Strong performance in both the retail and generation segments has contributed to a significant rise in profit for Trustpower for the year ended March 31, 2018.

Trustpower added the most shareholder value of all its listed competitors in the period, delivering a total return to shareholders of 29 per cent.

'It is particularly promising to see the strong retail result, as this represents a long term sustainable lift in profitability,” says Trustpower chair Paul Ridley-Smith.

He says it is fitting that the share price is beginning to reflect the underlying value and growth potential of the company.

'We are well positioned to drive long-term sustainable value for investors.”

A final dividend of 17 cents per share, fully imputed, has been declared bringing the total dividend for the year to 34 cents per share.

'Following the sale of our Australian operations we still anticipate sustaining this level of dividend in the immediate future.”

Paul says the final dividend will be paid on June 15.

'Our three generation schemes in New South Wales have performed well, however, given their size and distance from New Zealand, the Board considered that selling the Australian subsidiary was the best option for enhancing shareholder value.”

Chief executive Vince Hawksworth says the company's retail earnings of $60 million are a good indication the company has a strong underlying retail business, forming a solid platform for continued growth.

'Despite strong competition, our multi-product retail business strategy bundling life's essential utilities including power, gas, internet and phone, continues to deliver results.

'We are no longer a telecommunications start-up, but an established player with scale to compete with high quality internet service provision and network caching. For example, more customers are migrating to higher value internet plans with 52 per cent of our telecommunication customers now on fibre.”

Vince says the retail division is centred around value creation for its customers with an emphasis on technology and customer services aligned to Trustpower's core business, and the company is exploring opportunities such as the provision of mobile phone services.

'Our innovation and technology programme continues to assist us in delivering a great customer experience, and the launch of our new mobile app and chatbot during the year together with other customer facing technologies resulted in nearly half of all customer contacts being serviced by a virtual workforce.”

Vince says after a slower start to customer acquisition in the first half of the year while the company focussed its efforts on leveraging high wholesale electricity prices, the year finished on a high with a significant 11 per cent rise in bundled customers.

'Our most recent marketing campaign has been a tremendous success and we now have 100,000 customers with two or more products.”

Total utility account holders reached 397,000, a three per cent increase from 385,000 at March 31, 2017.

Gross margin increased to $151 million from $133 million in the previous year. 'This rise is well in excess of the increase in utility accounts, validating Trustpower's view that the new category of bundled energy/telco is more profitable than either energy or telco alone,” says Vince.

'We continue to see customer retention levels in our bundled customers that are higher than established energy retailers and much greater than the levels reported by the major telco players.”

New Zealand generation production was up 11 per cent at 2235 GWh. 'While there is an element of good fortune in having strong hydrological inflows, the ability to capture that benefit requires a focus on long term asset management and a dedicated team of experts operating the equipment throughout the country,” says Vince. 'To some extent you make your own luck.”

Trustpower remains well positioned to take advantage of opportunities for consolidation in both the energy and telco industries. Post balance date Trustpower completed the acquisition of King Country Energy Limited (KCE) together with the King Country Electricity Power Trust and is now integrating the customers into the retail business.

Trustpower advises that its EBITDAF guidance for the next financial year is expected to be in the range of $205 million to $225 million, assuming average hydrology and climatic conditions. This guidance assumes a reduction in revenue of $27 million following the sale of the Australian operations and a reduction from the current year of approximately $25 million for a return to average hydrology and pricing.

Paul says Trustpower is focussing on automation and quality service while seeking to reduce cost to serve and cost to acquire.

'We will continue our pursuit of profitable growth in keeping with our core convictions that customers value the bundled product offer, the value of loyalty, and the importance of renewable generation in New Zealand.”