Share Prices Under Watch: Redbubble, Pinnacle and Webjet

The companies under discussion in this article came up with significant announcements in the past few days with Redbubble Limited (ASX: RBL) releasing a trading update, Pinnacle Investment Management Group Limited (ASX: PNI) entering acquisition deals and Webjet Limited (ASX: WEB) responding to media speculations regarding a potential takeover.

Before taking a detailed look at these company developments, let us first go through their performance on the Australian Securities Exchange.

The stock of Redbubble Limited closed the day’s trading at $ 1.035 on 13 December 2019, up by 1.97% or $ 0.020 from its last closing price. The stock has delivered a year to date return of 11.54%, while its last six-month return is 7.98%. Redbubble Limited has a market cap of approximately $ 262.68 million.

On the same day, the stock of Pinnacle Investment Management Group Limited inched upward by 3.939% or $ 0.180 to $ 4.750, with a market cap of $ 836 million. The stock has delivered a return of 7.58% on a year to date basis and -17.21% in the last six months.

With a market cap of $ 1.69 billion, the stock of Webjet Limited settled at $ 12.800 on 13 December 2019, up 2.811% from its previous close. The year to date return of the stock stands at 17.56% and the six-month return is -16.33%.

Redbubble Limited (ASX: RBL)

Second QTD Marketplace Revenue Growth Up 20%

On 12 December 2019, Redbubble Limited (ASX: RBL), the creative online marketplace for print on demand products, released a trading update for the second quarter to date (QTD) from 1 October to 9 December 2019.

Redbubble Group estimated a 20 per cent year on year Group Marketplace Revenue growth for the concerned QTD on a floating basis, while TeePublic branded marketplace performd strongly with an increase of 59 per cent year on year in QTD Marketplace Revenue growth. The QTD growth of the Redbubble branded marketplace was noted at 2% year on year.

The company highlighted that the growth achieved was below expectations. Meanwhile, the group attributed the growth to increased price competition in its market leading sticker position. Apart from that, apparel sales could not recover to the historical growth level that was noted prior to October 2018.

The group is progressing to drive top line growth with focus on speeding up near-term tasks such as marketing optimisation, product merchandising and line extensions, and increasing member revenue. The group is hopeful to grow operating EBITDA YoY and realise positive free cash flows in FY20.

Management Commentary

Pinnacle Investment Management Group Limited (ASX: PNI)

PNI Reaches Deal to Acquire 25% Equity Interest in Coolabah Capital

On 11 December 2019, Pinnacle Investment Management Group Limited (ASX: PNI) announced to have entered into agreements to acquire a 25% equity interest in Coolabah Capital Investments Pty Ltd, owned by AMB Capital Partners, which is a private investment business of the Bennett Family. The deal completion is dependent on the fulfilment of certain limited conditions precedent.

PNI is a provider of superior distribution, fund infrastructure and support services to specialist investment managers, thereby enabling them to concentrate on delivering investment excellence to their customers.

Coolabah Capital Investments (CCI), founded in 2011, is an active long and long-short credit manager, engaged in managing a number of institutional mandates. The credit manager also holds the responsibility of managing the product suite of Smarter Money Investments (SMI) and BetaShares Active Australian Hybrid ETF (ASX: HBRD).

The terms and conditions of the agreement are:

  • PNI would acquire the interest for $29.1 million. The company would provide further $5 million upon the business attaining certain milestones over the period of next 18 months to 4.5 years;
  • Pinnacle and CCI have entered a global distribution partnership, under which PNI would share revenues generated from capital raised in the institutional, retail and offshore distribution channels;
  • PNI, along with the remaining shareholders, would reach an agreement with standard minority shareholder and governance protections for Pinnacle;
  • The acquisition is expected to close by 16 December 2019, with the funding by a facility from the CBA as announced earlier.

Ian Macoun, the Managing Director of PNI, stated that partnering with CCI is in line with the company’s strategy, while CCI Managing Partner Christopher Joye commented that the deal would add immense value to the next chapter of CCI’s evolution.

Webjet Limited (ASX: WEB)

Webjet Responds to Rumours of Being A Takeover Target

Webjet Limited (ASX: WEB), a digital travel business covering both global consumer markets and wholesale markets, became a topic of discussion recently due to media speculations about a potential takeover. There has been a buzz that the strong team of Goldman Sachs in Melbourne is taking charge, putting a full pitch to players it feels might have access to $2 billion.

Meanwhile on 11 December 2019, Webjet responded to the recent media speculation, releasing a statement that its objective is to create value for the shareholders and on a regular basis, the company considers acquisition interest in the business. In case a proposal is received that is powerful and certain, the company would ask the shareholders to consider the same. However, currently, no such proposal exists.

Additionally, the company clarified that it continues to remain focused on executing its growth strategy, as highlighted in the recent AGM held during November 2019.

Due to this media speculation about a potential takeover, the shares of Webjet Limited remained highly volatile for a couple of days. The shares which tumbled by 2.75% on 10 December 2019, suddenly soared up by 9.61% on 11 December 2019.


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