AGL Energy Limited (AGL):
Power giant AGL Energy has responded to the federal government’s criticism of an industry-wide ‘loyalty tax’ by automatically discounting bills for standing offer customers. Energy Minister Angus Taylor claimed last week the abolition of the loyalty tax could benefit up to 20 per cent of retail customers as part of its campaign to pressure companies to lower tariffs after several years of price hikes. AGL says all customers who remain on a standing offer for a year automatically get a better deal in a move which aligns them with most of its customers already on discounted tariffs. Mr Taylor today urged other energy companies to follow AGL’s lead and address concerns on energy affordability.
Lendlease Group (LLC):
Development giant Lendlease has apologised for its poorly performing engineering business, which led it to announce a surprise $350 million provision last week and prompted investors to wipe more than $2.5 billion from its market capitalisation. In a subdued annual general meeting, Lendlease chairman David Crawford said that external advisors had been hired to work on the strategic review of the engineering business that has been marked for a potential sale. The Australian can reveal that boutique house Gresham, which has close ties with the company, has been tapped to lead the review.
Link Administration Holdings Ltd (LNK):
Link Administration CFO John Hawkins will retire in November. More worrisome is new guidance of a “mild first-half business performance” although the Link is “well positioned for earnings growth”. Integration of its Australian businesses are “progressing well and remain on track” and UK integration activities are also “on track”. It has “organic pipeline of opportunities” across the business combining with “good momentum” from client wins in 2018. But while LAS financial performance remains positive “Brexit uncertainty has led to some delays in on-boarding recent client wins and continues to impact market related income. With a key Brexit date of 29 March 2019, the business remains susceptible to adverse market movements.” Looks like a profit warning of sorts.
Macquarie Group Ltd (MQG):
Following the ACCC's approval of Santos' acquisition of Quadrant Energy, in which Macquarie Group has a 21.8 per cent stake, Macquarie Group has forecast an even bigger jump in its annual profit after the $US2.15 billion sale of Quadrant Energy cleared the competition regulator’s scrutiny. After the Australian Competition and Consumer Commission said it wouldn’t oppose the sale of Quadrant to Santos, Macquarie (MQG) said it now expected an increase of up to 15 per cent in net profit in the current financial year. In early November, Australia’s biggest investment bank had forecast growth of about 10 per cent, which would mark a seventh straight year of earnings increases to a record $2.56 billion in the last year.
Myer Holdings Ltd (MYR):
Myer’s “temporary pause” to trading has now become a more conventional trading halt. There’s still no news from the retailer however, as it deals with media reports of a sales slide. Troubled retailer Myer has denied it has breached its continuous disclosure obligations following media commentary on the company’s poor financial performance. The department store chain (MYR) has paused trading in its shares pending a further announcement but said in a release on Friday it was “well aware of its continuous disclosure obligations and confirms it is in compliance with them”. The brief statement was in response to an article the Fairfax press suggesting that a disclosure threshold may have been reached by Myer’s decision to stop providing quarterly sales updates.
National Australia Bank Ltd (NAB):
National Australia Bank has slashed chief executive Andrew Thorburn’s deferred shares and bonus for the 2018 year, but his total realised pay fell by a smaller amount to $6.2 million. NAB’s annual report shows Mr Thorburn’s total realised pay – which includes deferred remuneration from prior years - dropped to $6.2 million for the 12 months ended September 30, from $6.4 million a year earlier. But for the 2018 year, the board took a knife to his variable pay, which came in at 45.5 per cent of Mr Thorburn’s target. Total remuneration awarded in 2018 dropped by $2.1 million, reflecting a large reduction in deferred shares, as the board imposed accountability measures for a string of wrongdoings at the bank uncovered by the Hayne royal commission, which found it had failed to put customer interests above other considerations. Andrew Thorburn took a luxury Fiji holiday and a Thermomix arranged through a company under police investigation over accusations it bribed his chief of staff to win contracts from the bank. Fairfax Media can reveal that the NSW police have uncovered information that Mr Thorburn's former chief of staff, Rosemary Rogers, organised the trip and a Thermomix kitchen appliance using executive events firm, the Human Group. Asked about the allegations, NAB on Thursday night confirmed a small number of "inadvertent" breaches of the company's policies by Mr Thorburn and that he had been cleared of wrongdoing by the bank's board.
Nufarm Limited (NUF):
Firetrail Investments deputy Blake Henricks has compared two stumbles of fertiliser maker Nufarm to that of Finnish distance runner Lasse Viren, who fell during the 10,000 metres in Munich in 1972 and then went on to win gold after an astonishing lap and a half kick. Backing the stock, Henricks says concerns about glyphosate are overdone and that any ban on the chemical would lead to a global food shortage. Adding to that, he says Nufarm’s expertise with Omega 3 is as yet under-appreciated by the market but will see ‘a billion-dollar upside’ in demand as fish demand increases and fish feed supply runs low.
Oil Search Limited (OSH):
Oil Search and its partners in the Papua LNG project have signed a memorandum of understanding with the PNG government, paving the way for an expansion that will double the Pacific nation’s gas exports by 2023-24. The deal provides a framework for the fiscal terms including tax rates and domestic market gas supplies which Oil Search expects to be finalised by March 31 next year. The Papua LNG project - controlled by France’s Total in partnership with Oil Search and ExxonMobil - could lead to three new export trains to be added to the existing Exxon, Oil Search and Santos-owned PNG LNG plant near Port Moresby. Oil Search boss Peter Botten noted with an integrated front-end engineering and design entry decision required to advance the three-train expansion at the PNG LNG site, it expects a gas agreement between the state and the P’nyang joint venture to be completed in the same March timeframe as the Papua LNG project.
Reece Ltd (REH):
Airlie Australian Share Fund portfolio manager Emma Goodsell has detailed the transformation of family plumbing business Reece, tipping it as her stock to watch at the Sohn Hearts and Minds investment conference. “Through many housing cycles, Reece has maintained excellent returns and continued investment in their stores and in their technology,” she said. Detailing Reece’s acquisition of US business MORSCO, she says it’s not a fixer-upper like Bunnings UK. “From a valuation perspective, margin and store rollout, could add several dollars to its share price.”
Santos Ltd (STO):
Santos has won clearance from the competition regulator for its $2.9 billion acquisition of Quadrant Energy despite concerns from some customers over the impact of the tie-up on West Australia’s gas sector. The South Australian energy producer snapped up Quadrant - formerly owned by Brookfield and Macquarie Capital and supplier of 20 per cent of the state’s gas market - in August as part of an ambitious growth plan and in the wake of its earlier rejection of a $14.5bn takeover bid by Harbour Energy. The takeover is unlikely to result in a substantial lessening of competition in the supply of gas to domestic customers, the Australian Competition and Consumer Commission said. Santos said completion of the deal is now expected within weeks.
WAM Capital Limited (WAM):
A fierce critic of Labor’s franking credit scheme, Wilson Asset Management chair Geoff Wilson has used his spot at Sohn Hearts and Minds investment conference to again thrash the proposed scheme. “I want to say thank you to Paul Keating for setting a good foundation. We have had 26 years without a recession, but I need to add a, ‘but’ the investment heavyweight said. “I can’t pick an Australian company today because of what might happen.” Instead, he’s picked what he calls an undervalued video game stock: Bandai Namco, created by the merger of two makers of video games. But Wilson speaks only briefly on his stock choice, and instead asks members of the audience who have benefited from the franking system to stand up. “The only thing necessary for the triumph of evil is when good men do nothing… please do something,” he leaves as his last words.
Wesfarmers Ltd (WES):
Wesfarmers shareholders have voted overwhelmingly in favour of the historic $20 billion demerger of Coles, to set up the retailer as a stand-alone company for the first time since the 1980s. The move comes at a time of intense competition from new players in the nation’s grocery sector, which Coles will now face without its parent. At a special meeting in Perth yesterday afternoon, following the Wesfarmers annual general meeting, investors waved goodbye to the supermarket chain they have had complete ownership of since it was bought for $19.3bn on the eve of the global financial crisis in 2007 by then chief executive Richard Goyder. Despite some investor angst over the costly push into Britain by Bunnings, executive pay and the question of why Coles had been bought 10 years ago but was now leaving the conglomerate, there was huge support for the spin-off, with more than 98 per cent of shares voting to demerge Coles.
(Source: AIMS)
Power giant AGL Energy has responded to the federal government’s criticism of an industry-wide ‘loyalty tax’ by automatically discounting bills for standing offer customers. Energy Minister Angus Taylor claimed last week the abolition of the loyalty tax could benefit up to 20 per cent of retail customers as part of its campaign to pressure companies to lower tariffs after several years of price hikes. AGL says all customers who remain on a standing offer for a year automatically get a better deal in a move which aligns them with most of its customers already on discounted tariffs. Mr Taylor today urged other energy companies to follow AGL’s lead and address concerns on energy affordability.
Lendlease Group (LLC):
Development giant Lendlease has apologised for its poorly performing engineering business, which led it to announce a surprise $350 million provision last week and prompted investors to wipe more than $2.5 billion from its market capitalisation. In a subdued annual general meeting, Lendlease chairman David Crawford said that external advisors had been hired to work on the strategic review of the engineering business that has been marked for a potential sale. The Australian can reveal that boutique house Gresham, which has close ties with the company, has been tapped to lead the review.
Link Administration Holdings Ltd (LNK):
Link Administration CFO John Hawkins will retire in November. More worrisome is new guidance of a “mild first-half business performance” although the Link is “well positioned for earnings growth”. Integration of its Australian businesses are “progressing well and remain on track” and UK integration activities are also “on track”. It has “organic pipeline of opportunities” across the business combining with “good momentum” from client wins in 2018. But while LAS financial performance remains positive “Brexit uncertainty has led to some delays in on-boarding recent client wins and continues to impact market related income. With a key Brexit date of 29 March 2019, the business remains susceptible to adverse market movements.” Looks like a profit warning of sorts.
Macquarie Group Ltd (MQG):
Following the ACCC's approval of Santos' acquisition of Quadrant Energy, in which Macquarie Group has a 21.8 per cent stake, Macquarie Group has forecast an even bigger jump in its annual profit after the $US2.15 billion sale of Quadrant Energy cleared the competition regulator’s scrutiny. After the Australian Competition and Consumer Commission said it wouldn’t oppose the sale of Quadrant to Santos, Macquarie (MQG) said it now expected an increase of up to 15 per cent in net profit in the current financial year. In early November, Australia’s biggest investment bank had forecast growth of about 10 per cent, which would mark a seventh straight year of earnings increases to a record $2.56 billion in the last year.
Myer Holdings Ltd (MYR):
Myer’s “temporary pause” to trading has now become a more conventional trading halt. There’s still no news from the retailer however, as it deals with media reports of a sales slide. Troubled retailer Myer has denied it has breached its continuous disclosure obligations following media commentary on the company’s poor financial performance. The department store chain (MYR) has paused trading in its shares pending a further announcement but said in a release on Friday it was “well aware of its continuous disclosure obligations and confirms it is in compliance with them”. The brief statement was in response to an article the Fairfax press suggesting that a disclosure threshold may have been reached by Myer’s decision to stop providing quarterly sales updates.
National Australia Bank Ltd (NAB):
National Australia Bank has slashed chief executive Andrew Thorburn’s deferred shares and bonus for the 2018 year, but his total realised pay fell by a smaller amount to $6.2 million. NAB’s annual report shows Mr Thorburn’s total realised pay – which includes deferred remuneration from prior years - dropped to $6.2 million for the 12 months ended September 30, from $6.4 million a year earlier. But for the 2018 year, the board took a knife to his variable pay, which came in at 45.5 per cent of Mr Thorburn’s target. Total remuneration awarded in 2018 dropped by $2.1 million, reflecting a large reduction in deferred shares, as the board imposed accountability measures for a string of wrongdoings at the bank uncovered by the Hayne royal commission, which found it had failed to put customer interests above other considerations. Andrew Thorburn took a luxury Fiji holiday and a Thermomix arranged through a company under police investigation over accusations it bribed his chief of staff to win contracts from the bank. Fairfax Media can reveal that the NSW police have uncovered information that Mr Thorburn's former chief of staff, Rosemary Rogers, organised the trip and a Thermomix kitchen appliance using executive events firm, the Human Group. Asked about the allegations, NAB on Thursday night confirmed a small number of "inadvertent" breaches of the company's policies by Mr Thorburn and that he had been cleared of wrongdoing by the bank's board.
Nufarm Limited (NUF):
Firetrail Investments deputy Blake Henricks has compared two stumbles of fertiliser maker Nufarm to that of Finnish distance runner Lasse Viren, who fell during the 10,000 metres in Munich in 1972 and then went on to win gold after an astonishing lap and a half kick. Backing the stock, Henricks says concerns about glyphosate are overdone and that any ban on the chemical would lead to a global food shortage. Adding to that, he says Nufarm’s expertise with Omega 3 is as yet under-appreciated by the market but will see ‘a billion-dollar upside’ in demand as fish demand increases and fish feed supply runs low.
Oil Search Limited (OSH):
Oil Search and its partners in the Papua LNG project have signed a memorandum of understanding with the PNG government, paving the way for an expansion that will double the Pacific nation’s gas exports by 2023-24. The deal provides a framework for the fiscal terms including tax rates and domestic market gas supplies which Oil Search expects to be finalised by March 31 next year. The Papua LNG project - controlled by France’s Total in partnership with Oil Search and ExxonMobil - could lead to three new export trains to be added to the existing Exxon, Oil Search and Santos-owned PNG LNG plant near Port Moresby. Oil Search boss Peter Botten noted with an integrated front-end engineering and design entry decision required to advance the three-train expansion at the PNG LNG site, it expects a gas agreement between the state and the P’nyang joint venture to be completed in the same March timeframe as the Papua LNG project.
Reece Ltd (REH):
Airlie Australian Share Fund portfolio manager Emma Goodsell has detailed the transformation of family plumbing business Reece, tipping it as her stock to watch at the Sohn Hearts and Minds investment conference. “Through many housing cycles, Reece has maintained excellent returns and continued investment in their stores and in their technology,” she said. Detailing Reece’s acquisition of US business MORSCO, she says it’s not a fixer-upper like Bunnings UK. “From a valuation perspective, margin and store rollout, could add several dollars to its share price.”
Santos Ltd (STO):
Santos has won clearance from the competition regulator for its $2.9 billion acquisition of Quadrant Energy despite concerns from some customers over the impact of the tie-up on West Australia’s gas sector. The South Australian energy producer snapped up Quadrant - formerly owned by Brookfield and Macquarie Capital and supplier of 20 per cent of the state’s gas market - in August as part of an ambitious growth plan and in the wake of its earlier rejection of a $14.5bn takeover bid by Harbour Energy. The takeover is unlikely to result in a substantial lessening of competition in the supply of gas to domestic customers, the Australian Competition and Consumer Commission said. Santos said completion of the deal is now expected within weeks.
WAM Capital Limited (WAM):
A fierce critic of Labor’s franking credit scheme, Wilson Asset Management chair Geoff Wilson has used his spot at Sohn Hearts and Minds investment conference to again thrash the proposed scheme. “I want to say thank you to Paul Keating for setting a good foundation. We have had 26 years without a recession, but I need to add a, ‘but’ the investment heavyweight said. “I can’t pick an Australian company today because of what might happen.” Instead, he’s picked what he calls an undervalued video game stock: Bandai Namco, created by the merger of two makers of video games. But Wilson speaks only briefly on his stock choice, and instead asks members of the audience who have benefited from the franking system to stand up. “The only thing necessary for the triumph of evil is when good men do nothing… please do something,” he leaves as his last words.
Wesfarmers Ltd (WES):
Wesfarmers shareholders have voted overwhelmingly in favour of the historic $20 billion demerger of Coles, to set up the retailer as a stand-alone company for the first time since the 1980s. The move comes at a time of intense competition from new players in the nation’s grocery sector, which Coles will now face without its parent. At a special meeting in Perth yesterday afternoon, following the Wesfarmers annual general meeting, investors waved goodbye to the supermarket chain they have had complete ownership of since it was bought for $19.3bn on the eve of the global financial crisis in 2007 by then chief executive Richard Goyder. Despite some investor angst over the costly push into Britain by Bunnings, executive pay and the question of why Coles had been bought 10 years ago but was now leaving the conglomerate, there was huge support for the spin-off, with more than 98 per cent of shares voting to demerge Coles.
(Source: AIMS)
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