The recent slump in price has created an opportunity for investors to take advantage of the weakness. Contact buys Empower. Empower has over 25,000 residential and business customers, and is currently signing up around 1,000 new residential customers a week. As a result of this growth, CEN will make payments in future that are tied to growth in customer numbers. This is one of a number of acquisitions by CEN in the past year and looks like an excellent way for the company to increase its exposure to the key Auckland market.
Contact produces growth.
Managing Director Paul Anthony said the result had been achieved in a difficult trading environment and at a time when the company was changing. The recent acquisition of Orion s gas retailing interests had made CEN the country s largest gas retailer and wholesaler and moved the company one step closer to its goal of becoming a major player in Australia. Whether this can be maintained depends on the government s review of energy sector pricing, which is why CEN s share price has taken such a battering lately, but I am impressed by the company s strategy of expansion, both domestically and overseas. The acquisition will make Contact NZ s largest gas wholesaler and retailer and demonstrates Contact s strategy of becoming the country s leading integrated energy supplier. This puts it high up the list of safe income shares.