Vita Group Limited
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VTG Details
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Strong Performance by Telstra retail stores, Retail & SMB segments:Vita Group Limited (ASX: VTG) stock rose 10.5% on 31
st August 2016 after the company reported solid performance for FY 16. VTG delivered a 19% increase in the group revenues from continuing operations to $645.1 million, and a 43% increase in net profit after tax to $38 million. The underlying EBITDA from continuing operations is up 55% to $62.0m and the underlying EPS has increased 89% to 23.29cps. The growth is due to the continued growth in VTG’s portfolio of Telstra retail stores, combined with a higher revenue contribution from the small-to medium business (SMB) and enterprise channels. Meanwhile, VTG stock has risen 51.58% in last six months as on 29
th August, 2016, and we still remain positive on the stock. The operating cash flows were strong in FY 16 and VTG has declared a record full-year, fully-franked dividend of 13.97 cents per share, which is up 75% on the prior year.
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Recommendation:We give a “Hold” recommendation on the stock at the current price of $4.84
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FY16 Financial Performance (Source: Company Reports)
Retail Food Group Limited
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RFG Details
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Hudson Pacific acquisition:Retail Food Group Limited (ASX: RFG) stock rose 2.4% as on 31
st August 2016. RFG has recently entered into a Share Purchase Agreement (SPA) to acquire the business and operations of Hudson Pacific Corporation (Hudson Pacific or HPC). The Hudson Pacific acquisition is expected to be immediately EPS accretive and would expand the present scale of foodservice activities undertaken. The transaction offers revenue diversification and vertical integration opportunity, offering meaningful benefit to the RFG’s existing franchisee community and wholesale. Moreover, RFG’s underlying NPAT increased 20.5% to $66.4m over the previous corresponding period.
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Recommendation:Even though RFG stock has risen 51.13% in the last six months as on 30th August, 2016, we give a “Hold” recommendation on this dividend yield stock at the current price of $6.87
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FY16 Financial Performance (Source: Company Reports)
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