Boral Limited (ASX: BLD)

BLD Details

Solid track record of maximising returns:The Group recently announced that it has successfully priced a US$300 million of US Private Placement of senior, unsecured notes. The note issue comprised of two tranches – US$225 million (8 years) of fixed rate notes and US$75 million (8 years) of floating rate notes and these are expected to settle around 16 April 2018. The proceeds will be kept in US Dollars and will be used in addition to the existing cash to refinance US$306 million of senior, unsecured notes which will mature in April 2018. The Group disposed the Headwaters Energy business for the net proceeds of $16.8 million and which included $7.6 million received on settlement and remaining $9.2 million will be received in annual instalments which will start from October 18 and will go on till October 2021. Interim Dividend (50 per cent franked) of 12.5 cents for FY18 was declared and paid, against interim dividend of 12.0 cents paid in FY17.
 

Earnings and Dividend Growth (Source: Company Reports)
 
Operating cash flow for 1HFY18 was up by 37 per cent and amounted to $216 million as compared to 1HFY17 and this was due to significant lift in earnings generated from Boral North America and Boral Australia. It is expected that synergies from the acquisition of Headwaters will exceed US$35 million. The share price was up by 10.08 per cent in the past six months; and as on 05 April 2018, the price rose up by 2.2 per cent with rise in construction driven businesses with overall upbeat market trend. We give a “Buy” recommendation at the current market price of $7.480.
 

BLD Daily Chart (Source: Thomson Reuters)
 

Medibank Private Limited (ASX: MPL)

MPL Details

Higher management expenses on the cards:While the market witnessed a broad level buying, Medibank also got some boost and the stock rose up by 1.8% on April 05, 2018.The Group’s financial result for 1H18 entailed NPAT growth of 5.9 per cent amounting to $245.6 million as compared to 1HFY17. The Group declared an interim dividend of 5.5 cents per share (fully franked) and this was up by 4.8 per cent over the dividend paid in 1HFY17. Medibank Health Revenue rose by 4.5 per cent and amounted to $291.9 million and operating profit rose by 45.7 per cent and reached to $25.2 million as compared to the same period in the last year. Net Investment income fell by 22.3 per cent and recorded at $59.7 million which was primarily due to lower equity and credit market returns. It is expected that Management expenses will be slightly higher in the second half.
 

Market Share Scenario (Source: Company Reports)
 
Meanwhile, MPL’sdirectors are seen to have acquired group’s shares. For instance, Dr Tracey Batten was earlier not holding any ordinary shares and later acquired 10,000 ordinary shares in the month of February 2018. MPL share price was down by 12.35 per cent in the past three months and declined by 2.07 per cent in the past five days, as at April 04, 2018. Despite the fall, the stock looks “Expensive” at the current market price of $2.890, given certain level of softness expected over second half.
 

MPL Daily Chart (Source: Thomson Reuters)
 

JB Hi-Fi Limited (ASX: JBH)

JBH Details

Mixed Performance for 1HFY18: Ellerston Capital Limited, a substantial holder of the JBH changed its substantial holding on 21 March 18. Earlier it was acquiring 8.43 per cent of the voting power and now after the change it holds 9.67 per cent of the voting power. Magellan Asset Management Limited, a substantial holder amended its substantial holding and now holds 6,378,206 of securities and 5.55 per cent of the voting power. NPAT for 1HFY18 was up by 21 per cent as compared to 1HFY17 and amounted to $151.7 million. Earning per share and Dividend per share for 1HFY18 were up by 13.7 per cent and by 19.4 per cent and amounted to $132.2 cents per share (cps) and 86.0 cps, respectively.
 

Divisional Performance (Source: Company Reports)
 
While Australian sales were up, total sales were down by 0.4 per cent in New Zealand and were reported at NZD 124.6 million. In January 2018, total sales growth was 6.9 per cent; and whereas in January 2017, it was 9.8 per cent and total sales growth for The Good Guys was -3.5 per cent (against January 2017 figure of 5.0 per cent) and comparable sales growth was -4.7 per cent against January 2017 figure of 3.5 per cent; and was impacted by the cycling strong sales of Seasonal products. During past one month, the share price edged down by 0.39 per cent, while it was up 0.74% on April 05, 2018. Given the trading scenario and on-going performance, the stock still seems “Expensive” at the current market price of $ 25.990.
 

JBH Daily Chart (Source: Thomson Reuters)
 

Flight Centre Travel Group Limited (ASX: FLT)

FLT Details

Update on ACCC Test Case: The Federal Court came out with the judgement and imposed penalty of $12.5 million on FLT in relation to the competition law test case, which was initiated by ACCC in 2012. Since past six years, FLT was losing in three different courts while winning on appeals. Though the Company believed that it acted lawfully, and it did not contravene the Trade Practices Act but the Company respects the court’s decision and will continue to adhere to the policies and practices. This penalty will not affect FLT’s market guidance for FY18 on underlying profit before tax of between $360 million and $385 million, and penalty will be included in the Group’s statutory results for the year. Despite this, FLT stock rose up by 1.1% on April 05, 2018. BlackRock Group ceased to be a substantial holder of the Group since 16 March 18.
 

Executing on Key Strategies (Source: Company Reports)
 
The share price was up by 27.33 per cent in the past six months and FLT still has room for improvement given the travel and tourism sector landscape and recent interim financial performance entailing strong profit growth with new revenue streams pertaining to business models, acquisitions, and products being highlighted. We recommend to “Hold’ the stock at the current market price of $57.290.
 

FLT 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.