Beach Energy Ltd

BPT Details

100% success rate across Cooper Basin JV appraisal and development drilling: Shares of Beach Energy Ltd (ASX: BPT) moved up 2.2% on September 06, 2017, after the company announced its drilling update for August 2017. A three-well oil development and appraisal campaign was successfully completed in the Zeus-Minos- Tennaperra Complex at Queensland Oil. The campaign included one development well, Zeus-12, which aimed to accelerate production and enhance recoveries from the Birkhead Formation. A two-well pad development campaign was successfully completed in the Jack Lake Field at South Australian Gas. Jack Lake-6 and Jack Lake-7 targeted stacked sand intervals within the Patchawarra Formation, with the aim to access remaining gas in place at field boundaries. At Queensland Gas, Roti-5 is the first of two gas development wells in the Roti Field, located approximately 35 kilometres east of the Ballera processing facility. The wells follow successful drilling in the Roti South and Windigo fields in 2016 and subsequent update of depth conversion mapping. Given the FY17 results and ongoing positive developments, we maintain a “Buy” recommendation on the stock at the current market price of $ 0.69

 Automotive Holdings Group Ltd

AHG Details

Strong performance in Refrigerated Logistics in the second half: Automotive Holdings Group Ltd (ASX: AHG) enjoyed a share price rise of 2.8% on September 06, 2017 with improvement in market sentiments. For FY17, AHG had reported 38.2% year on year (yoy) decline in statutory NPAT (Net profit after tax) to $55.5 million, primarily due to one?off costs associated with the Refrigerated Logistics transformation program and restructuring of the Company’s operations. However, the reported NPAT was down 10.2% yoy in line with its previous guidance. Notably, FY17 was a challenging year for the company led by decline in the new vehicle market in Western Australia and the tightening of consumer credit conditions, which impacted the Company’s finance and insurance income.


Financial Performance; (Source: Company reports)

However, AHG has witnessed a robust performance in Refrigerated Logistics in the second half of the year, with EBITDA up 68% on last year, led by the restructuring of the division. Additionally, the Company’s Other Logistics division, which includes the AMCAP parts distribution business and the importation and distribution of KTM and Husqvarna motorcycles, performed better than FY2016.The Board declared a final dividend of 9.5 cents per share, totalling the full year pay-out to 19.0 cents, consistent with AHG’s dividend policy of paying 65 to 75% of operating profit.

The Group expects modest uplift in operating performance in FY2018 based on the anticipated stability of Western Australian economy, benefits of AHG’s cost reduction programs and the ongoing improvement in Refrigerated Logistics. Given the strong improvement in logistics division and improving performance, we maintain a “Buy” recommendation on the stock at the current price of $ 3.34

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