Corporate Results Monitor
FNArena's All-Year Round Australian Corporate Results Monitor.
Currently monitoring post-August 2018.
Figures shown as at 25 September 2018
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Previous Corporate Results Updates
|Company||Result||Upgrades||Downgrades||Buy/Hold/Sell||Prev Target||New Target||Brokers||Commentary|
|BKW - BRICKWORKS||BEAT||0||0||1/3/0||15.80||16.56||4||
Brickworks' result beat broker expectations. Earnings upgrades follow but brokers agree a cooling housing market will provide a headwind for building products and rising energy costs are also an issue, suggesting slower earnings growth ahead. The cross-holding in WH Soul Pattinson provides a diversification offset but the stock is well valued.
|FSF - FONTERRA||MISS||1||0||0/2/1||0.00||0.00||3||
Despite twice downgrading guidance in the lead-up, Fonterra still managed to miss the bottom end of recent guidance and thus disappointed brokers. Factors out of the company's control, particularly input prices, remain an issue and while brokers see earnings growth ahead from a sensible strategy, forecast cuts mean this will be from a low base. Re-rating would require a better earnings track record. One upgrade to Hold.
|GOR - GOLD ROAD RESOURCES||IN LINE||0||0||1/0/0||0.95||0.95||1||
Gold Road is not yet at the production phase so its result is not a major focus. Macquarie expects Gruyere development capex to reach a peak in the second half 2018, with construction on track for first gold production mid-2019.
|KMD - KATHMANDU||IN LINE||0||0||2/2/0||2.92||3.07||4||
Kathmandu reported in line with guidance. Brokers saw a solid result, supported by strong same-store sales growth domestically and better margins as discounting eased, along with the Oboz acquisition. No FY19 guidance was offered but momentum is expected to continue into the first half, while thereafter online sales and the performance of Oboz and international will be important.
|LYC - LYNAS CORP||MISS||0||0||1/0/0||3.20||3.20||1||
Lynas Corp's FY18 results were below UBS's forecasts. The only negative news centred on the recurrence of water reliability issues. There are a number of initiatives to improve this so the broker believes there is nothing that fundamentally alters the value of the company's assets. The assets are strategic and the key product is experiencing robust demand amid the growth in electric vehicles. Buy maintained.
|MYR - MYER||IN LINE||2||0||0/3/3||0.37||0.39||6||
Myer's result was largely in line with weak expectations, although gross margins did slightly surprise to the upside thanks to less discounting. The new CEO's turnaround plan for a company that's been trying to turn around for five years -- that of focusing on revenue growth -- has been met with a mix of tentative approval and scepticism. Is this plan actually different to any other prior? Refinancing at least limits downside and there is possible corporate activity support. Two upgrades to Hold but no Buys.
|PMV - PREMIER INVESTMENTS||IN LINE||0||2||1/4/1||15.96||18.89||6||
Premier Investments' result was considered solid, with Smiggle once again starring and apparel brands posting positive second half growth. Cost control was impressive but the ongoing Smiggle strategy overshadowed, as the business focus moves more towards online, concessions and wholesale. The high growth, high margin Smiggle and Peter Alexander brands now account for 43% of sales but brokers see the stock as having reached overvaluation, hence two downgrades.
|SIG - SIGMA HEALTHCARE||MISS||0||1||0/1/3||0.48||0.47||4||
Sigma Healthcare reported weaker than expected. Brokers chorus a view that industry conditions are "challenging". FY19 guidance has been retained which suggests a second half skew driven by cost reductions, but brokers believe revenues will remain under pressure. Restructuring is being considered but this will also cost money. One downgrade to Sell despite a sharp share price fall on the day.
|SM1 - SYNLAIT MILK||IN LINE||0||0||0/0/3||0.00||0.00||3||
An 89% jump in profit for Synlait Milk was impressive but not surprising. A slower pace is expected in FY19. Brokers believe the company's diversification push is sensible and volume growth is expected to continue for a2 milk, but momentum is expected to slow and itís a simple case of a valuation being unjustifiable.
|TPM - TPG TELECOM||IN LINE||0||0||2/0/3||6.75||7.81||5||
TPG Telecom pre-released its numbers just recently at the Vodaphone merger announcement, so no surprises. Brokers are nevertheless split down the middle, as ratings imply. On the one hand TPG will continue to be impacted until the NBN rollout is complete and the loss of legacy iiNet fixed lines rolls out of the numbers over the next three years. On the other, the merger offers significant synergies over time. The approval process will take some time yet, so it is suggested by the naysayers a better entry point might present.
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