reports
- Adrian Atkins
Strong Fiscal 2018 for Narrow-Moat Trustpower; Shares Fairly Valued
Good performances across retail and generation drove a strong fiscal 2018 result for narrow-moat-rated Trustpower, with underlying earnings after tax increasing 17% to NZD 135 million. However, earnings are expected to fall around 20% in fiscal 2019 on normalisation of hydroelectric generation volumes, the loss of earnings from divested Australian assets and partial loss of avoided cost of transmission, or ACOT, revenue. We make only minor changes to our earnings forecasts and maintain our fair ...
- Adrian Atkins
Trustpower is a renewable energy operator paying reliable dividends.
The Tauranga Energy Consumer Trust, or TECT, withdrew its controversial proposal to wind up over the next five years after pushback from consumers. This is good news for Trustpower, though a revised proposal is likely. Some downside risk remains, but TECT's support of Trustpower customers' best interests through the consultation process provides comfort. We maintain our NZD 5.90 fair value estimate for narrow moat-rated Trustpower. At current prices of NZD 5.63, it looks roughly fairly valued. A...
- Adrian Atkins
TECT Backtracks; No Change to Trustpower's FVE
The Tauranga Energy Consumer Trust, or TECT, withdrew its controversial proposal to wind up over the next five years after pushback from consumers. This is good news for Trustpower, though a revised proposal is likely. Some downside risk remains, but TECT's support of Trustpower customers' best interests through the consultation process provides comfort. We maintain our NZD 5.90 fair value estimate for narrow moat-rated Trustpower. At current prices of NZD 5.63, it looks roughly fairly valued. A...
- Adrian Atkins
Trustpower is a renewable energy operator paying reliable dividends.
Trustpower looks relatively good value at the current price of NZD 4.60 per share, trading 19% below our valuation and offering an attractive yield around 7% close to fully imputed for New Zealand residents. With headwinds to earnings combined with plans to reduce its relatively high financial leverage, dividends are likely to remain flat at around NZD 32 cents per share for at least a few years. But growth should resume over the longer term, making Trustpower attractive for patient investors. W...
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