Reporting season First Half 2021

Scroll through the table below for individual reporting dates, our stock recommendations and our company comments.

You can also access the Reporting Season Playbook where our research team examines key strategic themes to watch including cost inflation, FY23 earnings trends, quality premium, short selling, and positioning in resources.

Reporting Season Coverage



Upcoming results

Date Company ASX Rating Comment
19/08/2022 AGL Energy AGL ADD Generation struggling to hit 100%: AGL’s coal plants have all had unplanned outages and Liddell’s running units are well below nameplate capacity in its last year of life.

Coal portfolio leveraged for wholesale prices: Bayswater and Loy Yang use very low cost coal. With ~75% operating output recently, AGL can cover the bulk of the increased cost of sustained higher wholesale electricity.

Margin expansion in retailing: High operational leverage from the generation fleet shields AGL from a lot of additional costs facing competitors. We expect AGL’s customer margins to expand as costs are passed through to customers by retailers.
Cleanaway Waste Management CWY HOLD Numerous small impacts: Floods, COVID, labour shortages, and equipment failure have impacted 2H22 performance.

Cost pressure: Watch for labour, fuel cost and general inflationary pressure. CWY has also guided for additional costs to pursue growth opportunities.

Revenue protections: CWY highlights its diversified revenue streams and contract cost-pass through mechanisms (albeit with a lag) insulate it. 

Sydney Resource Network: First full half-year contribution from the acquisition. Look for disclosure of the GRL onerous contract provision. 

Capital intensity: Watch for rising sustaining capex and lease utilisation.
19/08/2022 Cochlear COH ADD Earnings guidance: FY22 NPAT A$265-285m (+13-22%), includes A$180m (pre-tax) cloud accounting charge.   
Swings and roundabouts: We continue to expect varied trading conditions, with emerging market growth outpacing that seen in developed markets.

Services to lead the charge: Supported by a growing installed base, demand for new parts and improved clinic access from COVID-related delays. 

Implants to remain sluggish: The growth trajectory remains at the mercy of COVID impacts (eg region-specific elective surgery restrictions and hospital staffing shortages) and constrained operating theatres, but these issues appear more temporary than structural.
Inghams ING HOLD Rising feed costs: Australian grain prices have continued to rise in the 2H, meaning ING will have incurred higher feed costs vs the pcp. With ABARES forecasting higher prices for 2022/23, ING will feel the full impact in FY23. 

Inflationary cost pressures: ING’s cost base has risen materially due to inflationary headwinds including higher labour, energy, supply chain, transport (fuel) and packaging costs. Where it can, it will push through price rises.

FY23 earnings recovery: We expect ING to recover from COVID and the floods relatively quickly. Its volume growth should be solid given poultry is the affordable protein. The question is to what degree price rises (usually lag) and its continuous improvement program can offset cost pressures.
Newcrest Mining NCM HOLD Operating costs: Opex will be under pressure from industry-wide inflation, while the recent shield of higher copper credits has been reduced recently.  

Capital spending: A large capital spend in the coming years, particularly in WA in the near term, needs to be monitored in the current environment. 

Production: Chronic underperformance at Lihir, and a slower ramp up at Cadia since major maintenance, are areas to watch in annual production results. 

Outlook: We like NCM’s long-term target of reducing AISC to circa US$500/oz by the end of the decade, but there is a lot of capital yet to be spent to achieve this goal.
TPG Telecom Ltd TPG HOLD 1H22 result: TPG has a December year end so this will be an interim result. Management recently hosted an investor day but did not provide any quantitative guidance for the upcoming result. 

Mobile: The return of international travel has resulted in Vodafone returning to growing its mobile customer base. It has guided to +120k net adds in 1H22. It also noted comfort in its 160k FWA target by December 2022. 

ACCC preliminary approval: The Australian Competition and Consumer Commission (ACCC) will, in August, provide a preliminary view on TPG and Telstra’s proposed regional mobile sharing agreement. This is potentially a game changing event for TPG so approval would be positive.
19/08/2022 VEEM VEE ADD Gyros: Gyros will be the key driver of VEE’s growth over the long term. Management has guided to gyro sales of $5.3m in FY22, which will be lower than FY21 sales of $7.4m. Sales are likely to remain lumpy in the near term.

Propulsion: We expect propeller demand to be strong with many shipyards booked out to 2023-24. VEE has also been adding capacity to meet demand. 

Costs: VEE has been dealing with higher raw materials and freight costs, supply chain constraints, and labour shortages which will likely have a negative impact on margins despite price rises.

Outlook: We expect management to provide positive commentary on the long-term outlook despite cost inflation being a headwind in the short term.
22/08/2022 Adairs ADH HOLD Good initial contribution from Focus on Furniture. ADH announced the acquisition of Focus on Furniture in November 2021. We believe the business traded well in its first few months as part of the group.

Mocka likely to be feeling the after effects of 1H22 issues. Mocka’s courier partner in Australia was affected by COVID disruptions in 1H22 and was responsible for significant delays in product delivery. We expect the effects of these issues will have continued to have been felt in 2H22.

NDC issues now resolved. We believe the issues have been resolved, the duplicate lease ended and the annual savings of $3.5m previously flagged for the NDC will be starting to take effect.
Atomos AMS ADD New product launch: Focus will be on demand for new product. Atomos Connect and Shogun Connect provided tailwinds in late FY22, we’re looking for a July/August trading update for further confidence into FY23. 

Guidance updated: AMS released narrowed guidance in July for >A$82m sales and lower-end of 6-8% EBITDA margins.

Marketing strategy: We anticipate management will comment on the change in marketing strategy and any improved trading performance in the back half of 2H22 with higher promotional levels.

Inventory levels: Expect higher levels of inventory given new product launches, exacerbated by marketing issues experienced in 3Q22.
NIB Holdings NHF HOLD Strong ARHI profit margins expected: NHF’s key ARHI business should deliver a strong result benefitting from a continued benign claims environment.     
Policyholder growth: We forecast ARHI to deliver 3% full-year policyholder growth, broadly in line with the market growth rate. 

Has IIHI’s performance improved?: IIHI saw a 1H22 operating loss of -A$7.4m. We will be focused on whether business performance has started to improve as the Australian borders have re-opened.

Is management comfortable with previous outlook commentary?: For example, IIHI and NIB’s travel business will both return to profitability in FY23.
22/08/2022 National Storage REIT NSR HOLD Portfolio update: Occupancy and rate growth in FY22 was very strong (REVPAM +20%). We will be focussed on outlook comments regarding NSR’s ability to maintain growth in a potentially more challenging environment.

Acquisition/development pipeline update: We expect NSR to remain acquisitive but activity is likely to slow as management increasingly focusses on development and value-add opportunities.

Capital management: The weighted average debt maturity is <2 years; however, management aims to extend the debt tenor to beyond 4 years.

FY23 guidance: We expect NSR to provide FY23 guidance (we currently forecast EPS of 10.4c which incorporates assumed higher interest costs).
Reliance Worldwide RWC ADD Underlying demand: Commentary from peers suggest demand remains solid underpinned by ongoing repair, maintenance and remodeling activity, and elevated levels of new home construction.

Price rises: RWC expects to achieve weighted average price increases of ~10% for FY22 to mitigate against rising shipping, freight and energy costs.

Margins: RWC expects 4Q22 EBITDA margin to be in the mid-20% (ex-EZ-FLO) but will fall a little short of the 26.0% achieved in FY21. 

Outlook: Given the ongoing uncertain operating environment, we think management is unlikely to provide quantitative earnings guidance for FY23. Focus will be on commentary on current demand levels in all regions.
The Star Entertainment Group SGR HOLD Regulatory hurdles ahead: SGR is currently under investigation for breaches of AML/CT compliance from AUSTRAC and ILGA. The findings of the Bell Review are due by 31 August. We expect investors to take a keen interest in SGR’s views on the possible outcome.

Second half skew: We expect a large earnings skew to the second half in the current year (87% of FY22F EBITDA is forecast to be earned in 2H22). We expect ‘The Star Sydney’ to deliver close to 60% of group EBITDA.

Cost efficiency: We expect COVID restrictions and lower labour availability to have impacted operating margins in FY22. The situation is forecast to improve in FY23.
23/08/2022 Ansell ANN HOLD COVID tailwinds turn into headwinds: From increasing global infections, manufacturing disruptions and logistical challenges to labour shortages.

Industrial fighting costs: Favourable product mix and price increases need to overcome inflationary impacts and manufacturing delays.

Healthcare fighting COVID: Margin pressure likely as soft Exam/SU demand couples with high-cost inventories and curtailed US imports. 

Challenges to demand and pricing trends: Exam/SU glove pricing and costs to decline towards pre-COVID levels, with volume growth and in-house manufacturing acting as offsets.
Breville Group BRG ADD Robust demand in APAC and North America: We believe BRG continues to experience good demand in APAC and North America. It is pushing through higher selling prices, which is offsetting cost inflation.

Europe looks far more challenging: The geopolitical situation in Europe (23% FY22F sales) has hit consumer confidence and discretionary spending. 

Inventory build underway: BRG set itself a target earlier in the year to build an inventory ‘buffer’ against supply chain disruption. We forecast year-end inventory of $318m, up $101m over the course of FY22.

Growth set to slow: Although new products, the inclusion of LELIT and new markets will support positive growth, we expect growth to slow in FY23.
Endeavour Group EDV HOLD Retail: We forecast Retail LFL sales to fall by 0.4% in 2H22 as customers return to on-premise consumption following the easing of COVID restrictions.  

Hotels: Conversely, we expect the lifting of restrictions to benefit Hotels and forecast LFL sales to rise by 5.0% in 2H22. Margins however may be impacted by some damage due to the floods on the East Coast.  
Online growth: Retail reached annualised online sales of over $1bn in 3Q22 and should see further growth due to investments in digital and engagement. 

Outlook: We think EDV is unlikely to issue specific earnings guidance but expect management to provide an update on trading in both Retail and Hotels in the first few weeks of FY23.
HUB24 HUB ADD Result: We expect HUB to deliver FY22F EBITDA A$53.4m (+77% pcp) and Platform EBITDA of A$59.2m (+56%). We expect 2H22 Platform EBITDA margin to be relatively flat on 1H22 (2H22F 37.3%). 

Flows: HUB expects 4Q22 net inflows of ~A$2.5bn (flat on pcp ex-LTs). The flows outlook will be key (Morgans FY23F A$12bn). HUB has a FY24 FUA target of A$83-92bn, however this looks difficult without strong markets.
Leveraging expenses and pooled cash upside: We expect another cost growth year for HUB, however we expect incremental cost growth to slow and expect the group to aim to deliver margin improvement.  HUB’s current cash agreement expires 1-Dec. We see the potential for HUB to achieve a margin above market expectations.
Nanosonics NAN ADD Transition to direct sales model with GE: In late May, NAN announced that the transition is progressing on track and on time, with completion expected by end FY22. We anticipate the one-off impacts from the transition will be isolated to FY22 with FY23 approaching more normality. 

Installed base growth and replacement cycle: NAN increased their TAM for Trophon2 to 60k units (was 40k). This alongside the upgrade cycle sees NAN well positioned to grow its installed base and higher consumables. 

New flexible endoscope product: Since informing the market of the new product, there has been little information regarding product development and timelines. We anticipate first sales in CY23, but await further news. We think any clarification of timelines will settle investors.
Reece REH HOLD Market conditions: Commentary on repair, maintenance and remodeling activity, and new home construction in both ANZ and the US.

Price rises: Price inflation will be a key driver of revenue growth with REH estimating that in 1H22, inflation in ANZ grew at 8-9% while the US experienced 12-13% growth. 

Margins: With input costs rising across labour, supply chain, and logistics, a key focus will be how this will impact margins.

Outlook: We think management will be cautiously optimistic on the outlook for both ANZ and the US given a strong backlog of work in both repairs & maintenance and construction, despite inflation and supply chain risks.
SomnoMed SOM ADD New technology: We await updates on the new technology-enabled device (Rest Assure) in regard to timing on development finalisation, regulatory acceptance, pricing and guidance on subsequent launch of the product. 
Sales growth in the US and EU: In a more normal environment post COVID, sales growth in key regions in the US as well as Europe has continued. Of particular note is the increasing penetration across key jurisdictions in Europe. 

R&D investment: SOM continue to invest in R&D and build out its pipeline of new technology and potential future revenue streams. We expect a continued focus on recycling cash profits into further development works.
Step One Clothing STP ADD Hitting the number: In the first instance, we will be looking to see whether STP has hit its revised guidance of pro forma EBITDA in the range $7.0-8.5m. Our estimate of $7.2m is towards the bottom of this range. Back in May, STP also revised its sales growth guidance down to 15-20%. Our estimate is at the bottom of this range too.

Marketing costs: It appears incremental marketing spend in FY22 did not deliver the returns STP anticipated or has been used to, with the result that the effect of lower sales was compounded by materially higher operating costs. We forecast a ratio of marketing costs to sales of 46% in FY22.

EOFY sale: The success of this promotional period will largely determine where sales in FY22 land in relation to the (fairly wide) guidance range.
The Reject Shop TRS HOLD New CEO: Following the departure of Andre Reich, Phil Bishop became CEO of TRS on 11 July. The FY22 result will provide the first opportunity for most investors to gain exposure to the new CEO. So far, the rhetoric from Mr Bishop seems to suggest that he sees his job as developing and progressing the turnaround strategy rather than overhauling it. 

‘Well positioned’: As a discount variety retailer, TRS may find itself well positioned for consumers looking to save money by trading down from more expensive alternatives. 

Buyback ahead: On 16 June, TRS indicated it was assessing an on-market buyback. We assume a buyback of 10% of capital is executed in FY23. News of this could create a positive surprise at the FY22 result.
24/08/2022 Acrow Formwork and Construction Services ACF ADD Upside surprise? Following robust trading in 3Q22, ACF upgraded FY22 earnings guidance for the fourth time since August. With ongoing positive momentum in the business we think the FY22 result could beat guidance.

Industrial Services: The division continues to perform well with recent contract wins with Snowy Hydro 2.0 and Origin Energy to underpin further growth in FY23. 

Formwork: We forecast formwork revenue growth of 29% in FY22 supported by ongoing strength across all markets, particularly QLD.

Outlook: We expect management to provide positive commentary on the outlook with conservative earnings guidance given for FY23.
APA Group APA HOLD Look for evidence of CPI kicker: The vast majority of APA’s revenue is linked to CPI, with c. one-third of earnings directly linked to the strong US CPI.

…but watch for cost expansion: We think share price strength excessively factors in the revenue benefit of higher CPI without considering the likely cost impact on both corporate costs and sustaining/IT capex.

Capital deployment: Look for comments on M&A and organic investment opportunities, with thoughts on potential returns given higher cost of capital in a rising interest rate environment. Also consider project resourcing issues.

DPS outlook: Expect first-time FY23 DPS guidance. We currently target 54.75 cps (+3.3% growth on pcp), implying 64% free cashflow payout.
Airtasker ART ADD Oneflare integration: With the recent acquisition of Oneflare (A$9.8m, 1.6x FY23F revenue), we anticipate an update on how the integration is going and how soon synergies can be expected from the combined platform.

Offshore traction: Whilst in its early stages, the UK platform has seen robust growth (3Q22 GMV +138% on pcp). ART has also targeted a A$8m-A$10m GMV run rate by end of FY22. The US is focused on posted tasks (+90% 3Q22 on 2Q22), and we look for an update on GMV expectations in this geography, noting its prodigious TAM.

Domestic position: The domestic business has shown the ability to post positive OCF. Whilst not extrapolating this, we will look for an update on the how the domestic platform is positioned.
Australian Vintage AVG HOLD Pillar brand sales: As at 31 March, pillar brand sales were at 79% of group sales. We expect this percentage continued to improve in the 4Q, with AVG taking share in its key markets, whilst improving its product mix and margins. 

Growth initiatives: We will be looking for an update on AVG’s new drinks range, sales outside its key markets and JV’s with SJP/Invivo.

Inflationary pressures: Costs will likely increase in FY23 due to inflationary headwinds including higher labour, energy, transport (fuel) and packaging costs. Sales of AVG’s lower price-point wines could also slow given the inflationary cost pressures the consumer is under. We therefore think this could impact AVG’s return to earnings growth in FY23.
Coles Group COL ADD Smarter Selling: COL delivered Smarter Selling benefits of $100m in 1H22 and is targeting $200m of benefits in FY22. 

Food inflation: COL’s average prices increased 3.3% in 3Q22, which was higher than WOW’s inflation of 2.7%. Inflation is likely to accelerate in 4Q22 due to widespread industry cost pressures. 

Liquor: Liquor EBIT margin fell 40bp in 1H22 due to investments in team, systems, eCommerce and format. We expect further investment to drive a 10bp reduction in margin in 2H22. 

Express: Fuel volumes were impacted in 1H22 by the lockdowns in NSW, VIC and ACT. Volumes should improve in late FY22 as mobility increases.
Domino's Pizza
DMP ADD Inflation. Rising price of food, energy and labour all impact DMP’s margins in corporate stores.  DMP is able to mitigate some inflation through its own supply contracts, store efficiencies and judicious menu alterations. We are concerned that rising inflation may reduce the appetite of franchise partners to open new stores.

Unfavourable FX. The Japanese yen has moved to an 8-year low against the Australian dollar. This impacts the translation of DMP’s Japanese earnings back into AUD for reporting purposes, but also on a transactional basis given most of the food inputs used in Japan are imported.

Resilient demand. Our analysis suggests that consumer expenditure on takeaway food outperforms retail spending during times of high inflation.
Ebos Group EBO HOLD LifeHealthcare acquisition: During the half, EBO completed the acquisition of LifeHealthcare, a leading distributor of medical devices in AUS/NZ/Asia. 

Market leader strategy: EBO strives to be a market leader in each of its divisions (community pharmacy, institutional healthcare, contract logistics and animal care).

Consistent ROCE: EBO continues to improve its return on capital employed, delivering over above 15% consistently.   

Strategic acquisitions: EBO has a strong track of successful integration of acquisitions in each of its divisions, we anticipate further bolt-on acquisitions in key markets.
Home Consortium HMC ADD AUM targets: HMC has grown external AUM by $3.8bn to +$5.2bn which was driven mainly by acquisitions and the IPO of HealthCo (HCW). Management has previously stated it expects to reach +$10bn in AUM by the end of CY24.

Update on new funds: HCM Capital Partners was established during FY22 and is currently undertaking a capital raising via the unlisted HMC Capital Partners Fund 1. It will be focussed on high conviction stakes in listed Australian and NZ companies. Recently, HMC Capital has taken a 13.5% interest in Sigma Healthcare (SIG).

Outlook: We expect HMC will provide FY23 earnings guidance. FY22 guidance comprises FFO of at least 29cps and DPS of 12c (c40% payout).
Netwealth Group NWL HOLD Result: We expect NWL to deliver FY22 EBITDA of A$87m (+10% on pcp), with incremental 2H earnings contribution. Weaker markets should support the revenue margin in 2H22: tiered fee rates and improved pooled cash earnings in 4Q22.

Net inflows: NWL typically gives flows guidance; however, we expect a conservative position at this point in the year and given market volatility. Our FY23 net inflow forecast is A$12.6bn (ex any larger account wins). 

Pooled cash and margin outlook: NWL’s cash earnings provide a tailwind for FY23. We see upside to the margin achieved from ANZ under the pooled cash arrangement. With expense growth slowing and a cash earnings tailwind, we forecast ~300bp EBITDA margin improvement in FY23.

View: We view NWL as an attractive business, benefitting from a strong industry position, high cash generation and industry tailwinds; however we see better relative valuation upside in HUB.
Sonic Healthcare SHL HOLD COVID testing: 1H COVID testing (A$1.3bn) underpinned organic laboratory revenue growth (16% in cc; c30% of total lab revenue); where to from here?

The base business: Resilience expected to continue (1HFY22 +4.3% vs +2.3% 1HFY20) despite operational challenges posed by the pandemic. 

Imaging and Clinical Services challenged: Soft organic growth, weak volumes and COVID cost pressure paints an unfavourable near-term picture.  

Entering digital pathology: Insights into, the JV between SHL and, a diagnostic assistance tool that should strengthen its global competitive position.
Tabcorp Holdings TAH HOLD Demerger process: With the demerger less than three months old at the time of the FY22 result, we will be looking for indications as to how the process is proceeding and whether there is any risk of cost overruns. 

Recent changes in tax regimes: It was announced recently that the Point of Consumption Tax (POCT) will increase in Queensland and NSW. TAH has welcomed the changes as ‘levelling the playing fields’. We will look for more information as to the financial impact.  

Gaming Services: Contract losses are forecast to have led to a 5% decline in sales and EBITDA in Gaming Services in FY22. What is TAH’s strategy to turn this around?
The Lottery Corporation TLC ADD Frequency of large Tier 1 jackpots: Like for JIN, the incidence of large (>$15m) Tier 1 jackpots is an important factor driving demand for lottery tickets. We forecast 40 such large jackpots in FY22, up from 38 in FY21. TLC’s recent remodel of the Oz Lotto game is intended to increase the frequency of large jackpots in the future.

Remodel of Oz Lotto: In May, TLC launched changes to the Oz Lotto game, including a matrix change (7/45 to 7/47) and a third supplementary number. The price increased by 8.3%. How have these changes gone down?

Demerger process: As for TAH, we will be looking for indications as to how the demerger process is proceeding and any risk of cost overruns.
24/08/2022 Wagners WGN ADD No FY22 guidance: At the HY22 result the company pointed to strong concrete volumes and improving prices, offset against cost pressures. The lack of guidance leaves the increased potential for surprise.  

Construction Materials and Services (CMS): The CMS division was likely impacted by the SEQ rainfall during April/May-22, with the shortfall only partially made up in Jun-22. Volumes and prices should be strong. 
Compost Fibre Technologies (CFT): The CFT business is likely to see some growth on the pcp (c.7%), with potential for margin improvement. 

Earth Friendly Concrete (EFC): The division likely to be EBITDA break-even at best. Investors looking for a European contract win to demonstrate value.
25/08/2022 Eagers Automotive APE ADD Result: APE has provided 1H22 NPBT guidance of A$195m.  

Demand/supply/order book: We estimate APE’s order book sits at ~5 months of typical sales (>45k units), with further growth over the half (a ~A$50-100m PBT pool to ‘unwind’ into earnings in FY23). The market will be focused on the strength of current demand and any early impacts seen from emerging consumer pressures. 
Offsetting cyclical impacts: We expect an update on progress of APE’s structural growth strategies: further consolidation opportunities; EA123 execution and expansion; and new OEM strategies (ie BYD). The ability for APE to sustain structurally higher margins and the ability to sustain its current earnings level is a market focus.
Camplify Holdings CHL ADD Recent update highlighted strong bookings growth: Future bookings GTV flagged in June were broadly double that of the pcp at ~A$14.8m. We would expect this strength to have continued into early 1Q23.

How is NZ shaping up?: Post acquisitions, CHL is the #1 P2P platform in NZ. With the avg. booking value 2x AU, CHL’s strategy here will be key.

Product launches: Instant Book, automated pricing, Managed Services and the Temp. Accommodation Program look set to drive growth in FY23.  

Take rate expectations? We look for commentary on how the above products and new Summer series vans will impact CHL’s overall medium-term take rate (noting it was ~29% at the last update vs ~23.6% in the pcp).
Cromwell Property Group CMW HOLD Update on strategic initiatives: As part of moving towards a capital light model, CMW has flagged it is considering launching a new ASX listed office REIT (originally was mid 2022). We expect an update on strategic initiatives with the result.  

Portfolio update: Focus will be on the current leasing environment and outlook as well as June revaluations (weighted average cap rate currently 5.3%). During 2H22 CMW has sold $140m in non-core assets with proceeds to go towards reducing debt (gearing ~40%). 

FY22 guidance: There is no FY22 earnings guidance in place. CMW has previously stated it will pay a quarterly 1.625c distribution until further notice although we expect an update with the result.
Cedar Wood Properties CWP ADD Result:  CWP has guided to NPAT of ~A$35m, which we expect will be met (FY22F NPAT of A$35.6m, up 8.5% on the pcp).  

Pre-sales: CWP reported 3Q22 pre-sales of A$600m, +40% on the pcp (A$426m); and +7% on 1H22. Pre-sales (~A$500m for FY23/24) support a material uplift in NPAT heading into FY23, despite softening sale conditions.   

Market conditions: Cost pressures and consumer demand will be in focus. We expect some project delays to arise from cost and supply pressure.  

NTA: CWP’s last stated NTA stood at A$4.97ps (book value). The group’s capital position is solid and moving past FY23 capital commitments, we see scope for capital management (ie, share buy back).
Flight Centre Travel FLT HOLD EBITDA positive from March: With Group TTV at 59% of pre-COVID levels (Corporate was 76% and Leisure was 47%), FLT generated EBITDA of A$8m.   Corporate was profitable in March and Leisure was expected to be profitable in May given May/June is its key booking period. 

Liquidity position: In March, operating cashflow was +A$2m (included A$4m of government subsidies). FLT had liquidity of ~A$765m which is enough as long as travel continues to recover and it generates positive cashflow.

COVID recovery vs consumer/business slowdown: Markets continuing to reopen and fewer restrictions provide strong momentum into FY23. Asia and Australian outbound are the laggards. Given macroeconomic uncertainty, the potential for reduced corporate/consumer travel budgets is the unknown.
IDP Education IEL ADD Result: We expect IEL to deliver FY22 NPATA of A$102.9m (>150% on pcp). 
IELTs: We expect to see volume momentum in 2H22, giving confidence in solid system growth (>12%) into FY23. In the division we expect to see GM % uplift in FY23 (synergies, price increases), back to ~44-45%.  

Student placement: Canada visa delays have likely impacted 2H22, however AUS placements should show the start of a strong recovery. There will be a focus on early indications of UK volumes; the quantum of AUS FY23 recovery; any system capacity constraints in Canada; and the progress of IDPLive. 

Overhead investment: Expect IEL to point to relatively high cost growth into FY23 (investment led), which may be one outlook area the market queries.
QUBE Holdings QUB HOLD FY22 guidance is for “strong” earnings growth (pre-amortisation):  Transparency of revenue drivers is limited. However, we expect 2H22 to build on strong 1H22 growth with start-up of the BlueScope contract, contribution from growth investment, reduced net interest, and the $400m share buyback.  

Labour and fuel: While we expect QUB to be highly proficient at management of these key logistics resources, we will be watching for ability to pass through higher costs, an outbreak of wage growth, and service level constraints. 

Capital intensity: We think the market underestimates the capital intensity required to sustain and grow QUB’s earnings. 

M&A: We estimate c.$400m of excess debt capacity to pursue opportunities.
Silk Logistics Holdings SLH ADD Port Logistics: Volumes across the major container ports are down c.2% on pcp for 2H22 (through to May); SLH’s volumes will depend on its customers’ activity. We expect solid growth in revenue per container and stable margins.

Contract Logistics: High warehouse occupancy (from just-in-case logistics) is likely to support earnings growth, as will rise-and-fall price clauses and the rapid growth of the Distribution business. Expect COVID cost impacts.

Capital management: Watch for working capital management and gearing (including lease obligations). Expect a substantial increase in DPS in 2H22.  

M&A: SLH continues to pursue acquisition opportunities in both Port Logistics and Contract Logistics, and both domestically and in New Zealand.
Woolworths WOW HOLD Like-for-like sales growth: We forecast Australian Food 4Q22 LFL sales to be up 3.0% vs 4.4% in 3Q22 with the slowdown reflecting a shift from eating at home to eating out as economies reopen.

Food inflation: WOW’s average prices rose 2.7% in 3Q22 and is likely to accelerate in 4Q22 reflecting widespread industry cost pressures. 

BIG W: Trading was heavily impacted by lockdowns in 1H22 but should see an improvement through 2H22 as restrictions ease.

Outlook: While WOW is unlikely to provide specific earnings guidance, we expect management to provide an update on the first few weeks of trading in FY23. For FY23, we forecast Australian Food LFL sales to increase by 2.3%.
26/08/2022 Costa Group Holdings CGC ADD Solid domestic Produce result and modest growth from International: Strong prices and growth projects should underpin a solid 1H Produce result. The key area of weakness is avocado pricing which remains historically low given industry oversupply. Modest growth is expected from International given strong growth in China (despite lockdowns) offsets a weak Morocco.

Growth projects should underpin solid outlook: 21% footprint growth in China; 2PH Farms acquisition; tomato GH4 project; increased volumes from premium domestic blueberry varieties; and a rebound in Colignan grapes.
Citrus uncertainty: CGC’s citrus portfolio has been impacted by recent weather events which will impact the quality of the crop and potentially pricing. Given earnings are 2H weighted, it is too early to quantify the earnings impact.
Jumbo Interactive JIN ADD Increase in digital lottery penetration: A key driver of growth for JIN is the rising proportion of lottery tickets sold online. We forecast 37.4% in FY22, up from 32.8% in FY21.

Frequency of large Tier 1 jackpots: The incidence of large (>$15m) Tier 1 jackpots is an important factor driving demand for lottery tickets. We forecast 40 such large jackpots in FY22, up from 38 in FY21. The recent remodel of the Oz Lotto game is intended to increase the frequency of large jackpots in the future.

SaaS: Following the launch of the St Helena Hospice contract, we expect SaaS to contribute most to FY22 earnings growth (EBITDA up $6.4m).
Kina Securities KSL ADD Is loan growth remaining robust?: We forecast KSL to deliver 1H22 lending growth of 10%, broadly in line with recent half-yearly loan growth levels. 

Are bad debts remaining contained?: Noting KSL’s FY21 bad charge was materially better than our expectations at 36bps of Gross Loans.

Operating expenses: Cost growth has been an area of weakness in recent results for KSL, with the company spending heavily to grow.  We forecast a 1H22 cost-to-income ratio of 59%. 

Growth in Digital income: We see this as an important, low risk growth area for KSL.  FY21 revenue in this area (PGK 24m) was up 65% on pcp.
Monash IVF MVF ADD IVF cycle numbers: COVID isolation requirements on staff and patients have impacted the business, we anticipate rebounding cycle volumes as conditions normalise, but we continue to monitor monthly Medicare statistics. 

Strong industry fundamentals: Whilst we are cautious of macro-economic conditions (cost of living pressures and rebounding travel demand potentially pushing out the IVF decision), we still believe there is strong underlying fundamentals for IVF such as the focus on families, advanced maternal age, innovation in technology supported by government funding regimes. 

Strategic acquisitions: Recent acquisitions of PIVET medical centre in WA and 6 fertility specialists in Brisbane, sees MVF build out its footprint and enhances existing operations. We anticipate further strategic acquisitions.
PeopleIn PPE ADD Earnings guidance: PPE has provided FY22 guidance of $45-47m of normalised EBITDA (MorgansF: $46.3m). 

Industrial and Specialist Services: Forecast EBITDA for FY22 of $20.1m, driven by 10% organic revenue growth in 2H, along with full year contribution from Vision Surveys and slight compression in margin (FY) to 5.1%. 

Health and Community: Forecast EBITDA for FY22 of $12.3m, driven by 10% organic revenue (HoH) growth and compression in margin (FY) to 8.4%.

Technology: Forecast EBITDA of $20.1m, driven by 10% organic revenue growth (HoH) in 2H, along with full year contribution from Perigon and margin expansion (FY) to 14.1%.
PTB Group PTB ADD US growth: PTB has made strong gains in the efficiency of its US business to drive higher earnings. The company raised FY22 EBITDA guidance by 14% in April and pointed to the US business as a key contributor.

Strong balance sheet and acquisition options: PTB’s balance sheet remains strong with negligible net debt forecast at year end. This positions the company well for suitable opportunistic expansion opportunities to complement organic growth. 

Guidance unlikely at the result: We are looking for strong FY23 guidance from the company for the market to regain confidence in PTB’s outlook. Typically the company provides this in October/November at its AGM.
Peter Warren Automotive PWR ADD Result: We expect half-on-half NPAT growth, noting the PMG acquisition contributes for a full 6 months (1-month contribution of A$1.3m PBT in 1H22).   

Demand/supply/order-book: Demand has continued to outstrip supply through 2H22 and we expect to see another material uplift (%) in the order book. The market will be looking for comments on recent demand dynamics. We expect commentary on demand to be relatively cautious. 

Agency model and further consolidation: PWR has relatively high concentration to Mercedes, with the new sales model launched Jan-22. A further update on performance under the model will be expected. After bedding down the PMG acquisition, we expect PWR will look for bolt-on opportunities in the Vic market.
Ramsay Healthcare RHC HOLD All eyes on KKR: We remain optimistic that the Apr-22 A$88/share bid remains on the table, but the market has become quite skeptical. 

Softer for longer: A 3Q trading update highlighted ongoing challenging conditions and volatility across all markets, with underlying earnings down 25% and FY24 more of a “normal” trading year.

Activity to improve…: Pent-up demand is being seen to varying degrees across all geographies, with ongoing pressure on public systems. 

…but volume-limiting headwinds remain: Including surgical restrictions, staff shortages, cancellations along with COVID-related costs and other inflationary pressures.
Shine Justice SHJ ADD Result: Guidance is for low double-digit EBITDA growth (MorgansE 10.7%). 

Cash flow conversion: Cash flow will be the result focus. 1H22 GOCF conversion was weak at 24%, which SHJ expected to normalise in 2H22. We are looking for FY22 GOCF of A$32.4m (~52% conversion). Improved GOCF in FY23 will be important for confidence SHJ is converting growth profitably.  

Acquisition agenda to recommence: Cash timing following the Mesh resolution is unclear, but certainty on the balance sheet will allow SHJ to consider acquisition opportunities and potential capital management.

View: We think the market will need to see evidence that growth opportunities are being converted into cash flow improvement to sustain a re-rate.
SmartGroup SIQ HOLD Result: SIQ has guided to flat 1H22 revenue and EBITDA. We expect NPATA to be down ~2.5% on the pcp. Formal FY guidance is unlikely.    

Vehicle supply, Smart Future and EVs: Constrained vehicle delivery continues to impact. This dynamic should see further order book growth to >A$16m (key positive). ‘SmartFuture’ is aiming for A$15-20m incremental EBITDA run-rate by FY24-end. The market is looking for some tangible data points to show evidence the financial targets are on track. The potential tailwind from Labor’s EV policy will also be a focus point. 

Contract renewal profile and opportunities: After the recent loss of a major contract, increased focus will be on SIQ and competitors’ upcoming contracts renewal pipeline. Only one major contract remains for SIQ in CY22.
Superloop SLC ADD Guidance: As recently as May, SLC reiterated FY22 guidance for underlying EBITDA of $23-25m, reported EBITDA of $48-50m including a net ~$25m gain on the sale of SG/HK assets and after expensing multiple deal costs. 

Growth: A clearer set of accounts (which have been resegmented to continuing operations) should allow the investment community to see SLC delivering double digit growth again in 2H22. We expect healthy growth across the three segments being consumer, business and wholesale.  

Cash position: Cashflow conversion should be strong in 2H22 (after one-off costs impacted 1H22 conversion). SLC should end the year with ~$40m of net cash (noting the Acurus acquisition settled in June 22, ahead of plan).
Universal Store UNI ADD Sales growth: In FY22 we forecast 2% lower sales y/y, which reflects the impact of lockdowns in 1H22, when sales were down more than 8% y/y. The online store clearly continues to do well.

Margins will be under pressure: UNI itself raised the issue of rising costs in a tight labour market putting upward pressure on wages. We forecast post-AASB 16 EBIT margins to rise from 15.3% in FY22 to 17.5%, however, as new stores mature and on the assumption there are no lockdowns in FY23.

Perfect Stranger: Over the course of CY22, UNI has indicated it expects to open a further 5-8 Perfect Stranger stores (it has 3 now). UNI might provide some guidance as to how large the network could ultimately be (but don’t count on it).
Wesfarmers WES ADD Bunnings: We forecast Bunnings FY22 EBIT to be up 2% after 20% growth in FY21. Focus will be on cost management, growth in the commercial segment, and the impact of recent interest rate rises on demand.

Kmart Group: Both Kmart and Target were heavily impacted by government-mandated store closures in 1H22. Global supply chain disruptions remain a risk in 2H22 and inventory management will be important.

OneDigital: WES’s newly created data and digital ecosystem is expected to record an EBIT loss of $80m in FY22 and $100m in FY23.

Health: Earnings for the Health division will be reported for the first time following WES’s acquisition of API, which completed on 31 March 2022.
29/08/2022 The A2 Milk Company A2M HOLD Extent of China slowdown: The COVID lockdowns in Shanghai impacted A2M’s supply chain and the resulting slowdown in China has likely impacted revenue growth. China’s declining birth rate and increased competition (particularly from domestic players) are also headwinds.

Reduced marketing spend: FY22 marketing spend was guided at ~NZ$220m (+30% on pcp). We think A2M has spent materially less given the China lockdowns would not have necessitated it. Reduced spend could impact 1H23 revenue growth, however catch-up spend in FY23 is likely.

Inflationary cost pressures: Inflation has run rampant which is increasing A2M’s ingredient, packaging, sourcing and operating costs. A2M was looking to implement price rises to maintain its gross profit margin.
Booktopia Group BKG HOLD

Margin expectations: With elevated costs in the DC over FY22, the market will be focused on management’s strategy/confidence around stabilising margins into FY23.

Cost base: The Board flagged an assessment of the cost base to adjust to lower short term revenue growth, these initiatives were expected over 4Q22. 

Search for a new CEO: With co-founder and CEO Tony Nash announcing his intention to step aside from the CEO role in May, we await an update from the company on the progress of finding a replacement. 

ACCC proceedings still ongoing: We look to any update on the proceedings and any potential pecuniary penalties that may result.

29/08/2022 Dalrymple Bay Infrastructure DBI ADD Revenue/tariff negotiations: DBI has been negotiating prices directly with its customers (the first time under light-handed regulation) since the previous regulatory cycle ceased on 30 June last year. Pricing will back-date to 1/7/21.

Revenue resilience: DBCT has rolled forward its existing pricing during customer negotiations. While coal export volumes continue to be well below DBCT’s contracted capacity, it will be protected by take-or-pay revenues. 

Impact of higher cost of capital: Pricing negotiations will be based on interest rates in mid-2021, so won’t benefit from the subsequent surge in rates. However, base interest rates were largely hedged in mid-2021. Watch for increases in debt margins and total debt impacting debt service.
Generation Development Group GDG ADD Investment Bond business performance: We believe GDG’s Investment Bond (IB) business will deliver ~55% NPAT growth in FY22 driven by strong net inflows/FUM growth.  

Are IB margins stable?: There have been no real signs of competitive pressures affecting GDG’s IB revenue margins in recent results.   

Can Lonsec deliver another strong result?: Following an impressive 1H22 performance highlighted by ~23% revenue and EBITDA growth on pcp respectively.

Annuity sales: While this product has just launched, we will be interested in any update on initial sales progress and the pipeline.
Genex Power GNX ADD Sun shining on solar prices: Both Jemalong and Kidston should be strong beneficiaries of surging spot prices. We have recently upgraded our expectations in 4Q22 based on AEMO wholesale market data.

Bouldercombe battery online in CY23: Construction is expected to commence on the BBP this month and could be operational by mid-CY23. Volatility in spot prices is likely to lead to strong but potentially volatile returns.

Kidston Hydro digging deep: Construction of the access tunnel, powerhouse cavern and Wises Dam is expected to be materially progressed in FY23. Commissioning and cash flow will still be some time away but completion of key civil works will materially derisk the project.
ImpediMed IPD SPEC BUY Pathway to breakeven: Management is calling out a pathway to breakeven using the existing cash reserves. Key to achieving breakeven includes growing the number of Integrated Delivery Networks (IDNs) signed and increasing the average monthly licence fees.  

NCCN decision pending: A key catalyst is for IPD’s technology to be included in the guidelines published by the National Comprehensive Cancer Network (NCCN). The timing of this decision is uncertain, although expected before the end of CY22. 

Renal program upside: The renal observational trial is expected to read-out shortly paving way for more detailed studies. 
InvoCare IVC HOLD Funeral volumes: Management advised at the AGM in May that the mortality rate is continuing to track back towards long-term trends.  

Wet weather: Sustained wet weather on the east coast has impacted IVC’s memorial parks with potential for lost revenue and higher costs. 

Staff absenteeism: Like many other companies, IVC has been challenged by staff shortages due to COVID. This is limiting IVC’s ability to service the increased demand but should improve as restrictions ease.

Pet Cremations: Management said in May that while volumes continue to grow, the integration of the national network is seeing some short-term disruption. Cost inflation is also putting pressure on margins in this business.
Lovisa LOV ADD Store rollout: We forecast a net addition of 86 stores in FY22, leaving a closing balance of 630 at the end of the year. We forecast this pace to accelerate in FY23 and FY24 with forecast net additions of 92 and 104 respectively. Recent news that LOV has entered Canada, Poland and Northern Ireland in the space of a few days is very encouraging.

CEO incentives: Should EBIT before LTI be in the range $80-95m, as we forecast (MorgansF: $84.2m), CEO Victor Herrero will be awarded an incentive payment of $5.0m ($2.5m cash and $2.5m rights).

Underlying demand dynamics:  We believe LOV’s target demographic is less sensitive to macroeconomic concerns and we expect competitively priced fashion jewellery to remain resilient.
Mach7 Technologies M7T ADD Continued contract wins: M7T continue to win new contracts and the sales order book is building to over A$30m, which paints a positive outlook for subsequent years. The timing of the orders and subsequent receipt of the purchase orders results in lumpy revenue recognition.   

Expanding channel partners: M7T is looking to expand its reseller channels particularly into the APAC region and Europe. This potentially can generate material revenue over the next 3 to 5 years. 

Success in KLAS: M7T received best in KLAS Software & Services Report, ranking #2 in the Universal Viewer segment and #3 in the Vendor Neutral Archive, which bodes well for further tender wins and order book growth.
Motorcycle Holdings MTO ADD Result expectations: MTO have not provided formal FY22 guidance. We expect MTO to deliver FY22 EBITDA (pre-AASB) of A$35.2m; and Underlying NPAT of A$21.7m. 

Balance sheet strength: We forecast minimal net debt at year-end and sufficient balance sheet capacity to continue to pursue bolt-on M&A to support future growth. 

Investment view: We remain positive on the outlook for MTO over the medium-term, noting MTO’s strong balance sheet and moat around targeted acquisitions (with intent to scale). Trading on ~6.3-7x FY22-23 PE, we consider MTO oversold and the current valuation as an attractive entry point on a medium-term view and relative to its 5-year average (~10x).
NEXTDC NXT ADD Guidance provided: NXT has guided to Data Centre service revenue of $290-295m, Underlying EBITDA of $163-167m and capex of $530-580m.

Chip shortages: are a global issue that is creating challenges for equipment and server procurement. This will not impact the billing ramp-up of MW’s contracted but could slow new contract wins in CY22.

MW contracted: In 1H22 NXT reported 81 MWs contracted including its Jan 22 contract win. We forecast strong enterprise wins in 2H22 but do not expect any large-scale contract wins in 2H22. Go live of S3/M3 is imminent and this, combined with a recovery in chip manufacturing, should result in large-scale contract wins in late 1H23. Communication Service Providers have material options for new space. In our view, it’s simply when, not if, they exercise these.
Tyro Payments TYR ADD Operating leverage: The key focus area for TYR’s FY22 result is whether the company can show some improved operating leverage. Consensus has a mild EBITDA margin improvement in 2H22 vs 1H22 (3% vs 2%).

Merchant growth: TYR averaged 1,200 new merchant applications in 1H22, and we will be focused on whether this growth momentum continued in 2H22. 

Operating expense growth: Noting high cost growth was a key negative aspect of TYR’s 1H22 result, with operating expenses up 11% on pcp.  

Any outlook commentary: While TYR does not provide guidance, will be focused on any broad commentary on the outlook for volumes and margins.
Waypoint REIT WPR ADD Capital management initiatives: Post asset sales (target in CY22 around $150m of which most now settled), we expect WPR to provide an update regarding its next round of capital management initiatives ($100m flagged in 2H22).   

Hedging update: Gearing is currently around 26% with a weighted average debt expiry of ~5 years (ICR >5x and hedging 73% at Dec-21). WPR flagged it would aim to increase its hedging profile in 2022.

CY22 guidance: We expect CY22 guidance to be reiterated, which comprises distributable EPS of 16.44c (+4% growth on CY21). A 2Q22 distribution of 4.51c has been declared and will be paid on 31 August (total 1H22 distribution = 8.62c).
Aerometrex AMX ADD MetroMap growth: Continued shift from project-dominated revenue to subscription-based recurring revenue is key to narrowing the valuation gap with domestic listed competitor (NEA). Ongoing product traction encouraging.

Growth in 3D and LiDAR: 3D expected to be humming along, but eyes on FY23 where management expect it to start making a significant contribution. Stronger growth is expected from LiDAR product. A fourth sensor is expected to underpin growth going forward.

Off-the-shelf dataset to Aus Fed agency: A competitive open tender process has been awarded by the Department of Defence for aerial imagery and elevation data. Given its niche, unlikely to disclose tender pipeline but commentary on market opportunity in datasets would be a plus.
Atturra ATA HOLD Guidance for FY22: In May 2022 ATA upgraded its Prospectus forecast and guided to FY22 Revenue at or above $130m and Underlying EBIT of $13.5m. 

Organic growth: ATA has delivered double digit revenue growth over the last few years. This was 45-50% organic which equates to 8-15% organic YoY revenue growth. We expect a broadly similar trajectory in 2H22.
Cash flow: Typically ATA (and other IT services companies) have large cash inflows on Government spend in June. It’s plausible ATA’s operating cashflow and therefore net cash balance are higher than our $20m net cash forecast. 

MOQ: In June 2022 ATA announced a bid for MOQ at ~$15.5m. The MOQ Board has agreed but more details are required.
Healius HLS ADD Recent trading update below the market: Underlying EBIT A$473m (+102%) through May-22, but missed market expectations (c20%). 

Swings and roundabouts: Lingering COVID impacts (ie infections; staffing levels; and surgical cancellations), offset by continued PCR testing.

Sustainable Improvement Program (SIP) on track…so far: Entails >100 initiatives slated to deliver 300bp of operating margin improvement exiting FY23.

COVID PCR testing: Remains a large swing factor in our estimates, with FY22-24 revenues of A$765m, A$310m, and A$100m, respectively.
ImexHS IME SPEC BUY Pathway to breakeven: IME moves closer to profitability. Reiteration of guidance to FY22 revenue of A$19.5m to A$22.0m and EBITDA positive on an underlying basis and cashflow breakeven in 2H22 will be well received.

Clarity on divisional profitability: We view the major positive will be clarity around sales/growth/profitability between the software and services business.

Cost savings: Progress update expected on cost savings measures implemented including further synergy extraction post the RIMAB acquisition and hardened focus on receivable collection terms.
Link Administration Holdings LNK HOLD Update on Dye and Durham’s (D&D) proposed takeover of LNK: LNK rejected the revised D&D bid for the company at A$4.57 per share, although LNK is continuing to engage with D&D. 

How has PEXA been performing?: This is post PEXA delivering a very strong 1H22 result highlighted by 45% revenue growth on pcp and a 55% EBITDA margin.  

Any improvement in BCM?: This business has been heavily affected by COVID disruptions and seen 3 consecutive halves of negative EBIT results. 

Have the full expected global transformation benefits been delivered?: LNK was aiming to deliver A$75m of gross annualised savings by June 2022.
Micro-X MX1 SPEC BUY Argus x-ray camera launch: Customer demonstrations for the Argus (x-ray camera for explosive detection) is expected in July/August with first sales shortly after. We anticipate sales conversion will be strong and quick, given their relationships with leading defence and security organisations. 

Growing sales with distributor partnerships: MX1 has appointed two multi-year distributor agreements with large independent radiology distributors, Medlink Imaging and MXR Imaging for the distribution of the Rover in the US. These partnerships will help drive further sales growth. 

Airpoint checkpoint and CT scanner: MX1 also continues to meet key design milestones for both the passenger self-screen checkpoint development with the DHS and CT scanner with the Australian Stroke Alliance.
National tyre & Wheel NTD HOLD Result expectations:  No formal guidance provided. We expect NTD to deliver EBITDA of A$49.1m; and Underlying NPAT of A$19.3m. 

Looking for an integration update: Across its three acquisitions in FY22, NTD has added ~A$100m in annualised revenue and ~A$6m NPATA. An update on the newly combined business (ie. synergies) and plans to deleverage the balance sheet would be welcomed. 

Investment view: We’ve previously flagged industry headwinds (cost inflation, supply disruption) and integration risks, which we expect have not improved in 2H22. NTD has previously flagged optimism for a stronger 2H (HoH) and we continue to wait for improved confidence in NTD’s execution and headwinds to ease before assessing on valuation. Hold maintained.
30/08/2022 Woodside Energy WDS ADD Return surprise:  We see solid potential for WDS to deliver a positive surprise at its interim result in August. WDS could use its soaring earnings from the cycle and BHP merger to flex returns.  

WA growth progress: While the LNG industry is far removed from mining, we are on the lookout for signs of inflationary pressures from a wide array of common services and labour. 

BHP growth assets: We look for an update on growth assets such as Trion in the Gulf of Mexico which was close to ready for FID at the merger date.

Opex pressures?: Keen to see how WDS’ global business is performing against a backdrop of general inflationary pressures in its key markets.
31/08/2022 Atlas Arteria ALX HOLD Look for update on takeover bid: IFM has accumulated a 15% interest in ALX, and has indicated it may launch a takeover bid for the remaining stock.  

Q2 traffic & toll revenue: Scheduled to be released on 20 July. High frequency data published by VINCI and Atlantia indicates French traffic has rebounded close to or above pre-COVID levels (albeit recovery is patchy).
Capital management: Deployment of capital in pursuit of growth investment and/or a DG capital restructure may mitigate ALX’s valuation decay.

DPS outlook: Traffic recovery beyond pre-COVID, a lift in CPI expectations benefitting expected toll escalation, and cut in French tax rates should drive a 22% increase in the DPS paid over the next 12 months to 44 cps.
Audeara AUA
SPEC BUY Australian clinic maturity: With success in opening access to most major audiology clinics in Australia, focus will turn to the product’s ability to sell-through the channel. We are looking for any commentary on progress to quantify lead-time to clinical maturity and steady-state sales rates.

Amplifon agreement: Early days in this global partnership but looking for more information around timing of formal launch and initial target jurisdictions. 

Inventory balance: With the potential for significant levels of initial stocking across a number of new partners adding to re-stocking orders from existing customers, a healthy inventory balance will be required. Particular focus will reside in if any clearance activities are required on older model stock.
BlueBet Holdings BBT ADD Increased marketing spend: The planned increased investment in marketing in FY22 means we forecast an EBITDA loss of $1.2m in FY22 with an underlying net loss of $1.0m. 

Recent changes in tax regimes: It was announced recently that the Point of Consumption Tax (POCT) will increase in Queensland and NSW. This will lead to additional cost, but we expect the industry to adjust margins to compensate.  

US growth: BBT recently secured market access to Indiana (its fourth state in the US), meeting its targeted fourth skin before the end of FY22. The first bets will be taken in Iowa in a few weeks’ time and we will look for news as to progress in this regard.
Control Bionics CBL SPEC BUY Successful entry into Japan: After some COVID setbacks, CBL launched in the Japanese market in April; management are excited about the opportunity.

Sales momentum and product suite: The quarterly results suggest sales momentum is building, assisted with the appointment of additional sales staff. 

Product offering: CBL offers its patients a range of products to suit the persons individual needs. Crucially the technology can adapt to user energy levels which makes the technology flexible and avoids associated fatigue. 

New product development: CBL continue to progress its new product developments with testing of new miniaturised NeuroNode platform as well as the wheelchair self-drive prototype with user trials expected shortly.
Frontier Digital Ventures FDV ADD

Is 2Q22 revenue growth more broad-based?: While 1Q22 group revenue growth was +10% sequentially (+54% on pcp), stripping out the key Zameen business, 1Q22 revenue would have actually been down 8% sequentially.

We forecast FDV to deliver its first positive portfolio EBITDA result in 1H22: Our portfolio EBITDA forecast is +A$3.83m vs -A$0.40m in the pcp.

Cash on balance sheet: FDV timed its capital raising in December well.  We estimate FDV will have ~A$44m of cash on balance sheet as at 1H22. 

Restructure benefits: FDV has recently restructured its operations along regional lines. We are interested in any management comments on the benefits of this restructure, e.g cost out opportunities, strategic optionality etc.

31/08/2022 MoneyMe MME ADD SocietyOne integration: MME flagged A$17m p.a. in pre-tax cost synergies and A$15m+ p.a. in pre-tax revenue synergies from FY24. We will look for an update/confidence around achieving these post integration.   

Autopay: Rapid growth of the Autopay product continues (~46% of the A$340m originations in 3Q22). Focus will be on further scaling this product across additional dealers/brokers. The Autopay warehouse facility was recently upsized from A$300m to A$450m giving it additional growth capacity.

Asset quality: In a rising rate environment, we are focused on the overall asset quality of the loan book and how quickly MME can adapt if the macro continues to deteriorate (net charge-offs in 3Q22 were 3%).
TBA Bega Cheese BGA HOLD Record farmgate milk price: Due to fierce competition, BGA has increased its milk price (key COGS) three times since its opening offer. Its southern farmgate milk price is now ~A$9.40/kgms in FY23 (FY22 was ~A$7.40/kgms). 

Inflationary cost pressures: BGA’s cost base has risen materially due to  higher milk and other ingredient prices and inflationary headwinds including higher labour, energy, supply chain, transport (fuel) and packaging costs.

LD&D synergies: BGA is targeting FY22 synergies of A$36m, with the full A$41m of benefits in FY23. However, we expect that additional COVID and other cost pressures are likely to offset some of the benefits in FY22. Inflationary pressures will also likely offset most of these benefits in FY23. Overtime, we expect there are additional synergies beyond its base case.
Computershare CPU ADD FY22 guidance should be achieved: Given CPU re-affirmed FY22 guidance (~+12% EPS growth) recently at the MQG conference in May.   

Outlook commentary: CPU’s strong leverage to rising interest rates means the market is forecasting ~+45% NPAT growth in FY23. Therefore, robust outlook commentary is now factored into market expectations.

CPU’s 2H22 Corporate Trust (CCT) result: Noting CCT’s two-month contribution to the 1H22 result (EBITDA +A$9.6m) well exceeded market expectations. 

Has Mortgage Servicing improved?: This business produced a disappointing 1H22 result with a Management EBIT of -US$2.5m.
Earlypay EPY ADD Result expectations: We expect EPY to deliver on guidance (NPATA >A$15m). We forecast a flat half on half result, but note the 2H is usually seasonally weaker (a marginally lower 2H22 will still be within expectations).
Finance volumes: Continued momentum in Invoice Financing (IF) volumes should have continued in 2H22. Commentary on new client wins (providing growth into FY23) will be important. We expect a flat revenue margin on 1H22.  

Outlook: Expected performance in potentially softer economic conditions will be in focus. We expect IF demand to remain resilient.  

Investment view: We view EPY as solid value at ~8x PE. Upside risk comes from corporate activity, noting COG increasing to a ~20% holding.
Helloworld HLO ADD 4Q22 performance post sale of the profitable Corporate business: In the 3Q22, HLO reported a minor EBITDA loss of A$1.9m. However, this result benefited from the profitable Corporate business. Despite the sale of Corporate, HLO expected a breakeven or better outcome in the 4Q22.   

Strong balance sheet: Following the sale of the Corporate business, HLO now has no debt. The sale boosted its liquidity position by approximately A$175m.  

COVID recovery vs consumer slowdown: Markets continuing to reopen (except China) and fewer restrictions provide strong momentum into FY23. However, there is materially less airline/cruise capacity in ANZ. Reduced consumer discretionary spend is the unknown, particularly given high airfares.
Livehire LVH ADD Guidance: Whilst no earnings guidance was provided, LVH does expect to end FY22 with 36 clients in its North American Direct Sourcing (DS) business.  

Strategic partnerships: We look for any initial contract success in LVH’s recently announced TAPFIN partnership in the U.S and how it impacts our topline growth assumptions in the medium term. We note the pipeline remains strong, with 133 client opportunities live at the 3Q22 update, 16 of which were at proposal stage. LVH has pointed to US$800bn+ spend on contingent labour in North America (representing a ~US$800m+ addressable market).

Outlook: Our FY23 revenue forecast of ~A$17.7m (+95% on pcp) is predicated on the +200% growth in DS revenue. We remain focused on any commentary around new client expectations that will drive this growth.
Novonix NVX HOLD Commissioning of Riverside top priority: NVX is working to bring 10ktpa of anode material production capacity online at its new plant in Chattanooga. The plant is using furnace technology jointly developed with Harper International.

KORE Power the key contract right now: NVX’s first customer is KORE Power. KORE will commence construction of a 12GWh plant in Arizona in FY23.

R&D will continue at BTS: While growing its anode business, NVX is also continuing its R&D activity into dry processing of battery pre-cursor materials as well as new approaches to other components of lithium batteries (e.g. electrolyte).


Reporting season First Half 2021

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Disclaimer: The information contained in this calendar is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents ("Morgans") do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.