NZ's Contact shares hit record high

Contact Energy shares rose strongly as the market applauded a $2 billion renewable energy plan and a better-than-expected first half result.
The country's largest listed power company reported a 16 per cent fall in interim net profit to $122.9 million for the six months to December.
However, last year's net profit of $146.6 million included a one-off gain of $33.4 million due to an asset sale.
At 15.15pm Contact shares were up more than four per cent to an all-time high of $8.95, up 37 cents.
First NZ Capital energy analyst Jason Lindsay said the result was slightly above consensus, but the share price driver appeared to be the investment plan, despite the costs involved.
"I guess renewables are flavour of the month at the moment," he said.
"You see what happened to Trustpower, which is 100 per cent renewable generation, [and] trades on a 16 times EBITDA multiple, whereas Contact with a diversified portfolio is down around 10.5 times EBITDA.
"The market, I guess, is placing more value on renewable generation with the expectation that they'll benefit in a carbon constrained world."
Currently about 60 per cent of New Zealand's power is generated through hydro, with wind accounting for 1.5 per cent, geothermal about eight per cent and the rest through coal and gas.
Mr Lindsay did not believe the share price jump was influenced by news that Contact's majority shareholder Origin Energy had called off its merger plans with AGL Energy.
Investors also seemed to ignore Contact's continued "downbeat" forecasts for its four-year outlook and for a "materially lower" full year net profit.
Contact - which generates about 30 per cent of the country's electricity - wants to develop two new geothermal generation around the Taupo region.
It is also investigating four sites for wind farm generation and actively developing two of these.
The $2 billion plan would take place over five years.
Mr Lindsay said he viewed the geothermal part of the plan positively.
"I'm not so sure on the wind - Contact are pretty late to the game with wind, but nonetheless it's something they need to examine."
However, he was disappointed with the decision to hold the dividend.
Contact's dividend was unchanged at 10 cents per share and the investment program over five years scotched plans to return capital to shareholders.
"I would have thought there's ample scope to carry out this development program but also have some reasonable growth in the dividend," Mr Lindsay said.
He noted the company's policy was still to maintain or grow the dividend over time, with an 80 per cent payout ratio longterm.
"Well, they've got 50 per cent payout ratio for the first half. The second half dividend is usually bigger so that should increase to 70 per cent for the full year."
Contact reported a half year EBITDAF (earnings before interest, tax, depreciation, amortisation and financial instruments) of $275.4 million, down from $280.4 million the year before.
Revenue was $995.1 million.
Chief executive David Baldwin said the result was particularly pleasing, despite some challenging trading conditions.
Its average wholesale prices had fallen 37 per cent on the corresponding period, which contributed to a 33 per cent fall in wholesale revenue.
The overall retail electricity market had grown 2.5 per cent, and Contact's share had increased 3.9 per cent.
Contact continued to face significant challenges over the coming year, as the business adjusted to higher priced gas and reduced fuel flexibility, Mr Baldwin said.
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