Afterpay Touch Group Ltd (APT):
Afterpay, the buy-now, pay-later juggernaut, refuses to disclose the share structure of its US subsidiary, as Australian investors assign more value to its push into the lucrative American payments market. This week the $6 billion fintech darling issued a two-page release on its US "equity incentive plan", which it described as an "essential part of the company's strategy to attract world-class talent to its US operation in a competitive labour market". But the company will not disclose the total number of shares on issue in Afterpay Inc, and the number owned by Afterpay's Australian shareholders. "It is standard practice that subsidiaries are not required to disclose this information," an Afterpay spokeswoman said.
Aumake International Ltd (AU8):
Daigou-focused retailer AuMake is expanding its focus to the lucrative Chinese tourist market with the $14.2 million acquisition of Broadway, which operates eight stores across Australia and New Zealand aimed at Chinese tourists. If all goes to plan, the China-facing company says it will see a 14-fold increase in exposure to 70,000 Chinese visitors, while FY19 revenue could more than double to $100 million in FY2020. AuMake announced the Broadway deal on Wednesday after emerging from Monday’s trading halt.
Australian Pharmaceutical Industries Ltd (API):
Australian Pharmaceutical Industries has posted an in line half year result and says it continues to review its Sigma shareholding after its takeover offer was rejected last month. The company posted net profit of $25 million, up 0.2 per cent on the prior corresponding period, buoyed by its own Consumer Brands division. Priceline Pharmacies posted a slight rise in total network sales, with Christmas sales helping it to positive like-for-like sales. “We remain focussed on delivering our core strategy,” chief Richard Vincent said of the failed Sigma takeover. “The combination of our highly cash generative Pharmacy Distribution business with an attractive portfolio of growth businesses means we are well positioned to continue to deliver better returns for shareholders. “Retail trading has remained variable however the fundamentals of our business remain in good condition and we expect to deliver positive growth again in the second half.”
BHP Group Ltd (BHP):
BHP has cut iron ore production guidance and faces higher costs over the full year as it deals with the fallout from wild weather that hit its export operations in Western Australia. The mining giant downgraded iron ore production from 273-283 million tonnes to 265-270 million tonnes for 2018-19 in a move that compounds global shortages following Vale's mine closures in Brazil. The BHP downgrade on Wednesday came a day after Rio Tinto cut its iron ore production guidance to 333-343 million tonnes, down from earlier guidance of between 338 million and 350 million tonnes. Both companies were hit hard by Cyclone Veronica, which battered the Pilbara coast in March, causing infrastructure damage, port shutdowns and local flooding.
Challenger Ltd (CGF):
Annuitities provider Challenger has slipped by 5.6 per cent in midday trading after revealing a hit to its local business from the royal commission and weakness in its Japanese arm. The company said its local sales continued to be impacted by disruption from the royal commission, increasing adviser churn and reducing new client acquisitions. Annuity sales by major advice hubs were $352 million in the third quarter, down 24 per cent on the same period last year but offset by growth in IFA sales. Overall, Australian annuity sales were down by 7 per cent or $45m to $607m, and Japanese sales slashed by 49 per cent. Adding to that, the company reported a net outflow of $170m from its life arm.
Commonwealth Bank of Australia (CBA):
The Commonwealth Bank will reimburse millions of dollars to about 8000 staff after underpaying wages and other entitlements due to errors in its systems. The bank on Tuesday confirmed it had started reimbursing staff for the botched payments, which also included superannuation. The Finance Sector Union (FSU) estimated the bank could end up paying as much as $15 million to current and former staff. CBA apologised for the errors, pledged to pay all amounts owing plus interest, and said that its first tranche of payments to workers would be worth $4.8 million. The bank did not confirm or deny the union's cost estimate, and was unable to say how many tranches of payments there would be. The payments cover a range of problems going back as far as 10 years within parts of the CBA and its fully owned BankWest.
CSR Limited (CSR) & Senex Energy Ltd (SXY):
CSR has inked a deal to buy gas from a Senex Energy project in Queensland that is quarantined for domestic supply, bolstering gas producers' arguments that the east coast market is working and doesn't need further government intervention. The news of the agreement for CSR to source up to 3.25 petajoules of gas from Senex's Project Atlas came as a group of major energy users called for the next federal government to put a priority on sorting the east coast gas crisis, including considering setting up a government gas company to drive reforms and intervene in the wholesale market. But Senex chief executive Ian Davies said the deal with CSR, which will use the gas from Atlas at three bricks and plasterboard plants in Queensland, while small, was proof the market is working. "The work the Queensland government has already done you're now seeing that in action," he said.
DuluxGroup Limited (DLX):
The DuluxGroup board has unanimously recommended a proposal from Japanese-based Nippon Paint to acquire the company, saying going forward as a standalone company was not in the best interest of shareholders. Nippon's offer values the company at $9.80 per share, at a 28 per cent premium to its close price on Tuesday. "The Board has carefully considered the strategic options available to DuluxGroup to maximise value, including continuing to pursue domestic and global growth as a standalone company, and we have unanimously concluded that the transaction with Nippon is in the best interests of our shareholders," said DuluxGroup chairman Graeme Liebelt. "It provides an opportunity for shareholders to realise a significant premium to market value for their shares and is on terms that reflect the strategic value of DuluxGroup to Nippon. Nippon has been extremely complimentary of DuluxGroup's team, capability, high quality businesses and track record of performance, all of which they want to maintain. I have confidence that this new partnership will provide strong benefits for both companies."
Nearmap Ltd (NEA):
Aerial imaging tech Nearmap has had its price target boosted by 40 per cent by analysts at Morgan Stanley as it sets out its plans for the next stage of growth. The company, set to replace MYOB in the ASX200 after its takeover by KKR, is putting to work $70 million in expansion capital and analyst James Bales expects that to lift its actual cash value by 4 to 8 per cent in FY20 to FY21. “Our logic is that we expect the ramp up in sales investment (c.30pc) will be accompanied by a greater investment (110-120pc) in capture and R&D, driving greater scope for upsell and the capacity to sustain marketing efficiency for longer,” he says. The stocks target price is raised by 40 per cent to $4.20 wtith an overweight rating, and Mr Bales compares it to Corporate Travel, Flight Centre or Domino’s. “In our experience backing management into international expansion following a period of execution has been a very successful strategy.”
Orocobre Limited (ORE):
Lithium miner Orocobre has recorded its best first quarter to date at its Olaroz lithium facility and dismissed a recent derating in the commodity as just a short term correction. March production jumped by 10 per cent on the previous year to 3075 tonnes at the Argentinian facility, helping quarterly sales revenue edge 4 per cent higher to $US33.4 million ($46.55m). It said it maintained its strong long-term demand forecasts for lithium, with a compound annual growth rate between 18 per cent and 20pc between 2019 and 2025.
ReadyTech Holdings Limited (RDY):
Education and HR software company ReadyTech has dusted off the naysayers, jumping almost 18 per cent in early trade after its ASX debut on Wednesday. The strong start supports chief executive Marc Washbourne's beliefs that its crunched market capitalisation of $121 million undervalued the business, after it had struggled to find support from institutional investors. The company's flagship product is a cloudbased student management system, which has a strong presence in TAFEs and mid-tier universities, but it started out providing technology to employment firms that helped disadvantaged people find work. It has also expanded into payroll technology and other HR software, with the company saying there were commonalities between student and employee lifecycles that could be managed in a similar fashion.
Santos Ltd (STO):
Santos has reported record quarterly production thanks to the contribution from its Quadrant acquisition. The gas major posted production of 18.4 mmboe for the first quarter, a 33 per cent boost on the previous corresponding period. It said its operations had been impacted by cyclone activity in Western Australia and by facility outages in the Cooper basin but that sales volumes of 22mmboe were 21pc higher than the corresponding quarter. “The integration of the Quadrant business is proceeding well and we are on track to deliver the integration synergies promised,” chief executive Kevin Gallagher said. “In the second quarter, we look forward to continued drilling success, including commencing appraisal of the exciting Dorado oil discovery offshore Western Australia.” Santos reaffirmed production guidance between 71 and 78 mmboe and sales volumes between 88 and 98 mmboe.
Westpac Banking Corp (WBC):
Westpac has committed to source 100 per cent of its energy needs through renewables by 2025. As one of the first Australian companies to commit to transitioning to renewable energy, Westpac will become a member of RE100, a global initiative led by The Climate Group in partnership with CDP. The first phase of the transition to renewables will be through a 10-year power purchase agreement with Bomen Solar Farm, to be constructed in Wagga Wagga by Spark Infrastructure, which is expected to be operational in 2020. “We see our move towards the use of renewable energy in our operations as being key to delivering on our existing climate change and sustainability commitments,” said Westpac chief operating officer Gary Thursby. “When it comes to renewable energy, the advancement of technology and reduction in cost has presented a great opportunity to make this transition in a cost effective way.” Westpac will purchase just over a quarter of the solar farm’s output, which will deliver a 45 per cent transition to renewables by 2021 for Westpac globally.
(Source: AIMS)
Afterpay, the buy-now, pay-later juggernaut, refuses to disclose the share structure of its US subsidiary, as Australian investors assign more value to its push into the lucrative American payments market. This week the $6 billion fintech darling issued a two-page release on its US "equity incentive plan", which it described as an "essential part of the company's strategy to attract world-class talent to its US operation in a competitive labour market". But the company will not disclose the total number of shares on issue in Afterpay Inc, and the number owned by Afterpay's Australian shareholders. "It is standard practice that subsidiaries are not required to disclose this information," an Afterpay spokeswoman said.
Aumake International Ltd (AU8):
Daigou-focused retailer AuMake is expanding its focus to the lucrative Chinese tourist market with the $14.2 million acquisition of Broadway, which operates eight stores across Australia and New Zealand aimed at Chinese tourists. If all goes to plan, the China-facing company says it will see a 14-fold increase in exposure to 70,000 Chinese visitors, while FY19 revenue could more than double to $100 million in FY2020. AuMake announced the Broadway deal on Wednesday after emerging from Monday’s trading halt.
Australian Pharmaceutical Industries Ltd (API):
Australian Pharmaceutical Industries has posted an in line half year result and says it continues to review its Sigma shareholding after its takeover offer was rejected last month. The company posted net profit of $25 million, up 0.2 per cent on the prior corresponding period, buoyed by its own Consumer Brands division. Priceline Pharmacies posted a slight rise in total network sales, with Christmas sales helping it to positive like-for-like sales. “We remain focussed on delivering our core strategy,” chief Richard Vincent said of the failed Sigma takeover. “The combination of our highly cash generative Pharmacy Distribution business with an attractive portfolio of growth businesses means we are well positioned to continue to deliver better returns for shareholders. “Retail trading has remained variable however the fundamentals of our business remain in good condition and we expect to deliver positive growth again in the second half.”
BHP Group Ltd (BHP):
BHP has cut iron ore production guidance and faces higher costs over the full year as it deals with the fallout from wild weather that hit its export operations in Western Australia. The mining giant downgraded iron ore production from 273-283 million tonnes to 265-270 million tonnes for 2018-19 in a move that compounds global shortages following Vale's mine closures in Brazil. The BHP downgrade on Wednesday came a day after Rio Tinto cut its iron ore production guidance to 333-343 million tonnes, down from earlier guidance of between 338 million and 350 million tonnes. Both companies were hit hard by Cyclone Veronica, which battered the Pilbara coast in March, causing infrastructure damage, port shutdowns and local flooding.
Challenger Ltd (CGF):
Annuitities provider Challenger has slipped by 5.6 per cent in midday trading after revealing a hit to its local business from the royal commission and weakness in its Japanese arm. The company said its local sales continued to be impacted by disruption from the royal commission, increasing adviser churn and reducing new client acquisitions. Annuity sales by major advice hubs were $352 million in the third quarter, down 24 per cent on the same period last year but offset by growth in IFA sales. Overall, Australian annuity sales were down by 7 per cent or $45m to $607m, and Japanese sales slashed by 49 per cent. Adding to that, the company reported a net outflow of $170m from its life arm.
Commonwealth Bank of Australia (CBA):
The Commonwealth Bank will reimburse millions of dollars to about 8000 staff after underpaying wages and other entitlements due to errors in its systems. The bank on Tuesday confirmed it had started reimbursing staff for the botched payments, which also included superannuation. The Finance Sector Union (FSU) estimated the bank could end up paying as much as $15 million to current and former staff. CBA apologised for the errors, pledged to pay all amounts owing plus interest, and said that its first tranche of payments to workers would be worth $4.8 million. The bank did not confirm or deny the union's cost estimate, and was unable to say how many tranches of payments there would be. The payments cover a range of problems going back as far as 10 years within parts of the CBA and its fully owned BankWest.
CSR Limited (CSR) & Senex Energy Ltd (SXY):
CSR has inked a deal to buy gas from a Senex Energy project in Queensland that is quarantined for domestic supply, bolstering gas producers' arguments that the east coast market is working and doesn't need further government intervention. The news of the agreement for CSR to source up to 3.25 petajoules of gas from Senex's Project Atlas came as a group of major energy users called for the next federal government to put a priority on sorting the east coast gas crisis, including considering setting up a government gas company to drive reforms and intervene in the wholesale market. But Senex chief executive Ian Davies said the deal with CSR, which will use the gas from Atlas at three bricks and plasterboard plants in Queensland, while small, was proof the market is working. "The work the Queensland government has already done you're now seeing that in action," he said.
DuluxGroup Limited (DLX):
The DuluxGroup board has unanimously recommended a proposal from Japanese-based Nippon Paint to acquire the company, saying going forward as a standalone company was not in the best interest of shareholders. Nippon's offer values the company at $9.80 per share, at a 28 per cent premium to its close price on Tuesday. "The Board has carefully considered the strategic options available to DuluxGroup to maximise value, including continuing to pursue domestic and global growth as a standalone company, and we have unanimously concluded that the transaction with Nippon is in the best interests of our shareholders," said DuluxGroup chairman Graeme Liebelt. "It provides an opportunity for shareholders to realise a significant premium to market value for their shares and is on terms that reflect the strategic value of DuluxGroup to Nippon. Nippon has been extremely complimentary of DuluxGroup's team, capability, high quality businesses and track record of performance, all of which they want to maintain. I have confidence that this new partnership will provide strong benefits for both companies."
Nearmap Ltd (NEA):
Aerial imaging tech Nearmap has had its price target boosted by 40 per cent by analysts at Morgan Stanley as it sets out its plans for the next stage of growth. The company, set to replace MYOB in the ASX200 after its takeover by KKR, is putting to work $70 million in expansion capital and analyst James Bales expects that to lift its actual cash value by 4 to 8 per cent in FY20 to FY21. “Our logic is that we expect the ramp up in sales investment (c.30pc) will be accompanied by a greater investment (110-120pc) in capture and R&D, driving greater scope for upsell and the capacity to sustain marketing efficiency for longer,” he says. The stocks target price is raised by 40 per cent to $4.20 wtith an overweight rating, and Mr Bales compares it to Corporate Travel, Flight Centre or Domino’s. “In our experience backing management into international expansion following a period of execution has been a very successful strategy.”
Orocobre Limited (ORE):
Lithium miner Orocobre has recorded its best first quarter to date at its Olaroz lithium facility and dismissed a recent derating in the commodity as just a short term correction. March production jumped by 10 per cent on the previous year to 3075 tonnes at the Argentinian facility, helping quarterly sales revenue edge 4 per cent higher to $US33.4 million ($46.55m). It said it maintained its strong long-term demand forecasts for lithium, with a compound annual growth rate between 18 per cent and 20pc between 2019 and 2025.
ReadyTech Holdings Limited (RDY):
Education and HR software company ReadyTech has dusted off the naysayers, jumping almost 18 per cent in early trade after its ASX debut on Wednesday. The strong start supports chief executive Marc Washbourne's beliefs that its crunched market capitalisation of $121 million undervalued the business, after it had struggled to find support from institutional investors. The company's flagship product is a cloudbased student management system, which has a strong presence in TAFEs and mid-tier universities, but it started out providing technology to employment firms that helped disadvantaged people find work. It has also expanded into payroll technology and other HR software, with the company saying there were commonalities between student and employee lifecycles that could be managed in a similar fashion.
Santos Ltd (STO):
Santos has reported record quarterly production thanks to the contribution from its Quadrant acquisition. The gas major posted production of 18.4 mmboe for the first quarter, a 33 per cent boost on the previous corresponding period. It said its operations had been impacted by cyclone activity in Western Australia and by facility outages in the Cooper basin but that sales volumes of 22mmboe were 21pc higher than the corresponding quarter. “The integration of the Quadrant business is proceeding well and we are on track to deliver the integration synergies promised,” chief executive Kevin Gallagher said. “In the second quarter, we look forward to continued drilling success, including commencing appraisal of the exciting Dorado oil discovery offshore Western Australia.” Santos reaffirmed production guidance between 71 and 78 mmboe and sales volumes between 88 and 98 mmboe.
Westpac Banking Corp (WBC):
Westpac has committed to source 100 per cent of its energy needs through renewables by 2025. As one of the first Australian companies to commit to transitioning to renewable energy, Westpac will become a member of RE100, a global initiative led by The Climate Group in partnership with CDP. The first phase of the transition to renewables will be through a 10-year power purchase agreement with Bomen Solar Farm, to be constructed in Wagga Wagga by Spark Infrastructure, which is expected to be operational in 2020. “We see our move towards the use of renewable energy in our operations as being key to delivering on our existing climate change and sustainability commitments,” said Westpac chief operating officer Gary Thursby. “When it comes to renewable energy, the advancement of technology and reduction in cost has presented a great opportunity to make this transition in a cost effective way.” Westpac will purchase just over a quarter of the solar farm’s output, which will deliver a 45 per cent transition to renewables by 2021 for Westpac globally.
(Source: AIMS)
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