Mortgage Choice Ltd

MOC Details
Strong growth in Financial planning: Mortgage Choice Ltd (ASX: MOC) reported a 16.2% rise in cash NPAT to $11.7 million for the first half of FY17. Cash net profit for the half year was driven by an increase in net commission income, an increase in revenue generated by the strong control on OPEX. Commission income increased by 3%.  As per IFRS, the cash NPAT was at $11.4 million, up 6.4% from its corresponding period. Core broking business cash NPAT was up 4% while Financial planning business cash NPAT was up 113% with this business delivering a monthly result in 5 out of 6 months this half. HMC division was shut down during the period, however has received trailing commission from products introduced prior to closure.  Growth in FUA and PIF helped Financial planning deliver consistent monthly profit results. Lending loan book jumped up 3.3% to $52.4 billion while settlement was up 2.4% to 6.4 billion. MCFP funds under advice climbed 35.8% from $311.6 million in H1FY16 to $423.1 million in H1FY17. MCFP insurance premiums inforce surged past the $20 million milestone in H1FY16 to $423.1 million in H1FY17. The company reported basic EPS of 9.4 cents, up 16% while IFRS EPS was up 7% to 9.2 cents. The company declared interim dividend of 8.5 cents, which is higher by 6.3% compared with corresponding period. We recommend a “HOLD” on the stock at the current market price of $ 2.47 

 
MOC Daily Chart (Source: Thomson Reuters) 

MYOB Group Ltd

MYO Details
Double-digit growth across key financial measures:MYOB Group Ltd (ASX: MYO) continued to deliver a strong growth across all key financial metrics. Revenues increased to $370.4 million in FY16, up 13% to prior year. SMEs Solutions’ revenue was higher by 14% $233.2 million, Practice solutions were up 3% to $84.1 million, and Enterprise solutions were up 26% to 51.6 million. The organic revenue was up 11% from FY15, largely driven by 13% uplift in recurring revenue, representing 98% of SME Solutions total revenue. The pro forma EBITDA were $171.5 million, up 12% on prior year and EBITDA margins were at 46.3%. MYOB’s preferred measure of after tax profit was $96.8 million, up 13% on prior year. The Board has declared a final dividend of 5.75 cents, up 15% from the final dividend in FY15. Meanwhile, the group’s number of online subscribers increased 47% to 249,000 and number of paying SMEs increased 7% to 585,000. The SME ARPU increased 7%. MYOB invested $56 million in R&D in FY16, spending a major chunk of it on the MYOB platform. The development of MYOB platform is progressing positively with rapid uptake of new modules such as Practice Ledger, Portal and Dashboard. The company launched a number of new and innovative products and connected services to SME clients in 2016, including PayDirect Online, YourPay and PayAgent, to help drive uptake of its new online solutions and client retention. MYOB is acquiring Paycorp who is a leading market provider of payment processing solutions to over 6,500 clients. The acquisition is expected to complete on April 01, 2017 and will be immediately EPS accretive. Going forward, the group expects double-digit revenue growth for 2017 year and EBITDA margins to remain in the 45-50% range. We recommend a “Hold” on the stock at the current market price of $ 3.51

 
MYO Daily Chart (Source: Thomson Reuters) 

Ramsay Health Care Ltd

RHC Details
Focusing on cost savings:  Ramsay Health Care Ltd (ASX: RHC) reported a core NPAT up 12.8% to $267.8 million for H1FY17 while core EPS was up 13% to 128.9 cents. The group’s revenues for H1FY17 were up 3.5% to $4.3 billion and EBIT grew 8.8% to $463.5 million. Australia Revenues grew 8.8% to $2.4 billion, United Kingdom revenue growth was 6.8% to $217.3 million pounds and France reported 6.1% growth to 1.1 billion Euro. The group declared dividend of 53 cents, up 12.8%. The group has completed brownfield development of $142 million with further $90 million approved during the period.
 

Performance (Source: Company Reports)
 
The company said majority of its Australian Hospital funding arrangement were renewed during 2016 with an average of 3 year terms. The group during the period has successfully integrated HOM Group in France. Further, the procurement strategy is expected to deliver over $40 million of savings over the full year. Going forward, the group expects core NPAT and core EPS to grow 12%-14% for FY17 as against its previous expectation of 10%-12%.  We recommend a “HOLD” at the current market price of $ 69.46

 
RHC Daily Chart (Source: Thomson Reuters) 

Flight Centre Travel Group Ltd

FLT Details
Record transaction value: Flight Centre Travel Group Ltd (ASX: FLT) reported severe fall in underlying net profit after tax for H1FY17 to $78.2 million. Revenues also fell about 1% to $1,251 million. EPS fell 36% to 73.5 cents. The group has declared dividend of 45 cents per share against 60 cents of previous period. Flight Centre Travel has completed few acquisitions in promising market including a small travel agent in Mainland China. Despite record Total Transaction Volumes (TTV) in LC in 9 out of 10 regions, the profit was significantly lower.
 

TTV Growth (Source: Company Reports)
 
TTV growth outpaced network growth rate, despite deflationary impact on airfares, resulting in increase in TTV per person. The Australian sector delivered strong TTV, and Flight Centre’s ticket sales grew faster than the rate of outbound travel.  We give a “Buy” recommendation on the stock at the current market price of $ 28.33

 
FLT Daily Chart (Source: Thomson Reuters) 

Qantas Airways Ltd

QAN Details
Qantas and Jetstar growing margin advantage: Qantas Airways Ltd (ASX: QAN) reported a fall in revenues by 3.3% to $8.2 billion in H1FY17 while statutory profit fell 25.1% to $515 million from $688 million. Jester profit however grew 5% and reported a record half year underlying EBIT of $275 million. Moreover, the group has declared a fully franked dividend of 7 cents per share. Underlying PBT was at $852 million while statutory PBT was at $715 million. Twelve month ROIC was at 21.7%. The company said Qantas transformation is on track to deliver $2.1 billion in benefits and to date $1.9 billion benefits have already been delivered. Qantas domestic airlines continued to remain highest and second highest margin airlines in the domestic market. Qantas is opening new domestic business lounge in Brisbane in March 2017, with new Qantas Club following in Q4FY17. Internationally, London lounge is due for completion in 2017. The future performance depends upon oil price movement and also on the competitive position. We feel the stock is still “Expensive” at the current market price of $ 3.75

 
QAN Daily Chart (Source: Thomson Reuters)

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