AGL Energy Limited (AGL):
The competition watchdog will turn up its scrutiny of AGL Energy, Origin Energy and Energy Australia over concerns the trio are reaping excessive margins from their gas retailing businesses. The Australian Competition & Consumer Commission yesterday released its latest interim report into the east coast gas market, with ACCC chairman Rod Sims flagging his concerns about the profitability of the dominant gas retailers. The ACCC has already scrutinised gas exporters and pipeline operators as part of its inquiries into the east coast gas market and has highlighted the role the Victorian and NSW governments played in creating the current situation when they effectively banned the development of their onshore gas reservoirs. Gas retailers are in the watchdog’s sights after the ACCC’s preliminary analysis found the Australian-listed duo AGL and Origin, as well as the Hong Kong-listed CLP Group’s Energy Australia, were enjoying average earnings before interest, taxation, depreciation and amortisation margins of between 15 per cent and 21 per cent of the delivered price of gas.
AMP Limited (AMP):
Infrastructure investors Palisade, ICG and AMP Capital are all expected to line up to acquire a half share in the Macarthur wind farm that is up for sale by its owner, Malakoff. The farm comprises 140 wind turbines in Macarthur, Victoria, and is described as the largest wind farm in the southern hemisphere, generating enough power for 220,000 homes. The owner of the remaining share is HRL Morrison. Meridian sold its stake in the wind farm to Malaysian power company Malakoff for $650 million in 2013.
Bega Cheese Ltd (BGA):
Severe drought and a consequent increase in farmgate milk prices has taken a bite out of Bega Cheese earnings for the year ahead. In an update to the market this morning, Bega said its acquisition of the Koroit dairy had helped, but that its forecast earnings would be in the range of $123 million to $130m for FY19, still up from last year’s earnings of $109.6 million. “The overall reduction in the Australian milk supply pool has created significant competitive farm gate milk pricing pressure. The outlook for Bega Cheese’s financial performance in FY2019 is expected to be impacted by this competitive pressure.” It said current forecasts indicate a normalised profit range of between $44m and $48m. BGA shares down 5.81pc in early trade.
GPT Group (GPT):
Real estate group GPT has this morning upgraded the value of its portfolio by $447.5 million, thanks to a bumper half of its Sydney office assets. In an update to the market this morning, GPT said its net tangible assets had grown by approximately 4.7 per cent in just 6 months. The biggest contributors were its Sydney assets - 2 Park St increasing by 8.6 per cent and MLC and Australia Square by 5.2pc and 4.8pc respectively. Meanwhile, further south, Melbourne Central retail increased by 6.8pc. “We have continued to see strong growth achieved by the office and logistics portfolio during the period, with the office portfolio continuing to benefit from its high exposure to the strongly performing Sydney and Melbourne markets,” chief Bob Johnston said. GPT will report its annual results on February 11, 2019.
Graincorp Ltd (GNC):
Takeover target GrainCorp has granted suitor Long-Term Asset Partners access to its data room to determine a move forward on the $2.4 billion deal announced earlier this month. In a letter to shareholders, chairman Graham Bradley said the company was “seeking additional information from LTAP on its longer-term financing plans and intentions”. “GrainCorp is providing LTAP due diligence under the terms of confidentiality to enable LTAP to determine whether LTAP and its financiers can put forward a more certain proposal,” he said. “The LTAP proposal at this stage is not sufficiently certain or in a form which would allow the Board to make a recommendation to shareholders.” The proposal values shares at $10.42 - shares last traded at $9.09.
Medibank Private Ltd (MPL):
Australia’s listed insurers, Medibank and Nib, have announced average premium increases slightly above the wider industry figure announced by the government, as the sector prepares for a big cut to annual price hikes under a Labor government. Health minister Greg Hunt today announced that next year’s annual heath insurance premium increase, to come into effect from April 1, would be an average of 3.25 per cent, which was the lowest in 18 years. Medibank’s average increase of 3.3 per cent was also its lowest in 18 years, while Nib’s average increase of 3.38 per cent was its lowest in 16 years. Medibank chief executive Craig Drummond said the challenge of how to continue delivering quality healthcare in Australia, at an affordable price, remained. “We can’t ignore the fact that premium increases are unwelcome, and we know we need to work even harder on addressing the affordability concerns of Australians,” he said. “The pressure on the health system and our customers and their household budgets has my focus, and the focus of all Medibank employees.” Mr Drummond said healthcare costs in Australia had been tracking at an average of 4.6 per cent above inflation each year over the past 10 years, largely driven by more frequent and more expensive hospital admissions and a population that was getting older. He said that had put real pressure on the health system – both public and private.
National Australia Bank Ltd (NAB):
NAB received a record-breaking “first strike” at its annual general meeting today, with more than 80 per cent of shareholder votes cast against the company’s remuneration report. Chairman Ken Henry told shareholders the bank would “try again” to change the way it pays top executives. In a statement released to the market ahead of the meeting, Dr Henry said that about a third of “against” votes are due to the fact that bank has changed the design of its pay scheme.
Premier Investments Limited (PMV):
The gloss is coming off Premier Investments' and Lovisa's exposure to the British retail market amid growing fears about the impact of Brexit on consumer confidence and the UK economy. Lovisa shares fell 6.2 per cent and Premier shares by 3.4 per cent on Tuesday, mirroring the decline in UK retail stocks after a shock profit downgrade from once high-flying online fashion retailer asos.com crunched hopes that British consumers would indulge in retail therapy to overcome Brexit gloom. Asos.com shares fell as much as 41 per cent after it cut profit guidance after worse than expected November quarter sales and margins, while Marks & Spencer shares fell 2.8 per cent, Next slipped 3.4 per cent, Debenhams lost 6.5 per cent and rival online retailer Boohoo fell 11 per cent.
QMS Media Ltd (QMS):
Listed outdoor advertising company QMS Media is seeking to beef up its sports arm. Street Talk understands the company's recently created QMS Sport segment is in late stage negotiations to buy TLA Australia. Fund manager sources told this column QMS had been preparing an equity raising to help cover the acquisition, which is likely to be worth about $30 million. TLA Australia is the local unit of sports marketing, events and merchandise company TLA Worldwide. Its biggest money spinner is looking after professional Australian rules football players and swimmers. The business was founded by former Collingwood Football Club player Craig Kelly, who remains at the helm of TLA Australia. TLA Australia is understood to make about $5.6 million a year at the earnings before interest, tax, depreciation and amortisation line, and $30 million revenue. The deal is expected to be worth $27 million or about 5-times EBITDA.
(Source: AIMS)
The competition watchdog will turn up its scrutiny of AGL Energy, Origin Energy and Energy Australia over concerns the trio are reaping excessive margins from their gas retailing businesses. The Australian Competition & Consumer Commission yesterday released its latest interim report into the east coast gas market, with ACCC chairman Rod Sims flagging his concerns about the profitability of the dominant gas retailers. The ACCC has already scrutinised gas exporters and pipeline operators as part of its inquiries into the east coast gas market and has highlighted the role the Victorian and NSW governments played in creating the current situation when they effectively banned the development of their onshore gas reservoirs. Gas retailers are in the watchdog’s sights after the ACCC’s preliminary analysis found the Australian-listed duo AGL and Origin, as well as the Hong Kong-listed CLP Group’s Energy Australia, were enjoying average earnings before interest, taxation, depreciation and amortisation margins of between 15 per cent and 21 per cent of the delivered price of gas.
AMP Limited (AMP):
Infrastructure investors Palisade, ICG and AMP Capital are all expected to line up to acquire a half share in the Macarthur wind farm that is up for sale by its owner, Malakoff. The farm comprises 140 wind turbines in Macarthur, Victoria, and is described as the largest wind farm in the southern hemisphere, generating enough power for 220,000 homes. The owner of the remaining share is HRL Morrison. Meridian sold its stake in the wind farm to Malaysian power company Malakoff for $650 million in 2013.
Bega Cheese Ltd (BGA):
Severe drought and a consequent increase in farmgate milk prices has taken a bite out of Bega Cheese earnings for the year ahead. In an update to the market this morning, Bega said its acquisition of the Koroit dairy had helped, but that its forecast earnings would be in the range of $123 million to $130m for FY19, still up from last year’s earnings of $109.6 million. “The overall reduction in the Australian milk supply pool has created significant competitive farm gate milk pricing pressure. The outlook for Bega Cheese’s financial performance in FY2019 is expected to be impacted by this competitive pressure.” It said current forecasts indicate a normalised profit range of between $44m and $48m. BGA shares down 5.81pc in early trade.
GPT Group (GPT):
Real estate group GPT has this morning upgraded the value of its portfolio by $447.5 million, thanks to a bumper half of its Sydney office assets. In an update to the market this morning, GPT said its net tangible assets had grown by approximately 4.7 per cent in just 6 months. The biggest contributors were its Sydney assets - 2 Park St increasing by 8.6 per cent and MLC and Australia Square by 5.2pc and 4.8pc respectively. Meanwhile, further south, Melbourne Central retail increased by 6.8pc. “We have continued to see strong growth achieved by the office and logistics portfolio during the period, with the office portfolio continuing to benefit from its high exposure to the strongly performing Sydney and Melbourne markets,” chief Bob Johnston said. GPT will report its annual results on February 11, 2019.
Graincorp Ltd (GNC):
Takeover target GrainCorp has granted suitor Long-Term Asset Partners access to its data room to determine a move forward on the $2.4 billion deal announced earlier this month. In a letter to shareholders, chairman Graham Bradley said the company was “seeking additional information from LTAP on its longer-term financing plans and intentions”. “GrainCorp is providing LTAP due diligence under the terms of confidentiality to enable LTAP to determine whether LTAP and its financiers can put forward a more certain proposal,” he said. “The LTAP proposal at this stage is not sufficiently certain or in a form which would allow the Board to make a recommendation to shareholders.” The proposal values shares at $10.42 - shares last traded at $9.09.
Medibank Private Ltd (MPL):
Australia’s listed insurers, Medibank and Nib, have announced average premium increases slightly above the wider industry figure announced by the government, as the sector prepares for a big cut to annual price hikes under a Labor government. Health minister Greg Hunt today announced that next year’s annual heath insurance premium increase, to come into effect from April 1, would be an average of 3.25 per cent, which was the lowest in 18 years. Medibank’s average increase of 3.3 per cent was also its lowest in 18 years, while Nib’s average increase of 3.38 per cent was its lowest in 16 years. Medibank chief executive Craig Drummond said the challenge of how to continue delivering quality healthcare in Australia, at an affordable price, remained. “We can’t ignore the fact that premium increases are unwelcome, and we know we need to work even harder on addressing the affordability concerns of Australians,” he said. “The pressure on the health system and our customers and their household budgets has my focus, and the focus of all Medibank employees.” Mr Drummond said healthcare costs in Australia had been tracking at an average of 4.6 per cent above inflation each year over the past 10 years, largely driven by more frequent and more expensive hospital admissions and a population that was getting older. He said that had put real pressure on the health system – both public and private.
National Australia Bank Ltd (NAB):
NAB received a record-breaking “first strike” at its annual general meeting today, with more than 80 per cent of shareholder votes cast against the company’s remuneration report. Chairman Ken Henry told shareholders the bank would “try again” to change the way it pays top executives. In a statement released to the market ahead of the meeting, Dr Henry said that about a third of “against” votes are due to the fact that bank has changed the design of its pay scheme.
Premier Investments Limited (PMV):
The gloss is coming off Premier Investments' and Lovisa's exposure to the British retail market amid growing fears about the impact of Brexit on consumer confidence and the UK economy. Lovisa shares fell 6.2 per cent and Premier shares by 3.4 per cent on Tuesday, mirroring the decline in UK retail stocks after a shock profit downgrade from once high-flying online fashion retailer asos.com crunched hopes that British consumers would indulge in retail therapy to overcome Brexit gloom. Asos.com shares fell as much as 41 per cent after it cut profit guidance after worse than expected November quarter sales and margins, while Marks & Spencer shares fell 2.8 per cent, Next slipped 3.4 per cent, Debenhams lost 6.5 per cent and rival online retailer Boohoo fell 11 per cent.
QMS Media Ltd (QMS):
Listed outdoor advertising company QMS Media is seeking to beef up its sports arm. Street Talk understands the company's recently created QMS Sport segment is in late stage negotiations to buy TLA Australia. Fund manager sources told this column QMS had been preparing an equity raising to help cover the acquisition, which is likely to be worth about $30 million. TLA Australia is the local unit of sports marketing, events and merchandise company TLA Worldwide. Its biggest money spinner is looking after professional Australian rules football players and swimmers. The business was founded by former Collingwood Football Club player Craig Kelly, who remains at the helm of TLA Australia. TLA Australia is understood to make about $5.6 million a year at the earnings before interest, tax, depreciation and amortisation line, and $30 million revenue. The deal is expected to be worth $27 million or about 5-times EBITDA.
(Source: AIMS)
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