Independence Group NL


IGO Detail

Improved 1H17 results but lowered guidance: Independence Group NL (ASX: IGO) released its 1H17 results entailing profit after tax of A$20.2 million against 1H16 loss of A$77.8 million. Higher underlying EBITDA and revenue, with the non-recurrence of costs from the previous corresponding half-year relating to impairment of exploration assets and acquisition and integration costs of Sirius Resources Ltd (Sirius) has helped the group in terms of performance improvement. Higher realised base metal prices led to a 2% growth in revenue of A$223.1 million against 1H16 revenue of A$218.8 million, while the group witnessed lower product sales during the period. Cashflow from operations moved up by a combined 30% while operating cash flows of A$25.6 million were reported to be affected by the payment of stamp duty taxes to the Western Australian State Government.
 

Cash Flow (Source: Company Reports)
 
IGO’s Nova project witnessed plant construction completion, commissioning, first production, practical completion and first shipment of concentrates, all four to six weeks ahead of schedule. Even Tropicana gold production, cash costs and all-in sustaining costs were found to be better than guidance. Cash and cash equivalents totalled A$109.2 million at 31 December 2016, which is an increase of A$62.9 million for the half-year over June 2016 figures. Despite the strong results, the stock has fallen 6.5% on February 21, 2017. This might be at the back of lower than planned development at Nova which has led to potential delays to the ramp up to full production, now expected to have an impact limited to FY17 guidance. IGO expects the FY17 metal production guidance to be reduced by about half with the production being deferred to FY18. IGO intends to provide updates in April 2017. We maintain a “Buy” recommendation at the current price of $3.95
 

IGO Daily Chart (Source: Thomson Reuters)
 
Seek Ltd


SEK Detail

Strong result for Australia and New Zealand Employment: Seek Ltd (ASX: SEK) reported for 11% growth in 1H17 underlying NPAT (of A$113.6m) and confirmed FY17 guidance at upper end of range. The reported revenue of A$487.9m was above A$482.0m of previous corresponding period. The group declared 1H17 dividend per share of 23 cents per share. Strong financial results were witnessed in Australia and New Zealand Employment with revenue growth of 13% and EBITDA growth of 10%. Meanwhile, SEK formed a consortium with leading private equity firms, Hillhouse Capital Group and FountainVest Partners, for the purpose of a potential privatisation of Zhaopin Limited. Zhaopin has now been reported to have extended its market leadership alongside 23% revenue growth. The group has also appointed a new director, Vanessa Wallace. We maintain a “Hold” recommendation at the current price of 15.52
 

SEK Daily Chart (Source: Thomson Reuters)
 
Virtus Health Ltd


VRT Detail

Challenging domestic conditions: Virtus Health Ltd (ASX: VRT) reported for revenue decline by 0.7% to $131.4m at the back of soft domestic conditions. Primarily, the group cycles slipped 3.8% to 9,410 against H1FY16 figure of 9,782. Australian Virtus cycles were down 7.2%. There was a decline in Virtus full service activity in Victoria while NSW and QLD outperformed state markets. VRT witnessed a 12.3% drop in group EBITDA as Australian segment EBITDA was down 13.1% to $33.9m.
 

Revenue and EBITDA (Source: Company Reports)
 
On the other hand, International segment EBITDA was up 11.7% on prior corresponding period. International revenue growth, price increase, and diagnostics revenue growth partially offset the revenue impact by factors including Australian market contraction and Victorian market share loss. Ireland EBITDA growth and lower EBITDA loss at Singapore helped against the lower Australian volumes and increase in underlying operating costs. We give a “Hold” recommendation on the stock at the current price of $5.19
 

VRT Daily Chart (Source: Thomson Reuters)
 
Scentre Group


SCG Detail

Rise in distribution in FY16: Scentre Group (ASX: SCG) released its full year 2016 results indicating strong growth with Return on contributed equity (ROCE) of 11.8% compared to 11.4% in 2015. Funds from operations (FFO) earnings was $1.238 billion representing 23.30 cents per security up 3.2% and distribution of 21.30 cents per security up 2%. Excluding the impact of transactions, FFO growth is said to be about 5%. SCG’s profit was $2.991 billion including revaluations of $1.6 billion. Comparable net operating income rose 2.9%. The group expects to commence developments worth over $700 million, in FY17. We give a “Hold” at the current price of $4.45
 

SCG Daily Chart (Source: Thomson Reuters)

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