Amcor Limited (AMC):
Amcor's $US6.8 billion acquisition of United States-listed Bemis is likely to boost the company's earnings per share by 8 per cent, according to Citi analysts. As Amcor boss Ron Delia started selling the deal to Australian fund managers and analysts, Citi said it was a rational deal strategically and US-listed scrip would provide Amcor with currency and a platform for growth. But Citi questioned whether it would be able to deliver double digit EPS accretion, or meet the company's traditional hurdle rates for acquisitions. "Inclusive of estimated cost synergies of US$180m (4-5% of sales), AMC estimates that the deal would deliver double-digit EPS accretion (we estimate +8%) and double-digit returns (we estimate 10%), above AMC's WACC," Citi told clients on Tuesday morning.
BHP Billiton Limited (BHP):
BHP said it had formally requested a period of government mediation with the union at its Escondida copper mine in Chile, the world's largest, just hours before workers threatened to begin a strike. The union had earlier asked the company to negotiate by 10am local time, but said in a statement later on Monday that it had begun preparing for a strike. BHP had not commented on the matter until mid-afternoon. "We have asked authorities for obligatory mediation because we want to reach an agreement and because we know that no one wants a strike," said Patricio Vilaplana, BHP vice president for corporate affairs, in a statement. The government must now set a date for the mediation to begin. After that, negotiations extend for 5 days.
IOOF Holdings Limited (IFL):
Wealth manager IOOF has taken a hit to its annual profits after striking a settlement for a class action against its handling of the Provident collapse. IOOF on Tuesday reported a net profit of $88.3 million for the year through June, which was a fall of 24 per cent year on year. Revenue for the group rose 1 per cent to $919m. IOOF paid out $44 million to settle a class action against its subsidiary Australian Executor Trustees over its handling of the Provident Capital collapse in 2012. The subprime lender Provident Capital collapsed owing investors about $130 million. IOOF’s wholly-owned subsidiary Australian Executor Trustees Limited was the trustee for Provident’s debenture holders. Meanwhile, IOOF said inflows rose 28 per cent to $5.8 billion, taking the group’s funds under management to a total of $126 billion.
Navitas Limited (NVT):
Navitas shares have jumped 4 per cent in early trade despite the education services provider swinging to a full-year loss after booking one-off charges associated with a plan to rationalise its careers and industry business. For the year to June 30, Navitas has reported an after tax loss of $55.3 million, compared to an after tax profit of $80.3m for the full year last year. “Despite a disappointing reported result, Navitas’ continuing operations performed well in fiscal year 2018 reflecting the quality of our education businesses,” said Navitas group chief executive David Buckingham.
RCR Tomlinson Limited (RCR):
Engineering contractor, RCR Tomlinson, has dumped CEO Paul Dalgleish, as it continues to investigates cost overruns at a project. On August 1 it said the cost overruns will have a “material negative impact” on its FY18 results. Bruce James, a current independent nonexecutive director, has been named interim CEO. Mr James has extensive experience, including as CEO Transfield ANZ. Interestingly, the company didn’t give Mr Dalgleish the usual “thankyou”. Meanwhile it has requested an extension of the voluntary suspension of its share trading.
Reckon Limited (RKN):
Reckon has hired boutique investment bank Investec to sell its Accountant Practice Management Group. The accounting software company told investors while delivering its half year results today that it had received approaches from several parties for the division. Reckon announced it had sold its Accountants Practice Management division to rival MYOB last year for $180m, but the deal was blocked by the regulators following a review by the Australian Competition and Consumer Commission and the New Zealand Commerce Commission. Reckon said the company had anticipated a sale of its Accountant Practice Management Group would have now been finalised, but after what it said was a long and unnecessarily protracted process, the company was not able to obtain regulatory approval for the sale. Investec has been recruited to work with the interested suitors and evaluate any offers that may have been received. Reckon reported a $5.9 million net profit for the six months to June.
Transurban Group (TCL):
Transurban's annual net profits more than doubled to $468 million as the company said it was "confident" of securing regulatory approval to buy a 51 per cent stake in Sydney toll road WestConnex. The toll road group said it expected to pay shareholders a dividend of 59¢ per share in 2018-19 whether it is successful in buying WestConnex. Transurban will pay a dividend of 56¢ per share in 2017-18. Transurban delivered a statutory net profit of $468 million compared with a profit of $209 million a year ago, while revenues rose 21 per cent to $3.3 billion.
Wesfarmers Ltd (WES):
Wesfarmers will sell its 40 per cent stake in the Bengalla joint venture to partner new Hope Corporation for $860 million, divesting its last coal asset. Wesfarmers Managing Director Rob Scott said the agreement to sell Wesfarmers’ interest in Bengalla followed the completion of the sale of the Curragh coal mine to Coronado Coal in March this year and, subject to completion, would finalize the review of the Wesfarmers resources businesses initiated in 2016. “We believe this agreement with New Hope is in the best interests of our shareholders and ensures a smooth transition in the ownership structure of the Bengalla joint venture,” Mr Scott said. Wesfarmers shares have jumped 2.2pc to a new record high of $51.04 after ageeing to sell its 40pc stake in Bengalla to New Hope for $860m.
(Source: AIMS)
Amcor's $US6.8 billion acquisition of United States-listed Bemis is likely to boost the company's earnings per share by 8 per cent, according to Citi analysts. As Amcor boss Ron Delia started selling the deal to Australian fund managers and analysts, Citi said it was a rational deal strategically and US-listed scrip would provide Amcor with currency and a platform for growth. But Citi questioned whether it would be able to deliver double digit EPS accretion, or meet the company's traditional hurdle rates for acquisitions. "Inclusive of estimated cost synergies of US$180m (4-5% of sales), AMC estimates that the deal would deliver double-digit EPS accretion (we estimate +8%) and double-digit returns (we estimate 10%), above AMC's WACC," Citi told clients on Tuesday morning.
BHP Billiton Limited (BHP):
BHP said it had formally requested a period of government mediation with the union at its Escondida copper mine in Chile, the world's largest, just hours before workers threatened to begin a strike. The union had earlier asked the company to negotiate by 10am local time, but said in a statement later on Monday that it had begun preparing for a strike. BHP had not commented on the matter until mid-afternoon. "We have asked authorities for obligatory mediation because we want to reach an agreement and because we know that no one wants a strike," said Patricio Vilaplana, BHP vice president for corporate affairs, in a statement. The government must now set a date for the mediation to begin. After that, negotiations extend for 5 days.
IOOF Holdings Limited (IFL):
Wealth manager IOOF has taken a hit to its annual profits after striking a settlement for a class action against its handling of the Provident collapse. IOOF on Tuesday reported a net profit of $88.3 million for the year through June, which was a fall of 24 per cent year on year. Revenue for the group rose 1 per cent to $919m. IOOF paid out $44 million to settle a class action against its subsidiary Australian Executor Trustees over its handling of the Provident Capital collapse in 2012. The subprime lender Provident Capital collapsed owing investors about $130 million. IOOF’s wholly-owned subsidiary Australian Executor Trustees Limited was the trustee for Provident’s debenture holders. Meanwhile, IOOF said inflows rose 28 per cent to $5.8 billion, taking the group’s funds under management to a total of $126 billion.
Navitas Limited (NVT):
Navitas shares have jumped 4 per cent in early trade despite the education services provider swinging to a full-year loss after booking one-off charges associated with a plan to rationalise its careers and industry business. For the year to June 30, Navitas has reported an after tax loss of $55.3 million, compared to an after tax profit of $80.3m for the full year last year. “Despite a disappointing reported result, Navitas’ continuing operations performed well in fiscal year 2018 reflecting the quality of our education businesses,” said Navitas group chief executive David Buckingham.
RCR Tomlinson Limited (RCR):
Engineering contractor, RCR Tomlinson, has dumped CEO Paul Dalgleish, as it continues to investigates cost overruns at a project. On August 1 it said the cost overruns will have a “material negative impact” on its FY18 results. Bruce James, a current independent nonexecutive director, has been named interim CEO. Mr James has extensive experience, including as CEO Transfield ANZ. Interestingly, the company didn’t give Mr Dalgleish the usual “thankyou”. Meanwhile it has requested an extension of the voluntary suspension of its share trading.
Reckon Limited (RKN):
Reckon has hired boutique investment bank Investec to sell its Accountant Practice Management Group. The accounting software company told investors while delivering its half year results today that it had received approaches from several parties for the division. Reckon announced it had sold its Accountants Practice Management division to rival MYOB last year for $180m, but the deal was blocked by the regulators following a review by the Australian Competition and Consumer Commission and the New Zealand Commerce Commission. Reckon said the company had anticipated a sale of its Accountant Practice Management Group would have now been finalised, but after what it said was a long and unnecessarily protracted process, the company was not able to obtain regulatory approval for the sale. Investec has been recruited to work with the interested suitors and evaluate any offers that may have been received. Reckon reported a $5.9 million net profit for the six months to June.
Transurban Group (TCL):
Transurban's annual net profits more than doubled to $468 million as the company said it was "confident" of securing regulatory approval to buy a 51 per cent stake in Sydney toll road WestConnex. The toll road group said it expected to pay shareholders a dividend of 59¢ per share in 2018-19 whether it is successful in buying WestConnex. Transurban will pay a dividend of 56¢ per share in 2017-18. Transurban delivered a statutory net profit of $468 million compared with a profit of $209 million a year ago, while revenues rose 21 per cent to $3.3 billion.
Wesfarmers Ltd (WES):
Wesfarmers will sell its 40 per cent stake in the Bengalla joint venture to partner new Hope Corporation for $860 million, divesting its last coal asset. Wesfarmers Managing Director Rob Scott said the agreement to sell Wesfarmers’ interest in Bengalla followed the completion of the sale of the Curragh coal mine to Coronado Coal in March this year and, subject to completion, would finalize the review of the Wesfarmers resources businesses initiated in 2016. “We believe this agreement with New Hope is in the best interests of our shareholders and ensures a smooth transition in the ownership structure of the Bengalla joint venture,” Mr Scott said. Wesfarmers shares have jumped 2.2pc to a new record high of $51.04 after ageeing to sell its 40pc stake in Bengalla to New Hope for $860m.
(Source: AIMS)
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