AGL Energy & Origin Energy & Energy Australia (AGL&ORG):
News that the big three energy retailers — AGL Energy, Origin Energy and EnergyAustralia -had agreed significant rebates for retail customers with standing offers is being interpreted as reducing the likelihood of full reregulation of energy prices in Victoria. Around 285,000 customers will receive a rebate of $250-440 a year. RBC Capital Markets analyst Paul Johnston says that $345 midpoint equals $98m of revenue/EBITDA (earnings before interest, tax, depreciation and amortization) across the big three retailers. As AGL has the highest market share in Victoria, RBC estimates it will strip $35-40m a year from its revenue. With 2017-18 consensus net profit after tax at $1.02bn, the higher end of the range provided by AGL at its FY result in August of $940-1,040m. AGL shares (AGL) are up 1.8pc in the first hour of trade, with the utilities sector up 1.4pc. Origin Energy (ORG), which is outside the index sector because of its large gas export operations, is down 4c to $8.54.
Bellamy’s Australia Limited (BAL):
Within its short-ish life, Bellamy's Australia has had a more torrid run than most. This week marks almost exactly a year since shares in the infant formula group collapsed, after Chinese regulatory changes exposed risky take-or-pay contracts and triggered a slump in sales. Extraordinarily, in less than a year – after a board clean-out, CEO sacking, ASIC investigation, near bankruptcy and more – its market capitalisation almost as high as it has ever been. Bellamy's has more shares on issue than it did a year ago, after raising $60 million June at $4.75 a share to fund buying out an onerous take-or-pay contract with Fonterra as well as partially fund the acquisition of canning facility Camperdown Powder in Victoria. The deal was part of its restructure and strategy of moving from a pure marketing company to a manufacturer. Fueling the meteoric share price rise (up some 80 per cent since the start of the year) are big earnings expectations, though it's worth noting the share price run is easily outpacing the expected earnings growth. When shares were at a similar level last time around, the market was factoring in about $1 earnings per share (EPS). Now the share price is back at the same levels and the market is factoring in 40¢ EPS. Or look at it another way. The company is trading around five times its revenue, and roughly 27 times its earnings before interest, tax, depreciation and amortisation – that's a higher multiple than A2, one of the year's best performers across the market, which hasn't had Bellamy's challenges.
Bingo Industries Limited (BIN):
Bingo Industries is raising $120 million to buy businesses National Recycling Group and Patons Lane. The funds will also be used for organic redevelopment opportunities and to repay debt. Bingo Industries listed on the Australian Securities Exchange through Macquarie Group this year. However, the company has elected investment bank UBS for the latest raising. As part of the raise, shareholders will be offered one share for every 5.55 held. The company’s founding Tartak family has pre-committed to take up their full entitlement under the entitlement offer, which amounts to about 30 per cent of the offer in aggregate. Shares will be offered at $1.90 each, a 7 per cent discount to the theoretical ex-rights price based on the last close of $2.04. Investors Monday were describing the acquisitions as highly accretive to earnings.
Macquarie Group Limited(MQG):
Macquarie shares are over the $100 mark for the first time today, with the shares picking up on broadly positive market sentiment to finally breach that key level. The shares have been threatening to break $100 for some weeks. In late October Macquarie, the world's largest infrastructure manager ratcheted up full-year earnings guidance and made a marquee appointment of former Reserve Bank of Australia governor Glenn Stevens to its board. Macquarie was trading up 0.9 per cent at $100.25 a share.
Corporation Limited (RCG):
Retail billionaire Brett Blundy has emerged as the biggest single shareholder in footwear retailer RCG Corporation, after snapping up an 11.8 per cent stake in the group. Mr Blundy, who was listed on the 2017 Financial Review Rich 200 list with a fortune of $1.39 billion, now holds 14.4 per cent of the company. Mr Blundy is the chairman of investment vehicle BB Retail Capital. The group is also a large shareholding in ASX listed property group Aventus Property, with owns 14 centres across Australia. Mr Blundy has acquired the parcel of 64,000,000 shares from RCG directors Craig Thompson and Michael Hapgood, and William Duell. The three men were previously the owners of the New Zealand footwear group Accent, which RCG acquired in 2015 for $200 million. Shares are up 8.2 per cent.
Tatts Group Limited(TTS):
Tatts is expected to seek Supreme Court approval to delay its shareholder meeting until December 12 in the wake of last week’s formal decision from the Australian Competition Tribunal to approve its tie-up with Tabcorp. The Tatts (TTS) meeting was original set down for November 30 but the request for the delay is to give shareholders more time to consider the supplementary material. Just whether CrownBet will appeal last week’s ruling is not clear. The company is in the midst of its own ownership turmoil, with James Packer’s Crown looking to offload its 62 per cent stake for $150m. CrownBet chief executive Matthew Tripp, who owns the other 38 per cent stake, is in talks with potential buyers for the Crown stake and or a loan to gain 100 per cent control. CrownBet reported earnings before interest tax depreciation and amortisation of around $4m last financial year, so the $242m valuation the Packer stake places on the company amounts to 60 times historical earnings.
Woolworths Limited (WOW):
Woolworths’ turnaround looks set to continue, with further room for growth identified in Deutsche Bank’s latest annual Battle for Baskets survey. Coles has been the primary victim of the Woolworths resurgence but IGA and Aldi stores have lost customers too, with the relaunch of the Woolworths loyalty program spurring the latest improvement. This year’s report, which surveyed 2,400 shoppers, found that Woolworths’ loyalty program was the most important reason for choosing Woolworths for 10 per cent of shoppers, up from 6 per cent last year. Seventeen per cent of Coles shoppers rated the Coles loyalty program as their most important reason. “With a significant divide remaining between the two, Woolworths still has significant potential in this area to at least catch up to Coles,” the report said. It comes after Woolworths posted a 3.6 per cent fall in full-year net profit of $1.422 billion and a 3.7 per cent revenue rise to $55.47bn for the 2017 fiscal year. Reported profit was $1.533bn, a significant improvement from a $1.234bn loss the prior year, due to billions in writedowns and impairments.
（Source: AIMS）
News that the big three energy retailers — AGL Energy, Origin Energy and EnergyAustralia -had agreed significant rebates for retail customers with standing offers is being interpreted as reducing the likelihood of full reregulation of energy prices in Victoria. Around 285,000 customers will receive a rebate of $250-440 a year. RBC Capital Markets analyst Paul Johnston says that $345 midpoint equals $98m of revenue/EBITDA (earnings before interest, tax, depreciation and amortization) across the big three retailers. As AGL has the highest market share in Victoria, RBC estimates it will strip $35-40m a year from its revenue. With 2017-18 consensus net profit after tax at $1.02bn, the higher end of the range provided by AGL at its FY result in August of $940-1,040m. AGL shares (AGL) are up 1.8pc in the first hour of trade, with the utilities sector up 1.4pc. Origin Energy (ORG), which is outside the index sector because of its large gas export operations, is down 4c to $8.54.
Bellamy’s Australia Limited (BAL):
Within its short-ish life, Bellamy's Australia has had a more torrid run than most. This week marks almost exactly a year since shares in the infant formula group collapsed, after Chinese regulatory changes exposed risky take-or-pay contracts and triggered a slump in sales. Extraordinarily, in less than a year – after a board clean-out, CEO sacking, ASIC investigation, near bankruptcy and more – its market capitalisation almost as high as it has ever been. Bellamy's has more shares on issue than it did a year ago, after raising $60 million June at $4.75 a share to fund buying out an onerous take-or-pay contract with Fonterra as well as partially fund the acquisition of canning facility Camperdown Powder in Victoria. The deal was part of its restructure and strategy of moving from a pure marketing company to a manufacturer. Fueling the meteoric share price rise (up some 80 per cent since the start of the year) are big earnings expectations, though it's worth noting the share price run is easily outpacing the expected earnings growth. When shares were at a similar level last time around, the market was factoring in about $1 earnings per share (EPS). Now the share price is back at the same levels and the market is factoring in 40¢ EPS. Or look at it another way. The company is trading around five times its revenue, and roughly 27 times its earnings before interest, tax, depreciation and amortisation – that's a higher multiple than A2, one of the year's best performers across the market, which hasn't had Bellamy's challenges.
Bingo Industries Limited (BIN):
Bingo Industries is raising $120 million to buy businesses National Recycling Group and Patons Lane. The funds will also be used for organic redevelopment opportunities and to repay debt. Bingo Industries listed on the Australian Securities Exchange through Macquarie Group this year. However, the company has elected investment bank UBS for the latest raising. As part of the raise, shareholders will be offered one share for every 5.55 held. The company’s founding Tartak family has pre-committed to take up their full entitlement under the entitlement offer, which amounts to about 30 per cent of the offer in aggregate. Shares will be offered at $1.90 each, a 7 per cent discount to the theoretical ex-rights price based on the last close of $2.04. Investors Monday were describing the acquisitions as highly accretive to earnings.
Macquarie Group Limited(MQG):
Macquarie shares are over the $100 mark for the first time today, with the shares picking up on broadly positive market sentiment to finally breach that key level. The shares have been threatening to break $100 for some weeks. In late October Macquarie, the world's largest infrastructure manager ratcheted up full-year earnings guidance and made a marquee appointment of former Reserve Bank of Australia governor Glenn Stevens to its board. Macquarie was trading up 0.9 per cent at $100.25 a share.
Corporation Limited (RCG):
Retail billionaire Brett Blundy has emerged as the biggest single shareholder in footwear retailer RCG Corporation, after snapping up an 11.8 per cent stake in the group. Mr Blundy, who was listed on the 2017 Financial Review Rich 200 list with a fortune of $1.39 billion, now holds 14.4 per cent of the company. Mr Blundy is the chairman of investment vehicle BB Retail Capital. The group is also a large shareholding in ASX listed property group Aventus Property, with owns 14 centres across Australia. Mr Blundy has acquired the parcel of 64,000,000 shares from RCG directors Craig Thompson and Michael Hapgood, and William Duell. The three men were previously the owners of the New Zealand footwear group Accent, which RCG acquired in 2015 for $200 million. Shares are up 8.2 per cent.
Tatts Group Limited(TTS):
Tatts is expected to seek Supreme Court approval to delay its shareholder meeting until December 12 in the wake of last week’s formal decision from the Australian Competition Tribunal to approve its tie-up with Tabcorp. The Tatts (TTS) meeting was original set down for November 30 but the request for the delay is to give shareholders more time to consider the supplementary material. Just whether CrownBet will appeal last week’s ruling is not clear. The company is in the midst of its own ownership turmoil, with James Packer’s Crown looking to offload its 62 per cent stake for $150m. CrownBet chief executive Matthew Tripp, who owns the other 38 per cent stake, is in talks with potential buyers for the Crown stake and or a loan to gain 100 per cent control. CrownBet reported earnings before interest tax depreciation and amortisation of around $4m last financial year, so the $242m valuation the Packer stake places on the company amounts to 60 times historical earnings.
Woolworths Limited (WOW):
Woolworths’ turnaround looks set to continue, with further room for growth identified in Deutsche Bank’s latest annual Battle for Baskets survey. Coles has been the primary victim of the Woolworths resurgence but IGA and Aldi stores have lost customers too, with the relaunch of the Woolworths loyalty program spurring the latest improvement. This year’s report, which surveyed 2,400 shoppers, found that Woolworths’ loyalty program was the most important reason for choosing Woolworths for 10 per cent of shoppers, up from 6 per cent last year. Seventeen per cent of Coles shoppers rated the Coles loyalty program as their most important reason. “With a significant divide remaining between the two, Woolworths still has significant potential in this area to at least catch up to Coles,” the report said. It comes after Woolworths posted a 3.6 per cent fall in full-year net profit of $1.422 billion and a 3.7 per cent revenue rise to $55.47bn for the 2017 fiscal year. Reported profit was $1.533bn, a significant improvement from a $1.234bn loss the prior year, due to billions in writedowns and impairments.
（Source: AIMS）
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