Quick Update on CSR, AX1, AST, IPL, NHC, ALU, CAR

Quick Update on CSR, AX1, AST, IPL, NHC, ALU, CAR

After rising 1.3% on 11 May 2020, the Australian benchmark index S&P/ASX 200, dropped by 1.07% to close at 5,403 points on 12 May 2020. Several stocks registered a fall in their prices, thereby impacting their respective indices. A major number of indices closed in the red zone with a very few exceptions.

Let us look at some of the stocks that have been making headlines for today i.e. 12 May 2020, and the recent developments with these stocks.

Related: Stocks under Discussion: CIM, COH, ANO, MSB

Revenue up by 5% for CSR

CSR Limited (ASX:CSR) has released its preliminary full-year report for the period ended 31 March 2020 and reported a fall in its revenue by 5% to $2,212.5 million, and net profit after tax from continuing operations after significant items stood at $125.3 million, down 10% as compared to the previous corresponding period.

The revenue for CSR’s Building Products division was down by 6%, indicating a softness in residential building activity, which was down on average 21% during the period. The diversified business of CSR across product and market sectors has helped the business to be well-positioned in uncertain times.

CSR has been able to keep its sites fully operational and minimised disruptions for its customers, as an Australian manufacturer with core raw materials sourced locally.

With net cash of $95 million, the Company entered the COVID-19 pandemic in a position of financial strength and has strengthened its liquidity position through securing $200 million in May 2020. However, due to the uncertainty surrounding the COVID -19, the Company does not find it prudent to declare earnings guidance for YEM21.

Non-Executive Director Resigns from Accent

Accent Group Limited (ASX:AX1) announced that its non-executive director, Brett Blundy has resigned from the role with effect from 12 May 2020 and Mr Bundy shall offer advisory services to Accent Group under an agreement with the Company.

The new agreement shall help the Company to develop and sustain strategically valuable connection with Brett Blundy, as well as with the entire BBRC Group globally, which owns approximately 18.2% of Accent Group’s shares.  

AusNet’s Revenue up by 6.2%

AusNet Services Limited (ASX:AST) reported revenue from ordinary activities of $1,977.6 million, up 6.2% for the year ended 31 March 2020 and Net profit from ordinary activities after tax attributable to shareholders was $290.7 million, indicating a growth of 14.5%.

AST looks forward to undertaking natural disaster pass-through mechanisms under its electricity distribution business’ regulatory framework, assuming the magnitude of the bushfire event in FY2020. Moreover, as a result of the COVID-19 pandemic, the Company had introduced a suite of measures to support its customers experiencing hardship.

As an effect of the accounting for AST’s cumulative over-recovery (at 31 March 2020) of volume charges above those assumed in its pricing structures, the Company expects its regulated revenue to fall by $12.7 million for CY2020 and CY2021.  

Currently, a Dividend Reinvestment Plan is in operation for the FY2020 final dividend where eligible shareholders participating in the DRP shall be AusNet Services shares at the average trading price.

Incitec Concludes Capital Raising

Incitec Pivot Limited (ASX:IPL) has successfully concluded fully underwritten institutional placement to raise $600 million through the issue of 300 million new fully paid ordinary shares to institutional as well as professional investors at a price of $2.00 per Share.

The Company’s intention to raise capital was well-received by both domestic and offshore institutional and professional investors, and around 98% of the shares were allocated to existing IPL shareholders.

The placement was intended to fortify the balance sheet of the Company to increase flexibility in the current environment and ensure financial flexibility to pursue controlled organic growth opportunities.

Other than the placement, IPL also intends to raise up to $75 million through a non-underwritten share purchase plan, where existing shareholders shall have the opportunity to apply for up to $30,000 of new fully paid IPL ordinary shares free from brokerage fees or commission or other transaction costs.

The shares issued under the SPP shall be ranked equally with current IPL ordinary shares from the date of issue, and the SPP offer is scheduled to close at 5.00 PM (AEST) on 9 June 2020.

New Hope Announces CEO’s Retirement

New Hope Corporation Limited (ASX:NHC) announced the upcoming retirement of Shane Stephan, CEO and Managing Director of the Company scheduled for 31 August 2020. Mr Stephan has served the organization for around 11 years firstly as CFO and was later positioned as the CEO of the Company in February 2014.

Chairman, NHC, Robert Millner, commented:

“Shane has led the Company through challenging times associated with the process of seeking the approvals for the New Acland Stage 3 extension. He has also led the Company through a period of growth, with the acquisition of the Company’s 80% interest in the Bengalla Mine. Sales tonnages have more than doubled during his tenure as CEO, whilst the Company has maintained its record of tight cost control.”

Shane Stephen was optimistic about the ability of the Company to continue to generate strong returns for shareholders through its quality of the assets, robust balance sheet as well as a talented management team.

ALU Well-positioned with Strong Balance Sheet

Electronic design software company, Altium Limited (ASX:ALU) is commercially as well as operationally well-positioned, notwithstanding the continuing COVID-19 market conditions. However, at the same time, the perpetuation of the restrictions and its impact on the economic and societal aspects are expected to influence the performance of the Company in Q1 of the current year.

The Company has been engaged in working intensely to deliver a solid Q4 result within the unprecedented COVID-19 environment and had launched attractive pricing and extended payment terms to drive volume in challenging market conditions.

Moreover, the Company had also introduced its new digital online sales capability in order to bolster its transactional sales capacity and is expected to take some time to fully ramp up but shall play an integral role in achieving the 100,000 subscriber target by 2025.

ALU stands as a profitable and financially very strong business with a robust balance sheet and an existing cash balance of over USD 77 million.

Related: 5 Stocks Under Spotlight- LVT, CCP, NUF, RHC, COH

Carsales.Com Withdraws FY20 Outlook

Carsales.Com Limited (ASX:CAR) had withdrawn its FY20 outlook statement and found it difficult to offer precise financial guidance for FY20 due to the volatility of the existing operating environment. Moreover, in an attempt to support trade customers of carsales as well as its industry, the Company has

  • Waived all its fixed and variable advertising charges for April and offered a 50% discount in May
  • Deferred payment of April and May advertising invoices by 30 days

Through this, CAR is optimistic about the reduction in short-term operating costs of dealers and determines a strong commitment of carsales for supporting the Australian industry it serves through these difficult times.

The amplified social distancing measures rendered to a reduction in buying and selling activity on carsales, thus influencing the revenue performance throughout the operating segment. However, the SK Encar business continues to perform well in South Korea with the economic activity to date been materially less impacted in South Korea as compared to many other first world countries.

Let’s now take a look at the closing price of the stocks discussed above, as on 12 May 2020.

Stock Information

 

 


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