Praemium Ltd 

PPS Details 
Improvement in UK revenue relative to the expenses: Praemium Ltd (ASX: PPS) recently reported its financial results for the half year ending 31 December 2016 entailing a record 39% growth in EBITDA to $2.6 million over H1 FY16. There was a 16% rise in revenue and other income to $17.2 million. This was the sixth consecutive half of profit improvement for the group. The Australian SMA market is expanding quickly and EBITDA was of the order of $4.6 million with EBITDA margins of 41%. At the same time, PPS also commented that it is witnessing an improvement in UK revenue (21% growth) relative to the expenses. Particularly, there has been a reduction in losses of the International businesses with UK’s EBITDA loss reducing by 34% to $0.7 million. In local currency, UK revenue and other income witnessed a rise of 51% including 2% from the acquisition of the Wensley Mackay Self Invested Personal Pension (SIPP) business in November 2016. PPS believes that the acquisition will help it gain a well-run regulated position although the business has a relatively small pension book of £50 million. Further, the SIPP sector is expected to get support from an ageing population. Thus, PPS indicates that this move with the current acceleration of platform assets is expected to drive the UK business toward profitability. The group also reduced Asia’s EBITDA loss by 31% to $0.8 million. PPS also reported that record inflows during 1H FY17 led to a 29% growth in Global FUA to $5.4 billion at 31 December 2016. We believe that there is more potential in the stock and give a “Buy” recommendation at the current price of $ 0.44
 

PPS Daily Chart (Source: Thomson Reuters) 

OZ Minerals Ltd

OZL Details 
Lift in production estimates: OZ Minerals Ltd (ASX: OZL) reported that it has been able to achieve the copper guidance for 2016 and for the second consecutive year while gold production has been within revised full year guidance and up 13% on a quarter on quarter basis. There has been an extension to Prominent Hill mine life to 2028 at the back of over 40% growth in underground Ore Reserve. OZL has confirmed its 2017 copper production guidance and lifted the production estimates by a total of 30,000 tonnes through to 2019. The 2016 C1 costs of US 74.1 c/lb have been within guidance but the C1 cash costs of US 77.9c/lb for fourth quarter ending December 2016 have been higher than the prior quarter. The costs were higher owing to higher mining costs, a smaller mining deferral and slightly higher TCRC and transport costs. 

Quarterly Performance (Source: Company Reports)
 
The stock has partly benefitted from the recent rally in commodity prices and long-term success is generally seen for companies that manage production with the lowest costs. The direction for copper is expected to be bullish at the moment but costs for the group remain a concern. With a lot of exploration upside yet to be witnessed, the group might need to commit funds for prospect assessments. OZL stock has already surged 101.23% in last one year as at February 17, 2017 and now trades close to its 52-week high price. We believe that the stock is “Overvalued” at the current price of $ 9.82
 

OZL Daily Chart (Source: Thomson Reuters)

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