THE Fremantle Dockers, now even more firmly anchored at the bottom of the AFL ladder, run around every week with AlintaGas on the back of their jerseys. Is that causing angst for these long-time sponsors? Not a bit of it.
THE Fremantle Dockers, now even more firmly anchored at the bottom of the AFL ladder, run around every week with AlintaGas on the back of their jerseys. Is that causing angst for these long-time sponsors? Not a bit of it.
AlintaGas CEO Bob Browning, an American football fan from Kansas, has been apprised of what it means to be a battling Aussie footy team, and he barracks as hard as anyone at Subiaco.
When joint venture partners United Energy and UtiliCorp bought a cornerstone stake in AlintaGas for more than $300 million, or $4.38 a share, some people thought the price was too high. That opinion was reinforced when the Court Government sold the balance of the company for $2.25 a share to retail investors. But, increasingly, this view is looking wrong.
In its first year as a public company AlintaGas has popped the pilot light, with the share price roaring through $3.90. That values the concern at more than $625 million, ranking it at number 150 on the list of the biggest companies in the country. The 80,000 Western Australians who bought into the IPO and held on are showing a 72 per cent capital gain. The shares have kept their feet in a choppy stock market since the company reported profits of $42.2 million, which knocked the prospectus forecast of $26.1 million into a cocked hat.
Not bad for a boring old utility, really. But Browning is determined that is the last thing it is going to be. He has dropped heavy hints that AlintaGas will be changing its spots in a few months, in a way that will justify lopping the word “gas” off the corporate moniker.
There are a number of plans to underwrite the 10 per cent earnings growth that has been promised to shareholders. The
in-house construction and maintenance unit is to be outsourced into a profit centre that will bid for outside work. It is no secret that AlintaGas wants to elbow into the State electricity market and is waiting to see where the government will erect the goalposts for new players who want to compete with Western Power.
AlintaGas profits should be pressing towards $50 million this year. The core gas business is forecast to lift its customers’ base by at least 17,000 to 459,000.
The contract with Wesfarmers’ expanding Kwinana LPG facility will continue to be a solid money spinner
The 8 per cent dividend yield has shrunk to less than 5 per cent as the share price bubbled ahead. The 18 cents a share dividend is expected to be repeated in the coming year, but Browning has flagged that AlintaGas should now be regarded as more of a growth stock than a yield play. That should not worry most small shareholders, who only got the 450-share minimum allotment in the float and will be happy if they continue their upward move.
Investors put beef out to pasture for now
INVESTORS who supported the AACo beef spin-off out of Futuris were puzzled when the shares were left in the back paddock in first-time dealings.
Initially, there was a stampede for cattle baron Peter Holmes a Court’s company, and additional shares had to be made available to satisfy demand.
But evidently some institutions, which paid up to $1.10 for the stock, could not wait to flip them on the griddle. So the price sank to a modest discount at 99 cents and had backpedalled further. A further 1.1 million AACo shares have been set aside for Futuris shareholders, who are each entitled to subscribe for a modest $2,000 worth. In what was something of a shambles, many of these priority application forms were not received in time to get them back before the official close of the offer.
Small investors like the cut off the joint promised by the 6 per cent fully franked dividend. But it will not be long before they are asking for gravy.
Some brokers were cool towards the IPO because they believed it was being done at the top of the beef price cycle. Others claimed that it was unwise to buy something that Futuris was selling. They thought much the same about Bristile shares, which have doubled in a year, although admittedly bricks and tiles are not hooves and horns.
