Change of culture needed
Contact Energy chief executive Dennis Barnes says the firm now has the chance to steer its own course. Free of its Australian majority shareholder, Origin Energy, Contact is having a boardroom shakeup and could, says one analyst, start considering merger opportunities.
Barnes has headed Contact for the past four years on secondment from Australian company Origin. He is now an employee of Contact, which yesterday announced what it said was a disappointing full-year result but added it was at a turning point.
“You don’t get too many opportunities like this to change the culture of a business so this is a great opportunity,” said Barnes.
Origin is selling its 53 per cent stake in Contact, its board appointees have gone and the company is hunting for a new chairman.
“From now on we can plough our own furrow and be a bit more agile, creative and inspired on who we can have on the board,” Barnes said.
If the ownership had not changed, his next step would have been to look for board roles rather than remain in charge of a division of Origin which he said had determined strategy and had limited amounts of attention for its New Zealand offshoot.
Barnes said he did not have a set contract, adding, “Let’s see whether the new chairman likes me or not.”
Contact reported a 43 per cent fall in net profit to $133 million and a 29 per cent drop in underlying earnings to $161 million for the year to June 30, against the previous 12 months.
He said his biggest challenge was to transcend the decline of a mature business and find a new way to deal with assets and customers so Contact could increase earnings in time.
One analyst, Grant Swanepoel of Craigs Investment Partners, said Barnes could look at expansion through a merger, possibly with TrustPower. “I don’t see why they don’t consider TrustPower as a merger opportunity. Before they were restricted by Origin, which had different objectives,” Swanepoel said.