Australian Agricultural Company Ltd

AAC Details

Appointment of Managing Director and Chief Executive Officer: Australian Agricultural Company Ltd (ASX: AAC) has appointed Mr Hugh Killen (ex-Westpac Executive) as its Managing Director and Chief Executive Officer, with effect from February 2018. Meanwhile, AAC stock has fallen 13.25% in three months as on December 21, 2017. In 1H FY18, AAC has reported a fall in the revenue to $197.2 million vs prior corresponding period. This is due to the fall in the year on year volumes, in part reflecting strategic decision to transition to internal supply chains.
 

1H 18 Financial Performance (Source: Company Reports)
 
The company has posted the operating EBITDA margin of 8.2%, which got impacted by higher input costs in certain areas. However, AAC has refinanced debt on favorable terms with an increase in facility size ($500 million), extension in maturities (including a 5-year tranche) and more flexible terms. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $1.335


AAC Daily Chart (Source: Thomson Reuters)
 

Capilano Honey Ltd

CZZ Details

Year to date trading on track: Capilano Honey Ltd.’s (ASX: CZZ) FY18 year to date trading is ahead of the same point for the underlying business in FY17. The company continues to focus on export sales to improve the contribution by investing in high potential export markets. CZZ’s Australian honey inventory and current supply conditions have improved significantly. Meanwhile, CZZ stock has risen 14.11% in three months as on December 21, 2017. We give a “Hold” recommendation on the stock at the current price of $18.39, given the continued momentum.


CZZ Daily Chart (Source: Thomson Reuters)
 

Bega Cheese Ltd

BGA Details

Acquires Peanut Company of Australia:Bega Cheese Ltd (ASX: BGA) has acquired 93% of the shares in Peanut Company of Australia (PCA) and will proceed to full ownership through compulsory acquisition. The acquisition will enable the company to expand the production of peanuts in Queensland. With this acquisition, BGA will have a complete supply chain for Bega peanut butter from farm to processing infrastructure in Kingaroy and Tolga in Queensland and peanut butter manufacturing facilities at 1 Vegemite Way in Port Melbourne. BGA has also put to an end to the media speculation of being a potential purchaser of Murray Goulburn and has no plans to raise capital. Meanwhile, BGA stock has risen 5.56% in three months as on December 21, 2017. As of now, we give an “Expensive” recommendation on the stock at the current price of $7.47 given the trading scenario, and will review the stock at a later date.


BGA Daily Chart (Source: Thomson Reuters)
 

Costa Group Holdings Ltd

CGC Details

Satisfactory performance for the first four months of FY18 & upgraded full year NPAT-S guidance:Costa Group Holdings Ltd.’s (ASX: CGC) trading for the first four months of FY18 is in line with expectations with a satisfactory performance. With the acquisition of a further 37% interest in the African Blue business, CGC has upgraded the full year NPAT-S (NPAT before SGARA and material items) guidance to be approximately a 20% growth on last year. Further, at December 31, 2017, the company expects to record a material one off non-cash accounting gain in recognition of the step-up in valuation due to the change in classification of African Blue from an equity accounted investment to a subsidiary. Meanwhile, CGC stock has risen 27.05% in three months as on December 21, 2017. We give a “Hold” recommendation on the stock at the current price of $6.69


CGC Daily Chart (Source: Thomson Reuters)

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