Less risk and more profits for NGC

By CHRIS DANIELS energy writer

NGC, not long ago staring into the abyss, has released details of a successful transition from bullish ambitions of national domination to a quieter, more stable sort of company.

The transformation means shareholders, including Australia-based AGL, its 66 per cent owner, are keenly awaiting a big return of capital, due to be announced within two months.

In the past year NGC has abandoned its old dream of generating and retailing energy, deciding to stick to the less exciting - though less risky - business of natural gas transmission and distribution, LPG wholesale distribution and retailing, and owning energy meters.

Announcing a half-year after-tax profit of $35.4 million yesterday, chief executive Phil James said NGC had made good progress in its "repositioning", and financial recovery was now complete.

James said NGC's previous ambition of becoming New Zealand's largest integrated energy company was gone. It was instead now an infrastructure-focused energy services company.

"We are now evaluating a move away from our ambitions to be a significant growth stock."

NGC would now be a company with stable earnings, attractive growth, but "great yields for investors".

On the prospects of an impending capital return - top of the list being the $500 million earned from the sale of its Taranaki power station to Contact Energy - James said decisions were about to be made on NGC's new capital structure.

NGC shares closed yesterday down 1c at $1.46.