Aconex Ltd

ACX Details
Lower than expected sales performance for first half: Aconex Ltd (ASX: ACX) recently reported that for the first six months ended 31 December 2016, the group expects sales revenue of $76.5 million to $77.5 million, and earnings before interest taxes, depreciation and amortisation of $6.3 million to $7.3 million. ACX has witnessed lower than expected first half sales performance, particularly in the UK and the Americas while performance in other regions (such as the ANZ region, Asia, etc.) seems to be in line with expectations. Further, lower flow through from contracts that are long term and spread over more years than average, is said to impact short term revenue. However, ACX has noted a fast-unexpected transition to selling Aconex solutions in the UK but this also has a short-term impact of reducing new business flow through over the last six months. Brexit uncertainty and its impact on buying decisions for customers has also impacted the performance. Despite this, the stock price has been up 6.5% on February 14, 2017. However, the stock is trading at unreasonable high levels and we maintain our “Expensive” recommendation on the stock at the current price of $ 4.07

 
ACX Daily Chart (Source: Thomson Reuters) 

Flight Centre Travel Group Ltd

FLT Details
Expanding footprint: Flight Centre Travel Group Ltd (ASX: FLT) stepped ahead for diversifying its India business and had agreed to acquire the business assets of the Bengaluru Travel Tours Group (TTG), which is a leading local travel group. In FY 16, FLT had posted total transaction value (TTV) of $150 million from its 18 locations. The TTV from FLT's established businesses in India during FY16 had reached $AU 419 million, and about 70% was coming from the large FCM corporate business. The remaining came from FLT's emerging MICE and FX operations, and from a small network of leisure travel shops. Based on FY16 results, the combined India business would have surpassed South Africa to become FLT's sixth largest country by sales behind Australia, the USA, the UK, Canada and New Zealand. Additionally, FLT is continuing to expand in Europe and has secured a presence in five key countries Sweden, Denmark, Norway, Finland and Germany through the agreement to acquire corporate businesses owned by European online travel agency eDreams ODIGEO. The group in December 2016 announced about completing the acquisition of respective corporate travel businesses in Europe and agreement to buy the businesses is expected to turn over about 110 million Euros during 2017 financial year. FLT has acquired a minority interest (49%) in the Gold Coast-based Ignite Travel Group to further diversify its Australian sales network.
 

FY17 Guidance (Source: Company Reports)
 
In addition, FLT expects in FY 17, an underlying PBT to be in the range of $320 million - $355 million. For 1H FY 17, PBT is forecasted to be between $105 million and $120 million. On the other hand, the ACCC competition law test case has ended in favor of ACCC, and ACCC and FLT are expected to return to Full Federal Court in 2017. Meanwhile, FLT has a decent dividend yield. We give a “Hold” recommendation on the stock at the current price of – $ 31.00

 
FLT Daily Chart (Source: Thomson Reuters)

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