Programmed Maintenance Services Ltd
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PRG Details
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Reiterated guidance for FY17: Programmed Maintenance Services Ltd.’s (ASX: PRG) stock price rose 14.4% on July 27, 2016 as the group reiterated their guidance for fiscal year of 2017. The group reported that they would leverage their growing market opportunities given their expanded operations. Accordingly, management reiterated their February 2016 of EBITA range of $100 million to $110 million, before non?trading items. Meanwhile, PRG even delivered a solid FY16 performance, with Staffing revenue rising 138% year on year (yoy) to $897 million during fiscal year of 2016. Maintenance division’s revenue rose 19% during the period while the segment’s EBITA surged 27% to $41.1 million. The Marine division’s revenue rose 41% yoy at the back of skilled acquisition. The company also paid dividends of 5 cents per share on July 26, 2016.
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Recommendation: Trading at a solid dividend yield, we recommend investors to “Hold” the stock at the current price of $2.03
Fortescue Metals Group Limited
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FMG Details
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Solid June quarter production: Fortescue Metals Group Limited (ASX: FMG) surged 7.04% on July 27, 2016 with the updates on delivering shipments of 43.4 million tonnes of iron ore having cash production costs (C1) of US$14.31 per wet metric tonne (wmt), which is a decline of 3% against the March 2016 quarter and 35% against prior corresponding period. FMG also delivered a positive guidance for FY17 with shipments forecasts in the range of 165-170mt while C1 costs are estimated to be in the range of US$12-13/wmt. Net debt declined to US$5.2 billion as at June 2016. The company expects to achieve a key balance sheet goal of 40% gross gearing, a measure of debt to equity in about six-to-nine months. Given a strong balance sheet, declining cash costs coupled with recovering commodity prices, we believe FMG stock would continue to rise in the coming months.
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Recommendation: The stock has delivered 182.2% returns in the last six months (as of July 26, 2016) and we maintain our “Hold” recommendation at the current price of $4.41
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Solid June quarter performance (Source: Company Reports)
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