Empired Ltd (ASX: EPD)

H2 FY18 to be stronger: Empired’s stock touched down in last five days by about 4% (as at November 28, 2017) but surged up 3% on November 29, 2017 with the release of its trading update. The group, whose services are aligned to high growth segments of the market including Managed Services, Cloud, Mobility, Data & Analytics, now expects its H1 FY18 underlying EBITDA to be between $7.0m and $7.3m with modest revenue increase on prior corresponding period at the back of soft public-sector revenue in NZ during protracted election period. However, the group’s other areas of business are performing as per expectation. EPD expects to restart the significant public-sector projects in early H2 with improved earnings performance in New Zealand across the second half. Further, second half is said to benefit from lower non-billable overhead costs by an annualised amount of circa $2.5m per annum. Overall, the group expects a better H2 EBITDA and has flagged to achieve full year earnings and revenue growth. Considering the scenario and group’s ability and potential despite short-term challenges, the stock looks to be a speculative one.
 

Praemium Ltd (ASX: PPS)

Snaps-up first client for the new administration service: Praemium has signed Perth-based financial planning and investment manager Merchant Group as the first client for its new administration service. The PPS service, which is an extension of the Praemium Portfolio service (formerly V-Wrap), will enable financial planning practices to outsource the administration of their client portfolios to Praemium. Thus, a single platform can now be used by the advisers for serving clients’ administration and investment needs. Praemium’s reporting capabilities with an administration overlay will provide a rich digital experience and is expected to benefit the clients. Meanwhile, with expanding platform functionality and new clients on board, the group had reported for a strong FY17 with Australian business revenue growth of 15% and International business revenue growth of 25%. Looking at the high forward price to earnings ratio, current trading scenario and on-going momentum, we believe it is a stock to hold.


On-going Growth in Gross Inflows and Funds under Administration (Source: Company Reports)

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