Jumbo Interactive Limited

New Issue announcement by Jumbo:Jumbo Interactive Limited (ASX: JIN) announced that the company has issued an additional 125,000 fully paid ordinary shares (Shares) on February 15, 2019, following the exercise of options at a quoted price of $3.50 expiring on February 15, 2022.

As per the section 708A(5)(e) and 708A(6) of the Corporations Act, the Company states that the issued Shares were not disclosed to investors under Part 6D.2 of the Act and it has strictly complied to  Chapter 2M of the company Act along with section 674 of the Act. Further, JIL’s total number of ordinary shares quoted on ASX is 60,523,757, whereas its number of securities not quoted on ASX are 250,000 options exercisable at $1.75 expiring on November 18, 2020; 50,000 options exercisable at $2.25 expiring on November 2, 2022; and 2,375,000 options exercisable at $3.50 (with a $4.00 five-day VWAP vesting price) expiring on November 15, 2022.

Based on 1HFY19 performance, the company has revised its guidance for FY19 and expects TTV (total transaction value) growth of 62%, revenue growth of 53%, EBIT growth of 107%, and NPAT growth of 100% as compared to the prior year.


FY2019 Guidance (Source: Company Report)

The FY2019 guidance has been attributed to its new software platform to start in the 2019 financial year, and the company expects to make the most of the new Powerball which peaked at $100 million in August 2018.It enabled them to activate more customers and sign up new accounts in record numbers. Active customers surged 47.9% to 576,144, and new accounts grew 91.9% to 199,410 accounts in the six months to December 2018.
Based on decent performance in 1HFY19, the Board of Directors declared fully franked interim dividend of 15.0 cents per share which will be paid on 22 March 2019 with a record date of 8 March 2019. It will have an option of DRP (dividend reinvestment plan).

Meanwhile, the share price has risen 99.39 percent in the past six months (as at February 15, 2019) and traded at high PE level (28.57x) among its peer group and the stock seems to be overvalued at the current price. Hence, we maintain our “Expensive” recommendation on the stock at the current price of $9.910.
 

Bingo Industries Limited

Change in FY2019 EBITDA Guidance:Bingo Industries Limited’s (ASX: BIN) share price plunged 49.13 % on 18 February 2019 following the release of the market update and FY2019 outlook. As per the release, the group has downgraded the full year 2019 guidance and expects Group EBITDA to be between $92 Mn and $96 Mn from the previous guidance of $108 -$112 Mn, showing a decline of between ~14.8% and ~14.3%. Although BINGO’s post-collections and Toro business units have performed in-line with expectations in the first half of FY19, its second half is expected to be little disappointing owing to factors such as faster than anticipated softening in multi-dwelling residential construction activity along with competition in the B&D collections market which has put downward pressure on pricing, impacting the margins.

Bingo’s decision not to increase its price by absorbing increased costs for the whole of FY19, including tipping and transport, will add further burden to the operating profit margin. Its proposed acquisition of DADI (Dial A Dump Industries) and pending regulatory reforms, including comprehensive new fire regulations, a further review of the network configuration plan has been conducted. This has resulted in a change in scope to certain projects, impacting timing.

The reopening of its Mortdale facility will now occur in H1 FY20, whilst the requirement to redevelop their Minto facility is currently under review. Its Patons Lane redevelopment remains on track, and West Melbourne facility will commence operations in April 2019. Once open, this facility will provide Bingo with the first of its advanced recycling facilities in Victoria and is an important step in its margin expansion in Victoria. This will enhance operational efficiencies and lower the overall capital program by $25 Mn to $30 Mn, a saving of 15%-20% on the original budget.

Change in FY2019 EBITDA Guidance (Source: Company Reports)

Despite lower guidance, the company expects the construction market to remain strong, with overall volumes of construction activity in NSW and Victoria of over $130 billion. It aims to optimize its network of waste assets in both NSW and Victoria to achieve greater efficiencies and improvements in operations in preparation for future growth.

Meanwhile, the share price has shown a positive return of 13.30% for the last one month as on February 15, 2019. As the financial guidance for FY19 has been said to be in-line with the previous year, it is expected that it may witness a recovery in the latter half of the year; hence, we maintain our “Hold” recommendation on the stock at the current market price of $1.170.
 

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.