BigAir Group Ltd

       BGL Dividend Details
 
Record performance and growth through acquisitions: The group reported another record performance for FY 2015 with growth in all key metrics including the growth of 34% in underlying NPAT to $ 8.5 million. Other highlights included a 50% growth in full-year revenues to $ 62.7 million, full-year gross profit up by 34% to $ 35.5 million, and full-year underlying EBITDA up 25% to $ 18.9 million. The balance sheet is strong with a satisfactory gearing of 42% measured by net debt to equity and a growth of 9% in dividend to 1.2 cents per share fully franked. Results for the second half was particularly impressive with underlying EBITDA providing momentum for the performance in FY 2016.
 

  Result Overview (Source: Company Reports)

The strong revenue and earnings growth reflects the expansion into cloud services and unified communications in addition to the robust performance in community broadband and fixed wireless. Managing director Jason Ashton said that the year marked the end of a two-year period of transformation for the group. The acquisition of Oriel and recently Applaud IT has successfully converted the group into an integrated provider of telecommunications and managed services. In addition, significant investments have been made in the cloud and managed services segment. This performance suggests that the company is well placed to continue its growth in FY 2016 through organic route and consolidation of the acquisitions made in FY 2015. The stock has rallied 33.57% in last three months (as at November 04, 2015) We believe that the transformation to an integrated service provider and the integration of the acquisitions suggests a bright future for the group and have no hesitation in recommending the stock as a Buy at the current price of $0.925
 
 

 
 

Aveo Group

AOG Dividend Details
 
Transitioned to a pure-play retirement company: With the rise in the population of people aged 65 years and over in Australia, businesses focused on catering to retired people are beginning to look increasingly attractive and Aveo Group (ASX: AOG) seems to be in a benefitting position. The company builds and manages retirement communities throughout Australia and 75 locations ranging from Sydney to Tasmania. AOG reported record results in FY 2015 delivering a net profit after tax of $ 54.7 million, an increase of 30% over the previous period driven by record total sales of retirement units of 721. CEO Geoff Grady said that the record results were the outcome of the pure retirement strategy launched in the middle of 2013 and both the sales of non-retirement assets and acquisitions to expand the retirement asset pipeline which are part of the strategy are going well. The company is on track to achieve its objective of return in FY 2016 and FY 2018 on retirement assets of up to 6.5% and up to 8%, respectively. Going into FY 2016, there is strong sales momentum, a pipeline of 162 units for delivery during the year and increasing care and support services offered to customers in the portfolio. Consequently, the company is providing underlying profit after tax guidance for FY 2016 of over $ 80 million which is a 45% increase over FY 2015 and full-year distribution of 8 cents per security which is a 60% increase over the previous year.
 

Financial Overview (Source: Company Reports)
 
The retirement development team delivered 62 units in FY 2015 compared to 23 the previous year and is on track to deliver 182 new units in FY 2016 in Queensland, New South Wales and Victoria. The program has increased significantly to 5066 units and expects to deliver 521 units in FY 2016 to support its objectives for that year. The company has also made progress in its core strategy with the acquisition of 50% stakes in two allied health businesses which are being integrated into the operations of the company. It has also launched a development application for a new 131 aged bed care facility to replace the existing 25 bed facility and recruited new senior management for the division.
 
We are impressed by the pure retirement strategy which has yielded benefits and the plans that have been put in place to continue the ambitious growth. It is also prudent to note that retirement related housing is little resilient to fluctuations in broader housing market. The stock has rallied 43.52% year to date as at November 04, 2015. We have no doubts that the company will do its best to achieve its objectives for the future and have no hesitation in placing a Buy recommendation on the stock at the current price of  $3.06.
 

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