Investment Research Updates

Company Updates: PDL, CWM, MSB, ING, JHX, PNI


Pendal Group Limited (PDL) announced on Friday, Funds under Management (FUM) for the quarter ending December 2021 of A$135.7 billion, a decrease of A$3.5 billion on September 2021 FUM. The decrease was driven by net outflows of A$6.8 billion, primarily by two sizeable UK institutional redemptions in the Global Opportunities strategy totalling A$5.1 billion. Positive investment performance and market moves helped offset the outflows by A$3.8 billion, whilst negative currency effects accounted for a A$0.5 billion fall in FUM for the quarter. JOHCM performance fees of ~A$43.4 million were realised for the 12-month period to 31 December 2021, an improvement of A$2.2 million on the pcp. PDL shares fell 15.8% to close at $5.00.


Crown Resorts Limited (CWN) announced yesterday it has received a revised non-binding proposal from Blackstone, to acquire all of the shares in CWN by way of a Scheme of Arrangement at a price of $13.10 cash per share, representing an increase of $0.60 on the previous offer price. The revised offer remains subject to completing further due diligence and final approval by casino regulators, however, should Blackstone make a binding offer of no less than $13.10 cash per share it is the CWN Board’s intention to unanimously recommend that shareholders vote in favour of the proposal subject to an independent expert concluding that the proposed transaction is in the best interests of CWN shareholders. CWN shares rose 8.8% to close at $12.65.


Mesoblast Limited (MSB) announced yesterday the 36-month follow up results from the 404 patient Phase 3 trial of its allogenic cell therapy rexlemestrocel-L in patients with chronic low back pain (CLBP). The results showed durable reduction in back pain lasting at least three years from a single intra-discal injection of rexlemestrocel-L+hyacluronic acid (HA) carrier. MSB plans to conduct an additional US Phase 3 trial which may support approval submissions in both the US and EU. MSB shares rose 1.5% to close at $1.34.


Inghams Group Limited (ING) provided a trading update yesterday announcing that COVID-19 impacts have significantly disrupted production and distribution capability, and negatively impacted sales. The rapid spread of the Omicron variant across eastern Australian states from December 2021 is having a material impact on the ING’s Australian supply chain, operations, logistics and sales performance, and some of its suppliers and customers, with significantly lower levels of staff availability impacting production volumes and operational efficiency. ING noted it is not currently possible to predict how long this disruption will continue. ING shares fell 6.0% to close at $3.32.


James Hardie Industries plc (JHX) announced on Friday the termination of CEO, Jack Truong, following concerns raised by employees about Truong’s work-related interactions. JHX went through an extensive due diligence process which included retaining outside counsel and a third-party consultant, who provided opportunities and support for change in Truong’s behaviour, however he was unwilling to change. Harold Wiens has been appointed interim CEO. JHX also upgraded earnings guidance and now expects FY22 adjusted net income to be between US$605-625 million. JHX shares fell 4.1% to close at $51.54.

Pinnacle Investment Management Group Limited (PNI) announced on Friday that four Affiliates have crystalised performance fees of ~$18.0 million for the six months ended December 2021, while PNI’s net share of the performance fees, after tax payable by the Affiliates on this revenue, is ~$6.2 million. PNI also outlined it expects the 1H22 net return on Principal Investments to be ~$2.0 million, primarily comprised of $1.9m in dividends and distributions. PNI shares fell 1.2% to close at $13.52.


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