Clime Capital Limited

Hefty dividends: Clime Capital Limited (ASX: CAM) announced that, at the close of business on 29 March 2019, the gross assets value of the company’s investment portfolio stood at approximately $105.4 million (Cum-Dividend). During the month, the company paid $0.3 million as a quarterly interest payment to the Company’s Convertible Note-holders for the period 1 December 2018 to 28 February 2019. The Company also accrues interest at approximately $110k per month until it is paid each quarter.


Statement of Profit & Loss for 1HFY19 (Source: Company Reports)

The company recorded an after-tax loss of $5,182,729 for the half-year ended 31 December 2018 compared to an after-tax profit of $5,574,136 for the half-year ended 31 December 2017. This result was mainly driven by unrealized loss on financial assets at fair value to profit or loss recognised during the period.

Investment loss for the half-year was $6,090,762 compared to an investment income of $8,362,101 for the period ended 31 December 2017. The result was derived on the back of dividend and interest income of $1.67 million and net realised and unrealised losses from the investment portfolio of $7.82 million.

The company declared an interim dividend for the quarter ended December 31, 2018 amounting to 1.25 cents per share to ordinary shareholders.The record date for this dividend was January 4, 2019 and the dividend was paid on January 24, 2019.

Dividend Outlook: Followingthe preliminary review of results, the Board declared a 1 for 40 bonus issue. The Board intends, subject to market conditions, to at least maintain current dividends of 5 cents per ordinary share (1.25 cents per quarter) on the incrementally expanded ordinary capital base.

The company is having an annual dividend yield of 5.68% which can be considered at decent levels considering the challenging market environment. However, the company’s stock has delivered the return of 4.76% in the span of previous three months while, in the past 6 months, the return was -3.30% reflecting that the stock is volatile. Based on the foregoing, we maintain our “Speculative Buy” recommendation on the stock at the current price of A$0.865 per share (down 1.705% on 11 April 2019).
 

Dicker Data Limited

Robust Y-o-Y performance: Dicker Data Limited (ASX: DDR) announced that it will retain the current Dividend Policy of paying quarterly dividends. In line with last financial year and to provide consistency and certainty for investors, the Company proposes that each interim dividend for FY19 will be at an equal rate. The proposed rate for the interim dividends for FY19 will be 5.00 cents per share fully franked. This would bring total proposed dividend to be paid in the FY19 year to 22.00 cents per share, an increase of 22.2% from FY18 of 18.00 cents per share.


Operating & financial review FY18 (Source: Company Reports)

The revenue for the consolidated entity for the 12 months to 31 December 2018 was $1,493.6 million up by $187.6 million or 14.4% YoY. The company has continued to add new vendors and increased the breadth of products offered by existing vendors whilst still driving growth. The company’sNet Profit after tax increased to $32.5 million, up by 20.5% as compared to $26.9 million in FY17.

Among the key ratios, ROE and pre-tax ROA improved by 570 bps and 70 bps to 41.9% and 11.4% respectively in FY18.Although the equity multiplier grew 450 bps Y-o-Y, still there was a decent contribution from net-profit margin along with the asset turnover for improving the ROE.

FY19 Guidance: For FY19, the company is forecasting group revenue at $1.65 billion and net profit before tax of $51.4 million, maintaining its growth at over 10% for both revenue and profit. The growth in the Australian business is expected to be achieved through organic growth and full year contribution from new vendors.

Considering the robust financial performance Y-o-Y coupled with YoY improvement in RoE and decent outlook, we maintain our “Hold” rating on the stock at the current market price of A$4.160 per share (up 0.726% on 11 April 2019).
 

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