APA Group (APA):
APA Group chief executive Mick McCormack has sought to dispel lingering market concerns that the gas pipeline owner’s push into renewable energy may compromise returns after striking a deal for a new $315 million wind farm in Western Australia. APA is targeting renewable energy as one of three pillars in its $1.5 billion, three-year growth investment strategy and is developing solar farms as well as wind projects. Citigroup’s Michael Dargue said that while he believed APA could meet the target, ‘‘diversifying away from the core gas transmission asset base adds risk along with lower returns’’.
BHP Billiton Limited (BHP):
BHP Billiton is ‘‘likely’’ to soon increase rig numbers and grow production in its controversial US onshore petroleum division, but big shareholders are keen to better understand how US President Donald Trump’s energy policy might affect the business. Mr Trump has wasted no time making his thoughts known on energy policy, announcing on the day of his inauguration that his regime would ‘‘embrace’’ shale oil and gas in the US and was ‘‘committed to clean coal technology’’. Those comments appear to be positive for BHP’s onshore shale assets in Texas, Arkansas and Louisiana, which have been a drain on BHP during the six years since they were acquired and loom as one of the company’s few remaining structural issues since a cluster of underperforming assets were spun into South32 in 2015.
Blackmores Limited (BKL):
Vitamins group Blackmores says the influence of Chinese entrepreneurs clearing out the shelves of Australian retailers and big pharmacy chains of stock has shrunk to much more modest levels after some were ‘‘burnt’’ when super profits disappeared. Chief executive Christine Holgate says some of those entrepreneurs, who were on-selling vitamins for more than double or triple the price on e-commerce sites in China in 2015, have disappeared after being hurt financially when regulatory uncertainty hit in China and they were caught with too much stock. Some of the problems in the infant formula market, which have triggered a collapse in Bellamy’s share price, also had an influence as the ‘‘daigou’’ buyer.
Challenger Limited (CGF):
Australia’s giant annuities provider Challenger is set to be the next large issuer in local debt capital markets. Street Talk understands Challenger is putting the finishing touches on a $350 million raising, the details of which are scheduled to be announced to investors early next week. Challenger this month flagged that it was planning a new offer of subordinated convertible securities, to be known as Challenger Capital Notes 2, during the March quarter. The company gave no further details on the timing.
Coca-Cola Amatil Limited (CCL):
Coca-Cola Amatil chief executive Alison Watkins says the bottler’s pipeline of new fizzy drink products will stem falling sales in the group’s biggest earning division as local consumers shun sugary drinks. She has also said the company remains committed to vegetable and fruit packer SPC, despite taking a massive $171 million post-tax impairment in 2016. ‘‘If I look what’s in our pipeline and look what we have brought to market over the past two or three years it has been unprecedented the amount of innovation,’’ Ms Watkins told The Australian Financial Review . ‘‘We are going to continue to challenge ourselves and make sure that our portfolio has what the consumer today and tomorrow is looking for.’’ She said the carbonated soft drink category would always be an important component of the non-alcoholic ready to drink landscape. Ms Watkins pointed to smaller serving sizes, low or no-kilojoule options like Coke Zero, and cutting sugar by 25 per cent in Deep Spring flavoured mineral waters as recent product innovations.
Healthscope Limited (HSO):
Healthscope boss Robert Cooke said he is prudent in his outlook for the company’s key hospitals business, despite a small rebound in admissions in the second quarter. Mr Cooke did not provide formal guidance, but said he expects ongoing variability in the hospitals sector to continue in the near term. Second-half growth in Healthscope’s hospitals division, its major earnings driver, will match that of the first half, where operating earnings rose just 2.2 per cent. Since October, when Mr Cooke warned of a slowdown in patient admissions, data has come out showing all the big health insurers have had lower claim rates for the half year to December 31.
Stockland (SGP):
Stockland is predicting another year of positive house price growth of up to 5 per cent as the property group delivered a $702 million half year profit. Chief executive Mark Steinert lifted guidance and forecast the full year result would be strong on the back of the completion of housing projects. He warned that any changes in taxes such as negative gearing to combat affordability issues needed to be handled carefully. The $11 billion diversified property group Stockland is expecting another year of strong house price growth, up to 5 per cent, after reporting a record of more than 5800 home sales in the booming east coast housing market. Stockland delivered a strong net profit of $702 million, up 0.7 per cent, and generated funds from operations – its key metric – of $369 million, up 7.8 per cent. Its share price rose to $4.58 from $4.56 the previous day as investors responded to solid results from each of the group’s retail, office, retirement and residential divisions.
Vocus Group Limited (VOC):
Vocus chief executive Geoff Horth has said a once-in-a-generation battle for broadband customers is about to kick off in earnest as the company harnesses its huge acquisitions to lock in clients for the NBN era. Speaking to The Australian Financial Review as upbeat halfyearly numbers led investors to push its share price up 9.3 per cent on Wednesday, Mr Horth said the company had benefited from clearing the air following an unsuccessful attempted boardroom spill last year, and was now gunning for NBN market share against Optus, iiNet and TPG. Vocus shares climbed to $4.81, although they remain well below a 12-month high of $9.41 hit in May, after its results showed the company was coming to grips with integrating five acquisitions all at once. In recent times Vocus has made three sizeable Australian buys of Amcom, M2 and Nextgen, as well as FX Networks and CallPlus in New Zealand.
Woolworths Limited (WOW):
Woolworths has delivered its strongest supermarket sales growth in more than two years but chief executive Brad Banducci is reluctant to claim the worst is over until he sees whether rival Coles sparks a full-blown price war. Woolworths’ strategy of cutting grocery prices and boosting service in supermarkets reversed an 18-month slide in sales, but came at the expense of shareholders, who have forgone more than $120 million in dividends. Woolworths has delivered its strongest supermarket sales growth in more than two years but chief executive Brad Banducci is reluctant to claim the worst is over for Australia’s largest retailer until he sees whether Coles dives into a full-blown price war. Woolworths spent an estimated $300 million into reducing grocery prices and boosting service in supermarkets in the December half to regain market share from Coles and Aldi, taking its cumulative investment during the past 18 months to $1 billion. The $1 billion investment reversed an 18-month slide in samestore supermarket sales, but came at the expense of margins and Woolworths’ shareholders, who have foregone more than $120 million in dividends.
(Source: AIMS)
APA Group chief executive Mick McCormack has sought to dispel lingering market concerns that the gas pipeline owner’s push into renewable energy may compromise returns after striking a deal for a new $315 million wind farm in Western Australia. APA is targeting renewable energy as one of three pillars in its $1.5 billion, three-year growth investment strategy and is developing solar farms as well as wind projects. Citigroup’s Michael Dargue said that while he believed APA could meet the target, ‘‘diversifying away from the core gas transmission asset base adds risk along with lower returns’’.
BHP Billiton Limited (BHP):
BHP Billiton is ‘‘likely’’ to soon increase rig numbers and grow production in its controversial US onshore petroleum division, but big shareholders are keen to better understand how US President Donald Trump’s energy policy might affect the business. Mr Trump has wasted no time making his thoughts known on energy policy, announcing on the day of his inauguration that his regime would ‘‘embrace’’ shale oil and gas in the US and was ‘‘committed to clean coal technology’’. Those comments appear to be positive for BHP’s onshore shale assets in Texas, Arkansas and Louisiana, which have been a drain on BHP during the six years since they were acquired and loom as one of the company’s few remaining structural issues since a cluster of underperforming assets were spun into South32 in 2015.
Blackmores Limited (BKL):
Vitamins group Blackmores says the influence of Chinese entrepreneurs clearing out the shelves of Australian retailers and big pharmacy chains of stock has shrunk to much more modest levels after some were ‘‘burnt’’ when super profits disappeared. Chief executive Christine Holgate says some of those entrepreneurs, who were on-selling vitamins for more than double or triple the price on e-commerce sites in China in 2015, have disappeared after being hurt financially when regulatory uncertainty hit in China and they were caught with too much stock. Some of the problems in the infant formula market, which have triggered a collapse in Bellamy’s share price, also had an influence as the ‘‘daigou’’ buyer.
Challenger Limited (CGF):
Australia’s giant annuities provider Challenger is set to be the next large issuer in local debt capital markets. Street Talk understands Challenger is putting the finishing touches on a $350 million raising, the details of which are scheduled to be announced to investors early next week. Challenger this month flagged that it was planning a new offer of subordinated convertible securities, to be known as Challenger Capital Notes 2, during the March quarter. The company gave no further details on the timing.
Coca-Cola Amatil Limited (CCL):
Coca-Cola Amatil chief executive Alison Watkins says the bottler’s pipeline of new fizzy drink products will stem falling sales in the group’s biggest earning division as local consumers shun sugary drinks. She has also said the company remains committed to vegetable and fruit packer SPC, despite taking a massive $171 million post-tax impairment in 2016. ‘‘If I look what’s in our pipeline and look what we have brought to market over the past two or three years it has been unprecedented the amount of innovation,’’ Ms Watkins told The Australian Financial Review . ‘‘We are going to continue to challenge ourselves and make sure that our portfolio has what the consumer today and tomorrow is looking for.’’ She said the carbonated soft drink category would always be an important component of the non-alcoholic ready to drink landscape. Ms Watkins pointed to smaller serving sizes, low or no-kilojoule options like Coke Zero, and cutting sugar by 25 per cent in Deep Spring flavoured mineral waters as recent product innovations.
Healthscope Limited (HSO):
Healthscope boss Robert Cooke said he is prudent in his outlook for the company’s key hospitals business, despite a small rebound in admissions in the second quarter. Mr Cooke did not provide formal guidance, but said he expects ongoing variability in the hospitals sector to continue in the near term. Second-half growth in Healthscope’s hospitals division, its major earnings driver, will match that of the first half, where operating earnings rose just 2.2 per cent. Since October, when Mr Cooke warned of a slowdown in patient admissions, data has come out showing all the big health insurers have had lower claim rates for the half year to December 31.
Stockland (SGP):
Stockland is predicting another year of positive house price growth of up to 5 per cent as the property group delivered a $702 million half year profit. Chief executive Mark Steinert lifted guidance and forecast the full year result would be strong on the back of the completion of housing projects. He warned that any changes in taxes such as negative gearing to combat affordability issues needed to be handled carefully. The $11 billion diversified property group Stockland is expecting another year of strong house price growth, up to 5 per cent, after reporting a record of more than 5800 home sales in the booming east coast housing market. Stockland delivered a strong net profit of $702 million, up 0.7 per cent, and generated funds from operations – its key metric – of $369 million, up 7.8 per cent. Its share price rose to $4.58 from $4.56 the previous day as investors responded to solid results from each of the group’s retail, office, retirement and residential divisions.
Vocus Group Limited (VOC):
Vocus chief executive Geoff Horth has said a once-in-a-generation battle for broadband customers is about to kick off in earnest as the company harnesses its huge acquisitions to lock in clients for the NBN era. Speaking to The Australian Financial Review as upbeat halfyearly numbers led investors to push its share price up 9.3 per cent on Wednesday, Mr Horth said the company had benefited from clearing the air following an unsuccessful attempted boardroom spill last year, and was now gunning for NBN market share against Optus, iiNet and TPG. Vocus shares climbed to $4.81, although they remain well below a 12-month high of $9.41 hit in May, after its results showed the company was coming to grips with integrating five acquisitions all at once. In recent times Vocus has made three sizeable Australian buys of Amcom, M2 and Nextgen, as well as FX Networks and CallPlus in New Zealand.
Woolworths Limited (WOW):
Woolworths has delivered its strongest supermarket sales growth in more than two years but chief executive Brad Banducci is reluctant to claim the worst is over until he sees whether rival Coles sparks a full-blown price war. Woolworths’ strategy of cutting grocery prices and boosting service in supermarkets reversed an 18-month slide in sales, but came at the expense of shareholders, who have forgone more than $120 million in dividends. Woolworths has delivered its strongest supermarket sales growth in more than two years but chief executive Brad Banducci is reluctant to claim the worst is over for Australia’s largest retailer until he sees whether Coles dives into a full-blown price war. Woolworths spent an estimated $300 million into reducing grocery prices and boosting service in supermarkets in the December half to regain market share from Coles and Aldi, taking its cumulative investment during the past 18 months to $1 billion. The $1 billion investment reversed an 18-month slide in samestore supermarket sales, but came at the expense of margins and Woolworths’ shareholders, who have foregone more than $120 million in dividends.
(Source: AIMS)
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