Investment Research Updates

Company Updates: WOW, ALL, WEB, APE, BSL, UMG, JHX, GMG, BXB

23/05/2022

Woolworths Group Limited (WOW) announced a proposal to acquire an 80% interest in online marketplace MyDeal.com.au Limited (MYD) on Friday with an all-cash consideration offer of $1.05 per share. The offer price represents a significant premium of 62.8% to the last closing price of $0.65 per share and an equity value of $271.8 million. MyDeal’s board unanimously recommends that MyDeal shareholders vote in favour of the Transaction in the absence of a superior proposal and subject to the Independent Expert Report. MyDeal’s CEO and certain Key Management Personnel will continue to lead the business. WOW shares rose 0.5% to close at $35.35.

20/05/2022

Aristocrat Leisure Limited (ALL) released its 1H22 results yesterday, with operating revenue rising 23% vs the pcp to $2,745.4 million, whilst NPAT rose 47% to 530.7 million. Strong growth in Gaming sales (+38%) was achieved as COVID-19 restrictions eased and customers increased capital commitments towards ALL’s products. Pixel revenue grew 6.4% as ALL maintained their positions in Social Casino and Casual gaming with the average booking per daily user increasing by 11% over the half. ALL delivered strong cash flows over the half, moving to a net cash position and announced a $500 million on-market buyback along with a 26cps dividend up 73%. ALL shares rose 6.7% to close at $33.73.

Webjet Limited (WEB) released its FY22 results yesterday, with the business returning to profitability in 2H22 after a heavily impacted two years due to COVID-19. FY22 saw WEB generate a $4.0 million average monthly cash surplus compared to a $5.5 million average monthly cash burn in FY21, with TTV, revenue and EBITDA all up vs the pcp driven by the gradual return of global travel. WebBeds was profitable in 2H22, driven by North American and European markets, whilst Webjet OTA was profitable for FY22, notwithstanding border closures in 1H22 and the Omicron impact in 2H22. WEB noted that WebBeds May 2022 TTV is above pre-pandemic levels and are expecting a robust summer, while Webjet OTA bookings are tracking at ~80% of pre-pandemic levels. WEB shares rose 1.4% to close at $5.87.

19/05/2022

Eagers Automotive Limited (APE) released a market update for the 1H CY22 yesterday, with the underlying performance of the business continuing to benefit from a strong market where demand for new vehicles continues to materially exceed supply, creating a 25% increase in the new car order book since 31 December 2021. Despite this, an anticipated reduction in the number of new vehicles delivered to customers in the first half of 2022 is expected to impact half year performance, due to manufacturer related supply chain issues with the ongoing semi-conductor shortages in the industry. AEP expects to record an Underlying Operating Profit Before Tax for 1H CY22 of $183 to $189 million, compared to $214.8 million for the pcp. APE shares fell 3.3% to close at $11.50.

BlueScope Steel Limited (BSL) increased its earnings guidance for 2H FY22 yesterday, with EBIT expected to be within the range of $1.375 to $1.475 billion, above the prior guidance range of $1.20 to $1.35 billion. The stronger outlook has been driven by improved earnings expectations for North Star and the North America coated business due to better than expected realised steel prices and spreads in the United States. Australian Steel Products has seen softer than expected domestic dispatch levels, due to a range of supply chain disruptions including recent East Coast flood events, rail outages and pandemic-related impacts. This has been offset by stronger realised steel spreads and better than expected downstream businesses. BSL shares rose 1.5% to close at $18.20.

18/05/2022

United Malt Group Ltd (UMG) released its 1H22 result yesterday, reporting underlying EBITDA of $57 million (-5% v pcp), in-line with its April 2022 earnings guidance. Group revenue increased 11% to $652 million led by the Warehousing & Distribution segment, contributing $21 million to underlying EBITDA (+14%), whilst Processing contributed $41 million (-12%) offset by a significant deterioration in Canadian barley crop conditions, resulting in $8 million of logistics costs to maintain processing in the region. Rising input costs for the segment driven by supply chain disruption will largely be passed through to customers over the next nine months, reducing the FY23 impact. UMG reaffirmed its previous FY22 underlying EBTIDA guidance of $115-140 million. UMG shares fell 1.5% to close at $3.96.

James Hardie Industries plc (JHX) released its 4Q22 and FY22 results yesterday, with fourth quarter global net sales up 20% on the pcp to US$968.2 million and adjusted net income up 42% to US$177.5 million. FY22 global net sales increased by 24% to US$3.6 billion on FY21, with adjusted net income increasing 36% to US$620.7 million. The result was led by North America, with EBIT growth of 35% in the fourth quarter to US$206.1 million at an EBIT margin of 29.7%, as the execution of the high value product mix strategy continues to deliver strong Price/Mix growth. Asia Pacific EBIT grew 21% to AUD$52 million, whilst Europe EBIT grew 3%. JHX have reaffirmed the 2023 fiscal year guidance range for adjusted net income of US$740 million to US$820 million. JHX shares fell 3.5% to close at $37.50.

17/05/2022

Goodman Group (GMG) released its 3Q22 operational update yesterday, reporting $13.4 billion of development WIP across 89 projects, which was accompanied by 3.7% like for like NPI growth in managed Partnerships, with 98.7% occupancy across the Partnerships. GMG maintained low gearing of 7.2% (as at 31 December) and liquidity of over $2 billion maintained across the group. GMG has $68.7 billion total AUM, with a portfolio wale of 5.0 years , however 55% of the rent review profile is currently fixed. GMG are forecasting FY22 operating EPS growth of 23% for the year and a full year distribution of 30cps. GMG fell 0.6% to close at $19.55.

Brambles Limited (BXB) confirmed yesterday that it has had preliminary engagement with CVC in regard to an unsolicited proposal to acquire all of the shares in Brambles. Brambles notes the engagement is preliminary, incomplete and there has been no formal proposal received from CVC. Brambles also notes that there is no certainty that the engagement will lead to a binding proposal being received from CVC. BXB shares rose 11.2% to close at $11.60.

 

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