Reporting Season Summary: 26 Feb 2015
About the author:
- Author name:
- By Fiona Buchanan
- Job title:
- Co-Head of Research, Senior Analyst
- Date posted:
- 26 February 2015, 4:00 PM
- Sectors Covered:
- Property, AREITS
Adelaide Brighton (ABC)
1H15 result
NPAT: A$166.5 million; Dividend: 9.5cps
The result was in-line with expectations.
Morgans comment
ABC delivered a strong result with still supportive end markets and benefits from internal initiatives. We remain concerned that resource exposed end markets will provide a headwind over the medium term, without a near term uplift from roads activity providing a full offset. Given recent acquisitions and gearing of 31.7% capital management is likely to remain off the table for some time.
Sydney Airport (SYD)
1H15 result
EBITDA: A$948 million; Dividend: 23.5cps
The result was in-line with expectations.
Morgans comment
This was another solid result from a solid performer. With upgauges, ongoing load factor improvement and new services (especially given the recent increase in seat capacity between Australia and China) expected to drive ongoing traffic growth, and CAPA data indicating traffic growth to remain solid over coming months, we remain positive on the long term outlook for SYD. With solid growth also expected from recent commercial initiatives, we believe 2015 will be another solid year. However, SYD now trades on 18.4x FY15 EV/EBITDA (vs long term average of 14.6) and a 4.2% FY15F yield (vs long term average of 7.4%) and risks remain around the international air pricing agreements to be struck in June. While we see reason for SYD to be trading ahead of long-term averages, we see limited upside in the short term.
NextDC (NXT)
1H15 result
EBITDA: A$3.0 million; Dividend: 0cps
The result beat expectations.
Morgans comment
NXT is now guiding for FY15 of A$6-8m. Considering the achieved A$3m in the 2H we expect the full year result will be at least in the upper end of this guidance. Prior to today's results consensus was for around A$5m in EBITDA for FY15 so this is a 20-60% upgrade. This result proves, in our view, that NXT has very strong operating leverage and that around 80% of all new sales fall directly to EBITDA/cashflow profit. New contract wins from here will be highly profitable. After four years of hard work, NXT is finally profitable and the operating leverage is showing. We think this will result in renewed investor interest in the company.
Japara Healthcare (JHC)
1H15 result
NPAT: A$15.8 million; Dividend: 5.5cps
The result beat expectations.
Morgans comment
Positive result ahead of our forecast. Importantly, FY15 guidance has been confirmed at EBITDA of A$50.3m which includes Whelan acquisition contribution.
Ramsay Healthcare (RHC)
1H15 result
NPAT: A$204.4 million; Dividend: 40.5cps
The result was in-line with expectations.
Morgans comment
Headline numbers look solid and in-line, with underlying NPAT up 19.1% to A$204.4m, with drivers including ongoing traffic growth, potential upside from the EU stimulus package and APRR/Eiffarie to continue to benefit from improved debt financing conditions over coming months.
Acrux (ACR)
1H15 result
NPAT: A$7 million; Dividend: 0cps
The result missed expectations.
Morgans comment
ACR's revenue decreased 67% on pcp to $14.2m and slightly lower than our forecasts of $14.75m, NPAT decreased 71% on pcp to $7m, lower than our forecast of $8.5m. Axiron sales by Eli Lily dropped approximately 11% to US$83.9m on pcp, driven by the initial FDA assessment of cardiac risk outcomes in 2014. No milestone payments were received in CY14 as sales failed to reach US$100m which was well known.
Simonds (SIO)
1H15 result
NPAT: A$9.2 million; Dividend: 0cps
The result was in-line with expectations.
Morgans comment
The result shows SIO is comfortably on track to meet its prospectus numbers and our forecast (3.7% ahead of prospectus). Both divisions have contributed in-line with expectations, and both divisions have a strong secured sales pipeline. Considering the growth opportunities, 12x PE, net cash position and strong cash flow business - SIO looks cheap here.
Nine Entertainment (NEC)
1H15 result
NPAT: A$88.8 million; Dividend: 4.2cps
The result missed expectations.
Morgans comment
While the result was below our forecasts it reflects to some extent the AdEx market that we flagged with our 27 Jan TV sector note. Additionally the result was impacted by a weaker Nine Live (Events) business vs our forecasts. Importantly the reaffirmed guidance and the A$150m buy-back should provide solid share price support. Key to the outlook is NEC's expectations that its TV business will deliver 8-9% revenue growth in 3Q15 - this is critical against market expectations of an anaemic AdEx market. We retain our Add rating - NEC remains our preferred traditional media exposure.
IPH Limited (IPH)
1H15 result
NPAT: A$13.4 million; Dividend: 3.5cps
The result beat expectations.
Morgans comment
IPH is well on track to exceed its FY prospectus forecasts. Growth in Asia was stronger than we had anticipated which bodes well for organic growth of the Group. Our FY forecasts are 11% above prospectus (based on FX movements). This result leaves us comfortable with our forecasts over FY15/16/17. While IPH is trading on a hefty multiple (26x FY15/22x FY16) it is offering strong EPS growth of 18% in FY15 and 19% in FY16 ex acquisitons and further FX movements plus a c3% dividend yield. Next catalysts for the stock includes acquisitions plus potential ASX300 inclusion in March and ASX200 inclusion in June.
Logicamms (LCM)
1H15 result
NPAT: A$4.4 million; Dividend: 3.5cps
The result was in-line with expectations.
Morgans comment
Good result in line, no change to guidance a positive, strong cashflow and dividend will be of interest. Significant sector risk, but expect modest re-rate.
Select Harvests (SHV)
1H15 result
NPAT: A$21.5 million; Dividend: 15cps
The result was in-line with expectations.
Morgans comment
SHV has reported a solid 1H15 result and the outlook for the full year is very positive. SHV's share price has risen strongly on the back of positive almond industry fundamentals. We will review our investment view in the days ahead.
Qantas (QAN)
1H15 result
PBT: A$367 million; Dividend: 0cps
The result beat expectations.
Morgans comment
Overall it was a strong result. Consensus FY15 PBT is currently at A$768m, but with capacity growth continuing to moderate, the revenue environment improving as a result, and fuel costs benefits to flow through in the 2H, consensus forecasts are likely to be revised upwards.
More information
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