Rea Group Ltd

REA Details

Strong and Improving Financials: With a 36.9% rise in last one year in terms of stock price, REA Group Limited (ASX: REA) has been performing on track as per shareholders’ expectations and the latest interim result augurs well with the group’s strategy. REA has delivered strong consolidated sales growth of 21% to $406.8 Mn in 1HFY18, up from $337.3 Mn in 1HFY17 on the back of continued growth in listing depth products where agents pay additional amount to feature more prominent listing of a property, and the inclusion of Smartline operating income for the first time. Besides, strong residential growth included continued success of the Premiere All offering, favourable product mix and yield. EBITDA grew by 21% to $242.8 Mn from 200.1 Mn while EBITDA margin stood at 59.7% which inclined by 37 bps year on year (yoy). NPAT stood at $147.3 Mn in 1HFY18 against $121.8 Mn in 1HFY17 and NPAT margin rose 10 bps to 36.2% on YoY basis. During 1HFY18, Operating expenses rose 18% due to the inclusion of financial services segment and continued investment in strategic initiatives including an increase in marketing for both Australia and Asia region. Further, the Board declared a fully franked interim dividend of 47 cents per share and this is 17.5% higher than the dividend paid in prior corresponding period. On the other hand, the company announced that Pinnacle Investment Management Group Limited and Pinnacle Investment Management Limited became the substantial holder since 08 March 2018 by holding 8,206,768 of securities with 6.23% interest.

Given the group’s efforts on innovating at core property advertising, realestate.com.au becoming Australia’s No. 1 producer of original property video content online, and efforts on Asia to derive long-term revenue, we put a “Hold” recommendation on the stock at the current price of $78.73
 

Strong and Improving Financials (Source: Company Reports)
 

CSL Limited

CSL Details

Robust Performance: CSL Limited (ASX: CSL) is a global specialty biotherapeutic company that develops and delivers innovative biotherapies. The company has continued to deliver a robust performance in 1HFY18. Reported revenue for 1HFY18 came at $4147 Mn as against $3677 Mn in 1HFY17, marking a good year on year growth. NPAT registered growth of 31% YoY on a constant currency basis. EPS stood at 2.33 cents per share during the first half of the year. The company has declared an interim dividend of US79 cents per share unfranked which is 23% higher than previous corresponding period and the same will be paid on 13 April 2018. The company now expects that solid ongoing demand for CSL Behring biotherapies will support topline growth in future. Further, the haemophilia market position continues to be good with new generation products such as Idelvion (rFIX-FP) and Afstyla (rFVIII-SC) that are well placed in the market. On the other hand, Helixate sale might decline as the product winds down. CSL Group’s net profit after tax for FY18 has been upgraded and expected to be in the range of around $1,550 to $1,600 Mn at constant currency basis. The company has completed a US private placement and raised approximately US$700 million for general corporate purposes. While there is demand in plasma therapy products, Seqirus is expected to witness loss in 2H and the group would also witness an uneven expenditure phasing.

Meanwhile, the stock price inclined by 18.6% in the past six months; and despite down by 4.7% in the last five days as at March 23, 2018, the stock trades at a higher level. We give an “Expensive” recommendation on the stock at the current market price of $156.50
 

Robust Performance (Source: Company Reports)

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.