MARKET TALK: Greens' power companies' dividend analysis flawed, Wynyard 'shambles'

The Green Party issued a statement this week saying the Crown has foregone $945 million in dividends since the three state-owned electricity companies were partially privatised.

It was a predictable statement issued by Green energy spokesman Gareth Hughes. But it was also ironic considering the stunt Labour and the Greens pulled during the share sale process when they announced a proposal to centralise control of the wholesale electricity market should they take power.

“I’d suggest that the Greens along with Labour at the time cost the taxpayer probably north of a billion dollars by attempting to torpedo the Mighty River Power float and ensuring that the three companies were all sold off too cheap,” Craigs Investment Partners Mark Lister told NBR Radio’s Andrew Patterson.

“So, I disagree with their analysis, I’d say.”

The Greens analysis of dividend payments also fails to take into account the improved performance of Mighty River, Meridian and Genesis since they listed on the sharemarket and became subject to market discipline and investor scrutiny. Total dividend payments have doubled since the first IPO in 2013.

“All showed decent results … there are a few challenges in terms of the retail customer environment being quite competitive,” Mr Lister says. “But all three of the former SOEs announced increases in dividend. For me, Meridian was the pick of the bunch.”

Meanwhile, Air New Zealand and Scales produced bumper profits but software company Wynyard Group is under pressure to raise capital.

Mr Lister says he expects there are some unhappy Wynyard shareholders.

“It’s pretty terrible all round. They are telling us now that they will get the money in the door in terms of the $30 million they need to repair the working capital position. But it’s been a bit of a shambles.”

Tune into the special audio feature to listen to the full interview.

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