fully agree, a management issue, not a business issue, but as with AMP, Boral and so many others , starting with a pot of gold, bad management can manage to turn it into a pot of sxxt;Don't thank me and my apologies if you invested......
I maintain my view that the generation assets have real value, noting that wholesale electricity prices continue to trend upward, but it would seem that the company's management doesn't grasp how to turn that value into one that benefits shareholders.
Average wholesale price across the National Electricity Market (all states except WA and NT):
February 2020 = $55.63
March 2020 = $43.88
April 2020 = $36.61
May 2020 = $37.90
June 2020 = $35.48
...
February 2021 = $35.32
March = $40.48
April = $52.48
May = $107.33
June to date = $157.45
So year on year a pretty decent price rise there and as a low cost generation company with generation physical volumes exceeding retail sales, AGL ought to be doing nicely from that.
It seems however that management isn't managing to turn that into value for shareholders. Whilst I got it right about prices moving up, I very clearly didn't foresee what management would do....
The only other companies in the sector I'm aware of having done anything remotely similar was an unlisted one that contemplated exiting its relatively small retail operation, selling that as a going concern, in order to free up capital to further invest into the ongoing generation business. That was only a thought however, something they looked at as part of considering how to raise capital for the new investment, and they haven't gone through with it and are instead looking at other options to fund their planned investments.
Looking at the physical assets being split, it's pretty much straight down the divide from a technical perspective.
Hydro generation, open cycle (peaking) gas turbines, internal combustion generating plant and wholesale gas contracts stay with AGL.
Coal mining, coal-fired generation, base load gas-fired generation, physical gas production and storage infrastructure and contracts regarding purchase of energy from the SA and Victorian wind farms plus operation of the Dalrymple battery (SA) go into the new company Accel Energy.
The interesting part will be how they divi up the debts, how much debt is each section taking with them?fully agree, a management issue, not a business issue, but as with AMP, Boral and so many others , starting with a pot of gold, bad management can manage to turn it into a pot of sxxt;
worse, AGL is big enough so that the average aussie will probably pay this mismanagement with blackouts in the future
They will move the debt to the bad coal powered generation, and be ready to burn new cash on their funky the new dodo.i genuinely can not see how this could work even medium term.The interesting part will be how they divi up the debts, how much debt is each section taking with them?
Just my opinion.
Don't thank me and my apologies if you invested......
It seems however that management isn't managing to turn that into value for shareholders. Whilst I got it right about prices moving up, I very clearly didn't foresee what management would do....
Give implies a gift.Does this mean if you have 300 shares in AGL they will give you 300 shares in Accel?
I think I will be having a nibble, now they have some focus on where their future lies and I've never bought an electrical utility before.Did anyone notice the buy up of AGL on 29 Nov?
I think I will be having a nibble, now they have some focus on where their future lies and I've never bought an electrical utility before.
So be warned if I'm thinking it might be a goer, I'm usually dead wrong.
Did anyone notice the buy up of AGL on 29 Nov?
Hi Ann, I hear where you are coming from, but I'm terrible at picking the bottom, as I will be a long term holder and this will be a massive project to turn this ship, I will just pick up as funds become available.This is most certainly on my watch list sp. However, I would not be buying into it just yet. It is still in its free fall stage but seems to be slowing a bit perhaps but I can still see quite a bit more downside. It needs to break well away from its downtrend line and move sideways to consolidate for a while. ORG might also be worth a look if you are looking at utilities.
It was actually a sell-out by the BlackRock group, not a buy-up.
I've clearly got a lot to learn. Sell-out by the BlackRock group? So who was the buyer, buy back by AGL? Was this information publically available? Thanks for the perspective on the longer view as I was considering this spike in volume as a potential trigger for a trend reversal.It was actually a sell-out by the BlackRock group, not a buy-up.
They from memory are a dividend payer, so I will just add them to my income group, I really should take a more active interest but there are a lot smarter people than me on the forum who are willing to share their Knowledge as you do and I must say is greatly appreciated.
I just try and focus on what are they trying to achieve, how are they going to get there and how are they going to fund it.
ORG might also be worth a look if you are looking at utilities.
I've clearly got a lot to learn. Sell-out by the BlackRock group? So who was the buyer, buy back by AGL? Was this information publically available? Thanks for the perspective on the longer view as I was considering this spike in volume as a potential trigger for a trend reversal.
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