Stocks’ Details

Flight Centre Travel Group Limited

Strong Growth in Online Leisure Sales:Flight Centre Travel Group Limited (ASX: FLT) is into the business of travel retailing in both the corporate and leisure travel sectors, plus in-destination travel experience, including hotel management, tour operators, wholesaling and destination management companies (DMCs). The market capitalisation of the company stood at $4.77 billion. FLT has delivered a strong growth in online leisure sales in Australia in the Q1FY20. The Managing Director of the company, Mr Graham Turner, stated that although there was challenging trading climate, online leisure sales in the country has doubled during the three months to September 30, 2019.

Good E-Commerce Growth in Leisure Sector: As per Mr. Turner, Jetmax OTAs, BYOjet and Aunt Betty, and flightcentre.com.au has produced more than $250 million in TTV during the first quarter in Australia. Aunt Betty and BYOjet are trading strongly and delivered a TTV growth of 140% in Australia in Q1FY20. It was added that flighcentre.com.au delivered a TTV growth of 65% in Q1 as online booking fees were removed in late FY19. This growth is mainly coming from domestic travellers who are new to the Flight Centre brand and rather than from the existing customers who are moving between sales channels which indicates that there is market share gain over the period.


 Growth in flightcentre.com.au (Source: Company Reports)

The total revenues of FLT have witnessed a CAGR growth of 6.25% in the time span of FY2015 - FY2019 and, thus, it can be said that FLT is possessing respectable capabilities to garner revenues which might support its long-term growth prospects. FLT’s current ratio stood at 1.31x in FY 2019, which is above the industry median of 1.08x. Currently, the stock is trading below the average of its 52-week trading range. The company’s annual shareholders meeting might take place on November 6, 2019.

Hence, considering the aforesaid facts and current trading levels, we have a wait and watch stance on the stock at the current market price of $41.670 per share, down 11.716% on 9th October 2019.


FLT Daily Technical Chart (Source: Thomson Reuters)
 

Crown Resorts Limited

Notice for Annual General Meeting: Crown Resorts Limited (ASX: CWN) is an international gaming and casino entity, with investments and businesses in key international markets. The market capitalisation of the company stood at $8.25 billion. The company has announced that Annual General Meeting (AGM) will be held on 24^th October 2019.

Financial Performance for FY19: The total normalised revenue across Crown’s Australian Resorts decreased by 5.4% on the pcp basis. The decrease was mainly due to the reduction in VIP program play revenue in Australia, which was down 26.1%. Crown’s Australian resorts reported normalised EBITDA of $811.3 million which was down by 9.2%, while reported EBITDA was up by 6.4% to $859.6 million with an above theoretical VIP win rate experienced at both Crown Melbourne and Crown Perth. The company declared a final dividend of 30 cents per share, which were 25% franked, bringing the full year dividend to 60 cents per share.

Crown’s Major Focus Area: The company is focusing towards improving the underlying performance of Crown Melbourne, Crown Perth and Crown Aspinalls. The focus is also on delivering the Crown Sydney project on time and on budget and on growing and creating value from Crown Digital.


 Financial Performance (Source: Company Reports)

Stock Performance: The company’s EBITDA margin stood at 29.9% in FY19, which implies an improvement from 26.6% in FY 2018. CWN’s current ratio stood at 1.21x in FY 2019, which is above the industry median of 1.08x. Currently, the stock is trading below the average of its 52-week trading range. Hence, considering the aforesaid facts and current trading levels, we give a “Hold” rating on the stock at the current market price of $12.100 per share, down 0.657% on 9^th October 2019.


CWN Daily Technical Chart (Source: Thomson Reuters)
 

Star Entertainment Group Limited

Performance Highlights for FY19:The Star Entertainment Group Limited (ASX: SGR) operates The Star Gold Coast, The Star in Sydney and Treasury Casino and Hotel in Brisbane. The market capitalisation of the company stood at $3.99 billion.

The company’s statutory EBITDA (before significant items) grew by 14.1% on PCP basis and statutory net profit after tax grew by 33.7% after significant items, which were supported by an actual win rate in the International VIP Rebate business in FY2019 higher than PCP.Statutory net revenue increased by 3.6% on PCP. The company reported record domestic results which were led by solid domestic gaming revenue growth, tables revenue growth of 4% on pcp.

The company has declared a final dividend (fully franked) of 10 cents per share, representing a payout ratio of 92% of normalised 2H FY19 NPAT.This makes a total dividend of 20.5 cents per share for FY19.


 Performance Highlights (Source: Company Reports)

Outlook for FY20: In early 1HFY20, domestic revenues continue to reflect a cautious consumer environment but has improved from the levels of 2HFY19. International VIP Rebate business volumes in early FY20 are up on PCP, however comparisons are difficult given the short period of time. The company has maintained its focus on implementing long-standing strategy of investing to drive visitations and earnings to its network of properties situated in desirable destinations.

The total revenues of SGR have witnessed a CAGR growth of 5% in the time span of previous FY2010-FY2019 and, thus, it can be said that SGR is possessing respectable capabilities to garner revenues which might support its long-term growth prospects.

Stock Recommendation:SGR’s net debt to EBITDA multiple stood at 1.60x in FY 2019, which is above the industry median of 1.38x.The stock has generated positive returns of 4.32% and 2.59% in the three months and six months, respectively. Hence, considering the aforesaid facts, we give a “Buy” rating on the stock at the current market price of $4.280 per share, down 1.609% on 9^th October 2019.

 
SGR Daily Technical Chart (Source: Thomson Reuters)

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