Seven West Media Ltd

Reaffirmed the full year 2018 guidance and reduced group operating costs:Seven West Media Ltd (ASX: SWM) stock surged 18.63% on February 20, 2018 after the company reported for 1H 2018. There was a 5.1% growth in the underlying profit after tax to $100.7 million. The company has reduced the net debt to $711 million, with leverage within the lending covenants. Moreover, SWM has reaffirmed the full year 2018 guidance, and expects Group EBIT to be between $220 and $240 million. Further, SWM expects to deliver $40 million of cost savings in FY 18, offsetting the AFL uplift and the spectrum charge, that will result in an overall small reduction in group operating costs. In FY19, SWM is targeting an incremental $70 million in net reductions to group operating expenses. SWM is also targeting the net debt to reduce to $650 million by June. On the other hand, SWM and Southern Cross Austereo have extended their regional television affiliation agreement for Tasmania, Darwin, Spencer Gulf, Broken Hill, Central & Eastern Australia and Mt Isa. We give a “Buy” recommendation on the stock at the current price of $0.605
 

Vocus Group Ltd

Slashed the underlying profit guidance for FY18:Vocus Group Ltd (ASX: VOC) stock plunged 10.5% on February 20, 2018 after the company slashed the underlying profit guidance for FY18 to the range of A$125 million to A$135 million from its previous estimate of A$140 million to A$150 million. The downward revision primarily is due to the Australian Consumer division facing headwinds in H2FY18 due to over hedging of its energy portfolio and a change in its go to market strategy, resulting in a reduction in the amount of subscriber acquisition costs that can be deferred. VOC did not declare an interim dividend to focus on the overall leverage in the business and to seek the opportunities for investment across the business including the ASC project. Moreover, in 1H 2018, VOC has reported growth in the revenue and in the Underlying EBITDA. We give a “Hold” recommendation on the stock at the current price of $2.57
 

1H 18 Financial Performance (Source: Company Reports)
 

APN Outdoor Group Ltd

Low contract renewal exposure in FY18 and FY19 and mitigating $7m EBITDA Yarra Trams impact:APN Outdoor Group Ltd (ASX: APO) stock fell 3.7% on February 20, 2018 after the company reported 4% growth in the FY17 Underlying EBITDA to $90.3 million. This is at lower range of the guidance provided by the company. Moreover, APO is mitigating $7m EBITDA Yarra Trams impact. Excluding Yarra Trams, APO expects 1Q18 to be up by low single digit with good visibility and 1H18 up mid-single digit on early indications. For FY 18, APO expects the overhead growth to be 6% -8%, reflecting a one-off cost base reset to support growth. The revenue and EBITDA are skewed to the second half of the 2018. Further, the company has low contract renewal exposure in FY18 and FY19, has reduced to single digits given the recent renewals including the latest Sydney Trains. Additionally, the company is searching for a new CFO. We give an “Expensive” recommendation on the stock at the current price of $4.35
 

Virtus Health Ltd

9.7% growth in Group EBITDA in 1H 2018: Virtus Health Ltd.’s (ASX: VRT) stock rose 5.3% on February 20, 2018 after the company reported 9.7% growth in 1H 2018 Group EBITDA to $34.8 million and NPAT attributable to ordinary equity holders rose 12.6% to $16.6 million. The company has posted 1.8% growth in the revenue for 1H 2018 and declared the Interim dividend of 14 cents per share fully franked compared to 13 cps in 1H 2017. Looking at the past price dip while industry trends and group fundamentals are improving, we give a “Hold” recommendation on the stock at the current price of $5.55
 

Investa Office Fund

32.5% fall in the Statutory Net Profit in 1H 2018: Investa Office Fund (ASX: IOF) stock edged slightly low on February 20, 2018 after the company reported 32.5% fall in the Statutory Net Profit to $151.2 million for 1H 2018 as only five properties were independently valued at 31 December 2017. For 1H 2018, FFO grew 1.8% to $92.9 million and FFO (funds from operations) per unit grew 2.7% to 15.3 cents. The company’s portfolio is stable and is well positioned with 97% occupancy and 4.8-year WALE. There might be some shortcomings as seen in stock price fall of about 6.15% in three months as on February 19, 2018. However, the group has retained its full year guidance with distribution forecast at 20.3 cents per unit. Looking at the long-term scenario, we give a “Hold” recommendation on the stock at the current price of $4.25
 

Flexi Group Ltd

Growth in cash NPAT: Post a period of lull, FlexiGroup Ltd (ASX: FXL) stock rose 3.9% on February 20, 2018 after the company stated that its 1H 2018 underlying cash NPAT of $44 million depicted a 13% growth in volume and 4% growth in closing receivables. The company has reduced corporate debt by $62 million year on year. As a result, gearing reduced to 44% from 82% of pcp. The Australian Cards has posted significant volume growth of 51% in 1H18 due to the strong customer acquisitions and increasing spend behavior. Moreover, FXL has reaffirmed FY18 Cash NPAT guidance of $85 million to $90 million and expects an increased Cash NPAT contribution from AU Cards in FY19. Additionally, FXL has declared a fully franked interim dividend of 3.85 cents per share. Meanwhile, FXL stock has risen 10.30% in three months as on February 19, 2018 and is trading at a reasonable level. We give a “Hold” recommendation on the stock at the current price of $1.725
 

1H 18 Financial Performance (Source: Company Reports)

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