Reporting Season Summary: 22 August 2014
About the author:
- Author name:
- By Fiona Buchanan
- Job title:
- Co-Head of Research, Senior Analyst
- Date posted:
- 22 August 2014, 1:49 PM
- Sectors Covered:
- Property, AREITS
DUET Group (DUE)
Results
EBITDA: A$616m; Dividend: 17cps
The result was in-line with expectations.
Morgans comment
FY14 proportionate EBITDA of A$616m was up flat on the pcp and in line with CIMB estimates (CIMBF A$619m). Excluding customer contributions, EBITDA was up 1.1% highlighting the flat earnings profile of the overall business. With a flat earnings profile we see pressure on distribution growth. While yielding 7.1% it is trading at 12.9x FY15 EBITDA and looks pretty fully valued in our view. DUE is currently trading with a takeover premium and well ahead of our fundamental valuation and we don’t see anything in today’s announcement that is likely to change that. Hold recommendation.
Iluka Resources (ILU)
Results
EBITDA: A$108 million; Dividend: 6cps
The result beat expectations.
Morgans comment
Underlying earnings of A$12m (CIMB, loss A$32m). EBITDA A$108m (CIMB, A$53m). Free cashflow A$69m (CIMB – A$66m) Company previously guided A$64m. Div was A$0.06. Below CIMB A$0.10 estimate. Outlook commentary typically vague but does suggest there’s been little in the positive move in prices. Add recommendation.
Mermaid Marine (MMR)
Results
NPAT: A$58.3 million; Dividend: 12.5cps
The result was in-line with expectations.
Morgans comment
Today's result should be taken reasonably positively given low expectations, with the introduction of Jaya becoming evident with the fall in supply base earnings. While outlook commentary is vague, there should be significant work and ongoing demand for MRM's services to support FY15. Hold recommendation.
QUBE Holdings (QUB)
Results
NPAT: A$88.6 million; Dividend: 5.1cps
The result was in-line with expectations.
Morgans comment
Overall, the underlying result was marginally ahead of CIMB's expectations with Underlying EBIT (inc assoc) of A$155m 2% ahead of forecast (A$153m), while underlying NPAT of A$88.6m was 2% ahead as well (CIMB A$87m). Full year dividend of 5.1c was marginally ahead of 5.0c forecast. Hold recommendation.
Sims Metal Management (SGM)
Results
NPAT: A$68.8 million; Dividend: 10cps
The result missed expectations.
Morgans comment
Sales $7129m vs CIMB $7456m and cons $7470m. Underlying EBITDA $242.4m vs CIMB $268m and cons $252m. Underlying EBIT $118.5m vs CIMB $147m and cons $137m. Underlying NPAT $68.8m vs CIMB $90m and cons $86m. Expect the stock will weaken after a recent strong run and a poor result overall but may be helped somewhat by believers in the 5yr strategy who think this is a good time to get in. Hard to see anything that will have us change our current negative view based on cyclical factors. Reduce recommendation.
Beacon Lighting (BLX)
Results
NPAT: A$11.79 million; Dividend: 1.4cps
The result beat expectations.
Morgans comment
A great result from BLX. However, the group's multiple demanded a profit beat and will still be at elevated levels post upgrades (c18x FY15). Great business in its prime in these housing conditions, but also making sure it remains relevant with consumers with constant innovation. A great long term retail holding. Hold recommendation.
BigAir Group (BGL)
Results
NPAT: A$5.3 million; Dividend: 1.1cps
The result missed expectations.
Morgans comment
At face value it appears integration of the acquisitions has been more complex and costly than we expected. We understand that BGL was also undertaking system upgrades in 2H14 to create a single, unified administrative platform. Typically these system costs are capitalised (not expensed) and then amortised over 5+ years. We will discuss with management but it appears BGL has expensed theses items. If this is the case, then the cost are possible on-off in nature and sell-off is overdone. If this is not the case then BGL recurring cost base is higher than expected and we will need to reduce our forecasts by ~10%-15% in FY15. Add recommendation.
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