Reporting Season 2H15- part 2

Just a few glossary terms:

CAGR= Compound Annual Growth Rate

EBITDA=Earnings Before Everything Bad
EPS= Earnings per share
EV= Enterprise value (derived by adding debt on top of MC)
FCF= Free Cash Flow
MC= Market Capitalisation

NPAT= Net Profit After Tax
OCF= Operating Cashflow
HY= Half Yearly Report

FY= Full Year Report

17 August 2015

AZJ FY out. NPAT $600m. $1b in FCF. Trading at 13x EV/FCF.

TTI earnings guidance. Might be a good develeraging play? At this point in time, cashflow not enough to allay burdens of the debt.

SLX cash down to $50m. Lots of promises for over a decade.

CMI $30m in cash and $23m in franking credits. Returning capital.

18 August 2015

ONT FY out. Revenue (statutory) up 15%, and OTC revenue up 23%. NPAT up 32% evidencing margin expansion and synergies. ROE=22% up from 17% is a healthy indication of capital allocation skill, which is critical in a roll-up. Trading at PE 23x which is a bit pricey. Cashflow about $8m.

19 August 2015

SEK NPAT $315m, FCF $280m. MC=$4.4b, implying earnings CAGR of 5% for 10 years. Guided NPAT down for FY16.

TWE still at 3-5% ROE.

IMF FY out. Win loss ratio declining. CEO holds no shares. Spreading out to UK, Asia, USA will incur more costs. On balance sheet, net cash of $80m plus investments of $99m. NPV roughly $320m versus MC of $280m. Not enough MoS.

20 August 2015

ICS FY out. NPAT is $1m which exceeded their guidance. OCF is $1.4m, FCF is $1.1m. Company cash is $1.2m, total cash is $2.6m, evidencing some float. 30% increase in revenue, with 43% increase in EBIT, evidencing scaling. Normalised NPAT is $895k. Meaning nearly $550k in the second half, annualised to more than $1.1m for FY16 due to expansion of latest big clinic customer.

UOADB HY out. 10% increase in net asset during last 6 months. That will do! Nearly MYR$900m in the bank.

SCD FY out. NPAT just below $1m, OCF flowed $1.2m back, and ended up with cash of nearly $7.4m in the bank, plus property worth $3.2m less $2m mortgage=$1.2m. Total cash and property net of debt is $8.6m.  MC just under $9m. Service component of $7.2m is now larger than product sales of $6m, and both generated similar NPAT. Product sales only improved slightly, but service revenue went up $1.2m.

21 August 2015

GNG FY out. Revenue up, but margins went down to about 10% operating margins. Oil and Gas division made a loss. Over $40m of cashflow bloated cash balance to nearly $65m, however, about $20m of the cashflow came from squeezing working capital. Work in hand is solid with $220m booked for FY16. However, margin crimp and the oil/gas division remains a concern.

PME FY out. Only $3m NPAT. OCF of $4m ($7m before tax payment) gobbled up by $5m of R & D. Pipeline looks good, cash balance is still healthy at $12m. Next half year should receive a boost from the pipeline, estimated at about $10m for full year. This should underpin a valuation around $150m to $200m. Waiting for re-entry points.

LGD FY out.  Management doing a good job in view of difficult trading conditions. There is possibly a treasure buried within the larger business that has yet to be noticed by the market. Debt is of slight concern, so will need OCF exceeding $10m next year. Based on management comments of synergies and costs savings from the new acquisition, should not be too difficult to achieve.

JIN FY out. $16m in company cash. Player numbers up. OCF at $4m gobbled up by R & D investments. MC=$38m.

IIN FY out. $200m underlying profit with $570k spending on network/carrier costs. TPM will slash a chunk out of this post merger. Figured TPM should be hitting about $500m underlying profit post merger.

24 August 2015

NEA FY out. Revenue=$23.6m, which means second HY revenue=$12.2m versus first HY revenue=$11.4m. This is only 7% growth half on half, meaning Australia is starting to plateau. Australia made $14.8m EBIT, USA lost $4.5m EBIT, and corporate cost a whopping $9m. First USA commercial sale of $11k revenue, but spent over $11m in the US. Speculating that NEA should have piggybacked on Musk’s satellite system- option still open. Guiding to “runrate” of $28m to $32m by Dec 2015 instead of the previous $30m to $50m. Crowther continued with statements of expectations of significant revenue growth, but provided very scant details of how he was going to achieve this, especially since he is now in the USA.

25 August 2015

SRV FY out. Revenue up 15% to $277m (9% in constant currency). NPAT up 27% to $33m, OCF=$60m. Occupancy= 79%, margins= 14.8%. 145 floors. $114m in cash. Depreciation =$18m. ROE=15%. The cashflow is real, as SRV does not capitalise anything other than costs for new floors or floor expansions.

26 August 2015

SPZ FY out. Still burning cash and making losses. Although there is recurring revenue, the business model does not show any compelling customer lock-in.

CTE FY out. Investments continue to eat into NPAT. Cashflow second half has suffered consequently. Revenue has increased, but not as much as expected given investments last year.

UOS HY out.

27 August 2015

RHT FY out. Ferriscan profits improved modestly to $700k, which is slightly disappointing given the AUD/USD tailwinds. Statutory profit is slightly illusory due to government grants.

FLT FY out. TTV up from $16b to $17.6b.  Revenue as percentage of TTV dropped slightly from 14% to 13.6%. Overseas business generated over $100m of EBIT vs total EBIT of $340m. Corporate net cash is over $500m. Watching UK closely.

VOC FY out. OCF $42m lower than expected.

VED FY out. FCF $80m, EV over $2b. Implied CAGR 15% for 10 years. Nope.

REF FY out. 1800Reverse revenue of $6.8m meaning second half revenue= $3318 v $3472. NPAT $2m. OCF=$2.4m. Cash at current date is $7.6m. 1 cent fully franked dividend declared. Franking bank is now nearly $6m.

FID FY out. NPAT $4.6m. $12.3m in cash, 5.5 cents ff dividend. $6.5m in OCF. $57m MC is attractive. It is nice when a share priced for no growth shows actual growth. In such cases, the investor gets the growth for free.

SDI FY out. Most importantly, Brazilian GMP approval has been obtained. Revenue up at $68.6m, NPAT lower at $6.2m due to higher tax rate. Debt reduced, equity up from $52m to $58m. $7m OCF. $60m MC is attractive on various measures.

AWN FY out. Numbers looked horrible, but underlying numbers and strategy are sound.

28 August 2015

SGH FY out. Gain on Bargain Purchase line entries boosted NPAT. Cashflow is again anaemic, and WIP continues to balloon. ROE is poor despite increasing debt. Even assuming $100m of FCF next year, current enterprise value of $1.7b is challenging in terms of valuation.

ICU FY out. Revenue up, small profit before $1m of one-off expenses. Underlying PBT is $1.2m. Positioned for a strong year ahead. EBITDA for last 6 months is $1.2m. Headed for over $2m of EBITDA in FY16.

TCN FY out. NPAT $2.1m. $4.3m of cash in hand. Mixed outlook. FCF $1.1m, with another $1m stuck in working capital and $1.3m loan to Statseeker. Div=0.49 cents. MC=$19m is reasonable.

31 August 2015

AMA FY out. Revenue up to $95.7m, with EBIT up to $14.4m, hence EBIT margins maintained at 14.6%. Balance sheet is strong with net cash of $30m since capital raising. OCF is $7.8m, and FCF is $6.5m. Dividends increased to 1.7 cents ff. Very positive outlook.