3 Stocks Under Investors’ Radar - JLG, ROG, CZL

  • Jun 17, 2019 AEST
  • Team Kalkine
3 Stocks Under Investors’ Radar - JLG, ROG, CZL

Let us have an insight on the recent updates and the stock performance of the three companies JLG, ROG and CZL.

Johns Lyng Group Limited

FY19E Revenue and EBITDA Revised Upward: Johns Lyng Group Limited (ASX: JLG) provided a further forecast revenue and EBITDA upgrade of 7.5% and 5% respectively for the full 2019 financial year. These forecasts followed an earlier forecast upgrade of 4% to revenue and 8% to EBITDA for the full year, provided at February’s 1H19 report.

The robust performance is primarily driven by revenue from non-forecast catastrophe recovery work, predominantly relating to the hailstorm in Sydney during December and the Townsville flooding event in February. The result was also driven by the strong trading in the insurance building and restoration services division’s core business-as-usual segment. With this upward revision, FY19 revenue is expected to be $319 million (+7.5%/+$22.3 million on Feb’19 forecast). The FY19 operating EBITDA is estimated at $20.9 million (+5%/+$1 million) with total EBITDA at $25.4 million (+4.1%/+$1 million).

The CEO of the company Scott Didier stated that this result reflected both the strength of the group’s core offering and its unique capacity to respond to catastrophic events. The year remained very successful for the group, and this result is a product of the market-leading national presence that the group has worked on very hard to build.

The stock of Johns Lyng Group Limited settled the day’s trade at $1.475, up1.72% with a market capitalization of $322.03 million (As on June 17, 2019). The stock yielded a YTD return of 42.16% and exhibited returns of 67.63%, 11.54% and 2.11% over the past six months, three months and one-month period respectively. Its 52-week high price stands at $1.550 and its 52-week low price at $0.770, with an average annual volume of 349,341. The stock is trading at a PE multiple of 28.490x with an EPS of $0.051 AUD.

Red Sky Energy Limited

Strategic Review of 100% owned Projects Nearing Completion: Red Sky Energy Limited (ASX: ROG) is an oil & gas exploration company. It is into the exploration, development and acquisition of vital oil & gas resources.

On 20 May 2019, the company completed the full acquisition of four Cooper Basin oil and gas projects known collectively as the Innamincka Dome Projects. The projects include Flax, Yarrow, Juniper and PRL 180/181/182.

Company’s Project Located In Cooper Basin, South Australia (Source: Company Reports)

The company updated to the market on its four 100% owned oil and gas projects located in Australia’s Cooper Basin. The strategic review of four 100% owned oil and gas projects is near to completion. The company has a focus on near term cash flow projects with low capex. The company is considering self-funding or partnering options for larger exploration projects. The company is in the advanced stage of discussions on remediation bond financing.

It has been exploring various options over the past few months with respect to refinancing the remediation bond attaching to the company’s projects. Advanced discussions regarding a corporate bond instrument are in train with a view to limiting dilution associated with the financing. The company expects to release further information relating to the corporate bond over the coming few weeks.

Red Sky Energy Limited is currently undergoing a strategic review with a focus on scoping near term cash flow projects with low capex designed to support exploration and further development activities on the larger projects. Low capex projects are currently being scoped for both Flax and Yarrow with the results of the strategic review expected to be released shortly. Options with respect to financing the larger projects are being explored with consideration of self-funding or partner arrangements or a combination of the two.

The stock of Red Sky Energy Limited is trading at $0.002, with a market capitalization of $2.51 million (As on 17, 2019). 52-week high and low range for the stock stands at $0.006 - $0.001 respectively, with an average annual volume of ~5.69 million.

Consolidate Zinc Limited

Increased Production at Higher Grades: Consolidate Zinc Limited (ASX: CZL) provided an update at its Plomosas zinc-lead-silver mine in Mexico.

The mining from the level seven in the semi oxidised ore stopes has resulted in increased production at higher grades. 7,088 tonnes of ore have been produced for May at 14.5 % Zinc and 6.0% Lead. The SOX ore mined was sent to Triturado y Minerales La Piedrera S.A. de CV, who operate the Aldama concentrator facility, which is located close to the Plomosas Mine while the Tres Amigos ore mined was sent to the Grupo Mexico Santa Eulalia concentrator. As the SOX is over four metres wide, the stopes allow direct access of loaders and an increase in productivity. The Tres Amigos ore mined from level 5 stopes and the sublevel 972m RL stopes continued to require scraping to draw out the ore from the stope areas. This extra step in the mining process has limited production.

May 2019 Production Statistics (Source: Company Reports)

Ore processing during the month was at both the GMSE and Aldama plants. All Tres Amigo’s ore was delivered to GMSE with 2,527 tonnes milled and the SOX material was delivered to Aldama with 966 tonnes milled.

The average Zinc to Zinc concentrate recovery was 73.6%, which reflected the ramp-up of production at Aldama and the requirement to establish steady state operating parameters while commissioning.

The stock of Consolidate Zinc Limited settled the day’s trade at $0.013, up 8.33% with a market capitalization of $14.12 million (June 17, 2019). The stock yielded a negative YTD return of 29.41% and exhibited negative returns of 42.86%, 36.84% and 14.29% over the past six months, three months and one-month period respectively. Its 52-week high price stands at $0.029 with a 52-week low price of $0.006, and an average annual volume of ~1.07 million.


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