Stocks’ Details

MIRVAC GROUP (ASX: MGR)

Reaffirmed FY18 operating earnings guidance: Mirvac Group has reaffirmed its FY18 operating earnings guidance of between 15.3 and 15.6 cents per stapled security (cpss), and distributions of 11.0 cpss. The group’s operational update for the third quarter of the 2018 financial year showcased that the group has maintained its positive metrics across office, industrial and retail portfolios and continues to progress with key developments in Sydney and Melbourne. With construction at Calibre continuing well and expansions across the retail portfolio moving ahead for better urban retail offering, the group expects to have a decent outlook supported by development pipeline of well-located projects that have solid embedded margins. Mirvac also initiated an on-market buy-back program for up to 2.6 per cent of its securities on issue. However, the occupancy levels at Office and Industrial segment, while remaining high, have been below the prior corresponding period levels. Office maintained an occupancy at 97.1 per cent against 98.1 per cent at 31 December 2017 and Industrial maintained occupancy at 98.0 per cent against 99.3 per cent at 31 December 2017. While sales in residential sub-markets is slower and the group has settled 1,553 residential lots as at 31 March 2018, it is on track to settle approximately 3,400 lots in FY18. The stock has not moved much in last one year, in fact it was down over 5%. While we keep an eye on MGR, we give an “Expensive” recommendation at the current price of $ 2.140.
 

Lease Expiry Profile (Source: Company Reports)
 

MYOB GROUP LIMITED (ASX: MYO)

Challenges on acquisition of Reckon’s Accountant Group assets: Post a fall of 6% in last three months, MYO stock has risen over 2% in last one month, as at April 20, 2018. MYOB Group updated the market on the proposed acquisition of Reckon’s Accountant Group assets and has advised that both the Australian Competition and Consumer Commission (ACCC) and the New Zealand Commerce Commission (NZCC) have announced an extension to their review periods for the proposed A$180m acquisition of Reckon’s Accountant Group assets, with both decisions expected on 21 June 2018. It will continue to cooperate with both regulators during the review process. Earlier, ACCC has outlined competition concerns regarding MYO’s acquisition of the Reckon’s Group, as both the firms supply software used by accounting firms for tax returns and client accounting. Meanwhile, group delivered a 12% revenue growth in FY17 with NPATA rise of 10% on year-on-year basis; and MYO expects organic revenue growth of 8-10% and EBITDA margins in mid-40s for FY18 based on online subscriber growth (excluding the benefits from Reckon Group which would uplift the revenue and lower EBITDA considering earnings to be reinvested for maintaining relationships). We have a “Hold” on the stock at the current price of $ 3.180.
 

MACQUARIE ATLAS ROADS GROUP (ASX: MQA)

Updates on appointment of new CEO: Macquarie Atlas Roads is appointing internationally respected global infrastructure executive Graeme Bevans as Chief Executive Officer (CEO) elect, who will join on 1 May 2018. The group had otherwise reached an agreement with Macquarie on the terms of the internalisation and these will be put to a vote of securityholders at the AGM on 15 May 2018. James Hooke, current CEO will be with Macquarie post the internalisation but will continue as the MQA CEO until the time the new CEO joins. MQA will also be setting up a new management team and the establishment of the necessary infrastructure, systems and processes in order for MQA to manage its own operations independently and separately from Macquarie. In the last three months, the group’s stock has risen about 4.88%. We have a “Hold” on MQA at the current price of $ 5.910.

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