Operations and Guidance Update- CMW, HSN, COF

Looking at the current scenario, it is quite evident that the whole world has been hit hard from evolving COVID-19. This pandemic disease has had an impact on almost every growth aspect for an economy. However, the Governments are taking measures to limit the spread of the virus such as temporary lockdowns, and closure of public places,including hotels, bars, and worship places, under social distancing measures.

When it comes to the business scenario, many organisations have joined hands with the governments in order to restrict the virus by implementing measures like work from home. However, this has impacted the growth of business and led several companies to withdraw their guidance for the future.

In this article, we will look at three ASX-listed companies that have recently provided business updates and withdrawn their guidance.

Cromwell Property Group (ASX:CMW)

Cromwell Property Group is an internally managed Australian REIT (Real Estate Investment Trust). The company also has footprints in the management of property funds.CMW recently noted the announcement made by Prime Minister in relation to mandatory commercial tenancy code of conduct to assist struggling businesses through the uncertainty arising from COVID-19.

  • At present, CMW is unable to evaluate the impact of the application of the tenancy code on its business.
  • However, due to rising uncertainty from the impact of COVID-19, the company has suspended its guidance for the rest of FY20.

Strong and Resilient Position

  • During 1H FY20, the company reported operating profit amounting to $134.1 million, which was equivalent to 5.18 cps. This reflected a rise of 26% from the 4.10 cps reported in 1H FY19.
  • As per the key personnel, the company drives 40% of net operating income from government tenants which places CMW in a robust and resilient position.
  • As on 31 December 2019, its Debt position was well diversified throughout 21 domestic and international lenders with minimal debt expiries until FY23 and a debt duration of 4.2 years.

The stock of CMWwas trading at $0.755 on 06 April 2020 (at 01:03 PM AEST), indicating a rise of 1.342% against its previous closing price. The market capitalisation of Cromwellstands at $1.95billion,and the total outstanding shares are 2.61billion. The annual dividend yield of the company stands at9.97%. During the last three months and six months, the stock of CMW has generated returns of -36.86% and -40.15%, respectively.

Hansen Technologies Limited (ASX:HSN)

Hansen Technologies Limited is an ASX-listed company that develops, incorporates and assists billings system software for the telecommunication and utility industries.

Suspension of Guidance for FY20

Hansen has recently notified the market participants with operating and guidance update and outlined the following:

  • The company has thus far performed as expected for 2H FY20. Despite the performance, the company believes it is difficult to evaluate the impact on revenue from projects and new customer wins over the period of the pandemic.
  • Considering the uncertainty arising from the spread of COVID-19 pandemic, the company has withdrawn its earnings guidance for FY20, which includes operating revenues range of $300 million to $305 million and EBITDA range of $72 million to $77 million.

Funding Position of HSN:The company has availability of significant funding to assist with the requirements of cash flow. Hansen entered a secured syndicated multi-currency facility of A$225 million in May 2019which would mature on 30 April 2022. The funding would be subject to renewal upon negotiation with its external financiers.

However, the company has withdrawn facility to A$186 million, leaving unutilized funds amounting to A$39 million. Moreover, HSN requires no repayments during the term of the facility.

Do Read: How these IT companies are providing virus proof portfolio?

The stock of HSN was trading at $2.770 on 06 April 2020 (at 01:03 PM AEST), indicating a rise of 0.362% against its previous closing price. The market capitalisation of Hansen Technologies stands at $547.01 million, and the total outstanding shares are 198.19 million. The annual dividend yield of the company stands at 2.17%. During the last three months and six months, the stock of HSN has generated returns of -26.79% and -22.47%, respectively.

Centuria Office REIT (ASX:COF)

Centuria Office REIT is a Real Estate Investment Trust which makes investments in commercial properties within Australia. Recently, the company updated the market with its portfolio and capital position and outlined the following:

  • At present, the national portfolio of COF includes 23 high-quality office assets and its portfolio is 99% occupied with a WALE of 4.9 years. More than 60% of portfolio leases will be expiring at or beyond 30 June 2024.
  • When it comes to the capital position, COF’s current loan to value ratio and interest cover ratio stood at 35.2% and 5.9x against apledge of 50.0% and 2.0x, respectively.

Impact of COVID-19: Despite the uncertainty about duration and extent of the effects from COVID-19, the company is well-positioned to enter this period with a strong capital position as well as quality office portfolio, which helps in generating passive and diverse income streams.

As a result of the uncertainty surroundingCOVID-19 and the potential impact on business operating conditions, the company has withdrawn its FFO guidance for FY20. However, COF reiterated its FY20 distribution guidance of 17.8 cents per unit, which is subject to further changes in the scenario.

The stock of COF was trading at $1.680 on 06 April 2020 (at 01:03 PM AEST), indicating a rise of 3.704% against its previous closing price. The market capitalisation of Centuria Office stands at $833.53 million, and the total outstanding shares are 514.52million. The annual dividend yield of the company stands at 10.93%. During the last three months and six months, the stock of COF has generated returns of -44.90% and -46.53%, respectively.


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