2020: Growth drivers for 3 Blue chip stocks- TWE, SCG, ALL

2020: Growth drivers for 3 Blue chip stocks- TWE, SCG, ALL

Blue-chip Stocks

A blue-chip stock can be defined as a nationally recognised, financially sound and well-established company. Blue chips stocks usually sell high quality and widely accepted products across a diverse geography.

BLUE CHIP” is been derived from the Poker game in which the chips in blue colour have the highest value.

Historically the blue-chip companies are referred to as stocks which have high price tags but in the current scenario blue-chip referred to as quality companies that have been in operation for the number of years with a good reputation.

Let us look at the recent updates of three established companies along with their growth drivers.

Treasury Wine Estates Limited (ASX: TWE)

Treasury Wine Estates Limited is a leading wine company with a wide range of portfolio of outstanding wine brands and has a world-class production facility. The company employs more than 3,500 people across four key regions.

Appointment of Company Secretary

On 31 December 2019, the company has announced the appointment of Matt Young, Chief Financial Officer, has been appointed as Company Secretary of TWE effective from 31 December 2019 and would be the person responsible for communications with ASX.

The company also announced the Fiona Last, the erstwhile Company Secretary, leaves the business on 31 December 2019. The company’s board thanks Ms Last for her valuable contribution to TWE over the last 5 years.

Ben Dollard joins as President for Americas

On 5 December 2019, the company has announced the appointment of Ben Dollard as President of the Company’s operations in the Americas region. He would start in his new role with effect from 13 January 2020 and would be based in the company’s office in California.

Mr Angus McPherson who has informed TWE that he is unable to relocate to the United States due to unavoidable circumstances was replaced by Mr Dollard. He has twenty years of experience in the liquor industry in the Americas region.

Growth Drivers

  • The company is a leader in the wine industry with a focus on four key regions- Americas, Australia, Europe and Asia.
  • The company was ranked no 1 in winery and has a strong presence in New Zealand with 15 per cent growth in EBITS in Australia and New Zealand segment during FY 2019.
  • TWE sales in the Americas region comprised 40 per cent of total sales in FY19.
  • The company is also leveraging the new route to market in the US to drive greater brand visibility and availability.

The company financial performance for FY 2019 can be seen here

Stock Performance of Treasury Wine Estates limited

The stock of TWE closed at $16.610 on ASX on 7 January 2020, up by 2.658 per cent from its previous closing price. The company has a market cap of $11.65 billion and approx. 719.95 million outstanding shares. The stock has generated a positive return of 6.38 per cent in the last six months and a negative return of 0.06 per cent on a year-to-date basis.

Scentre Group (ASX:SCG)

Scentre Group owns and operates a portfolio of living centres in New Zealand and Australia. The company has an asset under management (Retail Real Estate) of $55.3 billion. SCG works with the world’s leading brands to create a unique shopping experience for their customers.

Change of Director’s Interest

On 16 December 2019, the company has announced to change the interest of one of its director (Peter Allen). The number of securities held by the director after the change were 5,510,627, which includes 718,263 shares with HSBC Custody Nominees (Australia) Limited, 230,908 shares with Pechal Pty Ltd (Pechal Family), 4,528,996 with Pechal Pty Ltd (Allen Family account) and 32,460 shares with Cheryl Allen.

SCG acquires 50 per cent stake in Booragoon

On 6 December 2019, the company announced acquisition of 50 per cent stake in Garden City Booragoon, Perth for a consideration of $570 million. This is inclusive of property management for long-term, development rights of the brand. The Booragoon was 100 per cent owned by AMP Capital Diversified Property Fund. This would now become 50 per cent JV partner with the company.

The company would immediately commence pre-development work for a new development scheme in order to create long-term value for the co-owners

The transaction is expected to be marginally accretive to the company’s earnings from 2020 and the company also confirmed the Fund Flow Operation (FFO) for the FY 2019 of 0.7 per cent and distribution of 22.60 cents per security.

Growth Drivers

  • SCG has reported its total in store sales grew by 2.4 per cent in the third quarter of 2019 and 1.6 per cent for the full year.
  • The company works with the large brand to provide a unique experience to their customers.
  • SCG reported that the Total Portfolio sales were more than $24 billion in the year to date as on 30 September 2019.
  • The company has recently acquired 50% interest in Booragaoon with FFO growth of 0.7 per cent and distribution forecast of 22.60 cents per security for FY19.

Stock Performance of Scentre Group

The stock of SCG closed at $3.940 on ASX on 7 January 2020, up by 1.285 per cent from its previous closing price. The company has a market cap of $20.4 billion and approx. 5.24 billion outstanding shares. The stock has generated a negative return of 3.95 per cent in the last six months and a positive return of 1.04 per cent on a year-to-date basis.

Aristocrat Leisure Limited (ASX:ALL)

Aristocrat Leisure Limited is the leading game publisher and provider with more than 6,400 employees located across the globe. The company’s products are available and approved in more than 300 licensed jurisdictions across 80 countries. Recently the company has announced that its 2020 Annual General Meeting will be held on 20 February 2020.

The company Reported 28.8 per cent surge in NPATA in FY19

On 20 December 2019, the company has released its Annual Report for FY 2019, a few highlights from the report are as follows:

  • Net Profit after tax of the company surged to $698.8 million compared to $542.6 million in the corresponding period of the previous year.
  • EBITDA of the company has been increased by 20.2 per cent to $1596.8 million from PCP.
  • The company has reported earnings per share (before amortisation) of 140.2 cents per share.
  • Cash and Cash Equivalent of the company stood at $568.6 million.

Growth Driver

  • The company’s strong balance sheet during FY 2019 showing an outstanding market share growth in existing market and prospects of future expansion.
  • Aristocrat’s digital footprint continues to scale up with the successful offtake of core apps and expansion in new genres.
  • The company has committed to a strong organic investment regime to ensure core momentum growth with a rigorous focus on returns.
  • The company also reported healthy growth in NPATA at $840.4 million, rise of 28.2 per cent from the previous year.

Stock Performance of Aristocrat Leisure Limited

The stock of ALL closed at $34.350 on ASX on 7 January 2020, up by 0.263 per cent from its previous closing price. The company has a market cap of $21.88 billion and approx. 638.54 million outstanding shares. The stock has generated a positive return of 17.01 per cent in the last six months and a positive return of 0.18 per cent on a year-to-date basis.


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