Going to keep this short as I gather most would not prefer to invest in a tech company via a large cap such as AGL...

In case no one noticed, back in June 2024, AGL announced a strategic partnership with software tech company Kaluza which included paying $150m in return for a 20% stake in Kaluza.

The payment values Kaluza at $750m.

Kaluza's largest customer appears to be Ovo Energy in the UK which serves more than 6 million smart meters in the UK.

Kaluza already migrated 80K customers of the Australian arm of Ovo Energy. The migration of AGL to the Kaluza platform from legacy SAP will take around 3 years and is expected to be completed in 2028. AGL expects savings to be around $70-$90m

This cash injection is important as the funding for Kaluza doesn't just help in the technology transformation of AGL, but also international expansion of Kaluza. Kaluza already has a partnership with Mitsubishi in Japan.

In other words, Kaluza starts breaking out of the "long tail" of the niche utilities market players and starts challenging Kraken and Gentrack. More details of the investor briefing are now on Youtube.

Note that this $150m investment is in addition to the expected $300m to be spent over 4 years on implementation of Kaluza at AGL.

However, Kaluza is not without problems. Ovo Energy UK scored worse in the Ofgem customer satisfaction survey with Octopus Energy scoring the highest rating.

E.ON/Next which uses both Gentrack (through npower) and Kraken scored above the average.

Morgan Stanley also mentions the Net promoter score (NPS) of Ovo Energy is lower than Octopus in their coverage of Gentrack.

Overall this is a big high-risk investment for AGL on a new enterprise billing platform with the expectation of a similar return from Origin's investment with Octopus/Kraken if Kaluza can expand successfully into other regions where others have failed (ie: Powercloud - no offence to Hansen investors).

If Kaluza performs as expected, we should see a rerating on AGL stock with the Kaluza investment included in the company valuation on analysts' radars.

I suppose not many people here may follow AGL but I will post a JP Morgan broker report from September.

I looked at this as another dividend growth (as opposed to dividend high yield) and exposure to next generation utilities billing through Kaluza. Surprisingly the investment in Kaluza is not covered in this report from JP Morgan which implies analysts see Kaluza investment as currently a cost to the company.

Will write more about Kaluza in another post and how it stacks up against Kraken which is currently used by Origiin.

16th June, Share price reaction $11.05 up 14.4% . Turning a Fossil Fuel Co into a 'Popular fuel source" see how the scales weigh up here in the long term. I've noted share price appreciation. So the AGL has pivoted.

Underlying EBITDA between $1,330 and $1,375 million (previous guidance was between $1,250 and $1,375 million); and  Underlying Profit after tax between $255 and $285 million (previous guidance was between $200 and $280 million). 

FY24 interim dividend. AGL will target a payout ratio of 50 to 75 percent of Underlying Profit after tax, which will be franked to the extent possible. 

AGL ENERGY LIMITED. (ASX:AGL) - Ann: Investor Day, FY23 & FY24 guidance and dividend policy, page-1 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

As suspected when Mike Cannon-Brookes and Brookfield bid earlier this year for AGL, it would not be the last attempt. At the time of the earlier bid, Cannon-Brookes was quoted as stating the aim was to rapidly progress toward shut down of AGL coal-fired power stations.

Now Cannon-Brookes, via his Grok Ventures is looking to acquire up to an 11.5 percent stake in AGL via a derivatives deal worth almost $650B, being facilitated by JPMorgan.

If successful, it appears Cannon-Brookes will use his influence to attempt to block AGL Energy’s proposed demerger - that being the likely stranded assets and the retail.

If you have ever wondered what the risk is in being a board member, I think we are about to see it played out.

Management have sacked employees who refused to get vaccinated in the last month - it wouldn't surprise me if there is legal action against them, though it probably won't be enough to seriously damage the company. This will probably result in them hiring contractors at a higher cost, but probably won't be enough to substantially effect the business.

They have a very corporate style of management.