CSL Limited

Margins Contraction Witnessed: CSL Limited (ASX: CSL) stated that it would pay a fully franked ordinarydividend for the six-month period ending December 31, 2018, of AUD 1.20317500, the record date for which was March 14, 2019, and the payment date shall be April 12, 2019. Also, the company has declared its 1H FY19 results where it reported a decent profit growth. It reported sales revenue of $4,505 million, up 11% in constant currency terms on pcp basis. This rise was witnessed on the back of rising in the usage of immunoglobulin products used for chronic therapies, sales of transformational Hereditary Angioedema (HAE) product and improved sales of adjuvanted influenza vaccine.
 

1HFY19 Financial Highlights (Source: Company Reports)
 
What to Expect From CSL: The company expects NPAT for FY19 to be in the upper-end range of approximately $1,880-$1,950 million in constant currency terms. Furthermore, the management assumes that there would be continued demand for plasma and recombinant products. The company expects to open 30 to 35 new collection centres moving forward, and this plan is on track.
 
The firm has posted a drop in RoE to 26% for the 1H 19 vis-a-vis 31% in the pcp, also the EBITDA margin fell to 39.5% for the period while EBITDA margins stood at 41.7% for the pcp. In the meantime, the stock price has dropped 4.12% in the past six months. However, the company’s stock is trading slightly towards the 52-week higher level and, thus, it can be said that the current trading juncture might have discounted all the key growth catalysts. As a result, we maintain our “Expensive” recommendation on the stock at the current market price of A$197.580 per share (up 1.354% on 1 April 2019).
 

ResMed Inc

Massive bottom-line growth In Q2FY19: ResMed Inc. (ASX: RMD) is a leading health company which provides cloud-connected health care services and devices to patients across 120 countries.ResMed and Fisher & Paykel Healthcare recently made an agreement that they will settle all outstanding disputes on patent infringement in all venues around the world.

Consolidated Performance Q2 FY19 (Sources: Company Reports)

In the second quarter of fiscal year 2019, the company’s revenue increased to US$651.1 million as compared to US$601.3 million in the previous corresponding period, an increase by 8%.The revenues in the US, Canada and Latin America, excluding the Software as a Service, rose 9% as compared to prior year period on the back of robust sales across the mask and device product portfolios. The net income increased by 1,208% to US$124.6 Mn in Q2FY19.
The company invested $155.1 million in FY18 on research & developments with a focus on the growth and commercialization of new and innovative products.

What to Expect Moving Forward: Going forward, the company will thrive on the strategies to expand the business operations & capitalize on growth through continuous product development and innovation in SDB products and in respiratory care products. Additionally, the company would also expand the geographic presence, increase public and clinical awareness, and expand into the new clinical applications.

With strong financials backed by robust quarterly performance in Q2FY19 and looking at current trading level, we maintain our “Buy” recommendation on the stock at the price of A$14.720 per share (up 1.869% on April 01, 2019).
 

Flight Centre Travel Group Limited

Margins under pressure: Flight Centre Travel Group Limited (ASX: FLT) had declared its fully franked interim dividend of 60 cents per share and fully franked special dividend of 149 cents per share.  This summarized a total dividend payment of 209 cents per share for the period of six months and it will be paid on April 12, 2019 to the shareholders who registered on or before March 22, 2019. 

The company’s 1H total transaction value increased by 10% to a record $11.16 billion i.e. a result which surpassed PCP’s record result by over $1 billion. The underlying PBT increased modestly to $140.4 million and was within the company’s targeted range for the period. However, the net margin (underlying PBT as a percentage of TTV), decreased to 1.26% against 1.37% in the prior corresponding period largely as a result of the lower Australian leisure profits during the first half.

Results for 1HFY19 (Source: Company Reports)

FY19 Guidance: The company will have a focus on expansion in models and sectors that are currently performing well, including specialist Flight Centre businesses, online and home-based agents. Also, the company is targeting to build a stronger network by closing or relocating poorly performing or poorly located shops and by opening new shops in prime locations.

FLT anticipates to make further progress towards the FY 2022 business transformation goals, relating to TTV growth, cost margin and net margin.

During the calendar year 2018, the general cash reduced from $361million to $284 million, mainly driven by, corporate BSP timing and repayment of $59 million of short-term borrowings.

The company’s stock posted -17.19% return in the span of previous 6 months and, in the time frame of three months, the returns were 1.32%. This reflects that the stock is quite volatile.

Thus, we have a watch stance on the stock at the current market price of A$43.150 per share (up 2.616% on April 1, 2019).


Stock Price Comparative Chart (Source: Thomson Reuters)       

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