3 Stocks Making Strong Operational Progress- NST, NHC, HUB

  • Aug 27, 2019 AEST
  • Team Kalkine
3 Stocks Making Strong Operational Progress- NST, NHC, HUB

The below mentioned have come up with significant updates today (i.e., 27 August 2019). These updates are showcasing how these companies have performed lately. Let’s take a look at these updates:

Northern Star Resources Ltd (ASX: NST)

Australian gold producer, Northern Star Resources Ltd (ASX: NST) has entered into a Bid Implementation Agreement with Echo Resources Limited (ASX: EAR) to acquire all the issued and outstanding ordinary shares in Echo that it does not already own.

As per the terms of the offer, Echo Shareholder will receive a cash offer of A$0.33 for every Echo Share held, which represents a significant premium to Echo’s recent share trading, specifically:

  • 4% to Echo’s Volume Weighted Average Price (“VWAP”) of A$0.237 on 19 August 2019 (Echo’s last trading day on ASX before Echo was placed in trading halt);
  • 1% to Echo’s 10-day VWAP of A$0.232 up to and including 19 August 2019;
  • 7% to Echo’s 20-day VWAP of A$0.220 up to and including 19 August 2019; and
  • 3% to Echo’s 60-day VWAP of A$0.183 up to and including 19 August 2019

The Directors of Echo have unanimously recommended that Echo Shareholders to accept the Offer in the absence of a Superior Proposal.

On 27 August 2019, Northern Star Resources unveiled its full year results for FY19. For FY19, Northern Star reported an Underlying Net Profit of A$179 million and group EBITDA of A$480 Million. During the year, the Group Resources increased by 31% and Reserve grade increase by 16%.

FY19 Financial Results (Source: Company reports)

During FY19, the company’s three producing assets combined to sell a record 840,580koz at an AISC of A$1,296/oz, with its Australian assets achieving the top end of FY19 guidance with 639,243oz sold at an AISC of A$1,167/oz. During FY19, 6 million tonnes were milled at an average head grade of 4.7gpt Au for 813,133 ounces Au recovered. Unprocessed ore stocks available for mill feed at the end of FY19 contained 84,857 ounces Au. Gold in circuit at the end of FY19 totalled 21,753 ounces.

The production guidance for FY2020 is set at 800,000–900,000oz at an AISC of A$1,200-A$1,300/oz (refer below figure).

FY2020 Guidance Range (Source: Company Reports)

In the past six months, NST’s stock has provided a return of 32.66% as on 26 August 2019. At market close on 27 August 2019, NST’s stock was trading at a price of $11.570, down by 6.618% intraday, with a market capitalisation of circa $7.92 billion.

New Hope Corporation Limited (ASX: NHC)

Australian owned and operated diversified energy company, New Hope Corporation Limited (ASX: NHC) has released its activities report for the quarter ending July 2019. For the July quarter, the company reported total saleable coal production of 3,316K tonnes, 39% higher than the previous corresponding period (pcp). The total coal sales in the July quarter was 3,337k tonnes, 32% higher than the prior corresponding period. The July quarter results were driven by the increased ownership in the Bengalla mine.

July Quarterly Results (Source: Company Reports)

Highlights for July Quarter include:

  • Full year Australian production of 10.9 mt was the highest in the company’s history;
  • The Company’s share of coal produced at Bengalla during the quarter was 2.0mt, representing an annualised run rate performance of 10 mtpa (100% basis);
  • Good progress made towards New Acland Stage 3 approvals;
  • Integration of the management of the Bengalla operation into the New Hope business was progressed during the quarter;

During the July Quarter, the company drilled 29 holes for a total of 3,184 metres across North Surat (Taroom project), New Lenton and Captains Mountain. With this, the pre-feasibility study for the North Surat project is nearing completion.

In the past six months, NHC’s stock has provided a negative return of 48.32% as on 26 August 2019. At market close on 27 August 2019, NHC’s stock was trading at a price of $2.230, up by 3.721% intraday, with a market capitalisation of circa $1.79 billion.

HUB24 Limited (ASX: HUB)

Australia’s leading financial services provider, HUB24 Limited (ASX: HUB) has released its FY19 results today. For FY19, the company reported Underlying NPAT of $6.8 million, up 27% on FY18. The company reported Underlying EBITDA of $14.8 million for FY19, up 30% on FY18.

Prompted by the strong performance of the company, the company’s Board declared a second half dividend of 2.6cps (full year dividends of 4.6cps up 31%) to be paid on 18 October 2019.

During FY19, the company was able to maintain its position as the fastest growing platform provider in percentage terms and witnessed a growth of 54% Funds Under Administration (FUA). As at 23 August 2019, the company had Funds Under Administration of $13.6 billion. During the year, the Platform revenue increased by 36% to $54.1 million while platform expenses increased by 30% to $36.0 million

HUB24 Limited FY19 Results (Source: Company Reports)

The company’s growth in FUA is driven by organic opportunities from both existing and new adviser relationships. During the year, the number of active licensees on the platform increased by 84, taking the total number of active licensees to 253. Along with this, the number of advisers using the platform also grew by 32% with 398 new advisers joining throughout the year.

Along with strong financial growth during FY19, the company also achieved some significant milestones:

  • Moved into 2nd place in terms of annual netflows having achieved 1st place for quarterly net flows in the December quarter
  • Maintained its first-place position for Managed Accounts functionality
  • Maintained its position as the fastest growing platform provider relative to our size in percentage terms

In December 2019, the company’s operations team completed its largest transition to date bringing across the Fitzpatricks Private Wealth inhouse MDA ahead of schedule.

During FY19, the Agility Applications extended their product capability and developed several new products to support their client needs. In June, the company announced an agreement with Cashwerkz to integrate their term deposit and cash management platform into Agility’s functionality and successfully implemented the Open Markets application and infrastructure solution.

While providing the outlook, the company informed that the future of Australian Wealth Management industry is now taking shape and HUB24 is continuing to move forward with positive tailwinds and unprecedented opportunity for growth.

The company is targeting an FUA range of $22–$26 billion by 30 June 2021, an uplift on its stated target last year. The company is confident it can continue its profitable FUA growth trajectory based on the broad appeal of its platform and managed accounts solution, and its ability to innovate solutions for customers, financial advisers, stockbrokers and investment managers.

In the past six months, HUB’s stock has provided a negative return of 9.05% as on 26 August 2019. HUB’s stock is trading at a PE multiple of 81.870x with an annual dividend yield of 0.18%. HUB’s stock has a 52 weeks high price of $15.550 and 52 weeks low price of $10.130. At market close on 27 August 2019, HUB’s stock was trading at a price of $10.900, down by 1.447% intraday, with a market capitalisation of circa $692.24 million.


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