Godfreys Group Ltd

GFYDetails
Improved sales and portfolio rebalance: For the first half financial year 2017, Godfreys Group Ltd (ASX: GFY) recorded sales of $92.4 million indicating an increase of 2.8% from the same period a year ago. In the same context, comparable stores sales dipped 7% while operating gross margins narrowed by 3.5 percentage points. Meanwhile, underlying EBITDA stood at $6.3 million as compared to $8.7 million in same period year-ago. Led by a $24 million non-cash impairment, GFY recorded a net loss after tax of $21.4 million. 

Retail Store Network (Source: Company Reports)
 
Along with the earnings announcement, Godfreys declared an unfranked dividend of 2.5 cents per share supported by strong cash flow from operations of $7 million. In October 2016, GFY strategized to move to a majority franchise model and has already converted four stores in the first half with a further 14 store conversions planned for the second half. GFY has maintained its FY17 underlying EBITDA at $14-$15m range. We rate GFY a "Speculative Buy" at the current price of $ 0.90

 
GFY Daily Chart (Source: Thomson Reuters) 

Insurance Australia Group Ltd

IAG Details

Bringing stability in financials: Insurance Australia Group Ltd (ASX: IAG) reported a first half 2017 insurance profit of $571 million as compared to $610 million in the year-ago period. Driven by building an increasingly customer focused organisation, insurance margin stood at 13.5% compared to 14.9% earlier. For the first half, Gross written premium (GWP) came in marginally above expectations at $5.8 billion, a 4.7% increase from year-ago. This is mainly due to rate increases in order to counter higher claim costs in short tail personal lines in Australia and New Zealand, and improved commercial pricing.
 

GWP Growth and Insurance Margin (Source: Company Reports)
 
With a cash return on equity of 14.8%, the company maintained interim fully franked dividend of 13 cents per share. Looking ahead, IAG raised its FY17 GWP guidance to low single-digit growth, as compared to its previous relatively flat growth prediction. The stock has gained almost 8.5% in the past three months (as of February 24, 2017). We maintain our “HOLD" recommendation at the current share price of $ 6.04

 
IAG Daily Chart (Source: Thomson Reuters) 

Amaysim Australia Ltd

AYS Details 
Solid result but decline in ARPU: Amaysim Australia Ltd.’s (ASX: AYS) stock slipped 3.2% post the company released its half year results that entailed a 564% growth in statutory EBITDA while underlying EBITDA surged 38% driven by growth in mobile and disciplined cost management. There has been 34% 1H17 mobile subscriber growth over prior corresponding period (pcp) closing subscribers of 1.03m. Revenues from ordinary activities rose 16.5% on pcp to $136.6 million. However, this solid result was impacted by the 15.1% slip in average revenue per user (ARPU) to $22.37, owing to initiatives to grow subscribers and reduce churn. On the other hand, the management expects ARPU to stabilise at current levels in the second-half and grow gradually thereafter.
 

Broadband Investment to drive earnings (Source: Company Reports)
 
AYS also intends to launch the broadband in next 90 days. The company has also declared for 2017 interim dividend per share of 4.0 cents, which is up 33% over pcp and represents a dividend payout ratio of 72%. We give a “Buy” recommendation at the current price of $ 1.79

 
AYS Daily Chart (Source: Thomson Reuters)

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