Fortescue Metals Group Limited (FMG):
Fortescue Metals, the world's fourth largest iron ore miner, has approved the development of a $US1.28 billion ($1.7 billion) mine and rail project in Western Australia, in a bid to boost the price it gets for its iron ore. Fortescue is eager to improve the quality of its iron ore as its biggest customer, China, is increasingly demanding higher quality ore for steel mills to help cut smog. Production from the mine is set to start in December 2020 and is expected to yield higher quality ore, closer to the benchmark of 62 per cent iron content. The project, named Eliwana, would help Fortescue maintain a 170 million-tonne-a-year production rate for over 20 years, the company said in a statement on Monday. "This project allows us to commence the supply of Fortescue Premium product to the market from existing operations in the second half of FY19 with volumes increased as Eliwana ramps up to full production," Fortescue chief executive Elizabeth Gaines said. The project would create up to 1900 jobs during construction and 500 full-time positions once operational.
Investa Office Fund (IOF):
Office manager Investa Office Fund is subject of a $3.14 billion cash bid from US private equity group Blackstone. The ASXlisted firm said Blackstone had offered $5.25 per unit, which equates to a distribution-adjusted price of $5.15 per unit - a 13 per cent premium to Friday's closing price of $4.55. The directors of IOF manager Investa Listed Funds Management (ILFM) said they planned to unanimously recommend the offer. ILFM's directors and Quartz Holding (NQ) Pte, a Blackstone affiliate, have entered a process deed setting out the offer's terms. The bid marks a move deeper into the Australia-New Zealand real estate market for the US-based private equity giant. Less than two weeks ago, it struck a $NZ635 million ($582 million) deal to buy an office portfolio in Auckland, which was co-held by Goodman Property Trust and Singaporean investor GIC. A Blackstone unit was said to be the buyer in the sale of a Sydney office building earlier this year. The building, which sold for $205 million, was owned by a unit of indebted Chinese conglomerate HNA Group. Investa said it received an initial confidential proposal of $5.05 a share on April 5, and negotiated the improved proposal that it received on May 4 - since when Blackstone has been conducting due diligence.
APN Outdoor Group Ltd (APO):
APN Outdoor's growing advertising sales momentum has led the out-of-home advertising to upgrade revenue guidance. On Monday morning, APN Outdoor said it now expects first-half revenue to be up by mid-single digits, and high single-digits, excluding the impact of the loss of the Yarra Trams contract in the second half of 2017. This compares with previous expectations of revenue to be up by low single digits, and mid-single digits, excluding Yarra Trams. Over 2017, APN Outdoor had revenue of $342.9 million and underlying earnings before, interest, tax, depreciation and amortisation of $90.3 million. The out-of-home advertising business also issued full-year EBITDA guidance of between $92 million and $96 million. The company previous said it would provide EBITDA guidance at its half year result in August. "The out-of-home markets in both Australia and New Zealand have remained robust in recent months and pleasingly our reinvigorated approach to sales continues to gain momentum," APN Outdoor chief executive James Warburton said. "We are actively investing in data and technology to add value to our product proposition and drive the Company's next wave of growth."
BHP Billiton Limited (BHP):
BHP Billiton is in settlement talks with the Queensland government in a bid to resolve a long-running dispute over coal royalties. BHP and Queensland's treasury faced off in Brisbane's Supreme Court on Monday, but the hearing lasted less than 10 minutes before the two parties sought an adjournment to allow settlement talks to proceed. The dispute is over close to $300 million worth of royalties the Queensland government believes should have been paid on coal exported from the Bowen Basin near Mackay. BHP's Singapore marketing hub is at the centre of the dispute, with particular focus on whether royalties should be charged on the price BHP's Singapore hub sold the coal to customers, or at the price BHP's Australian subsidiary sold the coal to the Singapore subsidiary. The Brisbane hearing is one of two court appearances by the mining company this week, with BHP also scheduled to face off against the Commissioner for Taxation in Melbourne's federal court on Thursday.
Metcash Limited (MTS):
Wholesaler Metcash has dashed hopes for a return to profit growth in its core supermarkets and convenience business in 2018, warning that earnings from the division will be flat and revenues will go backwards. In a trading update on Monday, Metcash said earnings from supermarkets and convenience for the 12 months ending April are expected to be in line with those in 2017, total sales are expected to fall 1.2 per cent and wholesale sales excluding tobacco are expected to fall 3.6 per cent. Metcash shares, which have risen 15 per cent this year, fell 48.5¢ – about 13 per cent – to $3.19 in early trade. While analysts were expecting supermarket and convenience sales to decline, they were hoping earnings would rise, underpinned by cost savings from Metcash's Working Smarter program. JP Morgan, for example, in a note last week, forecast that food and grocery earnings would rise 4.4 per cent to $188 million, underpinned by $32 million in Working Smarter Savings. Supermarket and convenience earnings have fallen almost 40 per cent since 2014. Metcash also revealed it was losing one of its major customers, Drakes Supermarkets, in South Australia.
Moelis Australia Ltd (MOE):
Moelis expects 1H18 underlying EBITDA profit of about $22m on revenue of $55m. The expected year-on-year profit increase is about 83pc and it expects underlying EPS of 9.4cps, up 27pc. Assets under management in the first 4 months grew about $250m to $3.15. It expects Corporate & Advisory Equities performance in line with 1H17 and says the pipeline is “strong”. Moelis has also obtained a business license in China and hired two asset managers there. And it’s close to getting an Australian Credit Licence to create credit related asset management products. All up the guidance looks quite strong and should boost the share price today.
Sirtex Medical Limited (SRX):
US cancer treatment developer Varian is seeking a Federal Court order to allow shareholders to consider its proposed takeover bid for Australian biotechnology company Sirtex Medical. On May 4, Chinese private equity firm CDH Investments had submitted a $1.9 billion bid for Sirtex Medical days before Sirtex shareholders were due to vote on a lower offer from US-listed Varian Medical Systems. Varian has stuck by its offer to acquire Sirtex at $28 per share. The company had gone to the Federal Court seeking orders that a shareholder meeting be reconvened on May 31. In a statement on Monday Sirtex said that the Federal Court will reconsider Varian's desire to have a shareholder meeting, and if approved a date will be set in July. Sirtex said it continues to support the Varian bid.
Star Combo Pharma Ltd (S66):
There are many Chinese companies - Chinese businesses being run by Chinese management - which have listed on the ASX but few run the gauntlet successfully. In non-ASX territory there already exists plenty of private businesses backed by Chinese capital. But a new breed of "Chinese" IPOs have surfaced, on the ASX, bettering the old Chinese IPO model, and many fund managers, especially those with interests in Asian-based companies, are backing them. Star Combo Pharma Limited is one of two such stocks that is headquartered and listed in Australia, but run by Chinese management and backed by Chinese capital. The other one is direct selling retail "daigao" business AuMake. "It's a whole new model, Australian businesses run by Chinese owners and with the business pretty much in China. It's very interesting to watch." one fund manager said. Star Combo Pharma, ticker S66, listed two weeks ago on May 14 raising $8 million in capital prior to listing. It commenced at just under 80¢ and is now trading at $1.365 with a market capitalisation of $104.95 million. Made up of two subsidiaries, Star Combo Pharma manufactures vitamins, supplements, nutritional products, and skincare products in its western Sydney Smithfield warehouse and factory. distributing them to the local and overseas markets.
Star Entertainment Group Ltd (SGR):
Star Entertainment has told investors revenue has risen in the second half so far, on the back of growth in Queensland and its international VIP business. At an investor day presentation, the company said its normalised gross revenue was up 16.4 per cent for the period January 1 to May 23, compared to the previous corresponding period. It comes after the company, which runs casinos in Brisbane, Sydney and on the Gold Coast, booked a 77 per cent fall in statutory half-year profit to $33 million in February, impacted by an abnormally low win rate in its international VIP business of 1.06 per cent and one-off items related to a debt restructuring. The return of Chinese high rollers had helped volumes, the company said at the time. In today’s trading update, the company said its international VIP rebate business, which offers luxury hospitality and cash rebates to high rollers, “continues to show strong growth”. Businesses turnover had lifted 63.7 per cent to date compared to the previous corresponding period, with the actual win rate below theoretical win rate of 1.35 per cent. The company said total domestic revenue was up 2.6 per cent for the second half to date, but volume growth had been impacted by lower table hold rates.
(Source: AIMS)
Fortescue Metals, the world's fourth largest iron ore miner, has approved the development of a $US1.28 billion ($1.7 billion) mine and rail project in Western Australia, in a bid to boost the price it gets for its iron ore. Fortescue is eager to improve the quality of its iron ore as its biggest customer, China, is increasingly demanding higher quality ore for steel mills to help cut smog. Production from the mine is set to start in December 2020 and is expected to yield higher quality ore, closer to the benchmark of 62 per cent iron content. The project, named Eliwana, would help Fortescue maintain a 170 million-tonne-a-year production rate for over 20 years, the company said in a statement on Monday. "This project allows us to commence the supply of Fortescue Premium product to the market from existing operations in the second half of FY19 with volumes increased as Eliwana ramps up to full production," Fortescue chief executive Elizabeth Gaines said. The project would create up to 1900 jobs during construction and 500 full-time positions once operational.
Investa Office Fund (IOF):
Office manager Investa Office Fund is subject of a $3.14 billion cash bid from US private equity group Blackstone. The ASXlisted firm said Blackstone had offered $5.25 per unit, which equates to a distribution-adjusted price of $5.15 per unit - a 13 per cent premium to Friday's closing price of $4.55. The directors of IOF manager Investa Listed Funds Management (ILFM) said they planned to unanimously recommend the offer. ILFM's directors and Quartz Holding (NQ) Pte, a Blackstone affiliate, have entered a process deed setting out the offer's terms. The bid marks a move deeper into the Australia-New Zealand real estate market for the US-based private equity giant. Less than two weeks ago, it struck a $NZ635 million ($582 million) deal to buy an office portfolio in Auckland, which was co-held by Goodman Property Trust and Singaporean investor GIC. A Blackstone unit was said to be the buyer in the sale of a Sydney office building earlier this year. The building, which sold for $205 million, was owned by a unit of indebted Chinese conglomerate HNA Group. Investa said it received an initial confidential proposal of $5.05 a share on April 5, and negotiated the improved proposal that it received on May 4 - since when Blackstone has been conducting due diligence.
APN Outdoor Group Ltd (APO):
APN Outdoor's growing advertising sales momentum has led the out-of-home advertising to upgrade revenue guidance. On Monday morning, APN Outdoor said it now expects first-half revenue to be up by mid-single digits, and high single-digits, excluding the impact of the loss of the Yarra Trams contract in the second half of 2017. This compares with previous expectations of revenue to be up by low single digits, and mid-single digits, excluding Yarra Trams. Over 2017, APN Outdoor had revenue of $342.9 million and underlying earnings before, interest, tax, depreciation and amortisation of $90.3 million. The out-of-home advertising business also issued full-year EBITDA guidance of between $92 million and $96 million. The company previous said it would provide EBITDA guidance at its half year result in August. "The out-of-home markets in both Australia and New Zealand have remained robust in recent months and pleasingly our reinvigorated approach to sales continues to gain momentum," APN Outdoor chief executive James Warburton said. "We are actively investing in data and technology to add value to our product proposition and drive the Company's next wave of growth."
BHP Billiton Limited (BHP):
BHP Billiton is in settlement talks with the Queensland government in a bid to resolve a long-running dispute over coal royalties. BHP and Queensland's treasury faced off in Brisbane's Supreme Court on Monday, but the hearing lasted less than 10 minutes before the two parties sought an adjournment to allow settlement talks to proceed. The dispute is over close to $300 million worth of royalties the Queensland government believes should have been paid on coal exported from the Bowen Basin near Mackay. BHP's Singapore marketing hub is at the centre of the dispute, with particular focus on whether royalties should be charged on the price BHP's Singapore hub sold the coal to customers, or at the price BHP's Australian subsidiary sold the coal to the Singapore subsidiary. The Brisbane hearing is one of two court appearances by the mining company this week, with BHP also scheduled to face off against the Commissioner for Taxation in Melbourne's federal court on Thursday.
Metcash Limited (MTS):
Wholesaler Metcash has dashed hopes for a return to profit growth in its core supermarkets and convenience business in 2018, warning that earnings from the division will be flat and revenues will go backwards. In a trading update on Monday, Metcash said earnings from supermarkets and convenience for the 12 months ending April are expected to be in line with those in 2017, total sales are expected to fall 1.2 per cent and wholesale sales excluding tobacco are expected to fall 3.6 per cent. Metcash shares, which have risen 15 per cent this year, fell 48.5¢ – about 13 per cent – to $3.19 in early trade. While analysts were expecting supermarket and convenience sales to decline, they were hoping earnings would rise, underpinned by cost savings from Metcash's Working Smarter program. JP Morgan, for example, in a note last week, forecast that food and grocery earnings would rise 4.4 per cent to $188 million, underpinned by $32 million in Working Smarter Savings. Supermarket and convenience earnings have fallen almost 40 per cent since 2014. Metcash also revealed it was losing one of its major customers, Drakes Supermarkets, in South Australia.
Moelis Australia Ltd (MOE):
Moelis expects 1H18 underlying EBITDA profit of about $22m on revenue of $55m. The expected year-on-year profit increase is about 83pc and it expects underlying EPS of 9.4cps, up 27pc. Assets under management in the first 4 months grew about $250m to $3.15. It expects Corporate & Advisory Equities performance in line with 1H17 and says the pipeline is “strong”. Moelis has also obtained a business license in China and hired two asset managers there. And it’s close to getting an Australian Credit Licence to create credit related asset management products. All up the guidance looks quite strong and should boost the share price today.
Sirtex Medical Limited (SRX):
US cancer treatment developer Varian is seeking a Federal Court order to allow shareholders to consider its proposed takeover bid for Australian biotechnology company Sirtex Medical. On May 4, Chinese private equity firm CDH Investments had submitted a $1.9 billion bid for Sirtex Medical days before Sirtex shareholders were due to vote on a lower offer from US-listed Varian Medical Systems. Varian has stuck by its offer to acquire Sirtex at $28 per share. The company had gone to the Federal Court seeking orders that a shareholder meeting be reconvened on May 31. In a statement on Monday Sirtex said that the Federal Court will reconsider Varian's desire to have a shareholder meeting, and if approved a date will be set in July. Sirtex said it continues to support the Varian bid.
Star Combo Pharma Ltd (S66):
There are many Chinese companies - Chinese businesses being run by Chinese management - which have listed on the ASX but few run the gauntlet successfully. In non-ASX territory there already exists plenty of private businesses backed by Chinese capital. But a new breed of "Chinese" IPOs have surfaced, on the ASX, bettering the old Chinese IPO model, and many fund managers, especially those with interests in Asian-based companies, are backing them. Star Combo Pharma Limited is one of two such stocks that is headquartered and listed in Australia, but run by Chinese management and backed by Chinese capital. The other one is direct selling retail "daigao" business AuMake. "It's a whole new model, Australian businesses run by Chinese owners and with the business pretty much in China. It's very interesting to watch." one fund manager said. Star Combo Pharma, ticker S66, listed two weeks ago on May 14 raising $8 million in capital prior to listing. It commenced at just under 80¢ and is now trading at $1.365 with a market capitalisation of $104.95 million. Made up of two subsidiaries, Star Combo Pharma manufactures vitamins, supplements, nutritional products, and skincare products in its western Sydney Smithfield warehouse and factory. distributing them to the local and overseas markets.
Star Entertainment Group Ltd (SGR):
Star Entertainment has told investors revenue has risen in the second half so far, on the back of growth in Queensland and its international VIP business. At an investor day presentation, the company said its normalised gross revenue was up 16.4 per cent for the period January 1 to May 23, compared to the previous corresponding period. It comes after the company, which runs casinos in Brisbane, Sydney and on the Gold Coast, booked a 77 per cent fall in statutory half-year profit to $33 million in February, impacted by an abnormally low win rate in its international VIP business of 1.06 per cent and one-off items related to a debt restructuring. The return of Chinese high rollers had helped volumes, the company said at the time. In today’s trading update, the company said its international VIP rebate business, which offers luxury hospitality and cash rebates to high rollers, “continues to show strong growth”. Businesses turnover had lifted 63.7 per cent to date compared to the previous corresponding period, with the actual win rate below theoretical win rate of 1.35 per cent. The company said total domestic revenue was up 2.6 per cent for the second half to date, but volume growth had been impacted by lower table hold rates.
(Source: AIMS)
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