SPARK INFRASTRUCTURE GROUP (ASX: SKI)

Capital Raising: Spark Infrastructure has updated the market about raising proceeds of about A$129 million through private placements, and these funds will be used for the capital works program and refinancing requirements during the second half of 2018. Primarily, Victoria Power Networks (Finance) Pty Ltd (VPNF), the Common Funding Vehicle for Victoria Power Networks for CitiPower and Powercor, in which SKI holds a 49% interest, reached an agreement with investors to place 10-year Norwegian Kroner and 12-year Euro Private Placements, being inaugural issuances in the respective markets. Under the Norwegian Kroner Private Placements, VPNF has raised Nkr550 million of 10-year fixed rate notes while cross currency swaps were executed at the time of the note placement resulting in total proceeds of approximately A$91 million. Under the Euro Private Placements, VPNF has placed €24 million of 12-year fixed rate notes with cross currency swaps executed at the time of the note placement resulting in total proceeds of approximately A$38 million. The group has interests in $16.6 billion of energy network assets in total, delivering energy to more than 5.5 million customers across its regions. Its businesses have strong and stable debt portfolios, with weighted average maturity of over five years. Group’s 2017 DPS has increased by 5.2% from 2016, and it expects 2018 DPS to further increase by 4.9%. The stock has fallen 8.8% in last six months and has room for growth. Meanwhile, director Richard Forbes Francis has acquired group’s securities and performance rights worth $318,711.7 through on-market trade. We give a “Buy” on SKI at the current price of $ 2.270.
 

RETAIL FOOD GROUP LIMITED (ASX: RFG)

Change in the stock price movement: Retail Food Group has been under immense pressure as seen in the last six months with a fall of 77.8% as at April 11, 2018. The embattled group however moved up about 9.7% in the last five days followed by a dip of 8.3% on April 12, 2018; and this movement seems to be related to short selling activity. Meanwhile, UBS Group AG and its related bodies corporate became the substantial holder of RFG as on 6 March 2018 by holding 9,242,629 securities with 5.06 per cent of the voting power. Despite this, the share prices declined by almost 11.3 per cent in the past one month with an upward trend observed on 11 April 2018 when the prices jumped up by 8.5 per cent. The Group released its 1HFY18 results in March 2018 and its underlying net profit after tax was down by 31.8 per cent ($24.7 million) as compared to the corresponding period in the prior year. Basis the weakness in the result, the Company suspended its dividend payment and will reassess its pay-out ratio. Further, RFG recorded a revenue of $195.5 Mn in 1HFY18 against $161.9 Mn in 1HFY17 and reflected a growth of 20.8% on a year on year basis. It is prudent to wait and watch the developments on this one.
 

1HFY18 EBITDA allocation (Source: Company Reports)

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