Global coronavirus crisis has transformed the world in the duration of a mere few months. The impact of the pandemic can be felt on every sector, which has further developed health and economic crisis among people. However, countries affected by it are taking effective measures to contain the spread of virus. COVID-19 has led the businesses to experience slowdown in terms of their respective growth.
In this backdrop, let us acquaint ourselves with the latest business updates of four ASX-listed companies- PET, MGR, QUB and GPT.
Phoslock Environmental Technologies Limited
Phoslock Environmental Technologies Limited (ASX:PET) provides solutions such as designing, engineering and project implementation for water related projects and water treatment products.
No Impact at Changxing factory amid COVID-19 Crisis: On its business update front, for China region, PET mentioned that the COVID-19 pandemic has affected growth of most of the businesses globally within past months. However, Phoslock’s China projects and Phoslock® production at its Changxing factory remained unaffected by the virus. All three major projects of PET are located in Yunnan province, which is essentially unaffected by COVID-19. The contract value of the Shilongba restoration has increased in size to $25 million, out of which $20m to be wrapped up in FY20.
Highlights from the Quarter closed March 2020:
The Company recently notified the market with performance of March 2020 quarter and outlined the following:
- In April 2020, the Company commenced capital raising to raise around $20 million in new equity. Out of which, $12 million would be raised from institutional placement, a Share Purchase Plan to raise $5 million and $3 million to be invested by the directors and officers personally. These funds would accelerate its rapidly growing business opportunities in China and elsewhere.
- During the quarter, the receipts from customers and government grants stood at $2.8 million. It spent $0.6 million for leasing costs for the new Changxing factory plus the annual rent of existing factory.
- The Company’s current project pipeline stood at $380 million, which comprises of $250 million in China, as well as $130 million of new International projects.
- On the cashflow front, net cash used in operating activities stood at $6.540k. Also, net cash used in investing activities was recorded at $29k. The Company’s cash and cash equivalents at close of quarter period was noted at $9.409k.
The stock of PET was trading at $0.52 per share on 1 May 2020, indicating a fall of 2.804% (at AEST 11:31 AM). On the same date, the total outstanding shares stood at 588.99 million. The stock of PET has provided shareholders the returns of 12.63% and -43.68% within the time span of one month and six months, respectively.
Mirvac Group (ASX:MGR) is in real estate investment, development and property asset management. Recently, the Company has notified the market with the operational update for Q3 FY20.
A few pointers from the same are as follows:
- Office & Industrial division of the Company has been concentrating on working with its commercial and retail tenants to develop safe and productive working environments, as well as supporting tenants in need since the outbreak of COVID-19.
- The Company has maintained occupancy of 100% and 98.5%, with a WALE of 7.3 years and 6.6 year in industrial and office division, respectively.
- With respect to Industrial, MGR has completed around 28,000 square metres of leasing activity till 30th April 2020.
- As at 31st December 2019, gearing of Mirvac stood at 20.8 % and the weighted average debt maturity was 7.7 years, along with a very diversified and well spread debt maturity profile. This reflects that MGR has strong balance sheet.
Considering the uncertainty arising from the duration and impact of the COVID-19 pandemic, the Company has retracted its FY20 earnings and distribution guidance. Mirvac’s purpose and unique urban asset creation capability places it well to capture opportunities and generate value, across the recovery process and beyond, despite the near-term negative economic impact.
The stock of MGR was trading at $2.100 per share on 1 May 2020, indicating a fall of 6.25% (11:48 AM). On the same date, total outstanding shares stood at 3.93 billion. The stock of MGR has provided shareholders the returns of 12.00% and -30.86% within the time span of one month and six months, respectively.
Qube Holdings Limited
Qube Holdings Limited (ASX:QUB) provides comprehensive logistics solutions throughout multiple aspects of the import-export supply chain.
Conclusion of Institutional Entitlement Offer
On 1 May, Qube notified the market on the conclusion of the Institutional Entitlement Offer of its fully underwritten 1 for 6.35 accelerated pro-rata non-renounceable entitlement offer (as notified on 30 April). The institutional component raised around $264 million at $1.95/share.
Qube’s suspension from official quotation
Further QUB announced that it will be suspended from quotation immediately as per Listing Rule 17.2, at its request, pending release of an update with regards to the resumption of trading in Qube’s securities.
Equity Raising to Pursue Growth Opportunities:
- The company has recently announced fully underwritten 1 for 6.35 accelerated non-renounceable entitlement offer at $1.95 per share to raise $500 million (Equity Raising) in order to provide additional balance sheet flexibility.
- QUB added that it would issue around 256 million new shares in the entitlement offer, representing around 15.7% of Qube’s existing issued capital.
The company had liquidity position of $470 million after adjusting for the 1H FY20 interim dividend, with no near-term debt maturities, and material headroom to its covenants as at 31st March 2020. Despite the near-term challenges as a result of COVID-19, its diversified business is resilient and its long-term strategic growth priorities are unchanged.
The stock of QUB last traded at $2.210 per share on 24th April 2020. The total outstanding shares of the Company stood at 1.63 billion. The stock of QUB has provided shareholders the returns of 18.82% and -33.03% within the time span of one month and six months, respectively.
GPT Group (ASX: GPT) is one of the leading property groups of Australia, which owns and manages a portfolio of retail, office and logistics property assets throughout Australia.
Availability of Decent Liquidity
The Company recently updated the market with the operational performance for March quarter 2020 and outlined the following:
- During the quarter, GPT executed unprecedented measures in response to the COVID-19 pandemic such as social distancing.
- GPT completed office leasing activity of 27,600 square metres with portfolio occupancy of 97.5%. GPT acquired a fully leased logistics asset for $32.4 million (21-23 Wirraway Drive in Port Melbourne), with a WALE of 5.7 years and reflecting a capitalisation rate of 5.125%.
- On the liquidity front, GPT has available cash and undrawn bank facilities amounting to $1.27 billion, with less than $5 million of debt maturing through to December 2021. GPT possesses A / A2 credit ratings from S&P and Moody’s respectively.
- In light of uncertainty with respect to the duration and impact of the coronavirus, the Company has suspended its FY20 FFO and distribution guidance.
The stock of GPT was trading at $3.810 per share on 1 May 2020 (at AEST 1:09PM), indicating a decline of 9.929%. On the same date, the total outstanding shares stood at 1.95 billion. The stock of GPT has provided shareholders the returns of 18.82% and -31.11% within the time span of one month and six months, respectively.
There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.
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