BHP Group Ltd (BHP):
Mining giant BHP has been accused of underpaying up to $300 million in iron ore royalties to the West Australian government dating back to 2004. Underpayments were identified following a "routine" audit, Treasurer Ben Wyatt said. BHP allegedly used its Singapore marketing hub to buy iron ore at a lower price, which meant it paid less in royalties. Reports AFR
Commonwealth Bank of Australia (CBA):
Commonwealth Bank could cut its highly-prized dividend after it spins off its wealth management and mortgage broking arms, under one scenario being discussed by analysts. As most of the big banks retreat from the wealth sector, CBA is this year planning to demerge the Colonial First State superannuation and financial advice business, as well as Aussie Home Loans and advice businesses Count Financial and Financial Wisdom. The spun-out business, dubbed NewCo, would be split off from CBA late this year, and could be worth as much as $3.2 billion, Morgan Stanley analysts say. In a note to clients, the analysts say the deal is likely to further boost CBA's capital (on top of CBA's plan to sell its funds management arm) above a "conservative" level, but also create an "earnings hole" which could lead to a re-think on CBA dividends. They say the deal will leave CBA will "excess" capital, which could lead to share buyback or 85c a share special dividend by June this year. But they add that CBA's board could review its dividend policy in the 2020 financial year. They put forward three scenarios: a flat CBA dividend; a flat combined CBA/NewCo dividend; or a flat CBA dividend payout ratio.
CropLogic Ltd (CLI):
CropLogic has received an advisor's report on how to exploit the legalisation of cannabis in certain parts of the United States. It tells the market is is most likely to apply for a grower licence. Oregon already has 576 industrial hemp growers registered, a 4369 per cent increase since licensing began in 2015. CropLogic is waiting for a second report from Green Light Law before it decides whether to create a new hemp business, but an existing business, or collaborate with existing licencees. CropLogic sells digital agricultural technology and is based in Western Australia. Its shares are currently 1.5 cents.
Healthscope Ltd (HSO):
Nine weeks after suitor Brookfield was granted exclusive due diligence there is still no sign of a binding bid for the private hospitals’ operator. It's understood an offer didn't come in over the weekend - despite the Friday due diligence deadline - and sources are now pointing to Tuesday at the earliest. The Canadian giant's exclusive due diligence period came after it offered to buy Healthscope for $2.585 a share via a scheme of arrangement, or $2.455 a share in an off-market takeover should the scheme fail to pass muster with Healthscope shareholders. The twin bids were enough for Brookfield to be given a look at the books on its own.
Mod Resources Ltd (MOD):
Billion-dollar copper producer Sandfire Resources is in a game of cat and mouse with ASX-listed copper hopeful, MOD Resources. Street Talk can reveal Sandfire has quietly approached MOD's board with a takeover offer valuing the exploration junior well north of its $55 million market capitalisation. MOD wants little to do with Sandfire or its non-binding and conditional bid at this stage. Investor sources said it thinks the offer undervalues the company, and it would have a much brighter future should it be able to develop its strategic Botswana prospects on its own. But MOD does appear willing to use the corporate interest to its own advantage. Street Talk understands MOD is seeking to raise $15 million to restock its dwindling bank account and ensure it has the financial strength to stand on its own two feet should corporate interest heat up.
Objective Corporation Limited (OCL):
Software provider Objective Corporation released a trading update this morning revealing lower revenue for the first half of the current financial year at about $29.2 million, compared to $33.3 million for the same period last financial year. This revenue is expected to translate to earnings of about $5.6 million. The decline is because a one-off consulting project with IBM and Defence was not repeated in 2018. Objective noted their entire business is being migrated to a subscription model, which boosts cash. Recurring revenue for the six-month period was $20.8 million.
Sims Metal Management Ltd (SGM):
Scrap and recycling giant Sims Metal Management has all but sealed the booby prize as the ASX company hit hardest by global trade tensions by delivering an ugly profit downgrade that underlines how it has been caught in the pincers of tariffs, trade wars and rising regulatory tensions. Having warned in September that its underlying earnings before tax and interest for the September quarter was weaker than expected, Sims said on Monday that EBIT in the December half of the 2019 financial year is likely to be more than 12 per cent lower than the year before, at about $109.8 million. Sims shares plunged 14 per cent at the open to trade about $9.40. The stock has now fallen 47 per cent since hitting a recent peak of $17.80 last in June.
Treasury Wine Estates Ltd (TWE):
Treasury Wines Estates has sacked its chief operating officer for an unspecified breach of internal policies. Its shares are outperforming today, up 1.4 per cent to a two-month high of $15.40. The wine maker said on Monday that Robert Foye had left the company effective immediately "due to a breach of TWE's internal policies unrelated to the company's trading performance". He was appointed COO in early 2017 and had been considered a likely internal candidate for CEO. Deputy COO, Tim Ford, will take over Mr Foye's role reporting directly to CEO Michael Clarke. Meanwhile the company said it was heading for above-consensus first-half earnings of between $335 million and $340 million. The market was expecting around $332 million. That result will represent earnings growth of 25 per cent.
Westpac Banking Corp (WBC):
Westpac will increase its backing of the emerging start-up sector through a Silicon Valley-style approach to debt financing, which has so far been scarcely used in the Australian market, targeting sectors it believes will grow the local economy. The institution has long been known for its focus on small-to-medium-sized businesses, but has quietly set up a national network of specialist bankers in a division known as "emerging industries", which is looking to provide specialised banking services and increase its funding to established start-ups – often referred to as scale-ups – in areas including business digitisation and low-carbon industries. Westpac already targets tech start-up investments through its backing of venture capital fund Reinventure, and has directly invested in some tech companies, but its emerging industries team will increase the use of debt funding to companies looking to expand, meaning start-up founders can minimise the dilution of their equity.
(Source: AIMS)
Mining giant BHP has been accused of underpaying up to $300 million in iron ore royalties to the West Australian government dating back to 2004. Underpayments were identified following a "routine" audit, Treasurer Ben Wyatt said. BHP allegedly used its Singapore marketing hub to buy iron ore at a lower price, which meant it paid less in royalties. Reports AFR
Commonwealth Bank of Australia (CBA):
Commonwealth Bank could cut its highly-prized dividend after it spins off its wealth management and mortgage broking arms, under one scenario being discussed by analysts. As most of the big banks retreat from the wealth sector, CBA is this year planning to demerge the Colonial First State superannuation and financial advice business, as well as Aussie Home Loans and advice businesses Count Financial and Financial Wisdom. The spun-out business, dubbed NewCo, would be split off from CBA late this year, and could be worth as much as $3.2 billion, Morgan Stanley analysts say. In a note to clients, the analysts say the deal is likely to further boost CBA's capital (on top of CBA's plan to sell its funds management arm) above a "conservative" level, but also create an "earnings hole" which could lead to a re-think on CBA dividends. They say the deal will leave CBA will "excess" capital, which could lead to share buyback or 85c a share special dividend by June this year. But they add that CBA's board could review its dividend policy in the 2020 financial year. They put forward three scenarios: a flat CBA dividend; a flat combined CBA/NewCo dividend; or a flat CBA dividend payout ratio.
CropLogic Ltd (CLI):
CropLogic has received an advisor's report on how to exploit the legalisation of cannabis in certain parts of the United States. It tells the market is is most likely to apply for a grower licence. Oregon already has 576 industrial hemp growers registered, a 4369 per cent increase since licensing began in 2015. CropLogic is waiting for a second report from Green Light Law before it decides whether to create a new hemp business, but an existing business, or collaborate with existing licencees. CropLogic sells digital agricultural technology and is based in Western Australia. Its shares are currently 1.5 cents.
Healthscope Ltd (HSO):
Nine weeks after suitor Brookfield was granted exclusive due diligence there is still no sign of a binding bid for the private hospitals’ operator. It's understood an offer didn't come in over the weekend - despite the Friday due diligence deadline - and sources are now pointing to Tuesday at the earliest. The Canadian giant's exclusive due diligence period came after it offered to buy Healthscope for $2.585 a share via a scheme of arrangement, or $2.455 a share in an off-market takeover should the scheme fail to pass muster with Healthscope shareholders. The twin bids were enough for Brookfield to be given a look at the books on its own.
Mod Resources Ltd (MOD):
Billion-dollar copper producer Sandfire Resources is in a game of cat and mouse with ASX-listed copper hopeful, MOD Resources. Street Talk can reveal Sandfire has quietly approached MOD's board with a takeover offer valuing the exploration junior well north of its $55 million market capitalisation. MOD wants little to do with Sandfire or its non-binding and conditional bid at this stage. Investor sources said it thinks the offer undervalues the company, and it would have a much brighter future should it be able to develop its strategic Botswana prospects on its own. But MOD does appear willing to use the corporate interest to its own advantage. Street Talk understands MOD is seeking to raise $15 million to restock its dwindling bank account and ensure it has the financial strength to stand on its own two feet should corporate interest heat up.
Objective Corporation Limited (OCL):
Software provider Objective Corporation released a trading update this morning revealing lower revenue for the first half of the current financial year at about $29.2 million, compared to $33.3 million for the same period last financial year. This revenue is expected to translate to earnings of about $5.6 million. The decline is because a one-off consulting project with IBM and Defence was not repeated in 2018. Objective noted their entire business is being migrated to a subscription model, which boosts cash. Recurring revenue for the six-month period was $20.8 million.
Sims Metal Management Ltd (SGM):
Scrap and recycling giant Sims Metal Management has all but sealed the booby prize as the ASX company hit hardest by global trade tensions by delivering an ugly profit downgrade that underlines how it has been caught in the pincers of tariffs, trade wars and rising regulatory tensions. Having warned in September that its underlying earnings before tax and interest for the September quarter was weaker than expected, Sims said on Monday that EBIT in the December half of the 2019 financial year is likely to be more than 12 per cent lower than the year before, at about $109.8 million. Sims shares plunged 14 per cent at the open to trade about $9.40. The stock has now fallen 47 per cent since hitting a recent peak of $17.80 last in June.
Treasury Wine Estates Ltd (TWE):
Treasury Wines Estates has sacked its chief operating officer for an unspecified breach of internal policies. Its shares are outperforming today, up 1.4 per cent to a two-month high of $15.40. The wine maker said on Monday that Robert Foye had left the company effective immediately "due to a breach of TWE's internal policies unrelated to the company's trading performance". He was appointed COO in early 2017 and had been considered a likely internal candidate for CEO. Deputy COO, Tim Ford, will take over Mr Foye's role reporting directly to CEO Michael Clarke. Meanwhile the company said it was heading for above-consensus first-half earnings of between $335 million and $340 million. The market was expecting around $332 million. That result will represent earnings growth of 25 per cent.
Westpac Banking Corp (WBC):
Westpac will increase its backing of the emerging start-up sector through a Silicon Valley-style approach to debt financing, which has so far been scarcely used in the Australian market, targeting sectors it believes will grow the local economy. The institution has long been known for its focus on small-to-medium-sized businesses, but has quietly set up a national network of specialist bankers in a division known as "emerging industries", which is looking to provide specialised banking services and increase its funding to established start-ups – often referred to as scale-ups – in areas including business digitisation and low-carbon industries. Westpac already targets tech start-up investments through its backing of venture capital fund Reinventure, and has directly invested in some tech companies, but its emerging industries team will increase the use of debt funding to companies looking to expand, meaning start-up founders can minimise the dilution of their equity.
(Source: AIMS)
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