Gas operator APA Group has announced that Rob Wheals will take the reins from outgoing chief executive Mick McCormack when retires in July. Mr. Wheals, currently the group’s transmission executive, joined APA in 2008 following a stint at AAPT where he was general manager of strategy.“Rob is a strategic thinker with ‘hands on’ operating experience and a strong track record in delivering results,” chairman Michael Fraser said “Rob is passionate about delivering for the customer and understands the importance of culture in driving business performance. ” The appointment of an internal candidate is testament to the quality of APA’s senior leadership team.”
Ausnet Services Ltd (AST):
Energy company AusNet says its net profit after tax for the year ended March 31 has fallen 12.9 per cent, to $253.9 million, but the cash flow was still enough to increase its dividend. Revenue fell 2.5 per cent to $1.86 billion because of a reduction in regulated revenues, including a 9.4 per cent decrease in gas tariffs. AusNet declared a final dividend of 4.86 cents per share, 45 per cent franked, up five per cent from last year.
Commonwealth Bank of Australia (CBA):
Commonwealth Bank has added further customer remediation provisions of $714 million as it reported a slip in cash profit for the third quarter. In an update to the market this morning, the bank said higher remediation had hit its bottom line, pushing cash net profit after tax down 28 per cent versus the first half average to $1.7 billion. The latest provision of $714m includes $334m relating to Aligned Advice remediation, taking the total paid back to customers to $534m, including $374m in refunds and $160m in program costs. The bank said the credit quality of its lending portfolios remained sound but highlighted some “pockets of stress” such as consumer arrears, influenced by subdued levels of income and cost of living pressures, especially in outer metro areas in Perth, Melbourne and Sydney. It also highlighted emerging signs of weakness in discretionary retail and drought -affected businesses, taking its troublesome and impaired assets to $7.2 billion from $6.7bn in the previous quarter.
Eclipx Group Ltd (ECX):
Car fleet manager Eclipx has flagged impairment charges of as much as $130 million, as it sent its chief executive packing. In a note to the market this morning, the troubled car business said chief Doc Klotz had agreed to step down from his role, to be replaced by Julian Russell, and revealed impairment charges of between $110m to $130m for its Grays and Right2Drive businesses. The board said the businesses had not been effectively integrated and had resulted in lower than expected earnings in six months to March and reiterated that it had received interest from a number of parties for the offload of those businesses. Eclipx also announced its intent to sell its Australian Commercial Equipment financing business. Current managing director of Fleet Australia, Bevan Guest, has been appointed alongside Mr. Russell in the new role of Chief Commercial Officer.
Genworth Mortgage Insurance Australia Ltd (GMA):
Scott Morrison’s $500 million housing affordability plan is set to pressure mortgage insurance provider Genworth in early trade. The new plan pledges to underwrite home loan deposits for first-home buyers struggling to hit a 20 per cent target imposed by the banks, a service that Genworth already provides and what is a large slice of their business. Under the plan, the government would pay for the shortfall on home loans for first-home buyers and remove the costs of paying lenders mortgage insurance.
IOOF Holdings Ltd (IFL):
IOOF has told the market its making progress on its deal to buy ANZ’s Pension and Investments business, but it still needs key approvals from ANZ, One Path and potentially even market regulator APRA. It said the successor funds transfer to separate ANZ’s P&I products from OnePath had been completed but the deal was conditional on notices from OnePath Custodians and ANZ that each have no objections to the deal progressing. As of July, the fund will also have to garner approval from APRA, and it said dependent on timing that could also be a hurdle for the deal. In a separate notice from ANZ the bank said it was still weighing up the deal. “The update announced today does not change ANZ’s position of continuing to monitor IOOF’s response to matters raised by the Australian Prudential Regulation Authority before making a decision about the transfer of the P&I business,” it said.
Lendlease Group (LLC):
The $7.21 billion real estate and construction group Lendlease is understood to be a takeover target, with a major Japanese company believed to be plotting an acquisition of the company. While it is unclear exactly what party is circling, the thinking is that it may be Mitsui. Apparently, the plan by the Japanese is to buy the company before embarking on a break-up, where various parts are offloaded to different suitors. It remains unclear whether approaches have yet been made to Lendlease. And in the later announcement, the company denied reports a Japanese suitor was considering a takeover.
Prospa Group Ltd (PGL):
Fund managers are expected to throw their support behind Prospa Group when it lists as a public company in June worth $610 million. Market sources say that they believe the deal has been well structured, with the entire IPO covered by the investors that lent the company the funds when it made attempts to list last year. Another drawcard is that Prospa has not been too overly aggressive on price. This time around, shares will be sold at $3.78 each as the company looks to raise $110m, whereas last year, the group was selling shares at $3.46 each as it tried to raise $146.5m. The management roadshow ends tomorrow ahead of its bookbuild on Wednesday and listing on June 11.
Reliance Worldwide Corporation Ltd (RWC):
Plumbing supplies company Reliance Worldwide has slashed its full-year earnings guidance, blaming changed trading conditions for the downgrade. The company said it now expects earnings before interest, tax, depreciation and amortisation for the full year to be within the range of $260 million and $270m, down its earlier guidance of between $280m and $290m. That revised earnings guidance was based on the assumption that a common freeze event would occur in the US, causing cracked or broken pipes over a sustained period, from which Reliance would usually benefit from. The lack of a modest freeze event was estimated to have reduced net sales by between $12m and $15m for fiscal year 2019, Reliance told the ASX this morning. Lower-than-expected sales in the US business, as a result of a number of partners pursuing strategies in the second half of the financial year to actively reduce inventory on hand, had also impacted.
Zoono Group Ltd (ZNO):
Hand and surface sanitiser developer Zoono has doubled its market value in Monday’s trade after inking a deal with MicroSonic to supply products to icon US auto care brand Turtle Wax for use in the car and cruise industry. The 10-year deal follows twelve months of testing between Zoono and MicroSonic and commits the buyer to $US2 million in purchase agreements for 2020, to as much as $US12m in 2023 and 10 per cent increases per year after that. Zoono said it hoped to target the cruise industry, helping to prevent well publicised issues regarding on-board bacterial and viral outbreaks.