Stocks’ Details

AP Eagers Limited

Robust FY19 Outlook:AP Eagers Limited (ASX: APE) had lately reported that the AGM of the company shall be held on Wednesday 15 May 2019 at 9.00 am. The venue for conducting the same shall be 5 Edmund Street, Newstead, Queensland 4006.
 
As regards the outlook for FY 2019, the management feels that the company will keep on outperforming its industry, underpinned by solid foundations, disciplined approach & multi-profit drivers.The management intends to Implement new Risk Based Pricing (RBP) finance models from its multiple financiers. The company will keep focussing on the redevelopment and reorganisation of its inner-city Brisbane facilities to provide improved long-term solutions for all stakeholders. Moreover, the company will continue to drive value from existing businesses through process improvements, operating synergies, portfolio management and organic growth.
 

APE’s Financial Highlights (Source: Company Reports)
 
On the financial metrics front, the company has shown continued financial strength and flexibility. This has been evidenced by a robust EBITDA Interest cover (EBITDA/Borrowing costs) which stood at 6.5 times for the period.
Meanwhile, the stock price has fallen by 3.67% in the past six months and trading at reasonable PE level of 14.63x. Hence, considering the continued financial strength and flexibility, along with decent outlook, we have a “Buy” recommendation on the stock at the current market price of $7.500 per share (down 1.445% on 07 March 2019).
 

Aventus Group

               
Rise in Adjusted FFO: Aventus Group (ASX: AVN) had lately reported that for FY19 half year which ended on the 31 December 2018, the net loss after tax attributable to the shareholders came in at $0.560 million. The net loss after tax for the period was mainly attributable to $680,000 in transaction costs associated with the acquisition of Aventus Property Group Pty Ltd and its controlled entities.
 
As regards the outlook, the Board has confirmed the FY19 guidance for FFO per security of 18.4 cents. The management’s strategy remains focussed towards driving the sustainable earnings from the portfolio through active diversification of the tenant base. The management also has a focus on increasing Everyday-Needs uses, high occupancy and annual contracted rent increases to underpin future rental growth and continued re-investment into the portfolio.
 

AVN’s financial highlights (Source: Company Reports)
 
Hence, the key factors which investors need to consider should be AFFO which rose to $43 Mn for 1H19 from $39Mn in the pcp & a decent FY2019 outlook.However, the company’s bottom line witnessed the negative impact. Meanwhile, the share price of the company has risen 9.22% in the past three months as at March 06, 2019 and is trading slightly towards its 52-week higher level. It reported a higher than the industry dividend yield of 7.28% as compared to the industry median of 5.4% representing more income for its shareholders. Hence, we maintain our “Speculative Buy” recommendation on the stock at the current market price of $2.260 per share (up 0.444% on 07 March 2019).
 

NONI B Limited

Announcement of off-market buyback:NONI B Limited (ASX: NBL) has, for the half-year ended 30 December 2018, reported a group revenue $464.4 Mn, up 140.4% from 1H 2018. This rise was on the back of contribution received from the acquisition of five brands from Specialty Fashion Group on 2 July 2018.

The company announced an off-market buyback of ordinary securities numbering 100,000 at a price of $3.42 per share.The Shareholder approval is not required for the buyback. The reason for this buyback is the enforcement of “Employee Share Scheme Buy-back”.On the 21st February 2019, the Board of Directors declared an interim dividend of 9.0 cents per share with a record date of 12 March 2019 and payable to shareholders on 22 March 2019.

What to Expect From NBL: As regards the outlook for FY2019, the Group remains on track to deliver the previously announced additional cost synergies of $20m by 30 June 2019, over the achieved $30m (on an annual basis). Above this, the management anticipates further efficiencies and margin improvements to add the FY20 earnings. Noni B reaffirms that its EBITDA continues in line with the market consensus of approximately $45m for the full FY19 financial year, subject to trading leading up to the all-important Mother’s Day trading period. The key focus and strategies for the Group include investing in its online presence & restocking the acquired brands to optimum levels.

 

NBL’s Financial Highlights (Source: Company Reports)

Meanwhile, the stock price has risen by 16.36% in the past one month and trading slightly towards the higher levels.Hence, since the stock is trading slightly towards the 52-week higher levels, we assume that the stock has already discounted the all positive catalysts. Therefore, we have a watch stance on the stock at the current market price of $3.250 per share (up 3.834% on 07 March 2019) and advise to the investors that they should wait for further growth catalysts.
 

Oil Search Limited

Production slated to recover: Oil Search Limited (ASX: OSH) has updated about its drilling report for February 2019. As per the release, 37.4 metres of core was cut in the objective Toro reservoir and the well was deepened to 3,820 metres. An extensive logging programme was conducted which has confirmed the presence of hydrocarbons. The forward plan is to conduct an extended well test over the Toro reservoir interval.

For FY2018, the company reported a 13% increase in NPAT to US$341 million, despite a 17% lower production.This was on the back of stronger oil and gas prices, with the average realised oil and condensate price up 27% and LNG and gas price 31% higher.

At the end of 2018, the Company had a strong liquidity position of US$1.5 billion, comprising US$601 million in cash and US$900 million in undrawn credit facilities.

OSH’s Financial Performance for FY18 (Source: Company Reports)

What to Expect Moving Forward: On the outlook for 2019, the management feels that, with the PNG LNG Project operating at record rates and operated production progressively returning to pre-earthquake levels, company’s production is expected to rebound in 2019, to 28.0 – 31.5 mmboe. The management anticipates generating operating cash flows of approximately US$1 billion annually.

Considering the decent outlook, robust liquidity position, decent increase in NPAT, we maintain our “Buy” rating on the company’s stock at the current market price of A$8.240 per share (up 0.365% on March 07, 2019).
 
 

Corporate Travel Management Limited

Robust growth in Underlying EBITDA: Corporate Travel Management Limited (ASX: CTD) has updated that it will be paying a fully franked interim dividend of 18 cents per share which is having the record date of March 8, 2019 and payment date of April 12, 2019.

CTD’s Financial Performance (Source: Company Reports)

For the 1HFY19, the company reported an Underlying EBITDA of $64.6 million, which was up approximately 21% on the pcp. This growth was underpinned by strong organic growth and specifically, the record client wins.

What to Expect From CTD: On the outlook for 2H FY 2019, for ANZ segment, the management expects steady client activity and gaining momentum from record client wins. The management feels that ANZ will again be a significant contributor to the Group profit.

Hence, considering the robust growth in the underlying EBITDA and the optimistic view of the company on ANZ business segment, we maintain our “Hold” rating on the company’s stock at the current market price of A$25.740 per share (down 2.055% on March 07, 2019).


Stock Price Comparative Chart (Source: Thomson Reuters)   

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