Wellcom Group Ltd

WLL Dividend Details
 
Strengthening performance via acquisitions: Wellcom Group Ltd.’s (ASX: WLL) first half financial year 2015 net revenue of $52.11 million surged 26% over the same period a year ago. This was led by the acquisitions such as that of Dippin’ Sauce (US), in conjunction with organic sales growth across all segments. Profit after tax from continuing operations rose 16% to $5.39 million and EPS rose to 13.76 cents per share. As of December 31, 2015, WLL had no net debt with cash and cash equivalents in excess of interest bearing liabilities by $3.30 million compared to $6.04 million in first half a year ago period. Dividend for the first half increased 6% to $9.0 cents per share.

 

Business overview and new acquisitions (Source: Company reports)
 
Looking ahead to the second half, WLL foresees subdued market conditions and uncertainty surrounding the ongoing viability of some retail clients including Dick Smith Holdings and Masters. Therefore, the stock corrected over 5.47% in the last four weeks (as of February 26, 2016). WLL has a decent dividend yield and has contribution from acquisitions. However, we believe that the stock is "SPECULATIVE BUY" at the current share price of  $5.01
 
 
WLL Daily Chart (Source: Thomson Reuters)
 

STW Communications Group Ltd

SGN Dividend Details
 
Boosting cash flow: STW Communications Group Ltd (ASX: SGN) reported an underlying net revenue of $416 million in FY15, an increase of 2% from the previous year. Underlying net profit after tax stood at $39.6 million, in line with guidance, but decreased 13% against prior year. Operating cash flow stood at $47.0 million, up $14.1 million on prior period. For financial year 2015, there was a conversion of 104% of underlying statutory EBITDA into operating cash flow compared to 67% in 2014. At the year end, the group's cash balance stood at $26.9 million compared to $19.9 million in previous year. Looking ahead, as a stand-alone business, in 2016, STW is expected to deliver mid-to-high single digit growth in underlying net profit after tax. However, the proposed merger between SGN and the Australian and New Zealand operations of major shareholder WPP is yet to reveal the growth prospects going forward. Accordingly we give a "Hold" recommendation at the current share price of $0.915
 
 
SGN Daily Chart (Source: Thomson Reuters)
 

Nine Entertainment Co Holdings Ltd

NEC Dividend Details
 
Acquisitions & deal extensions: Nine Entertainment Co Holdings Ltd (ASX: NEC) and WIN Corporation recently agreed to extend their affiliation agreement for six months to June 30, 2016, on terms that provide for additional payments to Nine over that period. News Corp Australia with its subsidiary FOX SPORTS Australia secured a five year deal with National Rugby League for seasons 2018 - 2022. With this deal, Nine Entertainment and Telstra will come together and deliver $1.8 billion to the NRL securing long term future of the game. The company came up with its half year results (1H16) with revenue down 5% to $690.3 million on year on year basis (i.e., compared to 1H15), impacted from the performance of Network and Digital segments. The EBITDA dropped 5.3% to $127.9 million and net profit after tax from continuing operations also dropped 6.1% to $78.4 million. However, NEC raised its dividend by 90.5% to 8 cents per share. With strong cash flow and conversion and cash on balance sheet coupled with growth from acquisitions and deal extensions, we believe that investors can leverage the correction in this dividend yield stock (declined over 21.64% during this year to date as of February 26, 2016) and reiterate "BUY" recommendation at the current share price of  $1.485
 
 
NEC Daily Chart (Source: Thomson Reuters)
 

Southern Cross Media Group Ltd

SXL Dividend Details
 
Stable financials and outlook: Southern Cross Media Group Ltd (ASX: SXL) reported revenue from ordinary activities of $322.0 million for the first half ended December 2015, an increase of 4.7% from year ago period. Net profit from ordinary activities after tax increased 25.1% to $43.4 million. Cash assets at the end of the half year declined to $62.4 million from $76.9 million earlier.
 

Debt facilities (Source: Company reports)
 
Interim financial 2016 dividend per share increased to 3.25 cents per share. Looking ahead, financial year 2016 net profit after tax is estimated to be 16% to 20% higher than adjusted prior year NPAT at $75 million to $78 million. With a good dividend yield but the stock trading close to its 52-week high, we rate the stock "Expensive" at the current share price of  $1.135
 
 
SXL Daily Chart (Source: Thomson Reuters)
 

Seven West Media Ltd

SWM Dividend Details
 
Strong cash flow and balance sheet: Seven West Media Ltd(ASX: SWM) reported its interim results with underlying net profit after tax of $140.3 million, up 2.1% from the same period a year ago. Total group revenue before associates was 4.1% lower than the same period last year, at $897 million. Operating cash flow stood at a strong $187 million while balance sheet remained strong with net debt of $655 million. The group recorded a debt leverage ratio of 1.7 times.
 


Financial highlights (Source: Company reports)
 
Looking ahead to 2016, the company maintains its guidance for underlying Group EBIT to be down approximately 10% on financial year 2015 while operating costs are estimated to be lower excluding third party commissions and events. Having an outstanding dividend yield, we recommend a "Hold" at the current share price of  $0.99
 
 
SWM Daily Chart (Source: Thomson Reuters)

 
SKY Network Television Ltd

SKT Details
 
Moderate financial results: Sky Network Television Ltd (ASX: SKT) reported its net profit plummeting 5.8% to $87.1 million for the six months to December 31 while there was 2.4% surge in revenues. The rise in revenues was driven by 0.5% expansion of its subscriber base. SKT’s customer churn rate rose to an annualised rate of 15.4% as at December 31, 2015 from 14.5% at June 30, 2015, while the board declared a dividend of 15 cents per share. The fall in the profit is driven by the rising cost of securing content in the competitive market. Given the above, we rate the stock "Expensive" at the current share price of  $4.20
 
 
SKT Daily Chart (Source: Thomson Reuters)

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