WorleyParsons Limited

WOR Details
Interested in leveraging various infrastructure related opportunities: WorleyParsons Limited (ASX: WOR) is being in the news as reports are doing the rounds that the group may consider partnering with the Dar Group for some global engineering and infrastructure projects. WOR has highlighted that the group might work with the Dar Group on opportunities, if any, arising in the Middle East and Africa particularly. The latter has been identified to have acquired about 19.9% interest in WOR, and the rise from an earlier 13% stake to about 20% reflected a “vote of confidence” in the company. WOR is also reported to be not soliciting any takeover proposal (Dar had earlier approached WOR with a $2.9 billion takeover proposal). UBS on the other hand, ceased to be a substantial holder of the group, as reported on April 24, 2017. WOR has been on the contract-winning spree, with the latest addition being a Project Management Consulting services contract from Manaseer Group for a greenfield integrated potash and phosphate fertilizer complex in Jordan. Earlier, the group inked a multi-regional agreement with Chevron. In last six months, WOR stock has risen about 21.7% (as at April 21, 2017) and is nearing its 52-week high price. We give a “Hold” recommendation at the current price of $ 11.24


WOR Daily Chart (Source: Thomson Reuters) 

Village Roadshow Limited

VRL Details
Subdued performance expected from Village Roadshow Theme Parks (VRTP): Village Roadshow Limited (ASX: VRL) witnessed a stock price crash of 6.7% on April 24, 2017 at the back of a soft trading update with regards to Village Roadshow Theme Parks (VRTP) entailing total Theme Park division’s FY17 earnings before interest, tax, depreciation and amortisation, excluding material items (“EBITDA”) now expected to be $55 million - $65 million, subject to the level of June 2017 VIP pre-sales and attendances at the Gold Coast. Primarily, the October 2016 tragedy at Ardent Leisure Group’s Dreamworld had impacted VRL’s Theme Parks division’s performance and conditions further deteriorated owing to cyclonic weather that prevailed in March and April 2017. While core local market witnessed subdued environment, and Gold Coast parks’ performance was cushioned by strength in international and interstate visitation during the peak summer period. There has been a 9.4% decline in total attendance for the Gold Coast parks for the nine months to March 31, 2017 along with a dip in March’s membership renewals. Owing to similar conditions, Sydney Wet’n’Wild is expected to have a subdued second half of financial year 2017. The group now expects to be back on track following key marketing campaigns and the introduction of new attractions. Recently, VRL reduced its stake in the loss-making Village Roadshow Entertainment Group (VREG) and entered into a transaction with Vine Alternative Investments and Falcon Investment Advisors. Through this move, VRL will be able to get rid of further funding obligations associated with VREG. Considering a mixed scenario entailing the current downside and a boost expected in the tourism industry in the upcoming months, we give a “Hold” recommendation at the current price of $ 3.75


VRL Daily Chart (Source: Thomson Reuters) 

Spotless Group Holdings Limited

SPO Details 
No material outcome on discussion with a listed global facilities services company for a superior proposal: Spotless Group Holdings Limited (ASX: SPO) has asked its investors to turn down the takeover offer ($1.2 billion with $1.15 per share bid) from Downer EDI citing the same to represent an inadequate value for SPO. In addition, SPO has stated that the group can deliver greater value to its shareholders than the Downer offer in the medium term, at the back of fundamental strengths of group’s core business and management's execution of the strategy reset. SPO’s strategy reset is already signalling for growth potential. On the other hand, SPO’s discussion with a listed global facilities services company over a potential alternative bid did not yield a material outcome. This is speculated to give some advantage to DOW. However, SPO is still ready to explore options in relation to a superior proposal to Dow’s offer. Further, the current 10.4% SPO stake by Coltrane Asset Management of New York might not allow Downer to attain the bid condition of 90% minimum acceptance for the takeover.
 

Contract Wins and Renewals (Source: Company Reports)
 
Spotless intends to release its target’s statement on April 27, 2017 with full-year earnings guidance for 2017 and 2018. It is worth noting that the Downer’s bid is dependent on SPO’s projections as well. The stock fell 0.45% on April 24, 2017.We maintain a “Hold” on the stock at the current price of $ 1.10


SPO Daily Chart (Source: Thomson Reuters)

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