Power company value rises

Ruapehu Bulletin, Volume 14, Issue 654, 17 September 1996, Page 4

Power company value rises

Asignificant rise in the Powerco share price has seen the value of the company rise well above $300 million. Over the past month the Taranaki Wanganui energy company 's share price has risen from $5.02 to $6.25 and with 52 million shares, the company' s market capitalisation is now $325 million. The current share price values Powerco at a price to earnings multiple of 19, consistent with the other leading power utilities. Investors should be mindful that while the short term Price to Earnings multiples will remain high longer term price to Earnings multiples are likely to be lower once the industry rationalisation has been completed, said Powerco Chairman, Barry Upson Mr Upson welcomed the rise in the company's share price and said this reflected confidence in the company's performance to date and its future prospects. The rise in the share price means that were Powerco listed on the New Zealand Stock Exchange, its market capitalisation would rank it in the Stock Exchange' s Top 30 companies. "The benefits from last year's merger between Taranaki Energy and Powerco have been far greater than anticipated and the company is on track to return a profit of $ 17 million, as forecast at our annual meeting in," said Mr Upson. He said many investors are also factoring in

anticipated earnings improvements available through furthermergers. The recent decision by voters to retain the Taranaki Electricity Trust shareholders in Powerco would result in the company's share price remaining firm, as demand for shares is outstripping supply. Recent buying has seen a significant shift to private investors from around New Zealand investing in Powerco. He said Powerco aimed to be part of a regional company to enable the delivery of better service, reduce pressure on energy prices and enhance returns to shareholders.