Domino's Pizza Enterprises Limited

DMP Details

Growth Momentum on the rise: Domino's Pizza Enterprises Limited (ASX: DMP) is the largest pizza chain company in Australia in terms of the number of store networks and network sales. Currently, the group is focused on to expanding its network across seven countries, with more than 2,200 stores through its international franchises. As per the recent Domino’s GPS Driver Tracker poll, Origin is the busiest night of the year for the Company, with 65% per cent of customers ranking pizza as their go-to “meal of choice” for game night – ahead of BBQs, burgers, and fish and chips. Further, the Group had reaffirmed its NPAT growth guidance in the region of +20% for the full year based on menu innovation and operational improvements, and growth in sales in all markets. For the first half of the year, its network sales moved up by 7.1% (+$82.8 Mn) on the prior corresponding period (pcp) to $1,248.9 Mn with over 4.0% of Same Store Sales (SSS). Besides this, the group store count target remains at 4,650 stores by 2025. This number includes 1,200 stores in ANZ, 2,600 throughout Europe and 850 stores in Europe.


Network Sales’ Growth (Source: Company Reports)

ROE improved from 13.0 per cent in July 2017 to 15.2 per cent in December 2017. The stock was up by 31.71 per cent in last three months and by 25.45 per cent in last one month. The stock climbed up by 10.15 per cent in last one week (as at June 04, 2018) and currently moving towards its 52-week high level ($ 58.345). While the group intends to achieve its guidance at the back of growing popularity across the region, challenges in the sector and competition have been weighing over DMP looking at the trading conditions at this point. The stock looks “Expensive” at the current market price of $ 53.380.
 

DMP Daily Chart (Source: Thomson Reuters)
 

AMP Ltd

AMP Details

Rating Downgrade: AMP Ltd (ASX: AMP) disclosed to the market that Moody’s Investors Service downgraded its credit rating for AMP Life Limited from Aa2 to Aa3, citing rising competition from international firms and challenging operating environment for life insurer companies in Australia. Moody’s ratings outlook for AMP entities remains unchanged. Lately, the Royal Commission inquiry revealed that the group misled the corporate regulator for 10 years, provoking departure of best administration from the firm. Based on above allegation, Moody revised its view on AMP Life's business profile and profitability which will lead to further pressure on earning and profitability of the business. But, the management stated that they remain strongly capitalized and at 31 December 2017 held a surplus over Minimum Regulatory Requirements of $2.3 billion. Australian Wealth Management’s (AWM) assets under management recorded A$128.3 billion in Q1 FY18 which is 2% down from Q4 FY17, largely due to weaker investment markets. AWM net cash outflow performance accounted A$200 million in Q1 FY18 which is in-line with Q1 FY17 performance, represent the subdued period of activity in superannuation following non-concessional contribution cap changes in 2017. AMP is continuing its program of work to review the nature of ongoing service arrangements between its advisers and customers, and the incidence of inappropriate fees and advice, since 1 July 2008. This program is ongoing however we expect that the outcomes will lead to higher customer remediation costs and related expenses in upcoming period.


Moody’s Rating (Source: Company Reports)

The company has recently appointed David Cullen as new Group General Counsel of AMP, effective immediately. Moreover, David Murray AO will join the AMP Board as a Chairman after the upcoming AGM 2018 meeting, on or before 1^st July 2018. Besides this, two non-executive directorsi.e., Vanessa Wallace, Holly Kramer stepped down from the AMP Limited Board. In addition, it’s another non-executive Director, Patty Akopiantz has also offered to step downto the Board and he will serve until the end of 2018 recognizing the need for a measured process of board renewal. As of now, AMP stock can be avoided at the current price of $ 3.79, based on aforesaid allegations coupled with weaker sentiments within the investment market.
 

AMP Daily Chart (Source: Thomson Reuters)
 

BWX Limited

BWX Details

Appointed Advisors: BWX Limited (ASX: BWX) has provided an update on its ongoing binding proposal with Bain Capital wherein the Independent Board Committee (IBC) has appointed Macquarie Group Ltd as its financial adviser, Bell Potter as an independent adviser and Minter Ellison as a legal advisor. Further, the Independent Board Committee, with the help of its advisers, intends to review the proposal and will update shareholders and the market when there’s something to announce. Yet, there is no guarantee that a binding proposal will be agreed between the parties. In the meantime, BWX’s management advised shareholders to take no action at this time in relation to the Proposal.


Summary of Growth Opportunity (Source: Company Reports)

NN Group N.V. and its subsidiaries, a substantial holder of the Group changed its substantial holding on June 01, 2018 and initially, it was holding 8.69 per cent of the voting power and now it holds 9.90 per cent of the voting power in the Company. Meanwhile, The Capital Group Companies, Inc ceased to be a substantial holder of BWX since 22 May 2018. BWX stock was down by 8.62 per cent in the past six months and inclined by 14.39 per cent in the past one month after receiving a sweetened offer from Bain Capital to acquire 100% of BWX Shares. Hence, we maintain our “Hold” recommendation at the current market price of $ 6.010, given the run-up and future potential.
 

BWX Daily Chart (Source: Thomson Reuters)

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.