Independence Group NL

IGO Details

Production ramp-up at Nova: Nova is a world class, low cost magmatic nickel-copper project with High grade, flat lying magmatic sulphide orebody. The loading of the first offshore shipment of nickel and copper concentrate from Esperance Port was completed with the shipment of 6,700 wet metric tons of nickel concentrate and 5,600 wet metric tons of copper concentrate. Importantly, IGO has two nickel concentrate offtake agreements, one with Glencore where concentrate was shipped overseas, and one with BHP Nickel West where concentrate was trucked to the Kambalda on an ongoing basis.


Operating margin break-up; (Source: Company reports)
The company has made a considerable progress with underground development and production, as well as in the processing plant transitioning through continuous operations. Metal production in concentrates in FY17 is expected to be in line with the plan, about ~3,400t nickel and ~1,500t copper. Further, substantial progress has been made on the lateral mine development of the Nova deposit allowing the first large stope of 60,000t to be accessed in May 2017 and subsequently mined, while mining of two similar tonnage stopes commenced in June 2017. Moreover, through the September 2017 quarter, the number of stopes accessed will be increased to ramp-up the underground ore production from the 74,000t (achieved in May 2017) to the name plate monthly target of 125,000t by September 2017 in-line with previous guidance. Over the past six months, the stock has declined 24.7%, while it was down 16.1% in the last three months (as on June 20, 2017).  Given the ongoing progress at Nova project and its contribution to overall operating margin going forward, we maintain a “Buy” recommendation on the stock at the current market price of $3.15


IGO Daily chart; (Source: Thomson Reuters) 

BT Investment Management Ltd

BTT Details

On 9^th June 2017, S&P Dow Jones Indices included the BT Investment Management Ltd (ASX: BTT) in S&P/ASX 100 Index, while removing Navitas Limited (ASX: NVT) as part of its June quarterly review. Further, BTT announced that the allocation price for shares to be issued under BTIM’s Dividend Reinvestment Plan (DRP) for the 2017 interim dividend payable on 5 July 2017, will be $11.21. In turn, it was anticipated that the total number of new shares to be issued under the DRP on 5 July 2017 will be 278,173, which will bring the total of ordinary shares on issue to 314,998,763.

The company had reported net inflows of $4.6 billion for the period for the six months to 31 March 2017, and the average FUM surged 10% to $86.3 billion against prior corresponding period. While, cash net profit after tax (Cash NPAT) was in line with pcp (prior corresponding period) at $88.4 million, statutory NPAT was up 1% to $79.0 million. The overall results were impacted by lower performance fees and adverse currency movements, in turn led to 2% yoy decline in cash earnings per share (Cash EPS) to 28.4 cents during same period. Recently in May 2017, Westpac Group sold around 60 million shares in BT Investment Management Limited (BTIM) at $10.75 per share, while retaining a 9.8% holding in BTIM post the settlement of the offer. The stock has moved up 51.8% over the past one year and currently trading at its 52-week elevated levels as on June 30, 2017. We maintain an “Expensive” recommendation at the current price of $11.38


BTT Daily chart; (Source: Thomson Reuters)

CSR Limited

CSR Details

For full year ending March 2017, CSR reported a revenue growth of 7% year on year (yoy) to $2.47 billion while posting net profit growth of 25% yoy at $177.9 million. Net profit growth was driven by a substantial increase in earnings from building products as it reported a record EBIT of 21% yoy at $202.8 million, led by the robust market for residential housing on the east coast of Australia.  However, Aluminum segment reported EBIT fall of about 11% to $93.1 million led by 4% yoy decline in realizations and subdued volumes growth of 1% yoy. The growth in earnings led to a 5% yoy increase in operating cash flow to $264.8 million and an 11% increase in the full-year dividend to 26.0 cents per share. The company’s 81% of net aluminium sales hedged at an average price of A$2,373 per ton (before premiums) for the year ending March 2018, and company expects that earnings will be supported by steady demand from detached housing and high-rise construction on the east coast coupled with improvement in Viridian’s earnings due to restructuring initiatives.

CSR Ltd.’s stock has moved up 24.0% over the last twelve months (as on June 30, 2017). Given, the current scenario as the residential construction markets peaked from recent record levels of activity and expected slowdown in the sector, we maintain an “Expensive” recommendation on the stock at the current market price of $4.23


CSR Daily chart; (Source: Thomson Reuters)

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