Coca-Cola Amatil Ltd

CCL Details
 
Strong FY 17 Performance and a target of mid-single digit EPS growth for medium term: Coca-Cola Amatil Ltd (ASX: CCL) has delivered the underlying net profit after tax (NPAT) of $416.2 million for FY 17, which is broadly in line with the previous year and is in line with guidance provided in April 2017. The company’s statutory net profit after tax (NPAT) grew 80.9% to $445.2 million in FY 17. CCL has posted 45.5% growth in the statutory earnings before interest and tax to $678.4 million. The earnings in 2017 grew due to the strong earnings performances in New Zealand & Fiji, Indonesia & Papua New Guinea and Alcohol & Coffee, and an improved trajectory for Australian Beverages in the second half. Moreover, CCL in FY 17 has completed the share buy-back program announced in February 2017 and acquired 39.6 million shares at an average price of $8.84 per share. However, the net debt has increased by $344.4 million to $1.3 billion but lower financing cost led to strong interest coverage.
 

FY 17 Financial Performance (Source: Company Reports)
 
Additionally, in 2018, as per Accelerated Australian Growth Plan, there will be an additional investment of approximately $40 million across marketing, execution, cold drink equipment, technology and price. For the medium term, CCL is targeting mid-single digit EPS growth. As a result, CCL stock has risen 13.60% in three months as on February 27, 2018 and is trading at a reasonable P/E level. Based on the foregoing, we give a “Buy” recommendation on the stock at the current price of $8.70
 

CCL Daily Chart (Source: Thomson Reuters)
 

Crown Resorts Ltd

CWN Details
 
Completes sale of its interest in CrownBet:With most of the trouble over, Crown Resorts Ltd (ASX: CWN) has completed the sale of its 62% interest in CrownBet, along with loans advanced by it to CrownBet, for $150 million. This is a part of CWN’s ongoing debt reduction strategy. Further, CWN has entered into an agreement with a subsidiary of Wynn Resorts, Limited to sell its interest in a 34.6-acre vacant site on Las Vegas Boulevard (the “Alon Land”) for US$300 million. The company has also entered into an agreement with Consolidated Press Holdings Pty Limited and an entity associated with Ms Gretel Packer to sell its interest in part of the property and operations at Ellerston in the Hunter Valley for $62.5 million. On the other hand, CWN’s Australian operations’ in the first half 2018 reflected mixed trading conditions. Total normalised revenue in 1H 2018 across Crown’s Australian resorts grew by 4.8% on the prior comparable period. For 1H 2018, the Normalised NPAT attributable to the parent grew 0.6% to $192.4 million but Reported NPAT attributable to the parent fell 33.65% to $238.6 million after significant items. Additionally, CWN planned to implement the on-market share buy-back of up to approximately 29.3 million shares on or after 23^rd February 2018. We give a “Buy” recommendation on the stock at the current price of $13.50, given the near-term prospects and March ex-dividend date.
 

CWN Daily Chart (Source: Thomson Reuters)
 

Spark Infrastructure Group

SKI Details

Delivered higher distributions to investors in FY17: Spark Infrastructure Group (ASX: SKI) has reported 4.5% growth in the FY17 EBITDA to $791.5m due to revenue growth and strong cost control. Standalone net operating cash flow in FY17 fell 7.9% to $267.5m due to lower distributions from TransGrid. Moreover, SKI has reaffirmed the distribution guidance for FY18, subject to business conditions, of 16.0 cps, which represents annual growth of 4.9% on FY17. The company, in FY17, delivered higher distributions to investors due to the efficiency and productivity gains within its strongly performing investment portfolio businesses. The full year 2017 distribution is of 15.25 cents per security (cps), which is in line with guidance and fully cash covered at payout ratio of 95.9%. Additionally, SKI expects significant opportunities in new energy landscape, due to the improved regulatory certainty and efficient transition to higher use of renewables. Meanwhile, SKI stock has fallen 8.02% in three months as on February 27, 2018. Based on the opportunistic price scenario, we give a “Buy” recommendation on the stock at the current price of $2.41
 

SKI Daily Chart (Source: Thomson Reuters)
 

Woolworths Group Ltd

WOW Details

All businesses have reported positive sales growth during the half 2018: Woolworths Group Ltd (ASX: WOW) reported 3.8% growth in the sales from continuing operations to $29,807 million in 1H 2018. The growth of 4.9% and 4.8%, respectively, in Australian Food and Endeavour Drinks led to the growth, and all businesses have reported positive sales growth during the half 2018. NPAT attributable to equity holders of the parent entity from continuing operations rose 14.7% on the prior year to $902 million, with corresponding EPS up 13.7% to 69.7 cents.
 

1H 18 Financial Performance (Source: Company Reports)
 
Additionally, WOW expects a better second half result over the prior year corresponding period with the FY18 loss before interest and tax currently expected to be in the range of $80 - $120 million. We give a “Buy” recommendation on the stock at the current price of $27.61, given the efforts of the group to strive for an increased market share in the supermarket against its key competitors.
 

WOW Daily Chart (Source: Thomson Reuters)
 

Telstra Corporation Ltd

TLS Details

Progress on strategic investment program: For 1H 2018, Telstra Corporation Ltd (ASX: TLS) has reported 9.5% increase in NPAT (excluding the Ooyala impairment) and 12.2% increase in basic EPS. On a reported basis for 1H 2018, including the Ooyala impairment, the total income grew 5.9 per cent, EBITDA fell 2.5 per cent, NPAT fell 5.8 per cent and basic EPS was down 3.4 per cent. Further, on a guidance basis, there is a 5.4% increase in the total income and 2.4% increase in EBITDA. The company has increased the subscriber numbers on mobile and fixed, reduced the underlying core fixed costs and made progress under its strategic investment program. Moreover, till the end of December, TLS had invested approximately $1.4 billion of additional capex, or approximately half of the up to $3 billion in its strategic investment program. This included $1.3 billion on networks and $100 million on digitisation. Additionally, TLS will pay a total fully franked interim dividend of 11 cents per share, comprising an interim ordinary dividend of 7.5 cents per share and an interim special dividend of 3.5 cents per share. TLS stock plunged 4% on February 28, 2018 as the stock traded ex-dividend. Despite the nbn headwinds, the group has managed to provide a decent result and is a “Buy” at the current price of $3.35
 

TLS Daily Chart (Source: Thomson Reuters)
 

NetComm Wireless Ltd

NTC Details

Strong 1H 2018 performance and expects better 2H 2018: For 1H 2018, NetComm Wireless Ltd (ASX: NTC) delivered 89% growth in group revenue to $88.6 million, EBITDA up 13 times to $9.2 million and NPAT rose to $3.7 million, compared to prior period loss of $(1.7) million. Moreover, in 1H 2018, NTC has received large orders for nbn FTTC, delivered fixed wireless devices to AT&T and signed additional contract with nbn for Network Connecting Devices. The company is also progressing discussions with Tier 1 Carriers globally. Additionally, NTC expects to continue to deliver strong revenue and EBITDA growth over the remainder of FY18 as key contracts are further rolled out. Therefore, NTC stock has risen 18.67% in three months as on February 27, 2018; and is still at a reasonable level. Based on the foregoing, we give a “Buy” recommendation on the stock at the current price of $1.43
 

NTC Daily Chart (Source: Thomson Reuters)

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