Coca-Cola Amatil Limited

Expecting Moderate Growth in 1HFY18: Coca-Cola Amatil Limited (ASX: CCL) is a mid-cap company with the market capitalization of circa $6.77 Bn as of August 14, 2018. It provides ready-to-drink alcohol and non-alcoholic beverages, spring waters, sports and energy drinks, fruit juices, iced tea, flavoured milk, coffee, tea, beer, cider, and spirits, etc. across the market. On the financial front, FY17 Profit attributable to shareholders (before non-trading items) was broadly in line with FY16, at $416.2 Mn. The Board of Directors declared 26.0 cents per share, franked to 70 per cent, resulting in a total dividend for 2017 of 47.0 cents per share, franked to 70 per cent. This represented an underlying payout ratio of 82.4 per cent for the full year. We expect that the company will maintain its focus on the priorities of business performance, partnerships, capability, and sustainability, giving priority to stabilizing Australian Beverages and growing other businesses. Given the backdrop of aforesaid facts, we presume that 1HFY18 performance will be quietly up as compared to the prior corresponding period.


Strong Product Portfolio (Source: Company Reports)

Meanwhile, CCL stock has risen 12.38% in the past six months as on August 13, 2018 and is trading at a level close to 52-week high. The group will report its 1H18 result in the next week around 22 August 2018. However, the group’s initiative towards structural changes, innovations, and high demand of its product mix in the market can drive profitable growth ahead while some negative sentiments on health related front do hover around. Hence, we maintain our “Hold” recommendation on the stock at the current price of $ 9.44 as it is trading at a reasonable PE level of 15.64x among its peer group.
 

Crown Resorts Limited

Strong FY18 Performance: Crown Resorts Limited (ASX: CWN) is a mid-cap entertainment company with the market capitalization of circa $ 9.75 Bn as of August 14, 2018. It has recently released its full-year results wherein Normalised NPAT attributable to the parent increased by 5.8 per cent in FY18 and amounted $326.7 Mn as compared to the prior year. Normalised EBITDA grew by 6.1 per cent to $878.3 Mn in FY18 against FY17. The overall growth was mainly driven by a good cost performance at Crown Perth and higher than expected VIP turnover growth during the same period. At 30 June 2018, the group has total liquidity of $1,889.8 Mn (excl. working capital cash of $130.9 Mn). This comprised of $1,713.7 Mn in available cash and $176.1 Mn in committed undrawn bank facilities. On the back of the overall performance, the Board of Directors declared a final dividend for six months ending 30 June 2018 of 30 cents per share and this is 60% franked totalling to $413.4 Mn. The final dividend will be paid on October 05, 2018 with the record date of September 21, 2018. The group enjoys rich cash position and announced a new $400 Mn buy-back program in which the group intends to buy back 687,421,194 ordinary shares with an aggregate consideration of $400 Mn for ongoing capital management purposes. The buy-back will start on August 30, 2018 and will end on August 29, 2019. We expect that the company will continue to generate decent earnings in years ahead at the back of organic and inorganic growth along with positive tourism sector trend across the regions.


FY18 Financial Highlights (Source: Company Reports)

Meanwhile, the stock has risen 9.15 per cent in the past six months (as at August 13, 2018) and is trading close to 52-week higher level ($ 14.590). Considering the foregoing update, we maintain our “Hold” recommendation on the stock at the current market price of $ 14.370 by looking at its decent fundamentals.

 
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.