Category

Australia

Oct 01
0

Daily Brief Australia: Symbio Holdings and more

By | Australia, Daily Briefs

In today’s briefing:

  • Symbio (SYM AU): Aussie Broadband’s Superior Proposal

Symbio (SYM AU): Aussie Broadband’s Superior Proposal

By Arun George

  • Symbio Holdings (SYM AU)‘s indicative proposal from Aussie Broadband Pty Ltd (ABB AU) is A$2.36 + 0.192 ABB shares per SYM share, 10.6% premium to Superloop Ltd (SLC AU)’s offer.
  • The Board has declared ABB’s offer as the superior proposal and granted exclusive due diligence until 20 October. The Board intends to recommend a binding ABB proposal.
  • Superloop’s offer was the final offer in the absence of a superior proposal. If it chooses to enter a bidding war, Superloop will need a higher cash component. 

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Sep 28
0

Daily Brief Australia: WRKR and more

By | Australia, Daily Briefs

In today’s briefing:

  • Wrkr Limited – Linked Up

Wrkr Limited – Linked Up

By Research as a Service (RaaS)

  • Wrkr Ltd (ASX:WRK) has announced a commercial contract with Link Group, following on from an MSA signed in November 2022 to provide employer solutions including clearing house and SuperStream Gateway infrastructure.
  • The contract has a three-year term with a one-year-plus-one-year extension with the initial contract value estimated at A$3m.
  • Importantly, this contract value does not include transaction fees which are estimated at $2.00/user/year and could amount to as much as ~$6m in recurring revenue per annum depending on the number of users uplifted to the platform. 

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Sep 26
0

Daily Brief Australia: Star Entertainment Group, Invocare Ltd, Carly Holdings and more

By | Australia, Daily Briefs

In today’s briefing:

  • Star Entertainment Entitlement+Placement – Would You Rescue Me? Again?
  • InvoCare: Shareholder Vote On 31st Oct. IE Says Fair
  • Carly Holdings (ASX:CL8) – 100% Revenue Growth Follows from Fleet Expansion

Star Entertainment Entitlement+Placement – Would You Rescue Me? Again?

By Sumeet Singh

  • Star Entertainment Group (SGR AU) (SGR) plans to raise around US$480m (A$750m) via an entitlement offer cum institutional placement.
  • SGR undertook a similar sized raising earlier this year in Feb 2023, at a price which was double the current deal price.
  • In this note, we will talk about the deal dynamics.

InvoCare: Shareholder Vote On 31st Oct. IE Says Fair

By David Blennerhassett

  • On 9 August, PE outfit TPG and InvoCare (IVC AU), Australia’s leading funeral services provider, entered into a Scheme Implementation Agreement at A$12.70/share, inclusive of a A$0.60/share fully franked dividend.
  • TPG’s had previously tabled A$12.65/share on the 7 March, which  InvoCare summarily rejected.
  • The Scheme Booklet is now out. InvoCare shareholders vote on the transaction on the 31 October, with implementation on the 24 November. The IE says terms are “fair and reasonable“.

Carly Holdings (ASX:CL8) – 100% Revenue Growth Follows from Fleet Expansion

By Research as a Service (RaaS)

  • Carly Holdings has announced 100% growth in subscription revenue in July/August against the September 2022 quarter.
  • The annualised revenue run rate is now $3.0m vs $2.5m in the June 2023 quarter and Carly has maintained a strong ratio of subscription revenue to transaction value at 66%.
  • These outcomes are in line with our base-case expectations for H1 FY24.

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Sep 25
0

Daily Brief Australia: Pointerra Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • Pointerra Ltd – FY24 Outlook Improving

Pointerra Ltd – FY24 Outlook Improving

By Research as a Service (RaaS)

  • Pointerra Ltd (ASX:3DP) provides a powerful cloud-based solution (Pointerra3D) for managing, visualising, analysing, using and sharing massive 3D point clouds and datasets.
  • Pointerra3D is a proprietary digital twin SaaS platform which delivers predictive digital insights and definitive answers to complex physical asset management questions.
  • The company has reported FY23 revenue of $8.3m, a decline of 22% on the previous corresponding period (pcp) and an underlying EBITDA loss of $4.68m (which includes non-recurring project services costs of $2.19m), against an underlying EBITDA loss of $0.02m a year ago. 

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Sep 24
0

Daily Brief Australia: Newcrest Mining and more

By | Australia, Daily Briefs

In today’s briefing:

  • Last Week in Event SPACE: Newcrest/Newmont, PTT/PTTEP, Naspers/Prosus/Tencent, Itochu Techno

Last Week in Event SPACE: Newcrest/Newmont, PTT/PTTEP, Naspers/Prosus/Tencent, Itochu Techno

By David Blennerhassett

  • The Newmont (NEM US) CDI selldown on 15 December will have to be bought by active shareholders, not passive; a relatively large reverse funding trade on the ASX rebal.
  • Naspers (NPN SJ)/Prosus NV (PRX NA)‘s CEO steps down. However, operations/investments, and the ongoing tweaking of the organizational structure with respect to Tencent (700 HK), should continue unabated. 
  • Activist shareholders and Toshiba Corp (6502 JP) stuck with each other for years. The takeover allows both sides to escape their mutual bearhug,

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Sep 23
0

Daily Brief Australia: Costa Group Holdings, Qbe Insurance, Symbio Holdings and more

By | Australia, Daily Briefs

In today’s briefing:

  • Costa Group (CGC AU): Binding Proposal Comes with Risks
  • QBE Insurance – COR 109% in N America Commercial, Where Growth Is High | Debt Surges USD700m in 1H23
  • Symbio (SYM AU): Superloop’s Best and Final Offer

Costa Group (CGC AU): Binding Proposal Comes with Risks

By Arun George

  • Costa Group Holdings (CGC AU) has entered a scheme implementation deed with Paine Schwartz Partners (PSP) led consortium at A$3.20 per share. 
  • The key conditions are regulatory and shareholder approval. China SAMR regulatory approval poses a risk, primarily related to timing. Costa anticipates completion in 1Q24.
  • The headcount test related to the retail vote remains a risk. The risk/reward is unfavourable as the deal break downside (10%+) outweighs the offer’s upside (3.6% at last close).  

QBE Insurance – COR 109% in N America Commercial, Where Growth Is High | Debt Surges USD700m in 1H23

By Daniel Tabbush

  • QBE Insurance is seeing a deteriorating combined operating ratio, in part due to CAT events and it unclear to us how underwriting, exposures will immediately improve
  • Net profit is nearly static, USD750m in FY21, USD770m in FY22. USD400m profit in 1H23 may note repeat in 2H23, due in part to USD700m more debt in interim.
  • North America net earned premiums are seeing far more distribution toward Commercial, where the COR is especially poor at 109% in 1H23

Symbio (SYM AU): Superloop’s Best and Final Offer

By Arun George

  • Symbio Holdings (SYM AU) disclosed a revised indicative “best and final” proposal from Superloop Ltd (SLC AU). The terms (A$1.425 cash and 2.14 SLC shares per SYM share) remain unchanged.
  • The two key changes are there is no due diligence condition and a mix-and-match option subject to scale back to achieve a maximum of 60% cash or 60% scrip.
  • The offer is conditional on entering a scheme implementation agreement by 29 September. The offer is palatable and the Board is likely to succumb and sign a binding agreement.

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Sep 22
0

Daily Brief Australia: Costa Group Holdings and more

By | Australia, Daily Briefs

In today’s briefing:

  • Costa Backs Paine Schwartz’s Lower Bid

Costa Backs Paine Schwartz’s Lower Bid

By David Blennerhassett

  • On the 18 September, Costa Group Holdings (CGC AU) announced A$3.20/share best and final Offer from Paine Schwartz Partners (PSP) down from the A$3.50/share NBIO in July.
  • Costa’s shares wobbled – would they, won’t they be supportive? A break price beyond the undisturbed price loomed. Vanguard kicked out a chunk of shares below A$3.
  • This morning Costa and PSP entered into a Scheme Implementation Deed. The transaction is expected to close in 1Q24. Key conditions are Costa’s shareholder vote and FIRB/SAMR/EU approval. 

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Sep 21
0

Daily Brief Australia: Newcrest Mining, Boss Resources and more

By | Australia, Daily Briefs

In today’s briefing:

  • Newcrest-Newmont Merger: Fancy Index Shenanigans
  • Quiddity Leaderboard ASX Dec 23: 5 ASX 200 Changes and Other Large Potential Flow Events (NCM, AKE)

Newcrest-Newmont Merger: Fancy Index Shenanigans

By Travis Lundy

Quiddity Leaderboard ASX Dec 23: 5 ASX 200 Changes and Other Large Potential Flow Events (NCM, AKE)

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the potential index changes for ASX 200, 100, 50, and 20 in the run up to the December 2023 Rebalance.
  • There could be up to five ASX 200 changes including the intra-review changes that could potentially be triggered by M&A events.
  • There are also couple of possibly large reverse funding flow scenarios involving Newcrest Mining (NCM AU) and Allkem Ltd (AKE AU).

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Sep 20
0

Daily Brief Australia: Whitehaven Coal and more

By | Australia, Daily Briefs

In today’s briefing:

  • Whitehaven Coal Suspension of Buyback: A Negative Despite Rising Coal Price/ Potential Acquisition

Whitehaven Coal Suspension of Buyback: A Negative Despite Rising Coal Price/ Potential Acquisition

By Sameer Taneja

  • The pivot in capital allocation plans of Whitehaven Coal (WHC AU) by suspending its buyback program (up to 25% of outstanding shares) is a big negative for us. 
  • We think the increase in capex spending in a frothy pricing environment and focus on M&A for spending the 2.6 bn of cash is a coin toss on capital allocation. 
  • We prefer names that keep their capital allocation plans consistent, e.g., Indo Tambangraya Megah (ITMG IJ), and would take money off the table here.

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Sep 19
0

Daily Brief Australia: Costa Group Holdings, Boss Resources, Challenger Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • Costa Group (CGC AU): Paine Schwartz’s Final Proposal Poses a Dilemma
  • S&P/​​​​​​​​​ASX Index Rebalance Preview: Changes from Now to December
  • Challenger (CGF AU) – Bank Sale 1H24 | ROC Highest in 23 Yrs | 85% Market Share Annuity FUM

Costa Group (CGC AU): Paine Schwartz’s Final Proposal Poses a Dilemma

By Arun George

  • Costa Group Holdings (CGC AU)  has disclosed a revised non-binding indicative proposal from Paine Schwartz Partners at A$3.20 per share, 9.6% lower than the previous offer on a like-for-like basis. 
  • The weak CY23 outlook impacted the debt that could be taken on to meet the IRR hurdles of the previous offer. The revised offer is the best and final offer.
  • The Board faces a dilemma as the offer is light, but some shareholders will want the Board to accept as trading volatility making Costa more suited to the private market.

S&P/​​​​​​​​​ASX Index Rebalance Preview: Changes from Now to December

By Brian Freitas

  • Privatisations could lead to two/three S&P/ASX 200 (AS51 INDEX) constituents being delisted in October/November and that means ad hoc inclusions to maintain the number of constituents at 200.
  • Then there could be one change for the S&P/ASX 20 Index and two changes for the S&P/ASX 200 (AS51 INDEX) at the regular rebalance in December.
  • The impact on the potential adds/deletes for the S&P/ASX 200 (AS51 INDEX) is high at between 7.5-23 days of ADV to trade from passive trackers.

Challenger (CGF AU) – Bank Sale 1H24 | ROC Highest in 23 Yrs | 85% Market Share Annuity FUM

By Daniel Tabbush

  • During 1H24 CGF expects to sell its bank for ~AUD36m which could include a AUD11m gain and allow to free-up bank capital of around AUD40-50m.
  • Return on capital is now at the highest it has been since FY10 at 6.2% with a substantial 160bps increase in normalized ROE in 2H23 YoY to 13.1%
  • 85% market share of annuity FUM from 50% about 10 years ago, operating in system with strong forced savings in superannution funds now at AUD3.5tr up 91% over 10 yrs.

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