CTX was getting about 150 million EBIT from the current wholesale supply contract.
the new arrangement will at least give them the stability of 15 years of a supply deal, but there is a one off payment of 50 million this July and a further 80 million loss in EBIT for every year after that!
now let's say the deal never eventuated. would the SP be still around the $33 mark , as WOW would in reality, have no chance of selling the business with ACCC approval and consequently, CTX would just keep on supplying Woolies fuel at 80 million extra EBIT?
in other words, about the only positive i can really see, is the conversion of stores to retail focus and the 'carrot' for customers to purchase food. the rewards and redemption offers could be considered as loss leaders!
cheers crazypunter
CTX Price at posting:
$31.40 Sentiment: Buy Disclosure: Not Held
