Mirvac Group

MGR Details

Rise in operating profit: Mirvac Group’s (ASX: MGR) stock price surged about 2.2% on August 17, 2017 at the back of positive full-year result that entailed a profit rise of 13% to $1.164 billion from the year earlier figure of $1.03 billion driven by strong performance in investment portfolio and operational earnings. In fact, operating profit after tax rose 11% to $534 million representing 14.4 cents per stapled security. However, MGR’s revenue fell 1% to $3.02 billion while earnings before interest and tax grew 17% to $750 million. The group’s office and industrial division saw a decline of 11% in earnings due to repositioning activities while the residential business witnessed an increase of 54% in earnings due to high volume of lot settlements and better residential gross margins. On the other hand, retail business witnessed 33% growth in earnings. Net property revaluation gains of 6.4% have boosted the FY17 profit.
 

Financial Trajectory (Source: Company Reports)

Stock Recommendation: MGR aims to manage its cost base effectively and expects strong operating cashflows in 2H18 with FY18 distributions to be fully cash covered. Given the positive outlook and stock movement towards its 52-week high,we give a “Hold” recommendation at the current price of $ 2.30

Whitehaven Coal Ltd

WHC Details

Earnings uplift: Whitehaven Coal Ltd (ASX: WHC) reported a huge uplift in its earnings at the back of coal prices and rising production. The group’s full year net profit surged to $405.4 million from $20.5 million of last year. There has been a 52.3% rise in revenue to $1.77 billion. The group has been able to expand its margins. The average earnings margin moved up to $46 per tonne in FY17 from $14 a tonne in FY16. Further, the group expects its FY18 production to be between 22 and 23 million tonnes with the consolidation of operations. WHC also intends to return 20 cents per share to shareholders in the form of a special distribution. Given the current scenario, WHC expects to continue witnessing demand for high quality thermal coal given that the Asian countries are still poised to be dependent on new high efficiency low emission power stations.
 
Stock Recommendation: The stock declined 2.1% on August 17, 2017 post an initial surge, and is still trading at higher levels. We give an “Expensive” recommendation at the current price of $ 3.29

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