Latest with 2 Technology Stocks – NXT and BVS

NEXTDC Limited (ASX: NXT)

New Australian Data Centre Sites:The Company announced its intention to purchase three new commercial property sites for future data centre developments: Sydney (“S3”), Melbourne (“M3”), and Perth (“P2”).  It will fund the New Sites, together with the initial development of P2, via an equity raising, consisting of fully underwritten $281 million institutional placement of new shares and a non-underwritten Share Purchase Plan. Institutional Placement includes a cornerstone investment of $150 million from UniSuper and $131 million of general placement. The General Placement underwritten floor price is $6.43 per share which represents a 3.0 per cent discount on 5-day VWAP (volume weighted average price) and 5.6 per cent discount on the last closing price. The Cornerstone Placement is priced at a 2.5 per cent premium on the Placement Price. This plan will allow eligible Australian and New Zealand shareholders to participate. All NEXTDC Directors have indicated an intention to take up their full $15,000 entitlement under the SPP. NEXTDC has highlighted that it continues to experience strong demand for its premium data centre services which has increased the Company’s confidence in the size and in nature of the long-term demand for its data centre services. Earlier during the day, the securities of NXT went into a trading halt session state and have been indicated to resume trading around 19 April 2018 or with release of company announcement. NXT also aims to achieve its FY 2018 guidance of underlying EBITDA in the range of $58 million to $62 million with capital expenditure of $220 million to $240 million. The share price was otherwise up by 3.8 per cent in the past one week as on 16 April 2018, post a fall of over 2% in last one month. While the securities entered a trading halt, we think that the stock has enjoyed a great run-up already and traded at a higher level and the latest capital raise move has been undertaken looking at the cost issues.
 

NXT’s Investment Model (Source: Company Reports)
 

Bravura Solutions Limited (ASX: BVS)

Expansion of the Sonata Platform:Bravura announced that it has signed a long-term contract with Commonwealth Superannuation Corporation (CSC) for the implementation of the Sonata platform as a managed cloud service. CSC provides superannuation and pension services to more than 700,000 current and former Australian Defence Force (ADF) across 11 superannuation schemes. CSC intends to use Sonata to more efficiently administer claims for death and disability benefit schemes and to better service the ADF personnel entitled to benefits under ADF Cover legislation. Sonata is a next-generation wealth management solution, capable of supporting investment and pensions across multiple distribution channels. On the other hand, Copia Investment Partners Ltd ceased to be the substantial holder of the Group since 6 April 2018. Otherwise, the 2018 guidance was revised on a positive note and is expected tolead to underlyingEPS growth in the high-teens while funds Administration are expected to return to growth in 2H FY18. The stock has been showing an upward movement for one year and has risen by 63 per cent in the past six months with a 5.1 per cent rise on April 17, 2018. The stock is now quite close to its 52-week high price and looks “Overvalued” at the current price.
 

Growth Performance for Sonata (Source: Company Reports)

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