Petrol retailer Z Energy provided a good first-up result as a
listed company, continuing to demonstrate its ability to
deliver on its promises, Forsyth Barr broker Suzanne Kinnaird
Overall, there was little surprise in the Z result.
At the operational level, it was in line with Forsyth Barr
forecasts with operating profit for the year ended March of
$212 million compared with the forecast of $213 million.
Reported profit was $101 million compared with forecasts of
Z reported an operating profit of $219 million but Forsyth
Barr adjusted it down by $7 million to strip out an
unrealised foreign exchange gain.
''We view this as a good result - coming in ahead of
prospectus and well within Z's $205 million to $215 million
Ms Kinnaird said the key driver of the result had been the
continued lift in margins. The gross margin of 17.1c per
litre was up from 15.3c in the previous year. The pro forma
net margin was 4.2c.
The final dividend of 14.3c per share was in line with the
prospectus and took the total dividend to 22cps.
''Given the result and outlook guidance is very much in line
with expectations, we do not expect material changes
following further analysis. We view Z as fairly valued,'' she
Z chief executive Mike Bennetts said the result highlighted
the company's ability to manage volatility in different parts
of the business and deliver quality earnings.
''We've deliberately and consistently focused our fuel volume
and margin strategy on delivering value for the loyal
customer Z seeks.
''This strategy has continued to allow Z to increase its
share of profit from the market and also to manage unexpected
impacts such as bottom-of-cycle refining margins for extended
Z was willing to trade some volume for the sake of better
unit margins, but it still closed the year with
market-leading positions across petrol and diesel sales.
Its total market share was down slightly from April 2010,
when the company was bought from Shell, Mr Bennetts said.
Z's guidance for the 2015 financial year was for an operating
profit of between $220 million and $240 million.
Mr Bennetts said the guidance factored in the costs
associated with the prolonged shutdown at Refining New
Zealand in April this year.