediate goals are:
Addressing under-performance. Not all of Infratil’s businesses and investments are providing a satisfactory return and they must be improved, or the capital extracted for better use elsewhere. Infratil will continue to rebalance it’s portfolio between long duration investments, capital growth, and current returns as volatility and the cost of capital rise.
Capital preservation and financial flexibility. Postponing spending where opportunities are durable and only entering into new capital commitments where opportunities are both perishable and of exceptional quality.
Proactive management of risks.
Infratil’s businesses, financing and risk management is undertaken with the over-riding goal of delivering superior risk-adjusted returns to shareholders. The target is 20% p.a. after tax over the long run. Following last year’s fall in share price Infratil is no longer exceeding that long-term target, but the Company has delivered 18% p.a. after tax over the 15 years since its establishment.
This out performance is based on being well positioned in the right sectors, having excellent management, investing to deliver compound growth, and scrupulous attention to risk management. Infratil’s ingredients of success remain intact.
Thoughts anyone? Seems that apart from European airports, results have been pretty much on track, but Infratil has been hit worse than the rest of the market.
Yep Europe airports is where the probelms are. They'll dispose of Lubeck and get their money back. Interesting news about interest shown in Kent solving Londons problems, but will be a long term play there and will lose medium term.
TPW - good results and of course this is where 50% of their assets are. They don't want to make too much of a song and dance about this investment due how unpopular power companies are for their big profits. Also uncertainties in the carbon trading will delay rerating for them having the renewals angle.
Energy Aus - this is a good story but growth is at the sacrifice of profits.
IFT group whatsup a trading halt but with all the action today looks like that the cat is out of the bag, somethings cooking re the sale( pending ) of a investment in Aust, looking good never the less.
Hopefully will be a good opportunity for IFT to retire some debt
Dumb question but how long will they stay halted ?
Ift ann out but not the one we all want , this one is about splitting the warrant payment.
Not sure of the NZX rule, but in Aust a trading halt can only last for 3 trading days. After that, the share is suspended and all bid/offers are cancelled.
This halt really depends on how long it takes to get the offer for ENE to the market. Shouldn't really take that long unless it's caused by info leaking before the parties are ready for an announcement.
Ann out ,trading halt lifted , great deal for IFT and its share price especially prior to the warrants exercise date next month.
Mac , I thought that in a report somewhere that it was a fairly close call in this particular investment but with this ann they could now be out of the woods.
Great Toddy , now we will have a new class of warrant listed from 11/07/09 a "Partly paid, $ 1.12 , 21/05/2010 Warrant" !!!.
ENE traded at $1-56 prior to the halt. IFT look to be still well out of the money at that price -
From the 2008 IFT annual report -
Hold about 28% of ENE - 43m shares approx.
MV of the holding was $207.5m as at 31/3/07, $110.3m as at 31/3/08.
At $110.3m, this represented a "decline of $59.7m from cost".
Therefore cost to IFT was about $170m.
M/V of that holding at $1-56 = AUD67.2m approx, say NZD85m approx.
Have I got it wrong somewhere?
On the lunch time finance reportI think that a spokesman for IFT said that they would accept a price of $2.00 per share which may include a premium for control, as IFT own 32%.
Mac ..., any idea as to why the increase in the P M today up in a other wise dull day, Aussie closed today as well.
IFT wrote down the book value of its investment in ENE by $113.7m in the last year to 31/3/09 so it will recoup some of this if it sells at $2 - AUD or NZD - and will show a "profit" on the investment in the current year.
Won't alter the fact that ENE has cost them a lot of money, capital and income foregone, over the past few years.
With IFTWB being back in the money again, and trading at slightly below the heads, seems to me they offer an attractive opportunity for anyone intending to buy into IFT - whose sp is in a recovery mode and the company will be able to strengthen its capital position further with the warrants now likely to be mostly exercised - an outcome which a couple of months ago the company seemed to be accepting was an unlikely outcome.
(For those not fully acquainted with the position, effectively an IFTWB holder will be entitled to one IFT share for each warrant, for payment of only 55c next month, and a further $1.12 in almost a year's time, i.e. a total payment of $1.67. The current IFTWB price is 11c, so all-up it will cost you $1.78 - but bear in mind you will have the use of $1.12 of that money for almost a whole year. Compare that with today's price of around $1.73 for the head shares [last time I looked] and this seems a solid discount, given that there is every likelihood that the IFT price will be well above $2 in a year's time - those who are paying 7c for the IFTWC warrants must certainly think so, given the exercise price of $4.12 for those instruments - I would not be so optimistic as to have faith in the IFT price being above that level by 2012, but who knows!)
DISC: I have to declare an interest in that I am a holder of IFTWB - and am tempted to buy a few more.
IFT has certainly had a bad run, worse than bad actually. The SP has reflected the mood of the market and one would hope that as confidence climbs then so will the IFT SP.
The timing of the B warrants exercise date could not have been more ill timed, which is reflected in the new arrangement to be voted on 25 June.
If the ENE monkey can be lifted off their back then I'm pretty confident that we can all live with the airport assets underperforming while the travel industry finds its feet again.
There is definately time for the SP to appreciate over the next 12 months to a level that fairly reflects the real risk of the IFT portfolio.
Bad day for the (boring) NZX but that doesn't seem to be reflected in IFT's SP.
No announcements though. What's driving the rise in the heads?