Bapcor Ltd

BAP Details

Completed the acquisition of Hellaby Holdings: For H1FY17, Bapcor Ltd (ASX: BAP) reported 30.7% yoy growth in statutory NPAT (including Hellaby transaction) at $25.3M and statutory EPS of 9.66 cents (up 21.2%). H1FY17 results include the benefits of 6 months of the ANA business and other acquisitions made post December 2015. Importantly, Retail segment consisting of Autobarn, Autopro, Sprints Auto Parts, Midas and ABS recorded revenue and EBITDA growth of 42.9% and 42.5% respectively. Moreover, the integration of Sprints has progressed well including the program to increase its sourcing from Bapcor Group’s specialist wholesale businesses. Due to the Hellaby related capital raising of $179.5M, Bapcor was in a positive net cash and debt position of $20.7M at 31 December 2016. Excluding the impact of the capital raising, net debt would have been $158.8M, representing a Net Debt/EBITDA ratio of 1.6X on an annualized FY17 EBITDA basis. The company is expected to report $57M to $59M of NPAT excluding the acquisition of Hellaby and related transaction costs for FY2017 against the previous guidance of $54.5M to $56.7M. The inclusion of the three Hellaby businesses of Auto, Footwear and Resource Services is estimated to increase NPAT in H2 FY17 by a further $8M to $12M before transaction costs and significant items.

Further, the company acquired the100% of the fully paid shares in Hellaby Holdings Limited by increasing offer price to NZ$3.60 per share. The transaction is funded via cash holding and the new acquisition facility with the Australia and New Zealand Banking Group. Additionally, the revised offer is expected to be EPS accretive to BAP shareholders. BAP stock fell over 6.9% (as of June 09, 2017) in the last six months and we believe the pressure to continue due to increasing competition in the industry. We give an “Expensive” recommendation at the current price of $ 5.01

Aconex Ltd

ACX Details

Europe business operations are remains challenging: During H1FY17, Aconex Ltd reported a revenue growth of 38% yoy to $77.0 million, primarily driven by the acquisition of Conject Holding GmbH in March 2016 and strong international growth. Earnings before interest, taxes, depreciation, and amortization (EBITDA) from core operations, excluding acquisition and integration costs grew by 9% yoy to $7.4 million. The company’s cash and cash equivalents stood at $43.2 million at December 31, 2016 against $52.5 million at June 30, 2016. Aconex has reaffirmed its earlier (Jan-2017) outlook for FY17, as it expects revenue of $160-165 million and EBITDA of $15-18 million.


H1FY17 financials; (source: company reports)

The stock has declined 11.5% over the last one month, while it tumbled 37.5% for the last one year as on June 08, 2017, owing to concerns on meeting guidance, uncertainty in the UK and Europe operations.We give an “Expensive” recommendation on the stock at the current price of $ 3.88 

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