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AUSTRALIA MARKETS(2019-02-14)

AIMS
2019-02-14 14:50

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AVEO GROUP (AOG):
Retirement community operator Aveo has been hit by a slowdown in the property market, this morning reporting a 67 per cent decrease in underlying profits to $12 million. On a statutory basis, Aveo came in at a $44.7 million loss, down 130 per cent after it wrote down the value of its retirement property portfolio by $63.2 million. “The Retirement result decreased by 49 per cent and amounted to 65 per cent of overall divisional contribution. Based on the current average written contracts rate, the previously indicated sales level of 1,150 written sales is regarded as achievable, with some risk,” chief Geoff Grady told the market. “The Retirement Established Business was resilient in HY19, despite the softening of the residential property market with sales leads remaining relatively strong.” Looking ahead, Aveo said it was focussed on delivering 419 major development units in fiscal 2019, progressing its strategic review to bridge the “value gap” for security holders and reviewing its free cash flow position to consider buybacks of shares. The board reaffirmed its target full year distribution based on 40 to 60 per cent of underlying profit.
 
Beach Energy Ltd (BPT):
Beach Energy’s first half profit has smashed Citi’s expectations, coming in at $279 million versus expectations of $222m. The energy play upgraded its guidance by $200m to between $1.25 billion and $1.35bn but Citi says those levels may not be sustainable. “The true upside to guidance beyond FY19 may be closer to A$100m, and hence ~18Acps upside may be the more rational share price reaction,” it said. “Guidance appears to have also been upgraded on lower FX assumptions, and given the quality of the best possibly on lower opex also.”
 
Carsales.Com Ltd (CAR):
Carsales.com, an online automotive classifieds business, said a writedown of its Stratton Finance business led to its first-half profit falling 82 per cent. Carsales reported a net profit of $11.1 million for the six months through December, a drop from $60.6 million a year ago. The result was dragged down by an almost $48 million impairment charge against the carrying value of its 50.1 per cent investment in Stratton. Management said changes to car financing regulation, which took effect in November, and tight credit-market conditions had driven the Stratton impairment charge. The company expects its share of Stratton’s net profit to halve to A$1 million this fiscal year, but remains committed to the business.
 
Computershare Limited (CPU):
Share registry operator Computershare has increased its full year guidance after strong growth in the first half. Releasing its half year results today, the company reported a 14.3 per cent increase in earnings to $335.4 million, and boosted its earnings per share outlook to 12.5 per cent growth from a previously advised 10 per cent rise. “Computershare is performing to plan with Management EPS increasing by 15.5 per cent in constant currency terms. The improvement was primarily driven by ongoing profitable growth in Register Maintenance, margin income gains and a reduced tax rate,” chief Suart Irving said. These results demonstrate the strength of Computershare’s business during a period of heightened market volatility and global uncertainty.
 
CSL Limited (CSL):
Australian biotech giant CSL has reported a seven per cent jump in half-year profit to $US1.6 billion with a boost in sales of its key products. The company’s half-year result also showed that reported sales revenue was up 11 per cent at $US4.5bn and earnings per share grew 7 per cent, or 10 per cent, on a constant currency basis. Paul Perreault, CSL’s chief executive, said the numbers were a “solid result”, which he said was particularly pleasing given it followed a very strong comparative period. “Our immunoglobulin portfolio is performing very well, with Privigen sales growing 17 per cent and Hizentra sales growing 14 per cent,” Mr Perreault said. The CSL CEO explained that part of that growth in the immunoglobulin portfolio was CSL’s new CIDP (chronic inflammatory demyelinating polyneuropathy) – a debilitating neurological disorder - label claim for Privigen and Hizentra. Mr Perreault added that Haegarda, CSL’s therapy for patients with Hereditary Angioedema and Idelvion, its therapy for Haemophilia B patients, had been transformational products and the sales growth reflected this. Haegarda sales have tripled and Idelvion sales were up 55 per cent.
 
Evolution Mining Ltd (EVN):
Evolution Mining recorded a 26 per cent fall in first-half net profit mainly because of one-time charges. The Australian gold miner said net profit totaled $91.1 million in the six months through December. That was down from A$122.5 million in the same period a year earlier. Evolution said the result was weighed down by non-cash items, including $11.4 million tied to the use of stockpiles at the Mt Rawdon mine and higher depreciation and amortization expenses of $13.3 million. Directors declared a mid-year payout of 3.5 cents a share. Earnings before interest, tax, depreciation, amortization and fair value adjustments were down 10 per cent at $359.7 million.
 
HT&E Ltd (HT1):
Australian media company HT&E has posted earnings growth of 7 per cent for 2018 and a strong balance sheet as it settles the sale of its Adshel outdoor advertisting business to oOh!Media. The company reported earnings of $71.8 million, in line with expectations and net profit of $36.7 million - up 23 per cent from the previous year. It said the $570 million sale of Adshel in September had bolstered its balance sheet and had allowed it to pay out a special dividend and commence an on market buy-back last December. “2018 was a truly transformational year for HT&E with the successful sale of Adshel and a pivot to focusing on the Company’s valuable and cash generative radio and audio assets,” chairman Hamish McLennan said. “The Company’s financial performance was in line with expectations with a strong first half in radio offset by a weaker advertising market in the last four months of the year.” The board declared a dividend of 4 cents per share, representing a payout of approximately 55pc of 2018 NPAT when combined with the interim dividend.
 
IPH Ltd (IPH):
Intellectual property firm IPH is raiding the register of smaller listed rival Xenith IP Group, this morning announcing it had taken a 19.9 per cent interest in the firm. In a note to the market, IPH said it had bought the stake to participate in industry consolidation, consistent with its acquisition strategy. IPH acquired its interest in Xenith at a price of $1.85 per share from institutional investors at a total cost of approximately $33 million which has been funded from debt facilities. In November, Xenith announced it was being courted for takeover by QANTM Intellectual Property Group, what IPH says it will not vote in favour of. “IPH believes an alternative transaction involving a strategic combination of one of these businesses with IPH has the potential to create significant value,” it said. “IPH intends to seek discussions with Xenith and / or QANTM in relation to an alternative transaction to the current scheme.”
 
Northern Star Resources Ltd (NST):
Northern Star Resources said Wednesday its first-half profit increased and it has raised its mid-year payout as it benefited from rising sales and steady prices. The mining company reported a net profit of $82.1 million in the six months through December, up 4 per cent on the same period a year earlier. Directors declared an interim dividend of 6 cents a share, up 33pc on-year. Northern Star said profit increased despite spending a record $83 million on exploration and expansion. The company on Tuesday reported better-than-expected exploration results at its Pogo deposit. “But those sorts of results don’t come for free,” Executive Chairman Bill Beament said. “We need to invest in Pogo in the same way as we have invested in our other Tier-1 operations.”
 
Orora Ltd (ORA):
Packaging company Orora said it achieved a 7.6 per cent rise in half-year profit in spite of challenging economic and market conditions across key trading regions. Orora reported a net profit of $113.7 million in the six months through December, up from $103.8 million a year earlier, with its Australian fiber-packaging and beverages operations offsetting weaker earnings in North America. Directors declared an interim dividend of 6.5 cents a share, up from 6.0 cents a year earlier. Orora’s footprint stretches from China to the US, including more than 44 factories making everything from cereal boxes to wine bottles and 90 distribution sites. Management has spent around $400 million over five years on upgrading existing facilities and buying additional plants to extend a record of earnings growth since listing on the ASX in late 2013.
(Source: AIMS)

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