Three Stocks under Spotlight – IFL, SDF, BVS

IOOF Holdings Limited (ASX: IFL)

Australian financial services company IOOF Holdings Limited (ASX: IFL) provides financial advice; portfolio and estate administration; and investment management services to its advisers and their clients.

Today (18 October 2019), this financial services giant provided an update in relation to proceedings brought by APRA against two of IOOF’s APRA regulated entities and certain directors and executives, wherein, the company has advised that the deadline for APRA to lodge an appeal was due to lapse today and APRA has announced that it will not appeal the matter.

Recently, the company welcomed the receipt of the No Objection Notices from both OnePath Custodians Pty Limited (OPC) and Australia and New Zealand Banking Group Limited regarding the transfer of the ANZ Wealth Pension and Investments business, reflecting both ANZ and IOOF’s commitment to completing the transaction.

In addition to this, both ANZ and IOOF have also agreed on the following changes to the terms of the ANZ P&I acquisition:

• a purchase price of $825 million for ANZ P&I, revised down from $950 million, with the purchase price remaining subject to a completion adjustment for the net assets of ANZ P&I;
• a revised date (31 December 2019) after which either party may terminate the acquisition of ANZ P&I if there are any outstanding conditions precedent on that date;
• Changes to warranty caps associated with the reduced purchase price and an amendment to the Strategic Alliance Agreement allowing for an earlier termination right by either party.

In the last three months, IFL’s stock has increased by 38.80% as on 17 October 2019. At market close on 18 October 2019, IFL’s stock was trading at a price of $7.300, up by 3.546% intraday, with a market cap of $2.48 billion.

To know more about IFL, click here.

Steadfast Group Limited (ASX: SDF)

Listed in the year 2013, Steadfast Group Limited (ASX: SDF) has successfully established itself as a leading general insurance broker in Australia. On 17 October 2019, the company held its 2019 Annual General Meeting (AGM), wherein it carried six resolutions.

While addressing the shareholders at the AGM, the company’s chairman highlighted strong revenue and profit growth achieved by the company in FY19. The chairman also highlighted:

• Underlying revenue was up 21.4% year-on-year to $688 million;
• Underlying earnings before interest, tax and amortisation (EBITA) was up 17.8% to $193 million;
• Underlying net profit after tax (NPAT) was up 19% to $89 million;
• Statutory NPAT, which includes net non-trading gains, was up 36.9% to $103.8 million;
• Underlying diluted earnings per share (NPAT) was up 16% to 11.27 cents per share.

Prompted by the strong performance of the company, the Board had decided to pay fully franked total FY19 dividends of 8.5 cents per share for the year, up by 13% on last year.

At the AGM, it was highlighted that, since listing in 2013, the company has grown its underlying EBITA from $57 million to $193 million at 30 June 2019 and underlying NPAT from $28 million to $89 million at 30 June 2019.

During FY19, the company made a total investment of $136 million in earnings per share accretive businesses, including seven new acquisitions and 12 increases in its equity holdings in Steadfast Network brokerages and underwriting agencies. The company recently announced the successful completion of the IBNA transaction which added 79 brokers to the Steadfast Network and which will be accretive to the company’s profit.

During FY19, Steadfast Network’s gross written premium (GWP) increased to $6.1 billion, which is 16% higher than FY19. Steadfast Group highlighted largest general insurance broker network in Australasia with 398 brokers prior to the completion of IBNA acquisition.

Steadfast Network GWP ($bn) (Source: Company’s Reports)

In FY2020, the company is expecting to earn underlying EBITA of $215 million- $225 million and underlying NPAT of $100 million- $110 million.

In the past six months, SDF stock witnessed an increase of 13.92% as on 17 October 2019. At market close on 18 October 2019, SDF stock was trading at a price of $3.660, up by 1.667% intraday, with a market cap of $3.06 billion.

Bravura Solutions Limited (ASX: BVS)

Bravura Solutions Limited (ASX: BVS) provide solutions across multiple business lines, including products for wealth management, eBusiness, funds administration as well as life insurance administration services.

The company already has a strong sales pipeline across its key markets and across its geographic regions, and in addition to this its strong market credentials is driving a pipeline of contracted work from existing clients.

In FY19, the company delivered outstanding results across all key metrics, driven by robust demand across the Bravura product suite and operating leverage expansion.

In FY19, the Wealth Management segment achieved healthy growth, with revenue increasing by 14% and EBITDA by 17%, primarily due to the company’s flagship offering, Sonata. During FY19, the company delivered complex implementation projects for new Sonata clients across key geographic markets, as well as met strong demand among the company’s existing global client base for additional functionality.

Strong FY19 financial Results:

• Group FY19 revenue increased by 16% to $257.7 million, as compared to FY18;
• Group FY19 EBITDA increased by 27% to $49.1 million as compared to FY18;
• Group FY19 NPAT increased by 21% to $32.8 million as compared to FY18;
• Unfranked final dividend declared of 4.8 cents.

In the past six months, BVS stock witnessed a decline of 33.45% as on 17 October 2019. At market close on 18 October 2019, BVS stock was trading at a price of $4.030, up by 7.181% intraday, with a market cap of $915.97 million.

To read more about BVS click here.

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