Australian Foundation Investment Co.Ltd. (AFI):
The nation’s largest and oldest listed investment company, Australian Foundation Investment Company, is moving up the risk curve as it seeks out small and mid-cap investments to offset the sluggish growth facing the larger end of the market. It is also eyeing a return to volatility that will be sparked by interest rates moving higher and says uncertainty in the markets could provide buying opportunities. While large companies still make up a significant proportion of its portfolio, a combination of increased competition and disruption, greater regulatory intervention and no prospect of further consolidation has forced the LIC (AFI) to hunt for growth in smaller companies. “This has been done having regard to balancing the need to grow dividends as well as provide meaningful capital growth within the portfolio over the long term,” AFIC said while releasing its full-year results which showed a 13.7 per cent lift in net profit for the 2018 financial year to $279 million. The result was driven by a lift in dividends across its holdings, particularly resource companies, including participation in the Rio Tinto off-market buyback. Revenue from operating activities was $308.5m, up 11.1 per cent from last year.
Bega Cheese Ltd (BGA):
Bega Cheese might be investing in mozzarella production, The Australian Financial Review's Brad Thompson has written today. Bega Cheese is set to target China's growing appetite for pizza in the wake of its $250 million acquisition of the Koroit dairy processing plant in western Victoria, Thompson writes. The company chief executive Paul van Heerwaarden acknowledged the opportunity to boost mozzarella production but said the immediate focus was on bedding down the transaction and trying to build up volumes at a plant operating a fraction of capacity. "There is a tremendous amount of flexibility to do a range of things, whether it is in the nutritional space, whether it's around cheese capacity, mozzarella or cheddar," he said. "We'll continue to assess the options. We've got a current mozzarella solution and we've been working on how we further develop that and we'll continue with those plans in our existing business in any event." Mozzarella has been touted as the next big thing after infant formula in the Chinese dairy market as pizza consumption picks up.
BHP Billiton Limited (BHP):
BHP Billiton is facing an investor class action over the 2015 dam failure at a Brazilian iron-ore mining operation that sparked a sharp fall in the miner’s stock. BHP, the world’s biggest mining company by market value, said the class action has been filed in the Federal Court of Australia in Victoria state and that it “intends to defend the claim.” BHP’s (BHP) Australian stock plummeted more than 20 per cent in November, 2015, after a tailings dam wall collapsed at the Samarco operation it jointly owns with Vale SA. It is believed to be Brazil’s worst-ever environmental disaster and one of the worst in the history of mining, with 19 people killed as waste from the collapsed dam destroyed villages and polluted more than 400 miles of waterways. The company is already facing a class action complaint from shareholders in the US, which was filed in 2016 and is seeking an unspecified amount of damages.
Investa Office Fund (IOF):
Developer Brookfield and the -listed Investa Office Fund have -received strong interest from -prospective tenants for their overhaul of the landmark office complex at 388 George Street in central -Sydney. The upscaling of the A-grade tower is one of the key markers for the city’s heated office market, where tenants are jockeying for position as space tightens. The progress of the $500 million tower in winning new tenants could also be a key factor in US private equity firm Blackstone’s takeover bid for the $3.1 billion listed trust. The co-owners lodged plans in May for a $54m five-storey retail and commercial podium adjoining the tower. They propose building out the forecourt, completing the city block with a podium with three levels of offices, three levels of shopping and a rooftop terrace -devoted to leisure use. The project has caught the eye of such tenants as First State Super, WeWork and the Australian Securities & Investments Commission.
Nufarm Limited (NUF):
Nufarm said one of the driest autumns on record in Australia will hurt its annual profit, with farmers choosing not to use its crop chemicals because they don’t expect a viable harvest. Nufarm said it now expects underlying earnings before interest and tax of between $255 million and $270 million in the year through July. That is down from revised guidance of about 5 per cent growth on last fiscal year’s $302.3 million, provided to the market as recently as May. The company (NUF) said the Australian and New Zealand business would likely contribute only $5m — $10m to annual earnings, down from $51.6m in the 2017 fiscal year. Nufarm said feedback from farmers last week was that the Australian market had reached a turning point, “and it was now considered unlikely that a viable crop season would occur in many parts of the country and the expected demand for post-emergent products would not eventuate.” With high stocks of crop chemicals in Australia and higher receivables in Northern Hemisphere countries resulting from long and relatively cold winter seasons there, Nufarm said it expects net working capital to be between $200m and $300m higher than a year ago. That would hurt group net debt and cash flow, it added.
Transurban Group (TCL):
Toll road giant Transurban has submitted a conditional offer for Sydney’s $16 billion WestConnex motorway project, pitting it against a rival bid led by infrastructure heavyweight IFM Investors. By announcing the bid, Transurban (TCL) has maintained good faith with the NSW government. The offer from the Transurban-led consortium hinges on receiving clearances from the Australian Competition & Consumer Commission and the Foreign Investment Review board and follows the surprise decision last week by the competition regulator to ask for a further seven weeks to make a ruling on its offer. Today was the deadline for the bid and NSW had declined to put it back because of the ACCC delay. “Transurban remains confident that it will obtain all necessary approvals,” the Melbourne-based company said in a statement today. Once final bids are received, the government will take the time to carefully evaluate them before making a decision, Transurban noted referencing an announcement made on Friday by the government.
Wesfarmers Ltd (WES):
Wesfarmers plans to retain a 15 per cent stake in supermarket chain Coles when it spins off the business later this year. The conglomerate (WES) today said non-executive director James Graham, who retires from the board with immediate effect, will take on the role of Coles’ chairman when the business is demerged in a deal that is expected to be completed in November. Wesfarmers said it would retain a minority interest in Coles to support a strategic alignment between the two companies, as well as a 50 per cent stake in loyalty program Flybuys. Announcing the demerger in March, Wesfarmers said it planned to keep up to 20 per cent of Coles. Today, Wesfarmers added that a spun-off Coles would have a strong balance sheet, with net debt of about $2 billion dollars and operating lease commitments of about $9.6 billion. Under the proposed demerger, Wesfarmers’ shareholders will receive one Coles share for every Wesfarmers share held.
(Source: AIMS)
The nation’s largest and oldest listed investment company, Australian Foundation Investment Company, is moving up the risk curve as it seeks out small and mid-cap investments to offset the sluggish growth facing the larger end of the market. It is also eyeing a return to volatility that will be sparked by interest rates moving higher and says uncertainty in the markets could provide buying opportunities. While large companies still make up a significant proportion of its portfolio, a combination of increased competition and disruption, greater regulatory intervention and no prospect of further consolidation has forced the LIC (AFI) to hunt for growth in smaller companies. “This has been done having regard to balancing the need to grow dividends as well as provide meaningful capital growth within the portfolio over the long term,” AFIC said while releasing its full-year results which showed a 13.7 per cent lift in net profit for the 2018 financial year to $279 million. The result was driven by a lift in dividends across its holdings, particularly resource companies, including participation in the Rio Tinto off-market buyback. Revenue from operating activities was $308.5m, up 11.1 per cent from last year.
Bega Cheese Ltd (BGA):
Bega Cheese might be investing in mozzarella production, The Australian Financial Review's Brad Thompson has written today. Bega Cheese is set to target China's growing appetite for pizza in the wake of its $250 million acquisition of the Koroit dairy processing plant in western Victoria, Thompson writes. The company chief executive Paul van Heerwaarden acknowledged the opportunity to boost mozzarella production but said the immediate focus was on bedding down the transaction and trying to build up volumes at a plant operating a fraction of capacity. "There is a tremendous amount of flexibility to do a range of things, whether it is in the nutritional space, whether it's around cheese capacity, mozzarella or cheddar," he said. "We'll continue to assess the options. We've got a current mozzarella solution and we've been working on how we further develop that and we'll continue with those plans in our existing business in any event." Mozzarella has been touted as the next big thing after infant formula in the Chinese dairy market as pizza consumption picks up.
BHP Billiton Limited (BHP):
BHP Billiton is facing an investor class action over the 2015 dam failure at a Brazilian iron-ore mining operation that sparked a sharp fall in the miner’s stock. BHP, the world’s biggest mining company by market value, said the class action has been filed in the Federal Court of Australia in Victoria state and that it “intends to defend the claim.” BHP’s (BHP) Australian stock plummeted more than 20 per cent in November, 2015, after a tailings dam wall collapsed at the Samarco operation it jointly owns with Vale SA. It is believed to be Brazil’s worst-ever environmental disaster and one of the worst in the history of mining, with 19 people killed as waste from the collapsed dam destroyed villages and polluted more than 400 miles of waterways. The company is already facing a class action complaint from shareholders in the US, which was filed in 2016 and is seeking an unspecified amount of damages.
Investa Office Fund (IOF):
Developer Brookfield and the -listed Investa Office Fund have -received strong interest from -prospective tenants for their overhaul of the landmark office complex at 388 George Street in central -Sydney. The upscaling of the A-grade tower is one of the key markers for the city’s heated office market, where tenants are jockeying for position as space tightens. The progress of the $500 million tower in winning new tenants could also be a key factor in US private equity firm Blackstone’s takeover bid for the $3.1 billion listed trust. The co-owners lodged plans in May for a $54m five-storey retail and commercial podium adjoining the tower. They propose building out the forecourt, completing the city block with a podium with three levels of offices, three levels of shopping and a rooftop terrace -devoted to leisure use. The project has caught the eye of such tenants as First State Super, WeWork and the Australian Securities & Investments Commission.
Nufarm Limited (NUF):
Nufarm said one of the driest autumns on record in Australia will hurt its annual profit, with farmers choosing not to use its crop chemicals because they don’t expect a viable harvest. Nufarm said it now expects underlying earnings before interest and tax of between $255 million and $270 million in the year through July. That is down from revised guidance of about 5 per cent growth on last fiscal year’s $302.3 million, provided to the market as recently as May. The company (NUF) said the Australian and New Zealand business would likely contribute only $5m — $10m to annual earnings, down from $51.6m in the 2017 fiscal year. Nufarm said feedback from farmers last week was that the Australian market had reached a turning point, “and it was now considered unlikely that a viable crop season would occur in many parts of the country and the expected demand for post-emergent products would not eventuate.” With high stocks of crop chemicals in Australia and higher receivables in Northern Hemisphere countries resulting from long and relatively cold winter seasons there, Nufarm said it expects net working capital to be between $200m and $300m higher than a year ago. That would hurt group net debt and cash flow, it added.
Transurban Group (TCL):
Toll road giant Transurban has submitted a conditional offer for Sydney’s $16 billion WestConnex motorway project, pitting it against a rival bid led by infrastructure heavyweight IFM Investors. By announcing the bid, Transurban (TCL) has maintained good faith with the NSW government. The offer from the Transurban-led consortium hinges on receiving clearances from the Australian Competition & Consumer Commission and the Foreign Investment Review board and follows the surprise decision last week by the competition regulator to ask for a further seven weeks to make a ruling on its offer. Today was the deadline for the bid and NSW had declined to put it back because of the ACCC delay. “Transurban remains confident that it will obtain all necessary approvals,” the Melbourne-based company said in a statement today. Once final bids are received, the government will take the time to carefully evaluate them before making a decision, Transurban noted referencing an announcement made on Friday by the government.
Wesfarmers Ltd (WES):
Wesfarmers plans to retain a 15 per cent stake in supermarket chain Coles when it spins off the business later this year. The conglomerate (WES) today said non-executive director James Graham, who retires from the board with immediate effect, will take on the role of Coles’ chairman when the business is demerged in a deal that is expected to be completed in November. Wesfarmers said it would retain a minority interest in Coles to support a strategic alignment between the two companies, as well as a 50 per cent stake in loyalty program Flybuys. Announcing the demerger in March, Wesfarmers said it planned to keep up to 20 per cent of Coles. Today, Wesfarmers added that a spun-off Coles would have a strong balance sheet, with net debt of about $2 billion dollars and operating lease commitments of about $9.6 billion. Under the proposed demerger, Wesfarmers’ shareholders will receive one Coles share for every Wesfarmers share held.
(Source: AIMS)
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