Ausdrill this morning confirmed an item in the Financial Review's Street Talk that it is considering raising $500 million by issuing US-dollar denominated notes. "Ausdrill wishes to confirm that it is considering a potential issue of Notes, although no decision has yet been made and any decision is subject to Board approval, taking into account market and other conditions," it tells the market. However, it says the offer will be made through a "private offering circular". As Street Talk reports today, "Ausdrill has hired a bunch of advisers to prepare the company for a potential United States dollar bond issue that would be worth about $500 million". "Sources said the preparations were reasonably advanced, however had been complicated by some fraudulent payments uncovered at Ausdrill in recent weeks."
Australia and New Zealand Banking Group (ANZ)& Westpac Banking Corp (WBC)& National Australia Bank Ltd (NAB):
Banking reporter Clancy Yeates writes that we should expect ANZ Bank, Westpac, and National Australia bank to face a few questions about the falling cost of funding when they deliver their half-year results over the next week. A note from Citi analysts Brendan Sproules and Thomas Strong highlights that a key measure of banks' funding costs has returned to its long-run average, and they expect it to stay around these levels. This chart shows the extent of the fall in the spread between the bank bill swap rate (an interbank funding market) and the overnight index swap. The slump has occurred after the US Federal Reserve's "pivot" away from raising interest rates, and the very weak inflation reading in Australia last week. All else being equal, the move in bank funding costs could boost bank profits by 3 to 4 per cent if costs stay at these levels. Given banks raised mortgage rates last year based on higher funding costs, it will also probably raise questions about whether banks will now reverse some of these hikes.
Coles Group Ltd (COL):
Coles' supermarket sales grew 2.4 per cent on a comparable basis in the three months to the end of March, driven up by higher fresh food prices and another successful toy giveaway. The result, which was in line with analysts' expectations, came as prices ticked up 0.9 per cent - a swing from 0.8 per cent deflation in the same quarter a year ago. Coles' chief executive Steven Cain said inflation was driven by fresh food, with the price of popular items like apples, bananas and capsicums all rising due to weather impacts. Fruit and vegetable consumption was meanwhile driven by Coles' "Fresh Stickeez" plastic toy giveaway, which came on the back of its popular Little Shop toy campaign in the first quarter. Excluding fresh food and tobacco, prices fell 0.9 per cent in the quarter, Coles said.
Freelancer Ltd (FLN):
Shares in Freelancer are up 14.3 per cent today to a six-week high of 80 cents after provided a first quarter market update this morning. Gross payment volumes are up 26 per cent to $204.3 million, an all-time high. It has a positive operating cash flow of $2 million for the three months ending in March. Freelancer now has cash or equivalents of $35.1 million. It has been focusing on technology upgrades including "a new frontend technical stack" that will soon be "deployed across the main funnels". It has signed on Arrow Electronics and an enterprise customer that allows major companies, such as Airbus, to find graphic designers, electronic and electrical engineers through Freelancer.
GPT Group (GPT):
Shares in GPT Group are down 1.7 per cent this morning to $5.89 as the real estate sector under performs the rest of the market. This morning The Age reported GPT has joined the exclusive club of Melbourne landlords earning millions of dollars in income from heritage building sites that have a nominal value of $1. ASX-listed GPT has successfully disputed the City of Melbourne's most recent valuation for the site of its 34- storey building at 100 Queen Street. The site is home to the ANZ World Headquarters as well as a clutch of Collins Street's most important historic buildings. As a result, the landmark National Trust-listed property, which earns GPT an estimated annual income around $14 million, is worth a mere $2 - $1 for each of the two property titles that cover the block. Read the full story by Simon Johanson here. And this morning GPT released a March quarter update confirming it is on track to meet 2019 guidance of 4 per cent growth for both Funds From Operations per security and Distributions per security. The update shows the slump in consumer demand is not hurting their retail portfolio, which continues to maintain high occupancy.
Orica Ltd (ORI):
Commercial explosives company Orica has written down its Burrup ammonium nitrate plant by $191 million as part of continuing rectification works. The company said capital works over the past six months had identified a number of defective assets which would need to be replaced or repaired. As a result, it said utilisation of the plant would be lower than the previously anticipated 20 per cent, but that the overall group outlook for the year remains unchanged from its November estimates. Adding to that, Orica said $36 million of IT and other assets would also be impaired in the first half. Orica reports its first half results on May 9.
Pioneer Credit Ltd (PNC):
Pioneer Credit has confirmed bidders are lining up for the Perth-based debt collector, with one suitor proposing an offer “at a material” premium to its hammered share price. The company on Monday revealed the offers after details of corporate interest were first revealed by The Australian Financial Review's Street Talk column on Sunday. It marks the latest corporate activity in the sector. Brisbane-based Collection House last month laid out $40 million in acquiring $400 million in debt ledgers of Sydney-based ACM Group, founded by racehorse owner Humberto “Bert” Vieira. “The company has received several confidential, non-binding, indicative proposals,” Pioneer Credit told the sharemarket on Monday.
SEEK Limited (SEK):
Employment classifieds platform SEEK is making a push into the online education market with two education business investments worth $142 million announced today. The company acquired a 50 per cent stake in FutureLearn for $92m and a minority interest in Coursera for $50m. “Both businesses are leveraged to structural trends such as migration of education online and in helping millions of people to adapt to evolving labour markets. The long-term opportunity is to significantly increase accessibility of ‘career ready’ education to the rapidly growing pool of learners,” chief Andrew Bassat told the market. SEEK said the transactions will be funded by a mixture of cash and existing debt facilities and that it expects to recognise $2 million in losses for the full year as a result.
Viva Energy Reit Ltd (VVR):
Oil refiner Viva Energy has issued another profit warning after a jump in the price of oil squeezed its petrol and diesel margins. Viva’s retail earnings will be hit in a range of $30 million to $35 million due to challenging trading conditions for the period from January 1 to April 30. The price of oil has spiked by 32 per cent from $US47 a barrel since the turn of the year to $US63 a barrel currently as geopolitical risks buoy the market along with OPEC production cuts. “Variability in retail margins is a typical feature of the retail fuel market, influenced by the competitive pricing cycle in major markets along with short term compression and expansion of margins as oil prices and foreign exchange rates rise and fall,” Viva said in a statement, noting its actual earnings will hinge on market conditions in May and June.
Worleyparsons Limited (WOR):
WorleyParsons is set to ditch the Parsons and be known as Worley, after completing its $4.6bn merger with Jacobs ECR. In a note to the market this morning, Worley said the deal was completed last Friday in New York and the new entity would be the pre-eminent global provider of asset and project services in the energy, chemical and resource sectors. “The transition process for combining the businesses into a cohesive, merged new company is underway following a period of extensive planning,” it said. “Cost synergies of approximately $130m at a cost of $160m are anticipated to be delivered within two years. Further benefits will be achieved from optimization and revenue synergies.” The new brand will be known as Worley, subject to the approval of members at the AGM in October.
（Source: AIMS）
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