BWX Limited (ASX: BWX)
Increase in the market share: BWX is a vertically integrated developer, manufacturer, distributor and marketer of branded skin and hair care products and focuses on the natural segment of the beauty and personal care market. The Company released its 1HFY18 results and reported an increase of 79.2 per cent in revenue ($67.2 million) and 63.9 per cent growth in gross profit ($40.0 million) as compared to the same period in the prior year. The Company declared an interim fully franked interim dividend of 3.25 cents per share which represented an increase of 30 per cent as compared to prior first half of 2017. During 1HFY18, the Group continued to implement its long-term strategies for markets like UK, China, Canada and New Zealand and developed few new markets like India with Sukin branded products now registered in the country. The Company upgraded its EBITDA guidance and now expects FY18 EBITDA to be in the range of $42 million - 46 million (an increase of 60%-74% on FY17). Meanwhile, the share prices declined by 17.31 per cent in the past one month and climbed up by 7% on April 13, 2018. Bennelong became the substantial holder of the Company by securing 23,998,028 securities with 19.5 per cent of the voting power. The Company disclosed to ASX that one of its director John Humble had direct and indirect interest in the Company through Leisure and Hospitality Services Pty Ltd and further acquired 193,373 shares from the market at a share price of $5.1838. By looking at the overall performance and growth prospects, we recommend to “Hold” the stock at the current market price of $ 4.80.
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Revenue Performance (Source: Company Reports)
Cochlear Limited (ASX: COH)
Downfall in the growth of implant units:Pinnacle Investment Management Group Limited ceased to be a substantial holder of Cochlear Limited since 27 March 2018. The positive momentum which the Company experienced across the developed markets over the past few years continued in FY18 and delivered an increase of 12 per cent in cochlear implant units across the markets. The Group delivered a reported net profit of $110.8 million for 1HFY18, which was down by 1 per cent as compared to same period in prior year, while it was up 1% in constant currency. The drop was owing to one-off non-cash impact from revaluation of deferred tax assets at the back of US corporate tax rates change. This is expected to impact the full year net profit as well. Cochlear implant units’ growth was down by 2 per cent (15,972) as compared to the same period in the prior year. Despite the share price fall of 5.94 per cent in the past one month, the stock is trading at high levels. We give an “Expensive” recommendation at the current market price of $ 180.02.
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Cochlear Implants Growth Trend (Source: Company Reports)
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