Newcall Refocuses Its Activities In New Zealand
Group aims to increase its presence in the electricity retailing market
Freed of its New Zealand telecommunications business, NEWCALL Group Ltd is concentrating on building its remaining assets – electricity retailer Energy Online Limited, Singapore-based NEWCALL Communications Singapore (PTE) Ltd, and developing a specialised utility billing and CRM systems subsidiary.
“There is significant value tied up in these businesses and now that we no longer have the loss making and cash consuming activities of the New Zealand telecommunications arm, we intend making the remaining investments realise their potential,” says NGL Chief Operating Officer, Guy Pierce.
The group’s fourth asset business market-oriented ISP, Iprolink, is close to a deal with an offshore buyer.
Apart from NEWCALL in Singapore, which recently become only the second telco to be certified for technical compliance after signing interconnect agreements with both Singtel and Star Hub, NGL’s main focus in New Zealand will be on expanding Energy Online’s presence in the local electricity market says Mr Pierce.
NGL is issuing 1.250 million shares at a value of 0.40 cents each to EOL’s minority shareholders. This, he explains, is being done in accordance with the agreement signed when the holding company acquired 75 per cent of EOL in January 2000.
“We are under a contractual obligation to make an adjustment to the original purchase price on condition that certain profit and growth criteria were met by EOL. These were met last November and is reflected in the issue of the additional shares.”
Mr Pierce says the additional valuation of shares represents NGL’s confidence in EOL and its future performance. When the electricity retailer was acquired by NGL in January last year it had 300 customers. By December its customer base had grown to 10,000. Since then, says Mr Pierce, EOL’s customer base has increased a further 2000.
The group, he says, is conservatively
estimating EOL’s value at this stage but
notes that the prevailing per customer value according to the market, as evidenced by the recent sale of Empower to Contact, would be in the $500 - $1000 range.
He says that EOL’s sales driven performance was achieved in a low-key fashion and without any consumer or profile building marketing or advertising. These aspects will now be addressed, and he predicts further strong and rapid growth with new customers coming mainly from areas within the North Island.
Mr Pierce also sees the possibility of taking EOL offshore, and says that as a first step NGL is in discussion with prospective joint venture partners to develop the Australian market.
NGL’s newest venture, will be to bring together the group’s billing expertise from both the electricity and telecommunications subsidiaries, and to market the product worldwide – again with a joint venture partner – as a specialised multi functional utilities billing and CRM tool.