Ardent leisure Group (AAD) & Ariadne Australia Limited (ARA):
Ariadne, the investment company that wants two board seats at Ardent Leisure, sought to highlight its turnaround and investor credentials with annual results on Monday that showed soaring earnings growth. Net profit at Ariadne, headed by Gary Weiss and Kevin Seymour, jumped to $79 million in the year to June from $11 million due to the sale for $75 million in December of its 50 per cent stake in Secure Parking. Net pre-tax profit within its investments unit nearly doubled to $11.9 million from $5.6 million. Ariadne declared a special dividend of 1.5¢ in addition to its final 1¢ dividend, bringing the full-year distribution to 3.5¢, compared with 1.5¢ the previous year. The company that last week scaled back its Ardent board-seat ambitions from four directors, after being told shareholders did not support its push, said it now had nearly 21 million shares in the troubled leisure company. ‘‘We consider that Ardent has some valuable assets, with good potential under the right board and leadership team,’’ Ariadne said. The company, which in May purchased Brisbane’s 40 Tank Street office tower in a joint venture with Mr Seymour for $56.1 million, said it would still make money while repaying the bank debt that financed 60 per cent of the purchase.
Australia and New Zealand Banking Group (ANZ), Commonwealth Bank of Australia (CBA), Westpac Banking Corporation (WBC) & National Bank of Australia (NAB):
There are fears among the major banks that the anti-money laundering debacle at Commonwealth Bank of Australia will have severe consequences for non-executive directors at all the major banks. Also, the banks are worried that the prudential regulator will be transformed from a collaborative, principles-based supervisor into an enforcement agency along the lines of the Australian Securities and Investments Commission. In its submission to the Treasury consultation paper on BEAR, Westpac Banking Corp urged the government to ensure the definition of ‘‘accountable persons’’ only covered senior executives responsible for a prescribed function or principles based function ANZ Banking Group said in its submission the conduct expectations in the BEAR regime could overlap with those covered by directors’ and officers’ duties in the Corporations Act. National Australia Bank’s submission to Treasury warned that APRA’s powers in relation to removal and disqualification of bank staff ‘‘could result in a fundamental and detrimental shift in regulation of the financial services industry in Australia’.
BlueScope Steel Limited (BSL):
BlueScope Steel has become one of the highest-profile victims of an increasingly downbeat profit reporting season, with $1.7 billion wiped from its market capitalisation after warning that the US division faced shrinking margins, while soaring energy costs and renewed dumping of products by Asian rivals would crimp its Australian operations. The 22 per cent fall in BlueScope shares followed big slides in the prices of Telstra, Domino’s Pizza, insurer QBE and wealth group Challenger in the past week over the outlook for profits in 2017-18. Each of those firms is facing specific issues in their industries but the unifying force is that investors are punishing stocks with an earnings cloud on the horizon. BlueScope heads the list of companies making a more seamless leadership transition. ‘‘The company currently expects 1H FY2018 underlying EBIT around 80 per cent of 2H FY2017 underlying EBIT (which was $527.3 million). Expectations are subject to spread, FX and market conditions.’’ And with that disappointment, a bloodbath of sorts began. By trading day’s end $1.64 billion had been stripped from BlueScope’s marketing capitalisation as four months of speculative froth was removed from the company’s share price.
Brambles Limited (BXB):
The structural disruption from the rise of big e-commerce businesses such as Amazon is squeezing profit margins at traditional retailers and manufacturers, which in turn is posing serious problems in the United States for logistics company Brambles. Brambles shares have slumped from $13.25 a year ago to around $9.65 now, largely because of the pressure the CHEP Americas business has been under. The stock slipped a further 1.3 per cent on Monday to $9.63 after the company reported a 69 per cent fall in bottom line profits to $US182.9 million for 2016-17 which were hit by large impairments on a recycled pallets business in North America which it wants to offload. Brambles revealed on Monday its underlying profit growth in 2017-18 would be restrained because of the loss of a large Australian reusable plastic crate contract with Woolworths and the shutdown of the Australian car manufacturing industry, where Brambles has several contracts. That will result in a combined $23 million in profits disappearing.
Caltex Australia Limited (CTX):
With the fuel supplier’s strategy firmly in place under chief executive Julian Segal, the unexpected change at the head of the board should not unsettle the market, investors signalled. Caltex shares slipped 3¢ to $32.56. Caltex has been in talks with BP, which is expected to sell petrol stations to help win approval for its $1.8 billion takeover of Woolworths’ fuel retail network, the deal that has put at risk its own supply arrangements with the supermarket owner. Caltex had also bid for the Woolworths fuels business. The past few months have seen Caltex complete two smaller acquisitions, the $325 million purchase of Gull New Zealand and the $95 million purchase of Milemaker Petroleum in Victoria.
Corporate travel Management Limited (CTD):
Corporate Travel Management heads into its results on Tuesday as one of the market’s most highvoltage short targets. So far, that has not set the fastgrowing business travel agency back. Almost 8 per cent of the company is in the hands of short-sellers, according to ASIC’s register of short positions. Documented short interest in the stock goes back to February 2016. The $2.4 billion group is viewed by the shorts as an overvalued roll-up and by supporters as a high-growth innovator. The stock fell 1.9 per cent on the update, but had rallied 4 per cent the previous session. Guidance is based on ‘‘underlying’’ 2016-17 earnings before interest, tax, depreciation and amortisation, an increase of 40 per cent over 2015-16.
Growthpoint Properties Australia Limited (GOZ):
Sydney’s surging office market has propelled landlord Growthpoint Properties Australia to a bumper result after it reweighted its portfolio to take advantage of the conditions. Sydney’s surging office market has propelled landlord Growthpoint Properties Australia to a bumper result after it reweighted its portfolio to take advantage of the conditions .The office and industrial property owner booked an increase of 26.8 per cent in statutory profit for the 2017 financial year to $278.1 million. The result included funds from operations – the earnings figure employed in the property sector – of 25.5¢ per security, an increase of 11.4 per cent on the previous year. Distributions for the year totalled of 21.5¢ persecurity. In2018, however, they will increase only marginally, to 22¢ even though Growthpoint will increase its payout ratio. That is because funds from operations will fall to at least 23.6¢ per security.
Industria REIT (IDR) & Growthpoint Properties Australia Limited (GOZ):
Industria REIT is set to book in a 15 per cent gain in its commercial property portfolio on the strength of its rental income and tightening capitalisation rates. The revaluation announcement comes as the boutique listed fund prepares to release annual results and a month after much larger player Growthpoint Properties Australia made a surprise raid on its register. Growthpoint holds 18.2 per cent of Industria after taking over the stake from the Tony Pitt-led 360 Capital through a $68.1 million trade brokered in July. Backed by its deep-pocketed South African parent, known simply as Growthpoint Properties, the larger trust is yet to make its intentions clear, with a takeover offer being one possibility.
Lifestyle Comm (LIC):
Affordable housing provider Lifestyle Communities on Monday said non-executive director Bruce Carter had resigned from the board and that former attorney-general Nicola Roxon and former Australian Super group executive Georgina Williams would be joining as nonexecutive directors from September 1.
NIB Holdings (NHF):
The chief executive of health insurer Nib says private health care premiums will continue to rise up to 5 per cent per annum for the next 20 years. However, he argues that anything above this would be a ‘‘damning indictment’’ of our health system. While the $2.7 billion private health insurer’s prices are fixed until next year, Mark Fitzgibbon insists that unless the government relaxes regulation, including rules concerning giving younger members premium discounts, prices will continue to go up. Analysts are tipping that private health insurers will need to increase premiums by 6 per cent per annum to maintain margins. In February, Health Minister Greg Hunt signed off on an average premium rise of 4.84 per cent, which will see the top tier of family hospital cover increasing to about $4500 a year and singles cover to increase by about $100 to $1250.
Super Retail (SUL):
Super Retail Group’s auto accessories chain, Supercheap Auto, has added another weapon to its Amazon armoury by entering into a joint venture with Bosch to open full-service auto repair workshops. The first ‘‘Autocrew – powered by Supercheap Auto’’ workshop will open in western Sydney early next year, offering drivers a full automotive service backed by Bosch’s diagnostic technology and Bosch parts and equipment. The joint venture follows the launch in June of a new Supercheap Auto store format, which incorporates car clinics, 24-hour parcel collection, 60-minute click-and-collect, Tesla electric vehicle charging, nitrogen tyre inflation, windscreen chip repair and baby-seat fitting.
Vocus Comm (VOC):
Just because two private equity firms have walked away from bidding for diversified telecommunications outfit Vocus Group does not mean it should be shunned. But shareholders in Vocus must face up to the fact that without some extensive surgery to the business, including a series of asset sales, the outlook is for anaemic earnings growth. Vocus is not a dog of a stock but it is facing a very different world to the one that propelled its revenue upwards by 29 times over four years and lifted profits by 20 times since 2013. We don’t know precisely why Kohlberg Kravis Roberts& Co and Affinity Equity Partners walked away from Vocus but there are two possible explanations. The most obvious is that they looked under the hood and saw a mess worse than the one described recently by chief executive Geoff Hor that the strategy day in June. Alternatively, they were unwilling to pay the rumoured $3.80 a share takeover price favoured by management and the board.
Westfarmers (WES), Tesltra Corp (TLS):
The 8 million members of Wesfarmers’ Flybuys loyalty scheme will be able to earn points without buying anything from Tuesday, after the company did a deal with fast-growing Lachlan Murdoch-backed advertising tech start-up Unlockd to use its technology. Flybuys members who sign up to the new Unlock Rewards app will earn 1000 Flybuys points every month in return for viewing an advertisement every third time they unlock their Android smartphone. The points earned would be the equivalent of spending $1000 in Coles, Target, Bunnings or another Wesfarmers subsidiary. Unlockd will sell the ads and customise them based on individual user preferences, while Wesfarmers takes both a cut of the revenue, and the chance that the deal translates into more Flybuys members. The app is Unlockd’s first foray into virtual currency rewards, as well as its first partnership with an Australian company and first opportunity to engage local advertisers.
Westpac (WBC):
Westpac Banking Corp is ‘‘on track’’ to reduce new interest-only loans to below the regulatory cap of 30 per cent by the September deadline, as analysts expect its earnings will be hit harder than rivals from the shift to owner occupier lending. Westpac shares fell on Monday morning, but by less than the rest of the banking sector after it released a third quarter capital, funding and asset quality update. Unlike the other major banks, Westpac does not provide quarterly profit figures. Of the big banks, Westpac has the largest proportion of loans made on interest-only terms, reflecting a book weighted towards property investors who use interest-only loans to take advantage of negative gearing tax benefits. Regulators have been concerned the amount of investor borrowing has been over-inflating house prices in Sydney and Melbourne, increasing risks of a hard landing. On Monday, Westpac said it had cut the proportion of interest-only loans to 44 per cent in the third quarter, down from 52 per cent in the second quarter.It also said interest-only lending now represents 36 per cent of new loans, down from 47 per cent last quarter, reports AFR.
Woodside (WPL):
Woodside Petroleum is set to break new ground for the offshore oil and gas industry by installing a large battery on one of its offshore platforms in a move that will save costs as well as cut carbon emissions. Chief executive Peter Coleman revealed the decision to install the battery is part of a wider effort at Woodside to improve its record on greenhouse emissions and came after studying a range of options to deploy power from wind, solar and waves, as well as batteries. The 1-megawatt-hour storage system to be set up early next year on the North West Shelf venture’s Goodwyn platform off the Western Australian coast will eliminate the need for a spare generator to be constantly kept spinning in reserve to avoid the risk of a costly interruption of gas production.
(Source: AIMS)
Ariadne, the investment company that wants two board seats at Ardent Leisure, sought to highlight its turnaround and investor credentials with annual results on Monday that showed soaring earnings growth. Net profit at Ariadne, headed by Gary Weiss and Kevin Seymour, jumped to $79 million in the year to June from $11 million due to the sale for $75 million in December of its 50 per cent stake in Secure Parking. Net pre-tax profit within its investments unit nearly doubled to $11.9 million from $5.6 million. Ariadne declared a special dividend of 1.5¢ in addition to its final 1¢ dividend, bringing the full-year distribution to 3.5¢, compared with 1.5¢ the previous year. The company that last week scaled back its Ardent board-seat ambitions from four directors, after being told shareholders did not support its push, said it now had nearly 21 million shares in the troubled leisure company. ‘‘We consider that Ardent has some valuable assets, with good potential under the right board and leadership team,’’ Ariadne said. The company, which in May purchased Brisbane’s 40 Tank Street office tower in a joint venture with Mr Seymour for $56.1 million, said it would still make money while repaying the bank debt that financed 60 per cent of the purchase.
Australia and New Zealand Banking Group (ANZ), Commonwealth Bank of Australia (CBA), Westpac Banking Corporation (WBC) & National Bank of Australia (NAB):
There are fears among the major banks that the anti-money laundering debacle at Commonwealth Bank of Australia will have severe consequences for non-executive directors at all the major banks. Also, the banks are worried that the prudential regulator will be transformed from a collaborative, principles-based supervisor into an enforcement agency along the lines of the Australian Securities and Investments Commission. In its submission to the Treasury consultation paper on BEAR, Westpac Banking Corp urged the government to ensure the definition of ‘‘accountable persons’’ only covered senior executives responsible for a prescribed function or principles based function ANZ Banking Group said in its submission the conduct expectations in the BEAR regime could overlap with those covered by directors’ and officers’ duties in the Corporations Act. National Australia Bank’s submission to Treasury warned that APRA’s powers in relation to removal and disqualification of bank staff ‘‘could result in a fundamental and detrimental shift in regulation of the financial services industry in Australia’.
BlueScope Steel Limited (BSL):
BlueScope Steel has become one of the highest-profile victims of an increasingly downbeat profit reporting season, with $1.7 billion wiped from its market capitalisation after warning that the US division faced shrinking margins, while soaring energy costs and renewed dumping of products by Asian rivals would crimp its Australian operations. The 22 per cent fall in BlueScope shares followed big slides in the prices of Telstra, Domino’s Pizza, insurer QBE and wealth group Challenger in the past week over the outlook for profits in 2017-18. Each of those firms is facing specific issues in their industries but the unifying force is that investors are punishing stocks with an earnings cloud on the horizon. BlueScope heads the list of companies making a more seamless leadership transition. ‘‘The company currently expects 1H FY2018 underlying EBIT around 80 per cent of 2H FY2017 underlying EBIT (which was $527.3 million). Expectations are subject to spread, FX and market conditions.’’ And with that disappointment, a bloodbath of sorts began. By trading day’s end $1.64 billion had been stripped from BlueScope’s marketing capitalisation as four months of speculative froth was removed from the company’s share price.
Brambles Limited (BXB):
The structural disruption from the rise of big e-commerce businesses such as Amazon is squeezing profit margins at traditional retailers and manufacturers, which in turn is posing serious problems in the United States for logistics company Brambles. Brambles shares have slumped from $13.25 a year ago to around $9.65 now, largely because of the pressure the CHEP Americas business has been under. The stock slipped a further 1.3 per cent on Monday to $9.63 after the company reported a 69 per cent fall in bottom line profits to $US182.9 million for 2016-17 which were hit by large impairments on a recycled pallets business in North America which it wants to offload. Brambles revealed on Monday its underlying profit growth in 2017-18 would be restrained because of the loss of a large Australian reusable plastic crate contract with Woolworths and the shutdown of the Australian car manufacturing industry, where Brambles has several contracts. That will result in a combined $23 million in profits disappearing.
Caltex Australia Limited (CTX):
With the fuel supplier’s strategy firmly in place under chief executive Julian Segal, the unexpected change at the head of the board should not unsettle the market, investors signalled. Caltex shares slipped 3¢ to $32.56. Caltex has been in talks with BP, which is expected to sell petrol stations to help win approval for its $1.8 billion takeover of Woolworths’ fuel retail network, the deal that has put at risk its own supply arrangements with the supermarket owner. Caltex had also bid for the Woolworths fuels business. The past few months have seen Caltex complete two smaller acquisitions, the $325 million purchase of Gull New Zealand and the $95 million purchase of Milemaker Petroleum in Victoria.
Corporate travel Management Limited (CTD):
Corporate Travel Management heads into its results on Tuesday as one of the market’s most highvoltage short targets. So far, that has not set the fastgrowing business travel agency back. Almost 8 per cent of the company is in the hands of short-sellers, according to ASIC’s register of short positions. Documented short interest in the stock goes back to February 2016. The $2.4 billion group is viewed by the shorts as an overvalued roll-up and by supporters as a high-growth innovator. The stock fell 1.9 per cent on the update, but had rallied 4 per cent the previous session. Guidance is based on ‘‘underlying’’ 2016-17 earnings before interest, tax, depreciation and amortisation, an increase of 40 per cent over 2015-16.
Growthpoint Properties Australia Limited (GOZ):
Sydney’s surging office market has propelled landlord Growthpoint Properties Australia to a bumper result after it reweighted its portfolio to take advantage of the conditions. Sydney’s surging office market has propelled landlord Growthpoint Properties Australia to a bumper result after it reweighted its portfolio to take advantage of the conditions .The office and industrial property owner booked an increase of 26.8 per cent in statutory profit for the 2017 financial year to $278.1 million. The result included funds from operations – the earnings figure employed in the property sector – of 25.5¢ per security, an increase of 11.4 per cent on the previous year. Distributions for the year totalled of 21.5¢ persecurity. In2018, however, they will increase only marginally, to 22¢ even though Growthpoint will increase its payout ratio. That is because funds from operations will fall to at least 23.6¢ per security.
Industria REIT (IDR) & Growthpoint Properties Australia Limited (GOZ):
Industria REIT is set to book in a 15 per cent gain in its commercial property portfolio on the strength of its rental income and tightening capitalisation rates. The revaluation announcement comes as the boutique listed fund prepares to release annual results and a month after much larger player Growthpoint Properties Australia made a surprise raid on its register. Growthpoint holds 18.2 per cent of Industria after taking over the stake from the Tony Pitt-led 360 Capital through a $68.1 million trade brokered in July. Backed by its deep-pocketed South African parent, known simply as Growthpoint Properties, the larger trust is yet to make its intentions clear, with a takeover offer being one possibility.
Lifestyle Comm (LIC):
Affordable housing provider Lifestyle Communities on Monday said non-executive director Bruce Carter had resigned from the board and that former attorney-general Nicola Roxon and former Australian Super group executive Georgina Williams would be joining as nonexecutive directors from September 1.
NIB Holdings (NHF):
The chief executive of health insurer Nib says private health care premiums will continue to rise up to 5 per cent per annum for the next 20 years. However, he argues that anything above this would be a ‘‘damning indictment’’ of our health system. While the $2.7 billion private health insurer’s prices are fixed until next year, Mark Fitzgibbon insists that unless the government relaxes regulation, including rules concerning giving younger members premium discounts, prices will continue to go up. Analysts are tipping that private health insurers will need to increase premiums by 6 per cent per annum to maintain margins. In February, Health Minister Greg Hunt signed off on an average premium rise of 4.84 per cent, which will see the top tier of family hospital cover increasing to about $4500 a year and singles cover to increase by about $100 to $1250.
Super Retail (SUL):
Super Retail Group’s auto accessories chain, Supercheap Auto, has added another weapon to its Amazon armoury by entering into a joint venture with Bosch to open full-service auto repair workshops. The first ‘‘Autocrew – powered by Supercheap Auto’’ workshop will open in western Sydney early next year, offering drivers a full automotive service backed by Bosch’s diagnostic technology and Bosch parts and equipment. The joint venture follows the launch in June of a new Supercheap Auto store format, which incorporates car clinics, 24-hour parcel collection, 60-minute click-and-collect, Tesla electric vehicle charging, nitrogen tyre inflation, windscreen chip repair and baby-seat fitting.
Vocus Comm (VOC):
Just because two private equity firms have walked away from bidding for diversified telecommunications outfit Vocus Group does not mean it should be shunned. But shareholders in Vocus must face up to the fact that without some extensive surgery to the business, including a series of asset sales, the outlook is for anaemic earnings growth. Vocus is not a dog of a stock but it is facing a very different world to the one that propelled its revenue upwards by 29 times over four years and lifted profits by 20 times since 2013. We don’t know precisely why Kohlberg Kravis Roberts& Co and Affinity Equity Partners walked away from Vocus but there are two possible explanations. The most obvious is that they looked under the hood and saw a mess worse than the one described recently by chief executive Geoff Hor that the strategy day in June. Alternatively, they were unwilling to pay the rumoured $3.80 a share takeover price favoured by management and the board.
Westfarmers (WES), Tesltra Corp (TLS):
The 8 million members of Wesfarmers’ Flybuys loyalty scheme will be able to earn points without buying anything from Tuesday, after the company did a deal with fast-growing Lachlan Murdoch-backed advertising tech start-up Unlockd to use its technology. Flybuys members who sign up to the new Unlock Rewards app will earn 1000 Flybuys points every month in return for viewing an advertisement every third time they unlock their Android smartphone. The points earned would be the equivalent of spending $1000 in Coles, Target, Bunnings or another Wesfarmers subsidiary. Unlockd will sell the ads and customise them based on individual user preferences, while Wesfarmers takes both a cut of the revenue, and the chance that the deal translates into more Flybuys members. The app is Unlockd’s first foray into virtual currency rewards, as well as its first partnership with an Australian company and first opportunity to engage local advertisers.
Westpac (WBC):
Westpac Banking Corp is ‘‘on track’’ to reduce new interest-only loans to below the regulatory cap of 30 per cent by the September deadline, as analysts expect its earnings will be hit harder than rivals from the shift to owner occupier lending. Westpac shares fell on Monday morning, but by less than the rest of the banking sector after it released a third quarter capital, funding and asset quality update. Unlike the other major banks, Westpac does not provide quarterly profit figures. Of the big banks, Westpac has the largest proportion of loans made on interest-only terms, reflecting a book weighted towards property investors who use interest-only loans to take advantage of negative gearing tax benefits. Regulators have been concerned the amount of investor borrowing has been over-inflating house prices in Sydney and Melbourne, increasing risks of a hard landing. On Monday, Westpac said it had cut the proportion of interest-only loans to 44 per cent in the third quarter, down from 52 per cent in the second quarter.It also said interest-only lending now represents 36 per cent of new loans, down from 47 per cent last quarter, reports AFR.
Woodside (WPL):
Woodside Petroleum is set to break new ground for the offshore oil and gas industry by installing a large battery on one of its offshore platforms in a move that will save costs as well as cut carbon emissions. Chief executive Peter Coleman revealed the decision to install the battery is part of a wider effort at Woodside to improve its record on greenhouse emissions and came after studying a range of options to deploy power from wind, solar and waves, as well as batteries. The 1-megawatt-hour storage system to be set up early next year on the North West Shelf venture’s Goodwyn platform off the Western Australian coast will eliminate the need for a spare generator to be constantly kept spinning in reserve to avoid the risk of a costly interruption of gas production.
(Source: AIMS)
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