Stocks’ Details

Thorney Opportunities Ltd

Rising Dividend:Thorney Opportunities Ltd (ASX: TOP) is a small-cap investment company with the market capitalization of circa $ 139.48 Mn as of September 06, 2018. The group has recently declared FY18 performance in which total investment income marked degrowth of 47% and amounted to $18.88 Mn in FY18 as compared to the prior year. It was majorly impacted by degrowth of unrealized gains which came down at $9.02 Mn in FY18, a fall of 70.3% from the previous year unrealized gains which were at $30.37 Mn. Resultantly, the profit before tax (PBT) amounted to $12.85 Mn while profit after tax (PAT) stood at $11.11 Mn for FY18. Despite this, the Board of Directors declared a final dividend of 0.9 cents per share (cps), fully franked, which is an increase of 38.5% when compared to FY17. Total dividends for FY18 came in at 1.5 cps, fully franked, an increase of 20% on FY17.  This equates a gross yield of about 3.0%. It will be paid on October 02, 2018 with the record date of September 12, 2018. It represents that the Board is committed to paying an increasing stream of fully franked dividends to shareholders, given the company has sufficient profit reserves and franking credits.


FY18 Financial Highlights (Source: Company Reports)

As of 30 June 2018, TOP’s net tangible assets (NTA) after tax per share stood at 75.7 cents (cps).  The NTA performance since 30 June 2018 has been particularly strong, with the NTA closing at 78.5 cps, marking the growth of 3.7% in the first two months of the 2019 financial year.  Meanwhile, the stock has risen 1.48% in the past three months as at September 05, 2018; and we give a “Speculative Buy” recommendation on the stock at the current price of $0.680, as the company is experiencing positive signs of improvement in the 2019 financial year.
 

Bailador Technology Investments Limited

Solid FY18 Performance:Bailador Technology Investments Limited (ASX: BTI) is a listed investment company to invest in businesses within the technology sector that are seeking growth-stage investment. Recently, the group delivered stronger FY18 with positive Total investment income of $8.49 million compared to the total investment loss of $3.81 Mn over the prior year. It was mainly driven by the combined revenue growth of the underlying portfolio companies (portfolio weighted) for FY18 of 32% on Y-o-Y basis. Resultantly, there was a significant growth registered in PAT at $3.65 Mn compared to the loss of $4.96 Mn in the FY17. Moreover, the underlying investment performance of the Bailador portfolio, measured as the increase in the NTA between 1 July 2017 and 30 June 2018 (pre-tax, after all fees), depicted an increase of 4.1% p.a. over the year. Five of the companies in the portfolio have had positive revaluations in the year, with one revaluation down. There have been no dividends paid or declared during the year. Based on the FY18 performance and eyeing on providing satisfactory returns to shareholders, we expect to see further valuation uplift across a number of portfolio companies in FY19 and assume that there will be cash realizations from one or more investment positions in the BTI portfolio in FY19.


FY18 Financial Highlights (Source: Company Reports)

Meanwhile, the share price has risen 5.13 percent in the past three months as at September 05, 2018.By looking at the current trading level and its solid financial performance in FY18, we give a “Speculative Buy” recommendation on the stock at the current market price of $0.845.
 

NAOS Small Cap Opportunities Company Limited

Decent Performance in FY18:NAOS Small Cap Opportunities Company Limited (ASX: NSC) is a listed investment company with the objective of providing investors with genuine, concentrated exposure to Australian undervalued listed small-cap companies (market capitalization in the range of $100 Mn to $1 Bn) with an industrial focus. The group has recently reported robust FY18 performance in which revenue grew by 177 percent to $9.55 Mn over the prior year. It was mainly driven by the significant changes in the investment strategy that includes a concentrated portfolio structure, a focus of investing in industrial-type companies, and a long-term investment philosophy during the same period. Resultantly, NPAT increased by 134 percent and amounted to $ 4.74 Mn in FY18 as compared to the loss of $13.89 Mn in the previous year. As a result, the Board of Directors declared fully franked final dividend of 3 cents per share for its shareholders and it will be payable on September 19, 2018 with the record date of September 04, 2018. This summarized a total dividend payment of 5.50 cents per share for the full year.


Five Year Financial Summary (Source: Company Reports)

On the other hand, the group outperformed the index by 8.02% p.a. since its inception as on June 2018. Therefore, we expect that the group will continue to strive towards better performance during the upcoming periods despite short-term headwinds. Meanwhile, the share price has risen 6.96% in the past three months as on September 05, 2018 and traded at a higher PE level of 30.18x. Hence, we maintain our “Hold” recommendation on the stock at the current market price of $0.850, considering positive outlook ahead backed by its new investment strategy to perform better in years to come.
 

Century Australia Investments Limited

Decent Investment Return Since inception: Century Australia Investments Limited (ASX: CYA) has posted operating profit before tax at $9.4 million for the full year ended 30 June 2018. This is an increase of 269% over previous year’s $2.5 million. Profit after tax (PAT) came in at $7.4 million as compared to $3.6 million in the prior year. The increase in profit is attributable to net gains from the trading portfolio which was in operation for the full year, compared to less than a month of trading in the previous year. However, total comprehensive income for the period was moderately down by 0.6% to $8.7 million in FY18 due to recognized higher income tax benefit in the prior year. The investment portfolio increased by 14.6%, outperforming the S&P/ASX 300 Accumulation Index by 1.4%. The company’s pre-tax net tangible assets increased from 94.1 cents per share at 30 June 2017 to 104.0 cents per share as at 30 June 2018.


FY18 Financial Highlights (Source: Company Reports)

Based on the performance, the Board of Directors declared a fully franked final dividend of 2 cents per share, bringing the total dividend for FY18 to 4.09 cps, up 51.5 percent as compared to the prior year. It will be paid on 28 September 2018 with the record date of 7 September 2018. Meanwhile, CYA stock has risen 6.99 percent in the past three months as at September 05, 2018 and is inching towards the 52-week higher level of $1.105. By looking at Index volatility, we maintain our “Expensive” recommendation on the stock at the current market price of $ 0.965 (down by 3.015% on September 06, 2018).
 

Stock Price Change Comparative Chart for above Stocks (Source: Thomson Reuters)

 
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