Computershare Limited (ASX: CPU)

The company reported Statutory Basic Earnings per Share of 27.61 cents per share for FY 2015 which is a decrease of 38.9% over the previous year. Management Earnings per Share came to 59.82 cents per share indicating a decrease of 0.7% over the previous year, and a final dividend of 16 cents per share 25% franked has been declared which is an increase of 1 cent per share over the previous year.


Revenue & EBITDA and Operating Margin (Source: Company Reports)
 
Statutory results for the year showed a decline of 2.2% in total revenues to $ 1.98 billion and decline of 38.9% in statutory net profit to $ 153.6 million. Management results showed EBITDA up 2.5% to $ 554.1 million. Management net profit was down 0.7% to $ 332.7 million, cash flow from operations was down 9.1% to $ 372.1 million and free cash flow was down 12.5% to $ 343.7 million. The ratio of net debt to EBITDA was down from 2.13 times to 2.10 times. The management results are used for superior analysis of operating performance and the management believes that the exclusion of certain items make for a better analysis. The company is also set to create almost 200 jobs in Bristol based on growing demand for its services. The conventional metrics indicate that the share is pricey as of now and accordingly, we give an Expensive recommendation for the stock.
 
 
CPU Daily Chart (Source: Thomson Reuters)
 

DEXUS Property Group (ASX: DXS)

The company recently announced for entering into an agreement to sell 57-65 Templar Road in Erskine Park, which is expected to contribute about $12 million pre-tax to FY17 trading profits. This comes at the back of leasing success that helped achieve 100% property’s occupancy. The company lately announced an operational update across its property portfolio for the quarter ended 30 September 2015. It has leased 35,088 m² of space across 78 transactions in the office portfolio, 50,873 m² of space across the industrial portfolio including the securing of a new lease across 18,013 m² of space and completed the final stage of development at 5 Martin Place, Sydney with committed office space increasing to 96% from 42%. It has achieved revaluation gains of $ 40 million; settled on the sale of few properties for FY 2016 trading profits of approximately $ 60 million net of tax; and divested 36 George Street in which the company has a 50% interest, reflecting a premium of $ 29 million or 44% to book value.
 

Results (Source: Company Reports)
 
However, office metrics have been disappointing with occupancy (by income) dipping to its lowest level in over ten years to 93.7%. Earlier the company had reported results for FY 2015 showing revenue up by 22.7% to $ 858.9 million, net profit after tax up 52.2% to $ 618.7 million, EPS up 36.3% to 67.58 cents per share and total distributions up 9.3% to 41.04 cents per share. However, we believe the stock is expensive as of now given a mixed set of results for the company.
 

DXS Daily Chart (Source: Thomson Reuters)
 
 

Telstra Corporation Ltd (ASX: TLS)

 
Australia’s largest telecommunications company has released its results for FY 2015. On a reported basis, total income excluding financial income rose by 1.2% to $ 26.6 billion and EBITDA declined by 3.5% to $ 10.7 billion. On a guidance basis, total income increased by 2.3% to $ 26.3 billion and EBITDA increased by 2% to $ 10.8 billion. Net profit after tax declined by 5.8% reflecting the growth of the business without the CSL operating results and the one-off profit from the sale of CSL. EPS increased by 0.3% to 34.5 cents per share and the final dividend was 15.5 cents per share making a total dividend of 30.5 cents per share for FY 2015. The company stated that it continues to attract new customers with a net addition of 664,000 retail customers and 189,000 retail fixed broadband customers. In November 2014, the company launched its new 4GX service to customers in 1200 suburbs and towns and also switched on the largest Wi-Fi network in Australia with hotspots in more than 250 towns and cities.
 

Financial Settings (Source: Company Reports)
 
For FY 2016, the company aims to deliver mid single-digit income growth and low single-digit EBITDA growth. Cash flow is expected to be between $ 4.6 billion and $ 5.1 billion, and capital expenditure to be around 15% of sales being used for increased mobile network investments. However, it is prudent to note that though TLS is the largest provider of integrated telecommunication services in Australia and is a leading mobile platform, there has been a rise in competition. Further, with the roll-out of National Broadband Network (NBN), the competition might further shoot up thereby having an impact on margins. Then impacts from slower subscriber growth and challenges to average revenue per user growth may also be few factors to consider. We look forward to the investor day on 29 October 2015 that would be revealing a lot of insights. As of now, we believe that the stock is Expensive at the current price.
 

TLS Daily Chart (Source: Thomson Reuters)
 
 
 

Collins Foods Ltd (ASX: CKF)

 
The company announced its results for the financial year 2015 and reported strong underlying earnings growth and better than anticipated performance from the Western Australia and Northern Territory KFC restaurants. Underlying revenues were up by 34.4% to $ 571.6 million with KFC same-store sales up by 4.8% and Sizzler Australia same-store sales down by 8.5%. Six new KFC restaurants were built and 16 underwent major remodelling in Queensland and Western Australia. EBITDA was up 37.5% to $ 67.4 million and statutory net profit after tax was substantially impacted by a non-cash impairment charge of $ 37.5 million on account of Sizzler Australia and resulted in a statutory loss of $ 10.4 million.
 

Net Debt/ Net Leverage Ratio & Return on Capital Employed (Source: Company Reports)
 
The balance sheet was strong with net debt down by $ 5.2 million to $ 122.8 million. The net leverage ratio was reduced from 2.22 times in the previous year to 1.83 times. The fully franked final dividend was of the order of 6.5 cents per share and the total dividend fully franked was up 9.5% to 11.5 cents per share. The company has announced it no longer considers Sizzler Australia to be a core strategic asset and will no longer be investing further capital. The risks related to termination of KFC franchise agreements and supply chain disruption may impact the performance. We put an Expensive recommendation for the stock at the moment considering a mixed sentiment for the company in terms of performance and risk factors.
 
 

CKF Daily Chart (Source: Thomson Reuters)

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