Village Roadshow Ltd

VRL Details
Successfully completed transcoding Showcase: Village Roadshow Ltd (ASX: VRL) and Linius Technologies Ltd successfully completed transcoding Showcase, and are now making path for commercialization. The Showcase confirmed that the Linius Video Virtualization Engine™ (VVE™) removed the need for transcoding. VRL stock lost over 40.5% this year to date (as of December 23, 2016) impacted by the concerns over their theme park performance. Tragic incident at Dreamworld in October contributed to the weak sector sentiment. VRL stock was removed from S&P/ASX All Australian 200 Index post December 16, 2016 close. On the other hand, VRL is making efforts to revive their overall performance. VRL Cinema Exhibition division reported strong FY16 results which is fifth consecutive record result. VRL continues to grow their Cinema circuit, even in 2017 financial year, and accordingly opened two exciting new bar concepts in Victoria, with Roc’s at the Jam Factory and nineteenforty on the Rivoli Rooftop. Cinema Exhibition division made a good start driven by good performance by Finding Dory, Suicide Squad and Secret Life of Pets. After a weak September at Wet’n’Wild Sydney, the group launched new exhibition and several guest service initiatives including Dinosaur Lagoon, better food menu, a summer concert series, Halloween and Christmas special events to boost FY17 performance. Village Roadshow Pictures renewed film financing facilities for USD775 million until 2021.
 

VRL group earnings division (Source: Company Reports)
 
For Theme Parks division, the group is getting Topgolf, major American golfing entertainment concept to Australia and would open by late 2017. Despite pursuing opportunities in Asia, management reported that they would be cautious over investment in China. After a fatal incident in Dreamworld, the group’s focus on safety and wellbeing of guests became their utmost priority. The group’s Film Distribution division is leveraging the subscription video on demand market opportunity via their relationships with Stan and Netflix. We believe investors can leverage the subdued levels as we give a “Buy” recommendation on the stock at the current price of - $ 4.48
 

VRL Daily Chart (Source: Thomson Reuters) 

Independence Group NL

IGO Details
Completed acquisition of Windward shares: Independence Group NL (ASX: IGO) recently reported that they have completed the compulsory acquisition of remaining shares of Windward Resources. IGO is executing an exploration program at Lake Mackay Project as part of an exploration alliance with ABM Resources. Recently, the group finished 18 RC hole program at EL24915 as part of their reconnaissance drilling program. Several further intersections at the Grapple Prospect include 6m at 8.98 g/t gold, 23.5 g/t silver, 1.45% copper, 1.40% zinc, 0.26% lead and 0.15% cobalt. Both the JV partners expect a potential to unlock a new metallogenic province hosting multiple styles of mineralization.
 

Lake Mackay Project location (Source: Company Reports)
 
AngloGold Ashanti Australia Ltd (70% and manager) and Independence Group NL (30%) joint venture project, Tropicana is also showing up strong potential. Throughput capacity of the processing plant in the Tropicana project is now enhanced to 7.5 million tonnes per annum (mtpa) from 5.8 mtpa while the launch of a 600 tonne shovel would accelerate mining rates. Moreover, the Tropicana project’s Gold production is projected to rise to an annualized rate of 450,000 – 490,000 ounce per annum from the second half of calendar 2017, and more potential is expected based on the outcome of the Long Island Study. IGO stock generated over 58.91% in this year to date (as of December 23, 2016) and we believe there is more momentum in the stock given their strong prospects. Accordingly, we maintain our “Hold” recommendation on the stock at the current price of - $ 4.26
 

IGO Daily Chart (Source: Thomson Reuters) 

Caltex Australia Ltd

CTX Details
Buying Gull New Zealand: Caltex Australia Ltd (ASX: CTX) recently reported that they are acquiring Gull New Zealand (Gull) for NZ$340 million (or A$325 million). With this move, the group would now hold Gull’s Mount Maunganui import fuel terminal and retail operating assets. The group’s retail fuel offering would now be strengthened while risk decreases. Transaction represents 8.2x 2017 forecast EBITDA and over 7.5x total annualized synergies while the acquisition would be earnings per share accretive in the first full year of ownership. Meanwhile, CTX forecasts a full year Historic cost profit after tax in the range of $560 million to $580 million while Full year Replacement Cost Operating Profit NPAT is estimated to be the range of $500 million to $520 million. The group expects that Lytton operating performance would offset unfavorable externalities. CTX expects EBIT of over $200 million while corporate costs are expected to be over $100 million. Lately, the group reported about Woolworths Ltd.’s deal with BP for sale of fuel business while CTX’s fuel alliance ends with Woolworths and the group aims to update the market following any change to Woolworths wholesale supply arrangement. CTX stock fell about 9.5% in last three months (as at December 23, 2016). We give a “Hold” recommendation on CTX at the current price of – $ 29.99
 

CTX Daily Chart (Source: Thomson Reuters)

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