Shares in transport fuel supplier Caltex Australia Limited (ASX: CTX) hit a 52-week high on the eve of its full-year results announcement on February 27 at $36.42 at the close.
But Caltex Australia share prices have dropped 2.5% to $35.48 at the time of writing after results out of the petroleum giant revealed it would get rid of its franchisees by 2020.
Caltex delivered a full year profit of $621 million, up 18% from the previous corresponding period – driven by strong performance out of their Lytton Refinery which logged earnings of $308 million for the year.
But Caltex has announced it will spend somewhere in the ballpark of $120 million to take company control of its 433 franchise stores within the next 2 years.
Caltex said the move to out franchisees is not connected to the staff underpayment issues they faced in 2017, but a company decision to regain control of its core business to achieve growth targets going forward.
Either way investors are a bit spooked today and Caltex has fallen from its 52-week high mantle after a solid 12 months of price gains, up from $27.55 at this time last year.
