A2 Milk Company Ltd (A2M):
Infant milk formula maker a2 Milk has reaffirmed its full year earnings, but hinted increases in dairy prices could dent the year following. In an investor presentation released this morning, a2 said first half performance was very strong with growing market share in China and it was in a position to double its marketing spend during the second half. “This is intended to drive brand awareness, predominantly in China, and the US. Increased brand and marketing investment is expected to continue into FY20,” a2 said. But it said increases in dairy pricing as reflected in Global Dairy Trade Indices were likely to have some impact to gross margins in FY20, though not in the current.
AP Eagers Ltd (APE):
The chief executive of one of Australia's biggest car dealership groups has warned of serious distortions in the vehicle market if one element of a Labor Party emissions plan was implemented. Martin Ward, who runs the $1.4 billion ASX-listed AP Eagers and its 110 new car dealerships, said a Labor Party plan to put car retailers responsible for ensuring more electric vehicles were sold from their outlets was "unworkable". "It is going to give rise to so much distortion and it will create major problems," Mr Ward said. Under the Labor plan announced on Monday as part of a suite of "cleaner transport" proposals, car retailers would be subject to an "average emissions standards" regime. Retailers would be forced to meet the average standards across their business by offsetting emissions from the sales of higher-polluting cars by selling more zero emitting cars, typically electric vehicles. Mr Ward said the vehicle manufacturers needed to be made responsible for emissions standards, not those retailers selling to customers in the last step of the supply chain.
Bellamy's Australia Ltd (BAL):
Morgan Stanley has cut its rating on infant milk formula maker Bellamy’s to equal-weight, saying its valuation prices in a stronger outlook from its new formula. Analyst Thomas Kierath points out that the stock has rallied 42 per cent since January 25, versus the benchmark’s gain of 6 per cent, what he puts down to greater confidence in BAL’s earnings outlook. “BAL’s shares have re-rated from 21x to 30x one-year forward EPS since Jan ‘19, which suggests greater confidence in the outlook,” he says. “While near-term uncertainty remains around the success of the new product and approval from the regulator (SAMR), the market now appears to be taking a more optimistic approach versus previously avoiding the uncertainty altogether.” MS rates the stock at equal-weight with a price target of $10. Shares in the company are down by 2.13pc early, adding to yesterday’s loss of 2.1pc.
DEXUS Property Group (DXS):
Office property group Dexus has unveiled a major raising by its main wholesale fund as it settled on its acquisition of an $800 million half stake in Sydney’s MLC Centre. The group, which picked up the stake with its Dexus Wholesale Property Fund last month, said the unlisted vehicle raised about $340m of fresh equity by bringing in six new investors. The DWPF is undertaking a total raise of up to $400m to help fund the acquisition of the stake in the Sydney landmark. The unlisted fund and Dexus each took a further 25 per cent in the tower under the deal they struck with exiting co-owner GPT. “We are pleased to welcome six new investors to DWPF, in line with our strategy of diversifying the fund’s unitholder base,” DWPF fund manager Michael Sheffield said. The fund has active inquiry on the remaining $60m, it said.
Eclipx Group Ltd (ECX):
Eclipx has agreed to terminate its takeover agreement with McMillan Shakespeare, and to reimburse the would-be partner its costs. The rejection was flagged by MMS two weeks ago, when Eclipx flagged a significant earnings miss for the half and ongoing issues with its non-core businesses. Today, Eclipx said the two had agreed to terminate the scheme of arrangement dated November 8, and it would pay MMS $8 million in costs in connection to the scheme. “This payment to MMS is equivalent to 1.8 cents per ECX share (post tax) and will be funded from operating cashflow,” it said. “Barring any unforeseen circumstances, ECX expects to be compliant with its corporate debt covenants at the next relevant testing date being 30 September 2019.” The company will release its half year results on May 24.
Pioneer Credit Ltd (PNC):
The corporate regulator has been in discussions with a whistleblower over accounting standards at Perth-based buyer of bad debt portfolios Pioneer Credit since November 2017 but did not contact the company to express its concerns until a year later, The Australian Financial Review can reveal. A spokesman for the Australian Securities and Investments Commission said it approached the company in October 2018 after it made statements in its 2017-18 annual report that it had no plans to change a controversial valuation method which subsequently has attracted the attention of its auditor and the ASX. “ASIC raised questions with Pioneer Credit as part of our routine surveillance of financial reports ... We are awaiting further information from the company at this time,” the ASIC spokesman said. Documents obtained by The Australian Financial Review, however, reveal ASIC was aware of concerns about the company and its methods dating back almost a year earlier with the regulator asking a whistleblower for more information in November 2017.
Telstra Corporation Ltd (TLS):
Telstra boss Andy Penn is convinced 5G technology will run almost every service within the next five years, despite concerns that the transformative benefits of the next generation of mobile services are overhyped. “During the 2020s we will start living in a world where virtually everything that can be connected will be connected via 5G,” he will say in a speech to be delivered today at the QODE technology summit in Queensland. Mr Penn said 5G mobile networks would tie together a number of emerging technologies — Internet of Things, cloud computing, machine learning and artificial intelligence — providing the backbone for consumers and businesses to deploy new solutions.
(Source: AIMS)
Infant milk formula maker a2 Milk has reaffirmed its full year earnings, but hinted increases in dairy prices could dent the year following. In an investor presentation released this morning, a2 said first half performance was very strong with growing market share in China and it was in a position to double its marketing spend during the second half. “This is intended to drive brand awareness, predominantly in China, and the US. Increased brand and marketing investment is expected to continue into FY20,” a2 said. But it said increases in dairy pricing as reflected in Global Dairy Trade Indices were likely to have some impact to gross margins in FY20, though not in the current.
AP Eagers Ltd (APE):
The chief executive of one of Australia's biggest car dealership groups has warned of serious distortions in the vehicle market if one element of a Labor Party emissions plan was implemented. Martin Ward, who runs the $1.4 billion ASX-listed AP Eagers and its 110 new car dealerships, said a Labor Party plan to put car retailers responsible for ensuring more electric vehicles were sold from their outlets was "unworkable". "It is going to give rise to so much distortion and it will create major problems," Mr Ward said. Under the Labor plan announced on Monday as part of a suite of "cleaner transport" proposals, car retailers would be subject to an "average emissions standards" regime. Retailers would be forced to meet the average standards across their business by offsetting emissions from the sales of higher-polluting cars by selling more zero emitting cars, typically electric vehicles. Mr Ward said the vehicle manufacturers needed to be made responsible for emissions standards, not those retailers selling to customers in the last step of the supply chain.
Bellamy's Australia Ltd (BAL):
Morgan Stanley has cut its rating on infant milk formula maker Bellamy’s to equal-weight, saying its valuation prices in a stronger outlook from its new formula. Analyst Thomas Kierath points out that the stock has rallied 42 per cent since January 25, versus the benchmark’s gain of 6 per cent, what he puts down to greater confidence in BAL’s earnings outlook. “BAL’s shares have re-rated from 21x to 30x one-year forward EPS since Jan ‘19, which suggests greater confidence in the outlook,” he says. “While near-term uncertainty remains around the success of the new product and approval from the regulator (SAMR), the market now appears to be taking a more optimistic approach versus previously avoiding the uncertainty altogether.” MS rates the stock at equal-weight with a price target of $10. Shares in the company are down by 2.13pc early, adding to yesterday’s loss of 2.1pc.
DEXUS Property Group (DXS):
Office property group Dexus has unveiled a major raising by its main wholesale fund as it settled on its acquisition of an $800 million half stake in Sydney’s MLC Centre. The group, which picked up the stake with its Dexus Wholesale Property Fund last month, said the unlisted vehicle raised about $340m of fresh equity by bringing in six new investors. The DWPF is undertaking a total raise of up to $400m to help fund the acquisition of the stake in the Sydney landmark. The unlisted fund and Dexus each took a further 25 per cent in the tower under the deal they struck with exiting co-owner GPT. “We are pleased to welcome six new investors to DWPF, in line with our strategy of diversifying the fund’s unitholder base,” DWPF fund manager Michael Sheffield said. The fund has active inquiry on the remaining $60m, it said.
Eclipx Group Ltd (ECX):
Eclipx has agreed to terminate its takeover agreement with McMillan Shakespeare, and to reimburse the would-be partner its costs. The rejection was flagged by MMS two weeks ago, when Eclipx flagged a significant earnings miss for the half and ongoing issues with its non-core businesses. Today, Eclipx said the two had agreed to terminate the scheme of arrangement dated November 8, and it would pay MMS $8 million in costs in connection to the scheme. “This payment to MMS is equivalent to 1.8 cents per ECX share (post tax) and will be funded from operating cashflow,” it said. “Barring any unforeseen circumstances, ECX expects to be compliant with its corporate debt covenants at the next relevant testing date being 30 September 2019.” The company will release its half year results on May 24.
Pioneer Credit Ltd (PNC):
The corporate regulator has been in discussions with a whistleblower over accounting standards at Perth-based buyer of bad debt portfolios Pioneer Credit since November 2017 but did not contact the company to express its concerns until a year later, The Australian Financial Review can reveal. A spokesman for the Australian Securities and Investments Commission said it approached the company in October 2018 after it made statements in its 2017-18 annual report that it had no plans to change a controversial valuation method which subsequently has attracted the attention of its auditor and the ASX. “ASIC raised questions with Pioneer Credit as part of our routine surveillance of financial reports ... We are awaiting further information from the company at this time,” the ASIC spokesman said. Documents obtained by The Australian Financial Review, however, reveal ASIC was aware of concerns about the company and its methods dating back almost a year earlier with the regulator asking a whistleblower for more information in November 2017.
Telstra Corporation Ltd (TLS):
Telstra boss Andy Penn is convinced 5G technology will run almost every service within the next five years, despite concerns that the transformative benefits of the next generation of mobile services are overhyped. “During the 2020s we will start living in a world where virtually everything that can be connected will be connected via 5G,” he will say in a speech to be delivered today at the QODE technology summit in Queensland. Mr Penn said 5G mobile networks would tie together a number of emerging technologies — Internet of Things, cloud computing, machine learning and artificial intelligence — providing the backbone for consumers and businesses to deploy new solutions.
(Source: AIMS)
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