Stocks’ Details

BWX Limited

A Look At 1H FY 2019 Results: BWX Limited (ASX: BWX) had lately declared that one of its Directors named Ms. Jodie Leonard had acquired 15,820 fully paid ordinary shares for the consideration of $2.35 per share as on 4 March 2019.Thus, post this development Ms. Jodie Leonard now has a direct stake in 15,820 fully paid ordinary shares & an indirect stake in 34,180 fully paid ordinary shares.
 
For the 1H 2019, the company reported an underlying EBITDA of $7.1 million a fall of 59.5% on the PCP. The NPAT, for the half-year, after providing for income tax amounted to $2.6 million and witnessed a fall of 51.8% on pcp. The fall in profitability was due to the fact that the Group has faced challenges in the half-year, resulting from numerous disruptions incurred during the same period, which had a significant impact on Sukin revenue, company’s highest margin brand.
 
What to Expect From BWX: The implementation of the new ERP system and unsuccessful management buy-out also impacted the performance of the company, but there is a strong & positive outlook concerning the second quarter. The management has revised its guidance stating that it will deliver an underlying EBITDA for FY19 ranging from $27-29 Mn as compared to the earlier stated $27-32 Mn. This cut is on account of the deferment of the several positive initiatives initially planned for 1H FY 2019.
 
 

1HFY19 Key Financial Highlights (Source: Company Reports)

From the analysis standpoint, the current ratio stood at 1.71x in 1HFY19 with a nominal debt-to-equity ratio of 0.19x, showing decent liquidity of the firm to meet its obligation in the short run.

Meanwhile, the share price has fallen by 17.83% in the past three months and is trading close to a 52-week lower level of $1.345. Hence, considering a respectable annual dividend yield of 3.17% and decent current ratio, the stock looks attractive for accumulation. Therefore, we recommend a “Buy” rating on the stock at the current market price of $2.350 per share (up 6.818% on March 15, 2019).
 
 

Myer Holdings Limited

 
Cost Optimization Initiatives Yet to Show Their Impact: Myer Holdings Limited (ASX: MYR) has recently come up with its results for the half year ended 26 January 2019. As per the same, the total sales from ordinary activities came in at $1,671.4 million, down 2.8% on pcp. The NPAT came in at $41.3 Mn, up 3.1% on pcp. This was on the back of Improved operating gross profit margin and continued disciplined cost management which more than offset the impact of higher depreciation and interest expense.

1H19 Financial Highlights (Source: Company Reports)
 
What to Expect From MYR: As regards the outlook for 2H 2019, the management is expected to continue to focus on the execution of the “Customer First Plan” including an ongoing focus on costs, profitability and cash management. The company will continue its investment in two key areas, i.e., Merchandise to establish new brands and Online business in order to improve both the customer experience and efficiency. However, the company’s stock is quite volatile as, in the previous three months, it delivered 25.93% and, in the previous 6 months, the stock gave -13.56% return. Hence, we maintain our “Speculative Buy” recommendation on the stock at the current market price of A$0.510 per share (down 8.929% on 15 March 2019).
 
 

Superloop Limited

 
Robust Top Line Growth: Superloop Limited (ASX: SLC) has lately disclosed that Mr. Gregory Alexander John Baynton has acquired 43,861 fully paid ordinary shares in Superloop as on 6 March 2019, at a consideration of $1.25 per fully paid ordinary share, resulting in total consideration of $54,826.25. Hence, the total securities held after a change is 856,192.
 
As per the results for the half year ended 31 December 2018, the company’s revenue from ordinary activities came in at $60.3 million, up 18% from the previous corresponding period. This growth was on the back of Connectivity Revenue which grew by 7%; also, the Broadband Revenue increased by 107%. However, this was slightly offset by the dismal performance witnessed in the company’s services revenue segment. Also, the EBITDA was $4.5 million versus $7.5 million for the previous corresponding period. This fall in EBITDA reflects the change in focus from managed services to connectivity and broadband as well as the short-term duplication of costs during the transition period.
 
 

1HFY19 Financial Highlights (Source: Company Reports)
 
What to Expect From SLC: As regards the outlook for H2 FY19, in the service segment the management will look into rationalising its product set to ensure that it is allocating capital appropriately and leveraging the company’s unique network assets. Also, it will work on Integrating CyberHound security product to compliment Superloop connectivity in Australian schools. With regards to the Broadband segment, the completion of connection into NBN points of interconnection will reduce off-net costs & create higher margin, faster, more reliable internet. Moreover, the stock is hovering around its 52-weeks low price of $1.282. Hence, considering the decent outlook coupled with capital allocation initiatives (as stated above) and attractive price levels, we recommend a “Buy” rating on the stock at the current market price of A$1.455 per share (up 1.042% on 15 March 2019).


 
Stock Price Comparative Chart (Source: Thomson Reuters)    
 

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.