Brickworks Limited (BKW):
Threats of a strike today at Brickworks’ Austral Bricks sites in Horsley Park and Bowral have been withdrawn as the company continues to negotiate with production employees. Earlier this week, workers had given notice of an indefinite strike and an indefinite overtime ban at those sites. In a notice today, Brickworks said: “Austral Bricks will continue its good faith negotiations in an effort to resolve the outstanding issues and attain a fair and reasonable outcome for all parties”.
Capilano Honey Ltd (CZZ):
The private equity consortium that has lobbed a $190 million takeover bid for the nation’s biggest honey producer, Capilano Honey, have won support for their move from the producer’s beekeepers. In a note to the market today, the beekeepers agreed to support the deal by selling their ‘foundation share’ into the takeover in return for two board seats in the new entity. The beekeepers were personally lobbied by businessman and investor Albert Tse whose Australian-Chinese private equity fund Wattle Hill has teamed up with ROC Partners to launch a $20.06-a-share bid for Capilano.
Commonwealth Bank of Australia (CBA):
Commonwealth Bank denied the claim of a life insurance customer who suffered a heart attack by using outof-date medical definitions and then misled the Financial Ombudsman Service by covering up advice it had received from a doctor when the customer complained. CBA also ignored the ombudsman’s findings that it should apply an updated medical definition to the claim, in a series of repellent manoeuvres revealed by the financial services royal commission yesterday that the corporate watchdog labelled “serious misconduct” but failed to take action against. The royal commission also revealed how CBA routinely ignored the medical advice of its own employed doctors, including its chief medical officer Dr Benjamin Koh who blew the whistle on the company’s misconduct in 2016, to update its definition of heart attack, and routinely rejected related claims because it would cost the company more money.
Fonterra Shareholders' Fund (FSF):
New Zealand's biggest company, dairy giant Fonterra, has posted a net loss of $NZ221 million ($203 million) - the first annual loss in its 17-year history. Last year the cooperative - best known for its Mainland and Western Star brands - posted a $NZ734m profit. But in March this year it reported its first half-year loss following a major write-down on a Chinese investment and a compensation payment over a 2013 botulism scare. Fonterra on Thursday announced a full-year loss for the 2018 financial year, with underlying earnings before income and tax dropping 22 per cent to $NZ902 million as revenue edged higher to $NZ20.4 billion in the year ended July 31, but on lower margins.
Funtastic Limited (FUN):
Struggling toy maker Funtastic has launched a $8.2 million capital raise to settle its debt and cover working capital. In a note to shareholders today, it offered a $1.2m placement to sophisticated investors, as well as a $7m underwritten 1-for-1 entitlement offer for eligible shareholders, both at 6c a share. It said the key reason for the raise is to strengthen its balance sheet, and settle its debt to NAB. Alongside the raise, Funtastic set its FY19 earnings guidance at $2.8m - what is marginally above its FY18 guidance of circa $2.5m after it was hit by the close of Toys’R’Us stores.
Myer Holdings Ltd (MYR):
The analyst community has greeted Myer’s latest annual result and maiden performance from new chief executive John King with cautious optimism, noting the latest $486 million lurch into the red was in line with expectations but there was some hope. Credit Suisse analyst Grant Saligari said the refinancing package provided the business with a stable funding platform and that with a Mr King as CEO it left a “retailer in the drivers’ seat” which suggested a chance of better execution. The investment bank has upgraded its fiscal 2019 forecast off a low base, with the change driven by a 100 basis point improvement in gross margin. “If execution works as planned, sales revenue is likely to decline in fiscal 2019 as Myer removes ‘unprofitable’ sales. An improvement in gross margin is predicated on increasing exclusive brand sales and removing unprofitable sales; the latter is easier said than done and requiring a higher level of supply chain capability than is likely to exist currently.” Citi analyst Bryan Raymond said the annual result delivered better bricks and mortar sales and gross margins, with the composition of sales and margins a surprise. The refinancing of its debt was welcome, but this had come at the cost of steeper interest payments. He has forecast Myer will breach its covenants by 2020. MYR shares have jumped 9 per cent on the optimism, last at 45c.
Origin Energy Ltd (ORG):
Speculation is mounting that Origin Energy is embarking on a strategic review of upstream assets worth more than $8 billion as it contemplates a future solely as an electricity retailer and generator. Sources in the market are adamant that investment banks and boutique advisers have been approached in the past two months to pitch to undertake a strategic review to be completed by Christmas of Origin’s upstream oil and gas business. RFPs were also said to have been received not just to undertake a strategic review, but to potentially gain a role as a defence adviser alongside Macquarie Capital. Sources say that up for review is Origin’s interest in Australia Pacific LNG, which is said to be worth at least $8bn, its Beetaloo Basin exploration project in the Northern Territory and its Ironbark coal-seam gas project in the Surat Basin in Queensland, with the latter two assets only thought to be worth hundreds of millions of dollars. The value of Ironbark is thought to be about $300m, with the project yet to prove it can produce gas at a profitable level.
Propertylink Group (PLG):
Listed trust Propertylink has quickly capitalised on its share market raid on the Centuria Industrial REIT by lobbing a hostile $755 million proposal to acquire its rival, which controls a $1 billion property portfolio. A combination of the trusts would create Australia’s largest listed passive pure play industrial vehicle, but is likely to be fiercely fought by manager Centuria Capital, which last year made a failed bid for Propertylink. Propertylink has effectively struck back and last night launched a raid for 5 per cent of the Centuria Industrial (CIP) register. It lifted that to 10 per cent before announcing it had secured a 12.3 per cent stake. JPMorgan handled the raid and is advising Propertylink. The company has now submitted a nonbinding and indicative scrip and cash proposal to acquire Centuria Industrial.