Investors fall back in love with AGL after period of upheaval
Following backlash over a failed demerger, a board shakeup and new leadership, AGL Energy is now regaining investor confidence.
Investors are showing renewed confidence in AGL Energy after a turbulent period driven by major shareholder Mike Cannon-Brookes, who forced the company to abandon its controversial demerger plan.
In August, AGL reported an underlying net profit of $812 million for fiscal 2024, exceeding both its guidance range and analysts’ expectations.
Barrenjoey Capital analyst Dale Koenders captured the positive vibes with the headline, “Dare I say it, is AGL a better quality business today?” He credited the strong result to higher power prices, improved availability of coal and gas power plants, a higher gross margin in the consumer electricity retailing business, and better-than-expected earnings from the Torrens Island Battery, which began operating partway through the financial year and contributed $28 million.
AGL’s stronger performance is also reflected in its share price, which has risen 26.5% since May 2022 when the company scrapped its demerger plans. Andrew Chambers, a portfolio manager with Martin Currie, noted that the refreshed board and management are focused on executing AGL’s new strategy. “We’ve seen an improvement in customer numbers, ratings, and better reliability of their existing coal-fired plants.”
