ASX bets during Melbourne Cup - A look at WOR, ALC

  • Nov 06, 2019 AEDT
  • Team Kalkine
ASX bets during Melbourne Cup - A look at WOR, ALC

Melbourne Cup Day is Australia’s most famous annual horse race. It is conducted on the first Tuesday, in the month of November, annually. This year, the event took place on 5 November 2019. On the race day, many investors invest their money on the horse race and some people think that investing money in the share market is akin to gambling. In this article, we would be discussing two ASX listed stocks WOR and ALC.

In stock market parlance, the return on capital may be a measure of a company’s current profitability, but the return on the company’s stock encompasses a combination of the dividends being paid by the company along with the stock price trend. The two companies under discussion are from Energy and Health Care sector respectively, and have performed exceptionally well in FY19 period, generating positive stock returns since the onset of the year.

On 6 November, the S&P/ASX 200 Index last traded at 6,660.2 points, slipping down by 0.6 per cent from its previous close. The S&P/ASX 200 Health Care Index closed the market session, declining by 1.02 per cent from the previous close to 38,693.7 points, and S&P/ASX 200 Energy Index ended the trading session at 11,136.5 points, moving down by 0.02 percent from its last close.

Let’s go through the two ASX listed stocks to get a better insight on them.

Worley Limited (ASX: WOR)

Worley Limited provides a wide range of advisory and consulting services. The company also offers procurement and construction related services. Worley operates in Australia and New Zealand via 4 business lines- Major Projects, Advisian, Integrated Solutions and Services.

WOR secured 2- year wells support and fluids hauling contract extension

On 6 November 2019, WOR via a release to the market notified that 2-year contract extension was given to it by BP Exploration (Alaska) Inc. for offering wells support and fluids hauling towards BP’s North Slope operations.

Nouryon awards Master Services Agreement to Worley
On 4 November 2019, WOR notified that Nouryon granted MSA or Master Services Agreement to it to provide EPCM or engineering procurement and Construction Management related services. The deal secured by WOR would give it around 20 of Nouryon’s chemicals sites throughout Europe region during the period of 5 years and 6 months. Also, Fifty of Nouryon’s people have been shifted to WOR’s Europe business segment.

The Chief Executive officer (CEO) of Worley commented: “The Nouryon relationship improve our position in the chemicals market, stable with our strategy and the transfer of Nouryon team enhances Worley’s deep skills and knowledge of the chemicals market.”

Worley Concluded the Acquisition of 3sun

WOR conveyed to the market on 28 October 2019 that on 25 October 2019, it concluded the acquisition of 100 per cent of the shares in 3sun Group Limited. The acquisition will provide the company with a prominent position in the offshore wind energy services sector in the Europe and United Kingdom region. Few benefits from the acquisitions are as below:

  • The acquisition helps the company to enter in growing offshore wind energy Operations and Maintenance (O&M) business.
  • Accelerates the company’s offshore wind energy strategy.
  • The company’s technical skill and financial strength would enable WOR to broaden 3sun’s capabilities to bigger projects and longer duration Operations and Maintenance contracts.
  • The acquisition would help WOR to expand in North America and the Asia-Pacific region.
The Worley CEO Andrew Wood commented:

The Worley CEO Andrew Wood commented

Underlying NPATA increased by 43 per cent during FY 2019

On 21 August 2019, the company declared the financial statements for the FY 2019 period ending 30 June 2019, a few highlights of the FY 2019 results were as follows:

  • The company’s aggregated revenue surged up by 36 per cent to $6,439.1 million from the corresponding prior year.
  • Underlying NPATA grew by 43 per cent to $259.8 million.
  • Underlying EBITDA of the company rose by 31.9 per cent to $412.8 million.
  • Proforma backlog expanded by 10 per cent and the company completed ECR acquisition.

ECR acquisition

Outlook

The company sees growth opportunities throughout the value chain comprising of oil and gas production, storage and processing; floating storage and greenfield LNG. In FY20 period, Worley anticipates providing the advantages of ECR acquisition (including the realisation of cost, margin and such).

Stock Performance

The stock of WOR last traded at $14.020 on 06 November 2019, falling by 0.284 per cent from its previous close. The company has approximately 520.36 million outstanding shares and a market cap of $7.32 billion. WOR’s 52 weeks low and high value of the stock is at $10.720 and $16.150 respectively. The stock has generated a positive return of 3.61 per cent in the last six months and a positive return of 23.99 per cent on year to date basis.

Alcidion Group Limited (ASX: ALC)

With 215 hospitals across the United Kingdom, Australia and New Zealand, Alcidion provides clinical decision support solutions. ALC offers clinical informatics technology that empowers clinicians with decision support tools. Alcidion’s technology has been used by 30k beds and it has 11k active users across Patientrack and Miya Precision.

ALC Raised $16.2 million via Institutional Placement

On 5 November 2019, the company declared that it has successfully raised $16.2 million via Institutional Placement at 18 cents per new share. A few highlights of the placement are as below:

  • The Placement was strongly supported by new and old institutional shareholders bringing several leading institutions onto Alcidion’s share register as cornerstone investors.
  • The proceeds from the placement will be used to speed up the Alcidion growth strategy, and the company has boosted its balance sheet to carry out the strategic plan.
  • The extra capital also offers the company with resources for further geographical expansion in other international markets.
  • Pricing of placement was determined by strong institutional book building with a price of 18 cents representing 12.2 per cent discount to the last traded price of the company’s shares on 31 October 2019, and 14.3 per cent discount to the 10-day volume-weighted average price of the company’s shares.
Notice of Annual General Meeting

The company has released a notice for Annual General Meeting of shareholders to be held on 14 November 2019. The resolutions mentioned below to be considered during the meeting are as follows:

  • Resolution 1 - Adoption of Remuneration Report
  • Resolution 2 - Election of Director - Mr Simon Chamberlain
  • Resolution 3 - Re-election of Director - Professor Malcolm Pradhan
  • Resolution 4 - Non-Executive Directors’ Remuneration
  • Resolution 5 - Ratification of prior issue of shares
  • Resolution 6 - Replacement of constitution
  • Resolution 7 - Approval of 10 per cent placement capacity

The Quarterly result for the Q1 FY20 of the company can be read here.

Stock Performance

The stock of ALC last traded at $0.210 on ASX on 06 November 2019, tumbling down by 12.05 per cent from its previous close. The company has approximately 900.69 million outstanding shares and a market cap of $216.17 million. ALC’s 52 weeks low and high value of the stock is at $0.038 and $0.305, respectively. The stock has generated a positive return of 150.00 per cent in the last six months and a positive return of 410.64 per cent on year to date basis.


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