AGL Energy Limited: A Comprehensive Financial Analysis

HI5002: Finance for business
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Table of Contents
Introduction....................................................................................................................................3
Portfolio..........................................................................................................................................4
1. A brief description of Company...........................................................................................4
2. Ownership Governance Structure.......................................................................................5
3. Calculation of Ratios.............................................................................................................7
4. Two graphs from www.asx.com.au with the description of results..................................9
5. Significant factors that influenced share price.................................................................11
6. Calculation of ’ beta values and Expected Rates of Return using the CAPM...............12
7. Weighted Average Cost of Capital (WACC).....................................................................13
8. Preferred optimal capital structure...................................................................................15
9. Dividend Policy....................................................................................................................17
10. Letter Recommendation....................................................................................................18
Conclusion....................................................................................................................................19
References.....................................................................................................................................20
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Introduction
The company is required to be managed in such manner that success is attained. For this, all the
resources which are available with it shall be used in most appropriate manner. In this report, the
overview of the company will be provided which in the given case is taken as AGL Limited. The
governance structure of the company will be provided and then the ratios will be calculated so
that performance of the company can be evaluated in most appropriate manner. Graphs will be
also included so that the fluctuations in the share price can be ascertained in the appropriate
manner. The dividend policy and the cost of capital and rate of return will also be calculated in
the report.
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Portfolio
1. A brief description of Company
AGL energy is an Australian company which is operating in the electricity generation. This is
one of the largest ASX listed investors which is dealing with the renewable energy. The numbers
of customer accounts are more than 3.6 million (AGL, 2017). The aim of the company is to
enhance and achieve growth in the carbon-constrained world. They work in such manner by
which customers are supported and also contribute to the charity partners. The portfolio of the
company is diverse and it includes peaking, intermediate generation plants, a base which is
spread in the traditional thermal generation, storage and natural gas. There are various renewable
energy sources which are also used by the company such as wind, solar and hydro.
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2. Ownership Governance Structure
i)
Main substantial shareholders
Having more than 20% shareholding: The person who holds the shares in the company are
considered as the shareholders and out of them some are considered as the substantial
shareholder. They are the ones who will be holding the shares of more than 20% total stake. In
the company, there is no such shareholder who is holding this large number of shares (AGL,
2017).
Having more than 5%: The shareholders who are holding the more than 5% present of the
stake, are also required to be identified. There is only one shareholder who is holding the 5.42%
of the stake which has 352055 shares and that is HSBC Custody Nominees (Australia) Limited.
ii)
Designation Name
Chairman Jerry Maycock
Managing Director & CEO Andy Vesey
Director Jeremy Maycock
Director Jacqueline Hey
Director Les Hosking
Director Graeme Hunt
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Director Belinda Hutchinson
Director Peter Botten
Director Diane Smith-Gander
Director John Stanhope AM
There is no such person who is holding the substantial interest in the company and so it cannot
be said that the company is a family company.
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