JB Hi-Fi Limited (JBH):
The arrival of the iPhone X could have made JB HBi-Fi a tidy $12.6 million in a single day, Morgan Stanley analysts reckon. On Friday the limited edition Apple 10th anniversary iPhone went on sale in Australia for between $1579 and $1829, with resellers advertising the phone on eBay for up to $12,000. The MS analysts JB Hi-Fi and reported that the 40 iPhone Xs in stock had sold out within a minute of the store opening. Wait times for the gadget are between three and six weeks. This, naturally, led the analysts to wonder what the impact of the phone might have on JB's sales. If each of the 185 JB stores received 40 phones and sold at $1704 on average it equates to $12.6m of sales on Friday, the calculate. "For comparison JB Australia generated $4149m of sales in FY17 or A$11.4m per day," they write. "Quite clearly, the uplift is material, not to mention the associated traffic lift." The analysts also note that JB Hi-Fi's management indicated at its AGM that Sept/Oct trade had moderated on the timing of product launches. So maybe some upside there? JB shares are up 0.1 per cent at $22.33, on the way to their first gain in nine sessions. The analysts are neutral on the stock and cautious on the discretionary retail sector.
McGrath Ltd (MEA):
The slowdown in off-the-plan apartment sales in Sydney has hit listed real estate agents McGrath, with the beleaguered company warning it won't hit analyst earnings forecasts for the current financial year. McGrath does not provide earnings guidance, but the John McGrath-founded company said it did not expect FY18 earnings (EBITDA) to reach the $16.6 million forecast by equities analysts at Bell Potter. "McGrath has completed the first four months of trading for FY18 and the company's financial performance has fallen short of expectations at both the revenue and EBITDA levels," McGrath said in an ASX statement. "The underperformance is largely in company owned sales, and is influenced by several factors including continued lower volumes of listings in most markets we serve, lower agent numbers and a significant slow‐down in the traditionally volatile project marketing segment. "Government policy changes around foreign buyers and developers coupled with tightened lending requirements have particularly affected this segment," McGrath said.
Myer Holdings Ltd (MYR)：
An influential proxy adviser has warned Myer shareholders against falling into Solomon Lew's "trap" by enabling him to exert control over the retailer and its board without making a takeover bid. Proxy adviser Ownership Matters has recommended Myer shareholders vote in favour of all resolutions at the November 24 annual meeting, including the election of chairman-designate Garry Hounsell and two other independent directors, JoAnne Stephenson and Julie Anne Morrison. Ownership Matters' advice contrasts with that of Myer's largest shareholder, Solomon Lew's Premier Investments, which has not only urged shareholders to reject all resolutions but has asked them to appoint Premier as their proxy at the AGM so it can control their votes. "We are recommending in favour of all resolutions, because all things being equal it's hard to recommend people vote into a vacuum," Ownership Matters director Dean Paatsch told The AFR. "Control of the company needs to pass at a price and you need to be very cautious that you don't inadvertently fall into a trap," he said. The Ownership Matters report endorses Myer's new directors but does not explicitly endorse Myer's revised strategy, which was released last week only to be immediately condemned by Mr Lew as "dead on arrival". However, the report reflects concerns that if shareholders voted against the resolutions it would leave Myer rudderless and in a vacuum, clearing the way for Mr Lew to appoint his own nominees and take control of the company without making a takeover bid. Myer has rejected Premier's request for three board seats and has accused Mr Lew, who owns 43 per cent of Premier, of seeking to control the company without paying a premium.
Orica Ltd (ORI):
Higher gas and ammonia prices cost Orica an extra $59 million in 2017 and were among a range of factors that offset improved conditions for the explosives manufacturer. Despite selling 3 per cent more ammonium nitrate (a key ingredient in industrial explosives) in the year ended September 30, Orica reported slightly lower revenues and underlying profits than last year as higher input costs and contract renewals took their toll. Gas is the key ingredient in ammonium nitrate, and surging prices on Australia's east coast are challenging manufacturers like Orica. Orica thrives when mining companies are moving large amounts of waste material, and while the past year of strong commodity prices has been a good portent for the company, it could be several years before the benefits flow through. Underlying profit of $386.2 million was about 3 per cent below analyst consensus and 1 per cent below last year's result. But the absence of exceptional items allowed the company to report a statutory profit which was 13 per cent better than the previous year. Despite the flat conditions, shareholders have been given an improved return; a final dividend of 28¢ per share unfranked means total dividends for 2017 were 4 per cent higher than last year at 51.5¢ per share. The lift in dividends comes after a period of strong capital growth for shareholders; Orica shares hit a 29-month high on Friday, but the stock has tanked 11 per cent to $19.08 this morning. Chief executive Alberto Calderon was cautious on the outlook for the next 12 months. "In 2017 the mining sector began to recover from the severe downturn that began in 2015. We expect this recovery and the normalisation of long term mining plans that it implies to continue in 2018. However there will be a lag before this makes a material difference to the services sector," he said. Citi analysts said the result was weaker versus consensus, and that management's guidance "suggests a downgrade to FY18 consensus" forecasts.
Westpac Banking Group (WBC):
Westpac Banking Group has marginally undershot expectations with a full year cash profit up 3 per cent to $8.062 billion versus consensus forecasts for $8.162b. Westpac's CEO Brian Hartzer spoke of the difficult environment for banks which included the impact of the major bank levy and the higher capital levels required by the regulator. "We have continued to successfully navigate a challenging environment while our strategy builds momentum" Mr Hartzer said. The major bank levy had a $66m impact on cash earnings at the bank in FY17. The bank said that it had made $169 million in customer refunds and payments in which weighed on full year earnings by 1.5 per cent. Looking ahead the bank flagged margin compression flowing from mortgage switching from interest only to principal and interest and the headwinds from reduced transaction fees from ATMs. Describing the result as "solid", Mr Hartzer said the nation's second biggest lender is positive about the Australian housing market although the bank expects price growth to moderate in 2018. In an outlook statement, Mr Hartzer implored the government to ensure the policy environment is made certain in order to provide business with confidence to invest. While global economic growth is expected to be 3.5 per cent, in Australia GDP growth in 2018 is expected to be slightly above trend at around 2.5 per cent but growth will remain mixed across the country. Mr Hartzer pointed to governments in the US and France where they are cutting taxes and red tape and investing in infrastructure. "It's a good reminder that policy certainty is a great spur to business investment… Business in Australia is ready to invest, however many of our customers are holding back because of policy uncertainty."
（from: AIMS）
The arrival of the iPhone X could have made JB HBi-Fi a tidy $12.6 million in a single day, Morgan Stanley analysts reckon. On Friday the limited edition Apple 10th anniversary iPhone went on sale in Australia for between $1579 and $1829, with resellers advertising the phone on eBay for up to $12,000. The MS analysts JB Hi-Fi and reported that the 40 iPhone Xs in stock had sold out within a minute of the store opening. Wait times for the gadget are between three and six weeks. This, naturally, led the analysts to wonder what the impact of the phone might have on JB's sales. If each of the 185 JB stores received 40 phones and sold at $1704 on average it equates to $12.6m of sales on Friday, the calculate. "For comparison JB Australia generated $4149m of sales in FY17 or A$11.4m per day," they write. "Quite clearly, the uplift is material, not to mention the associated traffic lift." The analysts also note that JB Hi-Fi's management indicated at its AGM that Sept/Oct trade had moderated on the timing of product launches. So maybe some upside there? JB shares are up 0.1 per cent at $22.33, on the way to their first gain in nine sessions. The analysts are neutral on the stock and cautious on the discretionary retail sector.
McGrath Ltd (MEA):
The slowdown in off-the-plan apartment sales in Sydney has hit listed real estate agents McGrath, with the beleaguered company warning it won't hit analyst earnings forecasts for the current financial year. McGrath does not provide earnings guidance, but the John McGrath-founded company said it did not expect FY18 earnings (EBITDA) to reach the $16.6 million forecast by equities analysts at Bell Potter. "McGrath has completed the first four months of trading for FY18 and the company's financial performance has fallen short of expectations at both the revenue and EBITDA levels," McGrath said in an ASX statement. "The underperformance is largely in company owned sales, and is influenced by several factors including continued lower volumes of listings in most markets we serve, lower agent numbers and a significant slow‐down in the traditionally volatile project marketing segment. "Government policy changes around foreign buyers and developers coupled with tightened lending requirements have particularly affected this segment," McGrath said.
Myer Holdings Ltd (MYR)：
An influential proxy adviser has warned Myer shareholders against falling into Solomon Lew's "trap" by enabling him to exert control over the retailer and its board without making a takeover bid. Proxy adviser Ownership Matters has recommended Myer shareholders vote in favour of all resolutions at the November 24 annual meeting, including the election of chairman-designate Garry Hounsell and two other independent directors, JoAnne Stephenson and Julie Anne Morrison. Ownership Matters' advice contrasts with that of Myer's largest shareholder, Solomon Lew's Premier Investments, which has not only urged shareholders to reject all resolutions but has asked them to appoint Premier as their proxy at the AGM so it can control their votes. "We are recommending in favour of all resolutions, because all things being equal it's hard to recommend people vote into a vacuum," Ownership Matters director Dean Paatsch told The AFR. "Control of the company needs to pass at a price and you need to be very cautious that you don't inadvertently fall into a trap," he said. The Ownership Matters report endorses Myer's new directors but does not explicitly endorse Myer's revised strategy, which was released last week only to be immediately condemned by Mr Lew as "dead on arrival". However, the report reflects concerns that if shareholders voted against the resolutions it would leave Myer rudderless and in a vacuum, clearing the way for Mr Lew to appoint his own nominees and take control of the company without making a takeover bid. Myer has rejected Premier's request for three board seats and has accused Mr Lew, who owns 43 per cent of Premier, of seeking to control the company without paying a premium.
Orica Ltd (ORI):
Higher gas and ammonia prices cost Orica an extra $59 million in 2017 and were among a range of factors that offset improved conditions for the explosives manufacturer. Despite selling 3 per cent more ammonium nitrate (a key ingredient in industrial explosives) in the year ended September 30, Orica reported slightly lower revenues and underlying profits than last year as higher input costs and contract renewals took their toll. Gas is the key ingredient in ammonium nitrate, and surging prices on Australia's east coast are challenging manufacturers like Orica. Orica thrives when mining companies are moving large amounts of waste material, and while the past year of strong commodity prices has been a good portent for the company, it could be several years before the benefits flow through. Underlying profit of $386.2 million was about 3 per cent below analyst consensus and 1 per cent below last year's result. But the absence of exceptional items allowed the company to report a statutory profit which was 13 per cent better than the previous year. Despite the flat conditions, shareholders have been given an improved return; a final dividend of 28¢ per share unfranked means total dividends for 2017 were 4 per cent higher than last year at 51.5¢ per share. The lift in dividends comes after a period of strong capital growth for shareholders; Orica shares hit a 29-month high on Friday, but the stock has tanked 11 per cent to $19.08 this morning. Chief executive Alberto Calderon was cautious on the outlook for the next 12 months. "In 2017 the mining sector began to recover from the severe downturn that began in 2015. We expect this recovery and the normalisation of long term mining plans that it implies to continue in 2018. However there will be a lag before this makes a material difference to the services sector," he said. Citi analysts said the result was weaker versus consensus, and that management's guidance "suggests a downgrade to FY18 consensus" forecasts.
Westpac Banking Group (WBC):
Westpac Banking Group has marginally undershot expectations with a full year cash profit up 3 per cent to $8.062 billion versus consensus forecasts for $8.162b. Westpac's CEO Brian Hartzer spoke of the difficult environment for banks which included the impact of the major bank levy and the higher capital levels required by the regulator. "We have continued to successfully navigate a challenging environment while our strategy builds momentum" Mr Hartzer said. The major bank levy had a $66m impact on cash earnings at the bank in FY17. The bank said that it had made $169 million in customer refunds and payments in which weighed on full year earnings by 1.5 per cent. Looking ahead the bank flagged margin compression flowing from mortgage switching from interest only to principal and interest and the headwinds from reduced transaction fees from ATMs. Describing the result as "solid", Mr Hartzer said the nation's second biggest lender is positive about the Australian housing market although the bank expects price growth to moderate in 2018. In an outlook statement, Mr Hartzer implored the government to ensure the policy environment is made certain in order to provide business with confidence to invest. While global economic growth is expected to be 3.5 per cent, in Australia GDP growth in 2018 is expected to be slightly above trend at around 2.5 per cent but growth will remain mixed across the country. Mr Hartzer pointed to governments in the US and France where they are cutting taxes and red tape and investing in infrastructure. "It's a good reminder that policy certainty is a great spur to business investment… Business in Australia is ready to invest, however many of our customers are holding back because of policy uncertainty."
（from: AIMS）
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