Villa World Ltd

Joint Venture with Greenfields:Villa World Ltd (ASX: VLW) in joint venture with Greenfields Development Company, has agreed to the unconditional purchase of a 153-hectare site at Greenbank, south of Brisbane at the purchase price of $50 million (exclusive of GST) with settlement anticipated to occur in stages during FY18 and FY19. Moreover, VLW has resolved the Silverstone litigation between all parties for the resolution of the proceedings. On the other side, VLW has reported a 32% increase in the statutory profit after tax to $33.7 million in FY 16 and 19% increase in the earnings per share to 30.6 cents. Additionally, 464 sale contracts carried forward into FY17 with a gross value of $165.6 million and gave a guidance for FY17 of profit after tax growth of at least 5% to $35.4 million. We maintain our “Hold” recommendation on the stock at the current price of – $2.28
 
Avjennings Ltd
Strong Operating Profit growth in FY 16: Avjennings Ltd (ASX: AVJ) reported the revenue growth of 32.7% to $421.9 million in FY 16. AVJ delivered a growth in profit before tax of 22.0% to $58.8 million while earnings per share surged 18.6% to 10.71 cents. The revenue grew on the back of changes in product mix and project share, and AVJ benefitted from the announcements made in prior periods that it would acquire the interests of joint venture partners in the ‘Argyle’, Sydney and ‘St Clair’, Adelaide projects. We give a “Buy” recommendation on the stock at the current price of – $0.63
 
Finbar Group Limited

Strong Project Pipeline: Finbar Group Limited (ASX: FRI) reported a $21 million operating profit for FY16 and the net profit after tax reached $8 million after the investment property valuation impairments. There is an 11% growth in the pre-sales level to $451 million and there are projects worth $2.2 billion in pipeline which would support significant profit growth. We give a “Buy” recommendation on the stock at the current price of – $0.90
 
FlexiGroup Limited

Updated Guidance in FY16: FlexiGroup Limited (ASX: FXL) reported 8% growth in cash NPAT of $97.0 million in FY16, in line with updated guidance provided in May 2016. The group’s new business volume increased by 19% to $1,350 million on the prior year, and the closing receivables were up 47% to $2,094 million, crossing the $2 billion mark for the first time in FXL’s history. FY16 portfolio income increased 16% on the prior comparable period, to $396.4 million. Moreover, FY17 cash NPAT is expected to be between $90 million - $97 million, after targeted growth investments. We maintain a “Speculative Buy” recommendation on the stock at the current price of – $2.37 
 
GR Engineering Services Ltd

Received the contract from Eastern Goldfields:GR Engineering Services Ltd (ASX: GNG) has been appointed as the lead manager to operate under existing partnership with Kibaran who aims to sell battery-grade graphite to lithium-ion industry. The group has also been awarded a contract with Eastern Goldfields Limited to provide engineering, procurement and construction services related with the refurbishment of the 1.2Mtpa Davyhurst processing facility of a value of about $12.5 million. The work under the contract would start immediately and will be completed by the March quarter of 2017. GNG stock rose 70.97% in the last three months. We believe there is more momentum left and thus give a “Speculative Buy” recommendation at the current price of – $1.67
 
Village Roadshow Ltd

Theme parks and cinema exhibition grew in FY 16: Village Roadshow Ltd (ASX: VRL) reported the attributable net profit after tax before material items and discontinued operations of $50.9 million in FY 16, which marginally increased from $50.1 million of FY15. The earnings before interest, tax, depreciation and amortization, excluding material items and discontinued operations is of $168.8 million, up 1.8% from $165.7 million in FY15. FY 16 results reported growth for fifth consecutive year of the Cinema Exhibition division, growth from the Gold Coast Theme Parks and the inclusion of approximately six months of Opia in the Marketing Solutions division. We give a “Buy” recommendation at the current price of – $5.03
 
Data#3 Limited

Strategic shift in the business mix:Data#3 Limited (ASX: DTL) reported a 13% increase in the total revenue in FY 16. There is a strategic shift in the business mix. The group delivered a 10.6% increase in product gross profit and reported a 15.9% increase in services gross profit. Meanwhile, DTL stock rose 39.5% in the last three months. We give a “Hold” recommendation on the stock at the current price of – $1.47
 
Rural Funds Group

Funds Raised: Rural Funds Group (ASX: RFF) reported the adjusted funds from operations (AFFO) increase from $11.0m to $14.3m or 9.09 cents to 9.26 cents on a per unit basis in FY 16. The earnings per unit has increased from 8.38 cents to 22.46 cents and the adjusted NAV per unit has increased from $1.22 to $1.43. Moreover, RFF has completed $61.0m equity raising to fund acquisitions in three sectors. We give a “Hold” recommendation at the current price of – $1.62
 
McMillan Shakespeare Ltd

Efforts to revamp growth: McMillan Shakespeare Limited (ASX: MMS) has reported a 29.9% growth in the segment revenue to $503.2m, and a 25.3% growth of underlying NPATA to $87.2m. The free cash flow reached $93.5m, which is up 42.1%. MMS would execute three specific initiatives to drive long term value creation (Maxxia Plus, enhanced technology and selective acquisitions) in FY 17. We give a “Hold” recommendation at the current price of – $11.83
 
Sunland Group Limited

Profit exceeded the guidance in FY 16: Sunland Group Limited (ASX: SDG) reported a 5% increase in the net profit after tax to $31.5 million in FY 16 exceeding the guidance between $25 million and $29 million and the earnings per share increased 17% to 19.7 cents. Moreover, the settlement volume has increased from previous years to 14% with 443 settlements and there are potentially up to 9 new projects which are expected to be launched for FY17 based on the pending planning approvals and market conditions. We give a “Speculative Buy” recommendation at the current price of – $1.52 
 
Ainsworth Game Technology Limited

Solid international markets growth: Ainsworth Game Technology Limited (ASX: AGI) has reported the before currency movements profit after tax of $52.4 million in FY 16 on the same basis and in line with guidance provided as compared to the $52.5 million achieved in the previous corresponding period. The sales revenue has increased by 19% to $285.5m for FY16 versus the prior corresponding period, reflecting strong underlying growth in international markets (71% of total revenue as compared to 61% in FY15). The domestic revenue was $81.5 million (29% of total revenue) which is 12% lower as compared to $93.0 million in the prior corresponding period. AGI’s acquisition of Nova and a Class II product offering has enabled the company to leverage the technology allowing greater access to new markets in the Americas. We maintain a “Hold” recommendation on the stock at the current price of – $2.26
 
RXP Services Ltd

Growth across all metrics in FY 16:RXP Services Ltd (ASX: RXP) reported a 61% growth in the revenue to $127.1 million in FY 16 and a 71% increase in the underlying EBITDA to $18.2 million. The headcount increased by 66% to 779 people while the NPAT increased to $10.6 million leading to a 127% increase in the earnings per share to 7.6 cents. Moreover, the revenue is expected to grow in the range of 10-15% over FY17, and the group intends to maintain the target EBITDA margin of 13%-14%. RXP stock rose 44.44% in the last three months and still trading at a reasonable P/E. We give a “Buy” recommendation on the stock at the current price of – $0.77
 
Vita Group Limited

Added to S&P/ASX 300 Index:Vita Group Limited (ASX: VTG) has reported a 19% increase in the group revenues from continuing operations to $645.1 million in FY 16, and a 43% increase in net profit after tax to $38 million. The underlying EBITDA from continuing operations is up 55% to $62.0m and the underlying EPS has increased 89% to 23.29cps. The growth is due to the continued growth in VTG’s portfolio of Telstra retail stores, combined with a higher revenue contribution from the small-to medium business (SMB) and enterprise channels. Moreover, VTG is included in the S&P/ASX 300 Index effective September 16, 2016. The operating cash flows were strong in FY 16 and VTG has declared a record full-year, fully-franked dividend of 13.97 cents per share, up 75% on the prior year.  We give a “Hold” recommendation on the stock at the current price of – $4.90 
 
Pepper Group Ltd

Management changes:Pepper Group Ltd (ASX: PEP) has announced the appointment of Mario Rehayem for the newly created role of Managing Director of Australian Mortgages & Personal Loans. This appointment is due to the PEP’s continued growth in both its consumer lending and loan servicing activities across Australia, Europe and Asia during CY2016. Co-Group CEO, Mike Culhane would also relocate to Hong Kong from November 2016. Half of the PEP’s revenues and profits are generated outside of Australia, mostly from Asia and Europe, as well as there are increased M&A opportunities in those jurisdictions. Hong Kong is the convenient location to negotiate the global transactions and developing new business partnerships. PEP stock rose 12.07% in the last three months. With more momentum expected, we give a “Speculative Buy” at the current price of – $2.55
 
Pulse Health Limited

Gold Coast Surgical Hospital are still in loss: Pulse Health Limited (ASX: PHG) reported the 29% growth in the group revenue to $72.4m in FY 16 and the underlying EBITDA grew 38% to $9.1m after excluding one off items and greenfield ramp up. In FY 17, the underlying EBITDA from established hospitals is expected to be in the range of $13.5m to $15.5m. Moreover, the EBITDA ramp-up losses related with the Gold Coast Surgical Hospital are expected to be in the range of $1.0m to $3.0m. But, the Greenfield development would turn to profit in FY18. We give a “Speculative Buy” recommendation on the stock at the current price of – $0.32

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