Australian Agricultural Company Ltd

AAC Details
25% reduction in H1 2017 production costs: Australian Agricultural Company Ltd (ASX: AAC) has recently appointed Dr Shehan Dissanayake as the Executive Director with an aim to expedite AAC’s transformation from a traditional cattle operation to a premium branded beef exporter. For H1 2017, the group had reported for operating EBITDA of $13.9m which is up $2.4m over H1 2016. The cattle inventory build was $41.4m, again up $36.0m, and the operating cash flow of ($34.5m) was down $31.4m. AAC’s production costs also dropped 25% to $2.09/kg from $2.77/kg.It is worthy to note that Wagyu branded beef sales price had risen 6% to $13.59/kg from $12.88/kg in the first half while branded beef sales as a share of total sales went up to 92% from 86%. 

Cash Flow (Source: Company Reports)
 
Overall, the group reported for better operating EBITDA and margins on lower revenue. AAC has also formed a Scientific Advisory Board under the chairmanship of Dr Megan Clark, former CEO of CSIRO, who will assist the group in future innovation and technology programs. The stock has surged 6.89% in last one month (as at April 11, 2017) and rose about 3.1% on April 12, 2017 with improved sentiments. We give a “Buy” recommendation on the stock at the current price of $ 1.68
 

AAC Daily Chart (Source: Thomson Reuters) 

Spark New Zealand Ltd

SPK Details
TeamTalk acquisition offer is said to lapse: Spark New Zealand Ltd (ASX: SPK) reported that its acquisition offer for TeamTalk has lapsed with the shareholder vote at the TeamTalk special shareholder meeting to approve the sale of a 70% shareholding in Farmside, being cited by the group. SPK has indicated about not waiving the remaining conditions of its offer to acquire TeamTalk. Accordingly, the offer to acquire 100% of the shares in TeamTalk now stands lapsed. SPK stock price has moved up 2.5% on April 12, 2017. In its half-year results 2017, total operating revenues were reported to have increased by $70 million, or 4.1%, to $1,793 million supported by growth in mobile and IT services. Earnings before interest, income tax, depreciation and amortisation (EBITDA) increased $16 million, or 3.5%, to $471 million with a full six-months earnings contribution from the CCL Group (acquired in December 2015). Improving customer service experiences for consumers and business needed an increased cost for resources that led the total operating expenses for the half-year go up 4.3%. Spark has also partnered with Netflix which has allowed Spark broadband customers to have a subscription to Netflix’s Standard plan for one year on signing up to a 24-month unlimited data Spark broadband plan. The group has also witnessed a substantial number of new business wins in platform IT and cloud, for Spark Digital.Given the mixed sentiments at the back of TeamTalk acquisition offer lapse and trading scenario, we maintain a “Hold” at the current price of $ 3.32
 

SPK Daily Chart (Source: Thomson Reuters) 

GetSwift Ltd

GSW Details
Momentum from partnerships: GetSwift Ltd (ASX: GSW) had gained traction in last one month and has risen 37.7% (as at April 11, 2017), with a 4.1% rise on April 12, 2017. The group has lately inked a partnership agreement with Mobi2Go. This will help GSW to offer additional global touchpoints for Mob2G’s online and mobile ordering system, and diversify its client base. Earlier, the group signed an exclusive multiyear partnership with Commonwealth Bank and this move helped offer CBA’s retail merchants to access class logistics platform for improving customer experience. The deal has been expected to yield 257 million deliveries on its platform for next five years with a transaction value of $9 billion. The stock is now trending close to its 52-week high price, and we give a “Hold” recommendation at the current price of $ 0.76
 

GSW Daily Chart (Source: Thomson Reuters) 

DroneShield Ltd

DRO Details
Increase in gross cash receipts: DroneShield Ltd (ASX: DRO) reported for increased gross cash receipts of $881k for quarter ending March 31, 2017 over the previous quarter at the back of increased awareness of government and civil infrastructure operators about drone threats. The group’s cash was $3.1m at the end of the quarter and was slightly lower than the previous quarter figure. DRO also made first sale of its newly launched WideAlert, acoustic drone detection product, for use by a European NATO country. For detecting and defeating swarms of drones, DRO has commenced work on DroneSentry.
 

DroneSentry Deployment (Source: Company Reports)
 
DRO stock has fallen 5% in last one month (as at April 11, 2017) but rose 2.8% on April 12, 2017 post the quarterly update release. We give a “Speculative Buy” at the current price of $ 0.37
 

DRO Daily Chart (Source: Thomson Reuters)

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