Power giant plugging into management strategy

By CHRIS DANIELS

UnitedNetworks shareholders have been told that their company is in good health and ready for the future.

The company held its annual meeting in Auckland yesterday and shareholders appeared to be content with its direction and management.

Chief executive Dan Warnock, who said early this year that the company was in an "acquisitive mood", told a media briefing that few opportunities were available to buy existing network companies.

There could, however, be a chance of managing other network companies. There was a widening performance gap between many of the companies and some should "reassess the way they approach their business and decide what their core competency and priorities are".

Warnock again said the company would not separate out its earnings from the fledgling telecommunications side of the business.

He said use of the fibre optic networks was up, along with an increase in connections.

UnitedNetworks was, however, very much "the little guy on the block" and the move into telecommunications should be seen as a long- term, "incubator-style" investment.

A changing regulatory environment in both the electricity and gas side of the business was another recent challenge for the company, said Warnock.

He saw no need to change the structure of the gas industry.

Company chairman Keith Stamm said there were no plans for another selldown of shares from Aquila, formerly Utilicorp United, which owns 70 per cent of UnitedNetworks.

In April last year, Aquila cut its stake from 78.8 per cent to 70.2 per cent in an attempt to raise liquidity and thus the value of UnitedNetworks shares.

The North Shore-based company is New Zealand's largest electricity network company. It also supplies gas to more than half of all gas users and has a fledgling broadband communications network, with two fibre-optic systems in the Wellington and Auckland central business districts.

It made $120.8 million last year, compared with $109.3 million for 2000, and paid a 35c dividend for the year.