Australian and New Zealand Banking Group (ANZ):
The combination of ‘‘open banking’’ regimes and data migrating to the computer cloud will lure global technology giants to create platforms for distributing financial services, a move that will force incumbent banks to compete head-on to control customer relationships or risk becoming mere suppliers of commoditised financial products. That’s a view of the future set out by the World Economic Forum in a 194-page report on fintech disruption, released in New York on Tuesday, that warns traditional bank distribution models and economics ‘‘are at risk of being deeply disrupted by the drive towards platform models of banking’’. NAB isn’t in a hurry to reach a conclusion and will run a fine toothcomb through the wealth business to assess how to best navigate some of the challenges. The bank and its executives are also keen to see the outcome of ANZ Banking Group’s wealth sale, which includes life insurance and funds management. Final ANZ Wealth bids are due in mid-September.
APA Group (APA):
Dominant gas pipeline owner APA Group has sought to shrug off mounting regulatory threats, posting a 32 per cent jump in full-year profit and signalling an increase in growth spending for the coming financial year. Grilled by investors about increasing risks to the pipeline business as the government tackles soaring gas prices on the east coast, managing director Mick McCormack said no investment plans or earnings expectations had been affected. However APA is guiding for a much smaller growth in core earnings this coming financial year, forecasting a range that was in line with market consensus but still below some analysts’ estimates.
APN Property Group Limited (APD); GrowthPoint Properties Australia Limited (GOZ); Industria REIT (IDR):
Industria REIT is getting on with growth while it waits to see what rival Growthpoint Properties Australia intends to do with its sizeable stake in its much smaller peer. The Melbourne-based trust, part of the APN Property stable, hasa $638 million portfolio of office and industrial assets in Sydney, Newcastle, Brisbane, Melbourne, and Adelaide. Its statutory profit surged to $101.6 million, mostly due to an uplift from investment property valuations. Funds from operations – the earnings measure used by the property sector – rose 23.6 per cent to $27.9 million, with FFO growth per security hit 18.1¢, the top of the guidance range. While the $159 million acquisition last September of the Westrac facility had a big impact on earnings and valuations, it was the 24,400 square metres of leasing deals that helped drive valuation increases, combined with the effect of tightening capitalisation rates.
Ardent Leisure Group (AAD); Ariadne Australia Limited (ARA):
Proxy firms ISS and Ownership Matters have largely backed Ardent Leisure’s board in its scrap with activist shareholder Ariadne, by recommending against the election of Ariadne director Gary Weiss at a crucial meeting next month. While 10.9 per cent shareholder Ariadne last week withdrew three resolutions it will put to shareholders at an extraordinary meeting it has called Monday week, it is still pushing for the election of Dr Weiss and USbased Brad Richmond to the board of the challenged leisure company. In their reports to shareholders, however, both corporate governance advisory firms opposed Dr Weiss. The reports suggest that Ariadne, despite burnishing its turnaround credentials with its own earnings report this week, is failing to convince the wider pool of shareholders that it offers a distinct plan for Ardent, which is battling to recover from last year’s fatal accident at its Dreamworld theme park.
Bapcor Limited (BAP); Super Retail Group Limited (SUL):
The chief executive of the $1.5 billion automotive parts retailer and trade supplier Bapcor says the potential impact of the looming entry into the Australian market of online giant Amazon has been significantly overblown when it comes to car parts. Darryl Abotomey said on Wednesday that automotive parts did not even feature in the top 10 categories for Amazon sales offshore. Bapcor, which runs the Autobarn and Autopro retail chains along with a large trade business supplying to mechanics under the Burson banner across a total network of 850 locations, would be spared from any substantial impact, he said. Mr Abotomey said Bapcor had a 75 per cent skew towards trade and wholesale supply of more than 500,000 different parts to mechanics and workshops, and the extensive knowledge of the company’s staff in highly technical areas plus the broad range of items it carried provided a big cushion against the Amazon threat. The US giant didn’t provide technical expertise.
BHP Billiton Limited (BHP); Rio Tinto Limited (RIO):
Grant King’s exit from the BHP Billiton board followed more than 100 meetings between chairman-elect Ken MacKenzie and investors, in which the new chairman was left in no doubt about shareholder anger with the appointment of the former Origin boss and Business Council of Australia president. Own goals are the one thing that the board and management of BHP Billiton simply cannot afford, as the global resources house attempts to stare down the deep pocketed, well connected and historically pretty successful activist shareholder that is Elliott Associates. And it is an uncomfortable and distressing fact that Grant King’s invitation to join the board of BHP was looming as a serious own goal for man and company. A month earlier BHP scrapped an iron ore joint venture with rival Rio Tinto, while it abandoned a full takeover of that company in 2008. It was an era that also cost Tom Albanese, the CEO from Rio Tinto his job. King went to BHP chairman Jac Nasser about a week ago saying he would not stand for re-election at the miner’s annual general meeting in November. His decision follows an aggressive campaign against Nasser’s decision to appoint the former Origin Energy chief to the BHP board given the recent performance of the oil and gas giant. Capital management is a sensitive issue in the mining sector, where both BHP and Origin Energy have come under fire for the amount of money they spent on long-life investments with mixed results.
BPS Technology Limited (BPS):
Shareholders of BPS Technology, the operators of the Bartercard payments network, are stepping up their campaign to replace the entire board of the Gold Coast-based company. Fund managers Alceon and LHC Capital wrote to the board on Wednesday to express concerns about the way the company is being managed and governed after amending its notice to call for a shareholder meeting earlier in the week. ‘‘The new board we are proposing, including two former BPS independent directors, unquestionably has the management and governance credentials to turn BPS around.’’ BPS listed in September 2014 with a market capitalisation of $58million,raising $28 million at $1 per share while Mr Dietz, Tony Wiese and Brian Hall retained $30 million at the time. The three shareholders serve on the board with Murray D’Almeida and Garth Barrett.
Commonwealth Bank of Australia (CBA):
It appears Maurice Blackburn is considering arguing that because CBA shares dropped heavily on the day the AUSTRAC proceedings were announced and the day after, the market considered them material – so under the Corporations Act’s continuous disclosure principles, they should have been made public at an earlier date, when the board and senior management became aware of them. IMF reckons the date of disclosure should have been as early as August 17, 2015. CBA chairman Catherine Livingstone said on August 9 that alleged issues relating to threshold transaction reporting in the intelligent deposit machines were brought to the board’s attention in ‘‘the second half of 2015’’ According to Watson, the share price drop of a few per cent in heavy trading in the few days of trading after AUSTRAC launched legal proceedings showed the market believed this information to be material, and thus should have been disclosed much earlier. So CBA shareholders get to sue CBA shareholders. For CBA, the likely class action suit is one more distraction amid the welter of reviews, inquiries, investigations and announced reforms now covering the entire banking sector like a mildewed blanket.
Centuria Capital Limited (CNI):
Centuria Capital has set itself up for further growth after a transformative year when the platform’s funds under management ballooned by 118 per cent to $4.2 billion. The bulk of that increase came through a single deal, the takeover of the 360 Capital platform, which added $1.4 billion in FUM. Distributions also rose, to a total of 7.5¢ for the year. Centuria’s earnings per share figure fell to 11.5¢, lower than the 2016 figure of 1.8¢, which was inflated by one-off performance fees of $16 million. As well, Centuria issued more equity during 2017 in a $150 million raising to back the 360 Capital transaction.
Charter Hall Group (CHC):
Property funds manager and investor Charter Hall Group will not be deterred from expanding its funds management business into infrastructure despite a failed deal to purchase Hastings Funds Management. After delivering a strong 19.7 per cent increase in full-year net profit to $257.5 million driven by higher fees income and higher property revaluations, Charter Hall chief executive David Harrison told analysts and media that he would continue to look beyond property for funds management businesses but that organic growth in this ambition was not likely. ‘‘I think for us to broaden our scope into infrastructure it needs to be a scale acquisition not organic,’’ Mr Harrison said. ‘‘It’s something we are continuing to explore.’’
(Source: AIMS)
The combination of ‘‘open banking’’ regimes and data migrating to the computer cloud will lure global technology giants to create platforms for distributing financial services, a move that will force incumbent banks to compete head-on to control customer relationships or risk becoming mere suppliers of commoditised financial products. That’s a view of the future set out by the World Economic Forum in a 194-page report on fintech disruption, released in New York on Tuesday, that warns traditional bank distribution models and economics ‘‘are at risk of being deeply disrupted by the drive towards platform models of banking’’. NAB isn’t in a hurry to reach a conclusion and will run a fine toothcomb through the wealth business to assess how to best navigate some of the challenges. The bank and its executives are also keen to see the outcome of ANZ Banking Group’s wealth sale, which includes life insurance and funds management. Final ANZ Wealth bids are due in mid-September.
APA Group (APA):
Dominant gas pipeline owner APA Group has sought to shrug off mounting regulatory threats, posting a 32 per cent jump in full-year profit and signalling an increase in growth spending for the coming financial year. Grilled by investors about increasing risks to the pipeline business as the government tackles soaring gas prices on the east coast, managing director Mick McCormack said no investment plans or earnings expectations had been affected. However APA is guiding for a much smaller growth in core earnings this coming financial year, forecasting a range that was in line with market consensus but still below some analysts’ estimates.
APN Property Group Limited (APD); GrowthPoint Properties Australia Limited (GOZ); Industria REIT (IDR):
Industria REIT is getting on with growth while it waits to see what rival Growthpoint Properties Australia intends to do with its sizeable stake in its much smaller peer. The Melbourne-based trust, part of the APN Property stable, hasa $638 million portfolio of office and industrial assets in Sydney, Newcastle, Brisbane, Melbourne, and Adelaide. Its statutory profit surged to $101.6 million, mostly due to an uplift from investment property valuations. Funds from operations – the earnings measure used by the property sector – rose 23.6 per cent to $27.9 million, with FFO growth per security hit 18.1¢, the top of the guidance range. While the $159 million acquisition last September of the Westrac facility had a big impact on earnings and valuations, it was the 24,400 square metres of leasing deals that helped drive valuation increases, combined with the effect of tightening capitalisation rates.
Ardent Leisure Group (AAD); Ariadne Australia Limited (ARA):
Proxy firms ISS and Ownership Matters have largely backed Ardent Leisure’s board in its scrap with activist shareholder Ariadne, by recommending against the election of Ariadne director Gary Weiss at a crucial meeting next month. While 10.9 per cent shareholder Ariadne last week withdrew three resolutions it will put to shareholders at an extraordinary meeting it has called Monday week, it is still pushing for the election of Dr Weiss and USbased Brad Richmond to the board of the challenged leisure company. In their reports to shareholders, however, both corporate governance advisory firms opposed Dr Weiss. The reports suggest that Ariadne, despite burnishing its turnaround credentials with its own earnings report this week, is failing to convince the wider pool of shareholders that it offers a distinct plan for Ardent, which is battling to recover from last year’s fatal accident at its Dreamworld theme park.
Bapcor Limited (BAP); Super Retail Group Limited (SUL):
The chief executive of the $1.5 billion automotive parts retailer and trade supplier Bapcor says the potential impact of the looming entry into the Australian market of online giant Amazon has been significantly overblown when it comes to car parts. Darryl Abotomey said on Wednesday that automotive parts did not even feature in the top 10 categories for Amazon sales offshore. Bapcor, which runs the Autobarn and Autopro retail chains along with a large trade business supplying to mechanics under the Burson banner across a total network of 850 locations, would be spared from any substantial impact, he said. Mr Abotomey said Bapcor had a 75 per cent skew towards trade and wholesale supply of more than 500,000 different parts to mechanics and workshops, and the extensive knowledge of the company’s staff in highly technical areas plus the broad range of items it carried provided a big cushion against the Amazon threat. The US giant didn’t provide technical expertise.
BHP Billiton Limited (BHP); Rio Tinto Limited (RIO):
Grant King’s exit from the BHP Billiton board followed more than 100 meetings between chairman-elect Ken MacKenzie and investors, in which the new chairman was left in no doubt about shareholder anger with the appointment of the former Origin boss and Business Council of Australia president. Own goals are the one thing that the board and management of BHP Billiton simply cannot afford, as the global resources house attempts to stare down the deep pocketed, well connected and historically pretty successful activist shareholder that is Elliott Associates. And it is an uncomfortable and distressing fact that Grant King’s invitation to join the board of BHP was looming as a serious own goal for man and company. A month earlier BHP scrapped an iron ore joint venture with rival Rio Tinto, while it abandoned a full takeover of that company in 2008. It was an era that also cost Tom Albanese, the CEO from Rio Tinto his job. King went to BHP chairman Jac Nasser about a week ago saying he would not stand for re-election at the miner’s annual general meeting in November. His decision follows an aggressive campaign against Nasser’s decision to appoint the former Origin Energy chief to the BHP board given the recent performance of the oil and gas giant. Capital management is a sensitive issue in the mining sector, where both BHP and Origin Energy have come under fire for the amount of money they spent on long-life investments with mixed results.
BPS Technology Limited (BPS):
Shareholders of BPS Technology, the operators of the Bartercard payments network, are stepping up their campaign to replace the entire board of the Gold Coast-based company. Fund managers Alceon and LHC Capital wrote to the board on Wednesday to express concerns about the way the company is being managed and governed after amending its notice to call for a shareholder meeting earlier in the week. ‘‘The new board we are proposing, including two former BPS independent directors, unquestionably has the management and governance credentials to turn BPS around.’’ BPS listed in September 2014 with a market capitalisation of $58million,raising $28 million at $1 per share while Mr Dietz, Tony Wiese and Brian Hall retained $30 million at the time. The three shareholders serve on the board with Murray D’Almeida and Garth Barrett.
Commonwealth Bank of Australia (CBA):
It appears Maurice Blackburn is considering arguing that because CBA shares dropped heavily on the day the AUSTRAC proceedings were announced and the day after, the market considered them material – so under the Corporations Act’s continuous disclosure principles, they should have been made public at an earlier date, when the board and senior management became aware of them. IMF reckons the date of disclosure should have been as early as August 17, 2015. CBA chairman Catherine Livingstone said on August 9 that alleged issues relating to threshold transaction reporting in the intelligent deposit machines were brought to the board’s attention in ‘‘the second half of 2015’’ According to Watson, the share price drop of a few per cent in heavy trading in the few days of trading after AUSTRAC launched legal proceedings showed the market believed this information to be material, and thus should have been disclosed much earlier. So CBA shareholders get to sue CBA shareholders. For CBA, the likely class action suit is one more distraction amid the welter of reviews, inquiries, investigations and announced reforms now covering the entire banking sector like a mildewed blanket.
Centuria Capital Limited (CNI):
Centuria Capital has set itself up for further growth after a transformative year when the platform’s funds under management ballooned by 118 per cent to $4.2 billion. The bulk of that increase came through a single deal, the takeover of the 360 Capital platform, which added $1.4 billion in FUM. Distributions also rose, to a total of 7.5¢ for the year. Centuria’s earnings per share figure fell to 11.5¢, lower than the 2016 figure of 1.8¢, which was inflated by one-off performance fees of $16 million. As well, Centuria issued more equity during 2017 in a $150 million raising to back the 360 Capital transaction.
Charter Hall Group (CHC):
Property funds manager and investor Charter Hall Group will not be deterred from expanding its funds management business into infrastructure despite a failed deal to purchase Hastings Funds Management. After delivering a strong 19.7 per cent increase in full-year net profit to $257.5 million driven by higher fees income and higher property revaluations, Charter Hall chief executive David Harrison told analysts and media that he would continue to look beyond property for funds management businesses but that organic growth in this ambition was not likely. ‘‘I think for us to broaden our scope into infrastructure it needs to be a scale acquisition not organic,’’ Mr Harrison said. ‘‘It’s something we are continuing to explore.’’
(Source: AIMS)
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