Powerco Expands Australian Operations

Thursday, May 23, 2002

Powerco Expands Australian Operations

Powerco today announced plans to further expand its electricity service operations in Australia, by purchasing three field service businesses based in southeast Queensland for a value of approximately $A7.5 million ($NZ 10 million). Total annual revenue for the Australian operations of Powerco will be more than $A20 million ($NZ 25 million) and the merger of these into Powerco’s Australian subsidiary company, will take effect progressively over the next six weeks.

Powerco Chief Executive Steven Boulton said this purchase supports the company’s growth strategy through continued expansion in both New Zealand and Australia.

“This new acquisition builds on our existing core competency in the contract field services area, which we can deliver to markets outside New Zealand and represents a growing revenue stream for Powerco,” said Mr Boulton.

The businesses purchased provide construction and maintenance services to electricity network owners, property developers and large business customers. These will be amalgamated with Powerco’s existing Australian business, and will be managed through subsidiary company, Powerco Australian Holdings Pty Limited. The businesses will extend Powerco’s existing coverage throughout Brisbane, into the Gold Coast and Sunshine Coast and west to Ipswich.

Powerco identified substantial opportunities for further growth in southeast Queensland, due to the growing trend by electricity network owners toward outsourcing maintenance and construction activities.

“This area is one of the fastest growing areas in Australia with recent reports of between 5% and 10% growth per annum in some locations. This is very significant when you consider that Queensland’s customer base alone is larger than the entire New Zealand electricity distribution market,” said Mr Boulton

Powerco’s Chairman Barry Upson said this latest move builds on Powerco’s strong track record of expansion and growth. He said the company has been responsible for the majority of the business and asset acquisitions and mergers in the New Zealand energy industry in the past eight years.

“As a listed company we have been able to grow and deliver strong results to shareholders as the energy industry regime in New Zealand supports a business environment that is conducive to innovative company activity and further investment. Approximately 20% of Powerco’s total income will be derived from this type of diversified investment,” said Mr Upson.

Ends

About Powerco
Powerco is New Zealand’s third largest electricity and gas utility with around 205,000 consumers connected to networks in Taranaki, Wanganui, Rangitikei, Manawatu, Wairarapa and Wellington and has more than 16,000 shareholders. Powerco’s asset base is around $867 million.

A map detailing Powerco’s geographic area of operations is attached.

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