Bubs Australia Ltd (BUB):
Baby food supplier Bubs Australia’s is charging ahead after the acquisition of goat milk products maker NuLac Foods helped bring about a fivefold increase in the group’s latest quarterly sales figures. Bubs yesterday said its third-quarter net sales grew by 422 per cent to $5.2 million, compared to a year ago. The lift in revenue came from both the Bubs business and NuLac Foods, which completed its first full quarter of trading under Bubs ownership. Sales of goat milk infant formula were up by 63 per cent. Bubs bought NuLac for $39m last November. Bubs said all three stages of its goat milk infant formula were to be sold in Woolworths supermarkets starting this month, and some varieties of organic baby cereals would start to appear in Woolworths in May. Chemist Warehouse will start to sell some varieties of Bubs organic baby food pouches in its stores in April. Bubs said its new-look branding launched last year was being well received. Bubs shares closed at their highest level in a month — up 9.2 per cent to 83c apiece.
Commonwealth Bank of Australia (CBA):
Commonwealth Bank has pledged to improve its financial advice after it signed an enforceable undertaking with the Australian Securities Investment Commission over its failure to provide annual reviews to about 31,500 customers. “We recognise the fact that we have failed customers in our advice businesses over the past decade,” said chief executive Matt Comyn. “These failures have resulted in a range of regulatory actions including imposition of licence conditions and remediation programs. “This is unacceptable and we owe our customers an apology for letting them down. Providing quality financial advice is critical for our customers.” As part of the arrangement with ASIC, CBA subsidiaries Commonwealth Financial Planning Ltd and BW Financial Advice Ltd will together pay a community benefit of $3 million in total, while CFPL will also provide evidence of material changes to compliance systems. BFAL ceased trading in October 2016, so CFPL is the focus on the compliance improvements, ASIC said.
Rio Tinto Limited (RIO):
Morgans have upgraded its recommendation for Rio Tinto from "hold' to "add" on the back of recent share price weakness and higher aluminium price forecasts. US sanctions on Russian aluminium giant Rusal has led Morgans to upgrade their aluminium price forecasts, increasing the discounted cash flow valuation for Rio by 9 per cent. The broker said that Rio was trading on 2019 EV/EBITDA 5.2x, FCF yield of 7.1 per cent, and dividend yield of 5 per cent. "The key risk to our Add call is commodity price risk," the broker noted. "While seeing value on offer at current levels, we still have lingering questions around RIO's future direction, after exiting coal and flagging an interest to enter new markets such as lithium." Morgans said that it had a positive view on Rio's earnings and valuation, and upgraded the miner's target price from $74.75 to $81.51.
Treasury Wine Estates Ltd (TWE):
The chief financial officer of Penfolds owner Treasury Wine Estates is being shifted from number-crunching to a new role running the operational side of the wine group's big United States operations as it undergoes a major distribution overhaul and eyes acquisitions. Gunther Burghardt will on May 1 become the executive vice-president of operations for the Americas, in a role heavily focused on the supply chain for the US business. He will work side-by-side with Robert Foye, Treasury's President Americas and chief operating officer. Matt Young has been elevated from deputy chief financial officer to chief financial officer, and he will be based in Melbourne rather than California where Mr Burghardt has been based. Mr Young has been with Treasury since 2014, and earlier in his career worked for PwC. Mr Foye has his hands full pushing through the major changes to the way Treasury distributes wine in the US market. The company on January 31 revealed it would overhaul distribution in 15 states.
Wesfarmers Ltd (WES):
Wesfarmers' boss Rob Scott proved himself willing to make bold moves with his $19 billion demerger of Coles. Now the market is wondering if he is eyeing another big – and risky – deal. Reports that Wesfarmers has taken a small stake in beleaguered Kiwi construction group Fletcher Building set a fire under the latter's New Zealand shares on Friday morning, which jumped 13 per cent. Fletcher continues to say it knows nothing. Wesfarmers also declined to comment on speculation, and it's worth noting that if it is planning a raid on Fletcher, this leak may have ruined its plans. But while several sources close to Wesfarmers were playing down the whole thing on Friday, the idea of a Fletcher takeover and/or breakup is one that has been kicked around the market by investment banks of late.
Westfield Corp Ltd (WFD):
The directors of global shopping centre group Westfield have unanimously recommended share-holders approve a $30 billion takeover by French property giant Unibail-Rodamco, with the founding Lowy family again voicing its support despite the falling value of the offer. If the deal is approved at a meeting on May 24, Westfield security holders will own 28 per cent of the new group. The combined group will hold €62bn ($97.8bn) of assets in 13 countries and be listed on the Euronext in Paris and Amsterdam and on ASX as CHESS Depositary Interests (CDIs). In an announcement after the market closed yesterday, Westfield said the security holders’ booklet for the takeover had been approved by the Australian Securities & Investments Commission. It comes after French and Dutch regulators approved Unibail-Rodamco’s prospectus for the bid last month. The Lowy family said it was “committed to the success of the new group and intends to maintain a substantial investment in the group”. The Lowys will own a 2.64 per cent stake if the deal goes ahead.
(Source: AIMS)
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