Caltex Australia Limited shares fall from 52-week high

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.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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