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Caltex Smartfuel deal to cost Z $5m

NZN 25/07/2016 Edwin Mitson

Z Energy, which is completing the integration of the Caltex fuel stations and Challenge! brand, has warned investors that it expects earnings to be $5 million lower due to Caltex's deal with AA Smartfuel.

In a statement published to the NZX, Z Energy said that after it had completed due diligence but before the sale was completed, Caltex renewed its AA Smartfuel contract.

Details of the contract aren't being disclosed, but it will hit profit between calendar 2015 and 2016.

Z said that it remained confident in delivering the $25m to $30m in savings anticipated.

Its plans to sell 19 fuel stations and one truck stop are described as progressing to plan with high levels of interest from multiple potential buyers. It's due to receive non-binding offers next month.

Z paid $785m to Chevron New Zealand for the Caltex stations and the Challenge! brand, in a deal which settled on June 1. It is providing monthly updates to investors on the integration of the two businesses.

The shares rose 1.2 per cent to $8.50, having gained 24 per cent so far this year.

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