Friday, June 14, 2019
Afterpay Touch Group Ltd (APT):
The federal financial intelligence agency has ordered an external auditor to probe Afterpay’s compliance with money laundering and terrorism financing laws. AUSTRAC said on Thursday that the scope of the audit will include the buy-now, pay-later company’s identification and verification of customers as well as its suspicious matter reporting obligations. “The audit will help identify if Afterpay has developed and implemented the systems and controls it needs to ensure it complies with its obligations ... in place to protect businesses, the financial system and the Australian community from criminal threats,” AUSTRAC chief executive officer Nicole Rose said.
AGL Energy Limited (AGL):
AGL Energy has hiked gas prices in NSW, Queensland, South Australia and Western Australia while reducing electricity tariffs for the minority of its customers still on standing offers in line with the government’s default market offer policy. Gas prices will jump from July 1 by 4.5 per cent in South Australia, 3.5 per cent in NSW and south-east Queensland and 1.3 per cent in Western Australia, reflecting a hike in costs and tighter market conditions. “We are committed to keeping gas prices competitive and any decision to change prices is based on a detailed consideration of a range of factors including costs, market conditions and the value we offer customers,” AGL interim chief customer officer Mark Enzinger said.
APA Group (APA):
Incoming APA chief Rob Wheals will take the reigns of the company early, as retiring chief Mick McCormack takes personal leave to recover from heart surgery. Mr Wheals is set to take over as chief on July 6, but will step up in an acting chief capacity while the current chief takes leave for the next 2 to 3 weeks. The company said Mr McCormack had arterial bypass surgery this week and was recovering well in hospital, with good spirits.
Carsales.Com Ltd (CAR):
Classifieds group Carsales is testing the market to sell off its stake in vehicle financial broking business Stratton, with timing to be determined by a strategic review. Carsales has a 50.1 per cent interest in the financial group, and said today that it’s shareholders would be better served by investments in its core Australian and international businesses. “Stratton has been an advertising partner of Carsales over many years prior to our investment in the business, and we expect this strong commercial relationship to continue into the future. The decision to divest Stratton when market conditions permit will allow Carsales to focus on other core business growth opportunities,” Managing director Cameron McIntyre said. The move means Stratton will be classified as a dicountinued operation on the CAR FY19 balance sheets, where the group estimates adjusted net profit after tax to be between $130m to $132m excluding the group, a 1pc to 3pc gain on last year. R
Challenger Ltd (CGF):
Annuities provider Challenger has forecast full year profits at the bottom end of its guidance range, blaming challenging conditions amid tighter asset risk premiums and a low interest rate environment. The company previously gave guidance for normalised net profit before tax between $545 million to $565 million, and today said it was expected to achieve the former, noting also that analyst consensus is for profits of $544m. Looking to the year ahead, the company forecast a range between $500m to $550m thanks to an assumption of lower equities nomalised growth and lower interest rates on shareholder capital. That said, Challenger maintains a normalised dividend payout ratio of between 45 per cent adn 50 per cent.
Commonwealth Bank of Australia (CBA) & Countplus Ltd (CUP):
Commonwealth Bank is offloading its financial planning group Count Financial to ASXlisted group CountPlus for $2.5 million, and selling down its stake in the buyer as it moves away from advice services after the royal commission. In a notice to the market this morning, CBA said CountPlus was the logical owner of the business given its historical corporate relationship and equity holdings in 15 Count Financial member firms. The bank said it would continue to manage remediation issues from the business, and provided an indemnity of $200 million to CountPlus - $56 million more than that already disclosed for the business. Adding to that, CBA will sell down its 35.9 per cent holding in CountPlus. “From a financial perspective, the Transaction will result in CBA exiting a business that, in FY19, is estimated to incur a post-tax loss of approximately $13 million,” it said.
Stockland Corporation Ltd (SGP):
Stockland said its residential business was on track to deliver an annual profit in line with expectations despite delays to some settlements, although management was cautious about the outlook for the next fiscal year. Stockland said it now expected around 5,900 settlements in the year through June, having previously targeted more than 6,000 lots. Management said settlement timeframes at a key new project-- Mt. Atkinson in Melbourne--had been affected by production delays there. Sentiment in the sector had also been hurt by a sustained fall in house prices in major cities including Sydney and Melbourne. In a presentation filed to the ASX at the start of its annual investor day, Stockland said its fiscal 2019 profit would be supported by a “favorable skew in settlements toward higher margin projects.” However, Stockland said lower residential sales in the second half of this fiscal year would likely hurt settlement volumes in fiscal 2020. R
Wesfarmers Ltd (WES):
Wesfarmers portfolio of businesses will be tarnished again by the underperformance of its discount department stores after Kmart, for the second time since January, issued a profit warning and stablemate Target warned of bruises of a damaging price war in the sector. Preparing to hold its investor day this morning Wesfarmers issued a trading update which revealed that conditions had worsened since the new year and would crunch pretax profits for the two stores. The recent poor performance is especially a stark switch for Kmart, which for the last four years had been one of the strongest profit drivers for Wesfarmers under its former boss Guy Russo but which is now proving a drag on group profitability. In a trading update this morning total sales growth for Kmart has almost halved from January to June while like for like sales growth has retreated from barely positive to a decline.