IOOF Holdings Limited

IFL Details

IOOF Holdings Limited (ASX: IFL) has reported an Underlying Net Profit After Tax of $169.4 million, net inflows of $4.6 billion. Funds under Management, Administration and Advice (FUMA) increased to $115.0 billion, up $10.8 billion vs 2016. With the company’s advice led strategy, there is positive momentum in each of businesses. During the year, IFL achieved strong funds growth, exceptional cost control with underlying performance metrics are on an upward trajectory, and the company’s strong balance sheet will allow it to capitalize on future growth opportunities. The company’s multi-brand model and unique open architecture makes IOOF an extremely attractive alternative for advisers looking to partner with a non-bank aligned dealer group.

IOOF recorded an 18th consecutive quarter of positive Platform net inflows with $1.2 billion of net inflows, up 130% vs 2016. Advice net inflows of $3.0 billion, up 131% vs 2016, included $976 million from 33 new advisers joining IOOF from another licensee. Further, adviser numbers are growing, which appears to be counter to industry trend as flagship platform net inflows stood at $1.2 billion during the year. Platform margins in the second half improved by 4 basis points on a net operating basis.  Importantly, the return of significant operating leverage allows IOOF to benefit from both organic funds growth momentum and positive tailwinds from equity markets. The company’s balance sheet strength is underpinned by strong cash flow generation, and resulted in no net debt and a debt to equity ratio of 13.3%. Considering the optimistic scenario, we maintain a “Hold” recommendation on the stock at the current price of $10.70


IFL Daily chart; (Source: Thomson Reuters)

Independence Group NL

IGO Details

Tropicana Gold Mine update:  Independence Group NL (ASX: IGO) has provided a progress report on initiatives to further maximize and optimize the Tropicana Gold Mine, a Joint Venture with AngloGold Ashanti Australia (ASX: AGG) located 370km north-east of Kalgoorlie, Western Australia. The accelerated mining plan is on track to bring forward over 200koz of gold into CY17 to CY19 through the re-introduction of grade streaming, while the current mining rates of ~90Mtpa using conventional mining practices have delivered a 37% reduction in unit mining costs since 2015 to A$2.95/t. Mill throughput successfully increased to 7.5Mtpa from original nameplate capacity of 5.8Mtpa (5.5Mtpa on fresh rock) with further potential to increase mill throughput rate further to 7.6 to 7.7Mtpa by end of CY17 with completion of plant improvements. A Pre-feasibility study is nearing completion on the addition of a second ball mill designed to lift throughput to 8.0 to 8.2Mtpa and improve recovery from ~89% to ~92%. The study will be completed to Feasibility level in the December 2017 quarter. Drilling beneath the Long Island final pit shells continues to confirm the underground potential with additional drilling planned beneath Boston Shaker in the September 2017 quarter. Further, underground mining could contribute supplementary high-grade production from 2020. Given the ongoing developments, we maintain a “Buy” recommendation on the stock at the current market price of $3.16


IGO Daily chart; (Source: Thomson Reuters)

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