Rural Funds Group (ASX: RFF)

Better Productivity: Up 4.5% on February 21, 2018, Rural Funds Group (ASX: RFF) through Rural Funds Management Ltd (RFM), as responsible entity and manager for RFF, has announced half year 2018 financial results entailing 22% rise in adjusted funds from operations (AFFO) to $15.4m and 4% growth in distributions of 5.02 cpu. Productivity improvements aided in independent valuation increase for cattle property. The adjusted total assets increased owing to acquisition of three adjoining cattle properties in northern Queensland totalling 390,600 ha, referred to as Natal. The group now expects FY18 AFFO of 12.7 cpu and distribution of 10.03 cpu while FY19 distribution of 10.43 cpu has been forecasted. We maintain a “Hold” on the stock looking at the current scenario and outlook.
 

Pacific Smiles (ASX: PSQ)

Network Expansion: Up 3.7% on February 21, 2018, dental clinics operator has been putting efforts on business expansion as seen in 1H 18 and reported a 9.7% rise in Patient Fees across the full Pacific Smiles dental centre network of $80.7 million with 10.8% growth in revenue of $50.5 million over the prior corresponding period. While underlying NPAT shrunk by 8.5%, EBITDA (underlying) was up 2.0% on the prior period. On the other hand, network expansion with 5 new Pacific Smiles Dental centres opened in H1 2018, brought the total to 75 centres as at 31 December 2017 and the group managed to declare interim dividend of 2.3 cents per share (fully franked) against H1 2017 dividend of 2.2 cents per share. All in all, a decent result has been reported with EBITDA growth for FY 2018 forecasted to be 10% on FY 2017 with Patient Fee growth of 10 – 15% on FY 2017. We maintain a “Hold” on the stock.
 

Data#3 Ltd (ASX: DTL)

Disappointing half year result: Technology company, Data#3 slipped on ASX with its FY18 interim net profit after tax, excluding minority interests, falling 52.5% to $2.7 million, at the back of unplanned events affecting product and services divisions (including customer delays, delivery constraints). While revenue surged 8.2%, the EBITDA dropped significantly by 45.6%. In fact, interim dividend plunged 52.2% from the previous year to 1.60 cents a share, fully franked. While the group aims to improve the performance through its pipeline of opportunities (with large integration projects) and growth in Australian IT market, it would be better to avoid this stock at the moment.
 

Bellamy's Australia Limited (ASX: BAL)

Rise in stock price: With the competitor A2 Milk surging high on February 21, 2018, Bellamy’s also moved up about 10%. Recently, the group upgraded its FY18 revenue and profit guidance and advised the market of the status of its China CFDA application and a binding agreement to acquire the remaining 10% beneficial interest in Camperdown Powder Pty (Camperdown) conditional on Camperdown obtaining CFDA approval for the Company's branded products. Full year FY18 guidance for its core business has been upgraded from 15-20% to a revised target of 30-35% revenue growth on FY17. While, the group seems to be resurrecting well against the last year performance, we have a “Hold” on this stock.
 

BWX Ltd (ASX: BWX)

Plunged heavily on multiple factors: Down 31.4% on February 21, 2018, cosmetics company BWX seems to be hammered by the investors at the back of price correction, interim result and revenue impacts owing to certain factors. The group’s NPAT (statutory) was down 34.1% while normalised NPAT of $10.7m was up 30.5%. The group reported revenue growth of 79.2% to $67.2m over prior first half year 2017 while gross profit of $40.0m represented a 63.9% increase. The interim fully franked dividend of 3.25 cents per share was up 30% versus prior first half 2017. On the other hand, the group highlighted that discontinuation of third party brand representation in order to concentrate resources towards maximising the returns from its own brands with introduction of a national distribution model will lead to unbudgeted reduction in third party revenues of approximately $6.5m, with approximately $2.5m 1HFY18 and $4m 2HFY18. Nonetheless, EBITDA guidance has been highlighted to be in the range of $42m - 46m for FY18, representing an increase of between 60% - 74% on FY17. While the acquisitions of North American businesses Andalou, Mineral Fusions and Nourished Life seem to be weighing towards some concerns when it comes to cost, the second half is expected to help regain some of the lost momentum. We have a “Hold” recommendation on the stock looking at the complete scenario and group’s potential.

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