Contact Energy shareholders have followed consumers, fleeing
the electricity retailer's stocks as droves of customers sign
up elsewhere.
Contact's shares slid from $5.28 to $5.23, a 1% decline, on
Wednesday which was their lowest in seven years, but retraced
some losses to trade up to $5.25 yesterday on relatively low
trading volumes.
Craigs Investment Partners broker Chris Timms said Contact
shares had lost more than 15% of value this year, partly
because of the dilutionary effect of issuing more shares in a
recent $350 million rights issue. They were now changing
hands at 2004 prices.
Contact lost 7679 consumers during June, its market share of
464,000 consumers overtaken by Genesis, which picked up 3000
customers and a majority market share of 470,000 customers,
according to the first month's figures released by
WhatsMyNumber, an independent joint venture enabling
consumers to compare electricity pricing.
Mr Timms said while the financial impact may be "flat" for
Contact, he did not expect "massive implications" for its
bottom line, as the underlying business of retail customers
switching to, and from, Contact was generally "sound".
- simon.hartley@odt.co.nz
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