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Some need to know, with a bit of WealthDesign nice to know thrown in.

A number of clients have asked my opinion on this share offer.  Here’s my take:

Z Energy Limited is a fuel retailer operating multiple stores under a franchise arrangement.  The company is very profitable and is projected to provide a cash dividend of around 5.9% per share (gross).

Z Energy Limited is floating shares on the NZX.  They have given an indicative price range for the shares of $3.25 to $3.75 per share.  Z Energy Limited is looking to raise between $780-$900 million.

The promoters and the present owners, Infratil and the New Zealand Superannuation Fund, will continue to hold between 40-50% of Z Energy Limited once this initial public offer has been completed.

The prospectus/offer document can be viewed at www.z.co.nz/investor

As with any share investment, there are specific risks attached to the individual company.  The prospectus has a full section on these risks and I suggest you read this carefully before investing.

My concern is the high level of debt that this company holds.  As we have seen in the past, this can cripple even the best organisations in adverse environments.

On the positive side, the company has been well run, is profitable and has a strong brand and market share in core industry.

I believe the institutions will support this stock and it may be oversubscribed. 

If you choose to buy these shares, I would add these to a buy and hold portfolio.  The strong dividend flows will underpin the share value going forward.

The company could also be thought of as a part property, part retail and part infrastructure stock.

 

DISCLAIMER – These are my personal views based on publically available information.  I am not employed or contracted to an issuer.

Any choice you make to invest or not to invest in Z Energy Limited, is yours alone. 

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Transfer your super fund from Australia

Did you know you can transfer your Australian super fund to New Zealand?

If you have worked in Australia, you can search for your super balance by going to www.ato.gov.au.  You will need your name, date of birth and your tax file number.

Transfers became possible from July 1st 2013, but make sure you get qualified advice before you sign up for anything.

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At WealthDesign we make the complex simple!

Here at WealthDesign we pride ourselves on helping our clients wade through the tangles of the financial world. We like to educate our clients and as part of this, we provide knowledge about the industry as a whole. Our aim is to make the complex simple and help you, our valued clients and friends, achieve your life goals.

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John talks KiwiSaver.

KiwiSaver is one of the cornerstones of successful financial planning in New Zealand today. Since June 2008 assets in all the combined KiwiSaver accounts have grown from $954.10 million to $11.64 billion as at 30th June 2012.

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