Countplus Ltd

 
CUP Details

Countplus Limited has finalized a five-year term of contract with Mr Matthew Rowe, Managing Director and Chief Executive Officer of Countplus. Mr Rowe was appointed as a Director of the company in October 2016 and appointed to the role of Managing Director and CEO on 24 February 2017. Recently, the company has successfully sold its shareholding in CBC Financial Advisers, representing an over $800,000 profit for Countplus. The sale results from a strategic review of operating assets and the company is in advanced discussions with a number of its’ leading firms for the principals to buy back equity in their firm. Moreover, Countplus’ strategic intention is to be an investor in high-quality practices firms and to become Australia’s leading network of professional accounting and advice firms.

H1FY17 results impacted by investment losses: During H1FY17, the company reported 1% yoy decline in revenue at $45 million and 67% drop in profit after tax at $2.1 million, led by the fair value loss on investment in Class Limited of $1.6m (after tax) compared to a fair value gain of $4.7m (after tax) in the prior half year. The result has also been impacted by a non-cash $780,000 impairment expense for an accounting subsidiary and a $1.1m provision relating to a TFS review and remediation program.However, excluding the financial impact of the fair value revaluation of the investment in Class and a gain on deferred consideration, profit from operations (before income tax) has increased by 9% for HY2017. Countplus Limited together with its subsidiaries owned approximately 4.5% in Class Limited at 31 December 2016.


H1FY17 financials summary; (Source: Company reports)
The stock has declined 27.8% over the past six months (as on June 22, 2017), led by poor results for H1FY17, and currently trading at its all-time low levels. However, considering the impact of investment losses in H1FY17 as non-recurring in nature, we give a “Speculative buy” rating on the stock at the current market price of $ 0.58


CUP Daily chart; (Source: Thomson Reuters) 

Beadell Resources Ltd

BDR Details

Recently, Beadell Resources Limited (ASX: BDR) has announced the results of a Feasibility Study (FS) on a plant upgrade project, incorporating the addition of a 6MW ball mill, a high-rate thickener, another leach tank and an oxygen sparging system (Project) at its 100% owned Tucano gold mine (Tucano) in northern Brazil. The throughput will be maintained at 3.6 million tons per annum and recoveries are projected to increase to 93% from the current budgeted recovery of 88%. Further, on 11 April 2017, Beadell released an updated Ore Reserve statement that highlighted a 7% increase in ounces to 1.575 million ounces and a 9% increase in grade to 1.74 g/t gold. After depletion, the new Ore Reserves increased by 18%. As the mine deepens there will be an increasing amount of sulphide ore, which requires a finer grind to achieve economic gold recoveries. The new ball mill will allow for a grind size of 75 microns and will enable the mine to be fully optimized for any combination of sulphide and oxide ores. Throughput remains at 450 tones per hour for a nominal annual throughput of 3.6 million tons per annum. The timing of the FS was driven by the need to undertake Project civil works and concrete pours during the dry season in the second half 2017 and expected to be completed in mid-2018. The FS demonstrates the viability of upgrading the Tucano process plant with an incremental estimated post-tax net present value (NPV) of US$127 million at a 5% discount rate and an estimated internal rate of return (IRR) of 138%. The estimated pre-production capital cost is US$27.6 million, while the payback period for the Project is estimated as 14 months.

Recommendation: BDR stock has declined 30.2% over the past three months after raising $46 million through the placement of 159 million fully paid ordinary shares at a price of 29 cents per share in February 2017. However, given the current positive momentum in gold prices, we give a “Speculative Buy” at the current market price of $ 0.22


BDR Daily chart; (Source: Thomson Reuters)

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