GWA Group Ltd
.png)
GWA Details
·
Outstanding bottom line growth: GWA Group Ltd (ASX: GWA) stock surged over 18.1% on August 22, 2016 as the group delivered a far better than estimated fiscal year of 2016 results. The group’s net profit rose 15% on a year over year (yoy) basis to $51.9 million while reported a fully-franked final dividend of 8 cents and a special dividend of 1 cent per share. Operating cash flow enhanced 12% to $91.7 million during the year driven by a better working capital during the second half. GWA was able to even control net debt by 7% and enhanced their credit metrics. Meanwhile, the company launched Caroma Cleanflush and is focusing on new product development pipeline while controlling cost base. GWA also improved their supply chain via Integrated Business Planning project. On the other hand, GWA’s revenue rise was limited which was only 3% during the period with its segments, Bathrooms & Kitchens revenue rising 4% and Door & Access Systems revenue rising 2%. GWA has surged 11.8% in the last one month (as at August 19, 2016).
· Recommendation: We believe that the stock is “Expensive” at the current price of $2.68
Cover-More Group Ltd
.png)
CVO Details
·
Delivered a solid Asian performance:Cover-More Group Ltd (ASX: CVO) stock surged over 5.7% on August 22, 2016 driven by the group’s revenue growth across its travel insurance operations. The group’s gross sales in Australia rose 7.6% yoy to $502.1 million in fiscal year of 2016 while the gross sales in Asia reported a solid increase of 20.9% on a yoy basis. CVO’s EBITDA fell over 14.2% to $44.6 million during the year due to higher underwriting premium in the first half coupled with direct and overhead costs of $2.1m for international expansion as well as rising advisory fees. But CVO reported that their underwriting premium have been stabilizing in the second half. Moreover, the group’s EBITDA in Asia rose over 30.1% yoy which now contributes over 22% of their profit. CVO started their travel insurance distribution in May 2016 at North America, via major brands like Flight Centre USA brands. Moreover, they have a partnership with Berkshire Hathaway Travel Protection to distribute travel insurance direct in the United States. CVO’s India business is really doing well which is reflected in the group’s rapid Asian growth and we believe this growth would continue, given the group’s affiliation with major brands like Yatra, Goibibo and GoAir. The group started offering travel insurance in partnership with Zurich in China via Hong Kong Express. Meanwhile, MyCover-More platform would launch for the direct to consumer business this month to enhance sales conversion. The stock is trading ex-dividend on August 25, 2016.
·
Recommendation: We believe the stock has more upside left and based on the foregoing, we give a “Buy” recommendation at the current price of $1.49
.png)
CVO segment performance (Source: Company Reports)
Disclaimer
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376).The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd currently hold positions in: BHP, BKY, KCN, PDN, and RIO. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.