Asaleo Care Ltd

AHY Details
 
Positive bottom line:Asaleo Care Ltd (ASX: AHY) managed to deliver an underlying NPAT rise of 4.1% to $28.2 million during the first half of 2017 while statutory NPAT enhanced 11.0% year on year (yoy) to $27.7 million. They reported an underlying EBITDA rise of 4.0% yoy to $60.9 million. The group’s Tissue EBITDA surged 18.3% yoy to $32.7 million. On the other hand, their Personal Care EBITDA lost 8.8% yoy to $28.2 million during the period. But the group has been strengthening their brands organically by launching innovations like Libra Roll.Press.Go Pads and Treasures New Core Technology Nappy, leading to a further $1.7 million in advertising and promotion in this half. Moreover, their finished goods reduction initiative led to a fall in finished goods inventory of $16.3 million and a major savings in logistics costs by exiting third party storage. Further, the sale and leaseback of the Springvale manufacturing site was completed in June 2017 with the sale realizing $22.4 million. Management declared a dividend of 4.0 cents per share (50% franked) for the first half of 2017 while their on-market share buy-back of up to 10% of issued capital got over in May 2017, with 60.3 million shares acquired at a cost of $99.5 million. The full-year guidance of single digit growth remains unchanged, and we give a “Buy” on the stock at the current price of $ 1.45

 

AHY financial performance (Source: Company reports) 

Myob Group Ltd

MYO Details

Expanding market opportunity: Myob Group Ltd (ASX: MYO) is targeting $1.2 billion total Addressable Market (TAM) via their new payments segment leading to a total TAM opportunity of more than $3 billion. The group’s revenue rose 14% yoy to $204 million, during the first half of 2017 while underlying earnings before interest, tax, depreciation and amortization (EBITDA) surged 9% yoy to $90 million. The group’s preferred measure of after tax profit (NPATA) rose 9% yoy to $48 million, during the year. They maintained their recurring revenue at 96% of total revenue, boosted by the SME segment, which reported a 99% recurring revenue during the period. Rising number of paying users and Average Revenue per Paying User (ARPU) drove the performance. SME Paying Users enhanced 5% yoy to 601,000, driven by solid online additions (total up 53% prior year to 306,000, of which SME online grew 32% on prior year to 257,000), coupled with a rising migration rate from non-paying to paying and improved retention rates. The opportunity to migrate MYOB’s existing desktop base to online users remains significant. Given the positive conditions, the group expects their revenue to grow in the range of 13% – 15% range while EBITDA margin is forecasted at 45% – 46% range. The stock moved up 5% on August 24, 2017. We give a “Hold” recommendation on the stock at the current price of $ 3.54

Estia Health Ltd

EHE Details
 
Huge investments on development programs: Estia Health Ltd.’s (ASX: EHE) full year of 2017 EBITDA rose to $86.5 million driven by their operational efforts coupled with development-led growth opportunities. NPAT rose 47% yoy to $40.7 million while operating revenue rose 18% yoy to $524.6 million. The group’s full-year average resident occupancy remained strong at 93.5%. The group invested $54.8 million during the period as a part of their refurbishment and expansion program wherein more than $28.4 million has been used for Twin Waters and Kogarah greenfield developments which are due to open soon and March 2018, respectively. EHE intends to boost their capacity by adding 136 net new beds during FY18, while forecasts a mid-single digit percentage growth in FY18 EBITDA. Although the stock has performed well, risks relating to the sector (such as regulatory issues) still persist. We believe the stock is “Expensive” at the current price of $ 3.15

Nine Entertainment Co Holdings Ltd

NEC Details
                                                                                                                     
Results on track:Nine Entertainment Co Holdings Ltd (ASX: NEC) met their guidance for fiscal year of 2017 with revenues, group EBITDA and Net Profit After Tax, pre-specific Items reaching $1,238 million, $206 million and $124 million, respectively. NEC otherwise reported $203.4 million loss for the year partly driven by $260 million writedown on the carrying value of its broadcast license.  The group’s ratings showed solid improvement and attracted 37.1% share of 25-54 demographics. Their cost control efforts led to a 1% fall of the overall costs while Free To Air (FTA) costs were controlled by 2% (6% including license fees). The group has around 4 million registered users of 9Now while Stan has 800,000 active subs. Going forward, NEC aims to enhance their advertising revenue share in FTA television, On Demand Television and Digital Publishing. We maintain a “Hold” on the stock at the current price of $ 1.55
 

Major financial metrics (Source: Company reports) 

Santos Ltd

STO Details
 
Mixed Performance: Santos Ltd (ASX: STO) reported a net loss of US$506 million, due to their earlier announced US$689 million after-tax net impairment during half year of 2017.On the other hand, the group’s underlying profit rose to US$156 million. Their free cash flow breakeven was cut to US$33 per barrel while net debt fell to US$2.9 billion.  Santos is aiming for a free cash flow breakeven for 2017 to be at US$33 per barrel. They also enhanced their 2017 sales volume guidance to 77 to 82 million barrels of oil equivalent, driven by solid volumes from the core assets in the first half and better forecast domestic sales volumes. We maintain a “Buy” on the stock at the current price of $ 3.47


Results performance (Source: Company reports)

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