Envestra profit up, waits on offer
One of South Australia’s largest companies, natural gas distribution company Envestra Ltd, has posted a $107.8 million profit – up 46 per cent on the previous year.
The solid result comes amid continuing acquisition discussions with Australia’s other major pipleine owner and operator APA Group
In its annual financial statements yesterday Envestra said it expects further growth in profitability in fiscal 2014 due to increases in regulated tariffs that came into effect on July 1 and more reductions in finance costs.
Total revenue rose eight per cent to $507.5 million in the year, compared with $468.6 million in the prior year.
Envestra will pay an unfranked final dividend of 3.2 cents.
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Combined with an interim dividend of 3 cents paid in April, the company’s total payout for the year was 6.2 cents, unfranked.
Shares closed yesterday at $1.15.
InDaily understands informal discussions with APA Group continued in Adelaide yesterday while the compnay maintained its official position that it will not progress its approach to acquire Envestra without gaining access to the books of the target.
‘‘We can’t advance anything … without due diligence,’’ APA managing director Mick McCormack told analysts on Thursday.
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APA had made a preliminary and conditional offer for Envestra, which Envestra rejected.
Its expected APA will raise its offer before Envestra will restart formal discussions.
“Until we get access to due diligence, we’re not going anywhere,’’ McCormack said.
APA’s offer is 0.1678 APA share for every Envestra share.
APA currently owns one-third of Envestra’s capital as well as managing and operating the Envestra gas network.
Envestra’s spokesman said the company is open to exploring a new bid.
“We received a proposal from APA and our board rejected that, and anyone is free to make a further proposal in the future — APA or anyone else,” Envestra managing director Ian Little said in an investor presentation.
“That all said, we don’t regard the company as being on sale.”
