Reporting season summary: 23 Feb 2015
About the author:
- Author name:
- By Fiona Buchanan
- Job title:
- Co-Head of Research, Senior Analyst
- Date posted:
- 23 February 2015, 3:33 PM
- Sectors Covered:
- Property, AREITS
Mermaid Marine (MRM)
1H15 result
NPAT: A$37.7 million; Dividend: 4cps
The result was in-line with expectations.
Morgans comment
On face value MRM is starting to look interesting given its asset backing. However a roll-off in earnings from the Supply Bases as they transition from construction to production and with vessels operating in a highly competitive market we continue to believe earnings risk lies to the downside over the next 18 months. With committed new capex of A$127m, currency moving against MRM and high fixed cost base we believe it is going to get worse before it gets better.
Lend Lease (LLC)
1H15 result
NPAT: A$315.6 million; Dividend: 27cps
The result was in-line with expectations.
Morgans comment
Result was driven by Australia and improvements in Europe with Americas a little weaker and Asia substantially lower (although the pcp included profit on sale of Jem). Operating cashflow was $496.8m, this is understandable as many projects are in full construction with no revenue support (as they are developed on the balance sheet). However, it is likely still cause for concern for some investors. No guidance provided but management reiterate their comfort with consensus range of A$604-628m. Stock should do okay from the result with only concern cashflow performance. Nevertheless we retain the view strength in the share proce should be used to begin to sell down existing positions.
Spark Infrastructure (SKI)
1H15 result
EBITDA: A$730m; Dividend: 11.5cps
The result was in-line with expectations.
Morgans comment
Overall pretty solid result but we continue to see the investment proposition clouded by DUE stake and potential participation in the NSW asset privatisation process, plus risks around impending resets. Maintain preference for lower exposure to regulatory risk hence APA preferred in the space.
M2 Group (MTU)
1H15 result
NPAT: A$38.5 million; Dividend: 15cps
The result was in-line with expectations.
Morgans comment
In-line with our forecasts with two exceptions - 1) the dividend was higher than our forecast (15cps vs our 14cps forecast); and 2) the divisional composition was different. We had expected the business division to deliver revenue growth for the first time in a few years but it was the consumer business that remained the powerhouse of MTU's growth. MTU have reiterated guidance. NPAT growth is impressive and well above market trend but may not be enough to justify the current share price and the run into the result.
Bluescope Steel (BSL)
1H15 result
NPAT: A$79.6 million; Dividend: 3cps
The result was in-line expectations.
Morgans comment
The result was mixed with good growth and performance from Australia and US HRC but NZ much weaker (through iron sands) and Asia is also weaker. Overall an okay result - probably not good enough to sustainably drive the stock higher from here.
UGL Limited (UGL)
1H15 result
NLAT: -A$122.5 million; Dividend: 0cps
The result missed expectations.
Morgans comment
The CFO is being replaced and the CEO has indicated a further review of projects is likely (so we may see another round of provisions in the next 6 months). Other write-downs also occured on bid costs, claim recoveries and low locomotive sales after development costs. No reason to be in the name and would be happy to be short.
Data#3 Limited (DTL)
1H15 result
NPAT: A$3.6 million; Dividend: 2.1cps
The result beat expectations.
Morgans comment
No meaningful guidance was provided. DTL expect to improve on last years NPBT. Today's result makes us more comfortable that our FY15 forecasts are achievable as the result indicates a 40% 1H, 60% 2H EBITDA skew for FY15 (based on our forecasts). This is a stronger 1H15 result than we were expecting and better than last year.
Beach Energy (BPT)
1H15 result
NPAT: A$72 million; Dividend: 1cps
The result missed expectations.
Morgans comment
NPAT was down 54% on the PCP. The company has cash reserves of $249m. Cost cutting is a continuing theme for the sector and the Chevron JV and convertible notes will become a greater focus for the market. In our view the stock will likely trade sideways in the current environment.
Brambles (BXB)
1H15 result
NPAT: A$285.3 million; Dividend: 14cps
The result was in-line expectations.
Morgans comment
Some divisional differences but overall Group result right on our numbers. Given BXB has had a decent run over the last couple of months, we don't see anything in the result to cause it to trade up materially from here.
More information
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