Electricity generator Contact's strategy remained the delivery of strong cashflows for distribution to shareholders, chief executive Dennis Barnes said in a letter to shareholders yesterday. Contact would continue to deliver value to its customers by providing choice, control and certainty.
‘‘We are developing customer centric offers in-house and with partners to improve customer life time value while we also target the lowest cost to serve in the industry.''
The investments in the generation business had ensured a robust business. Contact had a low cost, long life and flexible generation portfolio with a focus on safety, reliability and resource utilisation, he said.
The past year had been a hugely formative one in the future of Contact, Mr Barnes said.
It was a new independent era without a majority shareholder for the first time in the company's 20-year history.
There were new shareholders and investors in the company, a renewed board of directors and a stronger sense of ownership among employees.
In the first half of the financial year, Origin sold its majority shareholding, Contact played an important role in the operation of the Tiwai aluminium smelter and the company completed the closure and sale of its Otahuhu thermal power station, he said.
Contact earlier reported a statutory loss of $116million for the six months ended December, 2015. The loss was mainly due to $257million of impairments relating to the closure of the Otahuhu power station and an assessment the Taheke geothermal resource was unlikely to be developed in the foreseeable future.
The interim dividend of 11c per share would have 7c imputed, reflecting the continued low imputation credit balance.
Contact was expected to complete the final $38million of the current share buy back programme announced in October during the second half of the financial year.
Contact's financial performance over the past two years had been affected by the customer business coming under increasing pressure from the growth of smaller competitors and increasing innovation and targeted offers from existing retailers, Mr Barnes said.
‘‘While we have seen a continuation of this theme in our financial performance over this period, I remain confident our focus on becoming a truly customer-inspired business will deliver improvements in the next six months and years ahead.''
Contact shares last traded at $4.92.
