Latest On Four Diversified Stocks: SHJ, RD1, KSC, BSX

Latest On Four Diversified Stocks: SHJ, RD1, KSC, BSX

With the ongoing earnings season, companies are busy with releasing results as per their accounting periods along with the important information. Here, we are discussing four companies that have either released their annual results for FY19 or recently released important information related to their respective businesses.

Shine Corporate Ltd

Shine Corporate Ltd (ASX: SHJ) is engaged with the provision of legal services throughout Queensland, Victoria, Western Australia and NSW in addition to the conduct of an insurance recovery consulting business in New Zealand.

FY19 Results: The company recently released its full year financial results for FY19, wherein the Management declared a final dividend (unfranked) of 2.5 cents per share with a record date of 13 September 2019 and a payment date of 27 September 2019, bringing the total dividend for FY19 to 3.75 cents per share (unfranked).

The company reported a fall of 0.8% in revenue to $177.9 million in FY19 against $179.37 million in FY18. Earnings Before Interest, Tax, Depreciation, Amortisation and Impairment (EBITDAI) came in at $47.44 million, posting a growth of 25.8% on EBITDAI of $37.72 million in FY18. Statutory NPAT for the company stood at $14.03 million which included the $5.0 million impairment for FY19 as compared with an NPAT of $19.11 million for FY18. Earlier reported operating leases now disclosed below EBITDAI as a combination of depreciation and interest, owing to the adoption of AASB 16 Leases on 01 July 2018 which had an impact on EBITDAI and Gross Operating Cash Flow (GOCF). GOCF at $31.25 million was up 42.9% with underlying GOCF of $22.15 million, up 1.3%.

FY19 Financial Results (Source: Company Reports)

Consolidated Financial Conditions: The company intends to maintain an appropriate balance of debt and equity, resulting in an optimal capital structure. The Management has kept the current target of interest-bearing debt to equity ratio at 30%, which is the maximum level. The company, as at 30 June 2019, saw an interest-bearing debt to equity ratio at 26%.

The Management intends to deliver improved results with growth in new and existing markets while keeping its focus on innovation and integration. Going forward, the Management expects a rise of 10% in underlying EBITDAI in FY20.

Stock Performance: On 28 August 2019, the stock closed the day’s trading at $0.755, up 0.667% from its previous closing price. The stock is available at a price to earnings multiple of 9.620x with a market capitalisation of $129.87 million and an annual dividend yield of 4.67%. The stock has shed ~23.47% in the last one year and is currently trading towards the lower end of its 52-week trading range of $0.610- $0.985.

Registry Direct Limited

Registry Direct Limited (ASX: RD1) is engaged with the provision of share registry software and services to listed and unlisted companies, fund managers and product issuers. Unlisted companies can use the software on a self-services basis which typically reduces their registry costs relative to traditional full-service offerings while gaining the benefits of an enterprise grade registry system. This self-service capability distinguishes the company from the traditional registry service providers in Australia.

FY19 Key Financial Data (Source: Company Reports)

During FY19, the company incurred a net loss after tax of $1,486,151 and had a net cash outflow from operating activities amounting to $805,555. At the end of FY19, the company reported net current liabilities of $44,669.

The company, on 29 July 2019, raised additional capital of $646,400 pursuant to a fully underwritten renounceable rights issue to fund its core business. This was fully underwritten by the company’s Chairmen Mr Donald McLay and CEO Mr Ian Roe.

Opportunities for Growth: The Management has anticipated few opportunities to maintain the growth which include – (a) Continue to innovate with the registry services platform, and make addition to features that help improve the solution (b) Enhance marketing strategies and management (c) Continue to boost sales and channels to the existing targeted market.

Stock Performance: On 28 August 2019, the stock closed the day’s trading at $0.015, up 25% from its previous closing price. The market capitalisation of the stock stands at $2.07 million. The stock has corrected ~53.62% in the last one year and is currently trading at the lower end of its 52-week trading range of $0.011 – $0.038.

K&S Corporation Limited

K&S Corporation Limited (ASX: KSC) is engaged in providing transport and logistics, contract management, warehousing and distribution, and fuel distribution solutions. The company recently announced about the appointment of Mrs Sallie Emmett as a non-executive director with effect from 24 September 2019. The company also notified that A.A. Scott Pty Ltd, Zenaray Pty Ltd, Raymond Walter Scott and Zena Kaye Winser have increased their voting power from 64.67% to 66.78%.

Transport and Logistics Solutions (Source: Company Reports)

The company recently announced that it has inked a binding agreement with Centurion Transport Co. Pty Ltd, under which, KSC would sell the business and certain assets of its Western Australia based Regal General Freight business to Centurion. It is an unconditional agreement, which has involved the parties – Centurion and K&S Corporation subsidiaries’ Regal Transport Group Pty Ltd (Regal) and K&S Freighters Pty Ltd (KSF). As per the deal, Regal would transfer its rights and entitlements under customer contracts to Centurion, which would make offers of employment to the majority of the employees of KSF working in the Regal General Freight business.

The rationale behind the transaction is to focus on core competencies, including its Regal Heavy Haulage business. The company also intends to sell or redeploy assets which are not contributing much towards profits in the Regal General Freight business. The transaction is likely to release working capital of ~$7 million. The transaction is planned for completion on 30 August 2019.

As per the trading update released on 27 May 2019, the company expects underlying profit before tax for FY19 to be between $3 million to $4 million. Statutory profit before tax for FY19 is anticipated to be in the range of $9 million – $10 million.

Stock Performance: On 28 August 2019, the stock closed the day’s trading at $1.820, up 1.111% from its previous close. The stock is available at a price to earnings multiple of 10.110x with a market capitalisation of $229.1 million and an annual dividend yield of 2.22%. The stock has gained ~24.14% in the last one year and is currently trading towards the higher end of its 52-week trading range of $1.350 – $1.920.

Blackstone Minerals Limited

Blackstone Minerals Limited (ASX: BSX) is engaged with mineral exploration activities. The company recently released an Investor Site Visit presentation wherein it detailed about the progress of the projects and sites.

Ta Khoa Nickel Project (Nickel-Copper-Cobalt-PGE), Vietnam has seen the capital investment of more than US$136 million which drove the revenue of US$213 million. The project paid total contributions to the government of US$65 million during the period of 42 months of falling nickel prices.

Silver Swan South Project (Gold & Nickel), Western Australia: The project is an emerging gold discovery located 8 km along strike of the world class Kanowna Belle gold mine. Nickel-Cobalt sulfide targets are located only 10 km south of the Silver Swan (655 kt @ 9.5% Ni) and Black Swan (10 Mt @ 1% Ni) nickel mines (166 kt nickel endowment).

Ta Khoa Project (Source: Company Reports)

The company recently updated that it has started the phase II of drilling with a second diamond drill rig mobilised at the Ta Khoa Nickel Project in Northern Vietnam. This second drill rig with deeper drilling capacities would test the various new targets fetched from a recently completed IP survey.

Stock Performance: On 28 August 2019, the stock closed the day’s trading at $0.135, down 3.571% from its previous close. The stock has a market cap of $21.41 million. The stock has gained ~40% in the last one month and is currently inching towards the higher end of its 52-week trading range of $0.063 – $0.180.


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