Healthscope Ltd

HSO Details
· Growth in 1H 17 Revenue: Healthscope Ltd (ASX: HSO) stock rallied over 5.8% on February 22, 2017 as the group reported 3.9% growth in the revenue to $1,192.0m during 1H 17 and a 5.1% growth in the group operating EBITDA to $216.8m. However, the statutory NPAT fell 7.0% to $90.5m. Hospitals Operating EBITDA growth of 2.2% reflected the softer operating environment while there was support from strong growth in New Zealand pathology. The group further mentioned that action is taken to increase flexibility in the Hospitals cost base in light of ongoing market variability. HSO is securing long-dated contracts, has renegotiated multi-year contracts with NIB and the Australian Health Service Alliance. The company has successfully renewed three DHB contracts in New Zealand in advance of maturity. Additionally, HSO has posted increase in depreciation due to completion of three major hospital expansion projects in 2HFY16, increased investment in New Zealand pathology and investment in theatre technology. In Hospital expansion plan, two projects have been completed in 1HFY17 and two major projects are expected to be completed in 2HFY17. Nine projects are under construction that will deliver a further 792 beds and 49 operating theatres by the end of FY19. In addition, the Hospital Operating EBITDA growth in 2HFY17 is expected to be similar to 1HFY17.

· Recommendation: We give a “Buy” recommendation at the current price of – $ 2.37
 

1H 17 Financial Performance (Source: Company Reports) 

McMillan Shakespeare Ltd

MMS Details
· Completed two acquisitions in UK: McMillan Shakespeare Ltd.’s (ASX: MMS) stock surged 8.41% on February 22, 2017 given their solid first half 2017 results. MMS has reported for 2.9% growth in the Segment Revenue to $250.4 million in the 1H 2017 and the segment EBITDA grew 1.8% to $66.4 million. The UNPATA grew 0.8% to $42.1 million over the prior period. Moreover, the Assets under management (on balance sheet) in Australia and New Zealand grew by 2% and a further $4m in assets were financed using Principal and Agency (P&A) agreements. The Assets under management (on balance sheet) in the UK grew by 9% and a further $155m of assets were financed during the period. Additionally, MMS has completed two acquisitions in the UK -  European Vehicle Contracts acquired in December 2016 and Capex Asset Finance acquired in January 2017.

· Recommendation: MMS stock fell over 25.90% in the last six months (as of February 21, 2017). We give a “Hold” recommendation at the current price of – $ 11.60

Fairfax Media Ltd

FXJ Details
· Net profit grew 6% in 1H 17: Fairfax Media Ltd (ASX: FXJ) stock also rose over 8.05% on February 22, 2017 given the 6% growth in the underlying net profit to $84.7m during first half of 2017. However, the group revenue for continuing businesses fell 5.8% to $902.9m. The Domain Group posted the strong digital advertising growth of 15%, notwithstanding a challenging listings environment. Moreover, the cost reduction programs underpinned a 5% decline in operating expenses, notwithstanding continued investment in the growth businesses. Additionally, the trading in the first two weeks of February saw revenues around 6% below last year. The trading in January entailed revenues around 10% below last year in a slower than usual start across the media industry. The new real estate listings have seen some early signs of improvement in February following the weak FY17 H1 performance.

· Recommendation: We give a “Buy” recommendation at the current price of – $ 0.94 

1H 17 Financial Performance (Source: Company Reports)

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