Flight Centre Travel Group Ltd

FLT Details

Forecasting a solid TTV growth:Flight Centre Travel Group Ltd (ASX: FLT) is emerging to have stable in-destination & distribution/support businesses that form the T.E.N (Travel experience network). They recently finished the acquisition of the Travel Partners business. Travel Partners, has a solid sales force of home based / mobile travel agents, which would boost the group’s Australian business by expanding into a fast-growing sector of the leisure market. The group is forecasting a TTV growth of 7% per annum on average in constant currency and aiming for $4.5 billion of TTV growth in the next 3 years.
 

T.E.N – Business Structure (Source: Company reports)

FLT intends to divest or close their loss-making businesses within three years. Accordingly, they expect a lower cost growth of less than $100 million in constant currency during FY18. The group is forecasting a return to 2% PBT as percentage of TTV within 3 to 5 years (subject to business mix). The group is targeting a further 30% TTV growth during FY18. They are investing in low-cost & scalable leisure models, which comprise Independent Contractor model in Australia & NZ. FLT continues to focus on their e-commerce developments and integration of their acquisitions in NZ & Canada. They made their first investment in accommodation sector via BHMA acquisition. They acquired Olympus to create a global Destination Management Company. The shares of FLT rallied over 44% in the last six months (as of October 10, 2017) and were up 4% on October 11, 2017; and we believe this positive momentum would continue in the coming months. We give a “Hold” recommendation on this dividend yield stock at the current price of $ 45.42


FLT Daily Chart (Source: Thomson Reuters)

Bellamy’s Australia Ltd

BAL Details

Completion of ASIC investigation:Bellamy’s Australia Ltd.’s (ASX: BAL) stock rallied over 12% on October 11, 2017 leading to a total increase of over 27% in the last five days. The group reported that they paid a $66,000 penalty after ASIC issued an infringement notice related to allegations that the group contravened their ongoing disclosure obligations in the period from 18 October 2016 to 2 December 2016. The group accepted the infringement notice and paid the penalty so that they can focus on their core operations. The group’s Camperdown acquisition and recent reinstatement of their CNCA license would offer a pathway to CFDA (China Food and Drug Administration) registration in China. The group’s offline channel in China accounted for over 15.4% of FY17 sales.


FY17 performance (Source: Company reports)

Apart from the benefit from their license, the group believes that their Camperdown business could be a major future contributor given their current customer base and potential Bellamy’s volumes. BAL stock almost doubled in the last six months post the fall of over 25% in last one year (as of October 10, 2017).We give a “Hold” recommendation on the stock at the current price of $ 9.78


BAL Daily Chart (Source: Thomson Reuters)

Xero Ltd

XRO Details

Outstanding subscribers’ growth:Xero Ltd (ASX: XRO) recently exceeded over a quarter of a million subscribers (253,000 at 30 September 2017) in the UK. The group is well positioned for growth as the digitization of UK businesses continues and government legislation ‘Making Tax Digital’ is implemented. They also deepened their UK partnership with HSBC and Banco Santander. The group’s major products include HQ Open Practice Platform, which is an integrated multi-vendor platform for accountants and bookkeepers to run their entire back office. Their HQ Ask, drives meaningful engagement between advisors and clients by reducing the time accountants spend asking clients for information and waiting for a response. Xero Expenses is the mobile-first expense management platform with open APIs for banks to connect to the millions of employees in small business. Xero Projects manages time and job costing for small businesses in professional services while Xero Discuss enables users and their advisors to communicate within the Xero platform. Xero stock surged over 77.7% in this year to date (as of October 10, 2017) and we believe the momentum would continue. We give a “Hold” recommendation on the stock at the current price of $ 30.27


XRO Daily Chart (Source: Thomson Reuters)

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.