NZ Windfarms cans asset sale, plans share buyback

NZ Windfarms cans asset sale, plans share buyback

By Rebecca Howard

July 24 (BusinessDesk) - NZ Windfarms has canned its planned asset sale and instead plans to buy back as much as 5 percent of its shares.

The company, which operates the Te Rere Hau wind farm near Palmerston North, late last year hired Jarden to conduct a strategic review, including a possible sale of its assets.

Interest was shown by a number of parties but "indications of value did not match the directors' expectations nor the company's current strong operating and financial performance," chair John Southworth said today.

Rather "the directors believe the company's focus should be continuing to generate strong earnings and maximising cash return to shareholders," he said.

The company said it expects to report operating earnings - earnings before interest, tax depreciation and amortisation - of about $4.7 million for the June year just ended, up about 19 percent from the year before.

Ebitda for the year to June 30, 2020 is also expected to be in a range of $6.5 million to $7.5 million, up 38 percent to 59 percent on the year. That guidance is based on the wind farm's historic production and forward electricity prices on the ASX futures market, the company said.

The total dividend for the financial year ended June 30 is expected to be 1.0 to 1.5 cents a share.

Southworth said the board considers that returning capital to shareholders is prudent and reflects the firm's improved financial position. Buying shares around current prices would be an efficient use of surplus capital and would be value-enhancing for shareholders, he said.

The shares last traded at 13.4 cents and have shed 4.1 percent during the past year.

The company intends to buy back up to 5 percent of its ordinary shares through the NZX's order-matching market during normal trading hours. Shares may be acquired from July 25 until June 30 2020 and all shares acquired will be cancelled.

(BusinessDesk)

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