Updates and Full-Year Results of the Stocks - WLD, LBL, DW8

  • Aug 21, 2019 AEST
  • Team Kalkine
Updates and Full-Year Results of the Stocks - WLD, LBL, DW8

In this article, we discuss three stocks with recent announcements released to the market on 20 August 2019. Concurrently, the benchmark index S&P/ASX 200 was trading at 6473, down by 71.3 points or 1.1% (at AEST 1:00 PM).

Wellard Limited (ASX: WLD)

On 20 August 2019, the company announced the sale of M/V Ocean Swagman for USD 22 million. Accordingly, the company would proceed with the sale of M/V Ocean Swagman to Heytesbury Holding Company Pty Ltd.

Reportedly, the transaction includes a bareboat charter of the vessel back from Heytesbury to Wellard following the completion of the sale, which is anticipated to be completed on or before 30 September. Besides, the approval was pending from the board of Trim Shipping SA – a subsidiary of Nova Marine Carriers SA of Switzerland by the deadline of 19 August 2019. Therefore, the condition precedent for the sale of Nova for US$25.2 million was not fulfilled.

M/V Ocean Swagman (Source: Company’s Website)

As per the release, the company has been working with Heytesbury to complete required documentation, and it anticipates agreeing on the terms of Memorandum of Agreement for the vessel sale along with Bareboat Charter in upcoming days. Besides, the conditions were confirmed and completed by Heytesbury, involving financing, due diligence and vessel inspection.

Further, the conditions left for the completion include satisfactory standstill with the company’s noteholders, WLD shareholder approval of the sale and lease back, bank consents, key shareholder support, and complying with Singapore law requirements.

Previously, the company had notified that Heytesbury holds 11.42% interest in the company. As a related party transaction, the company would schedule a shareholder meeting via a notice to seek approval for Heytesbury transaction. Meanwhile, an independent expert report would be included in the notice of the meeting.

On 6 August 2019, the company had notified regarding the acceptance of a proposal to sell the M/V Ocean Swagman for US$25.2 million to Trim Shipping SA, Panama. Accordingly, the offer was of US$3.2 million higher than the proposed offer by Heytesbury for US$ 22 million.

WLD’s stock last traded at A$0.042 on 19 August 2019.

Laserbond Limited (ASX: LBL)

On 20 August 2019, the company reported full year results for the period ended 30 June 2019. Accordingly, the total revenues of the company were up by 44.9% to $22.6 million in FY19 compared with $15.64 million in FY18. Besides, the NPAT for the period was $2.8 million, up by 190.3% from $0.96 million in FY18. Consequently, the EPS for the period was recorded of 2.972 cents, up by 185.8% from 1.04 cents in the previous year. The company declared fully franked dividend of AU 0.5 cent per share payable on 11 October 2019 with a record date on 13 September 2019 and ex date of 12 September this year.

Services Segment

Reportedly, the division accounted for revenues of $11.175 million in FY19, representing a growth of 11.3% over pcp. The NSW facility contributed to 87.8% of these revenues while it posted a growth of 9.3%. Besides, the second half was muted compared with the first half, because of the capacity constraints due to the manufacturing of equipment for technology segment sales.

The company anticipates the segment would continue to provide growing revenue at similar rates, driven by increasing customer demands, and escalated capacity & capability improvement through the investments in equipment and human. Besides, the company expects profit margin to improve driven by productivity improvements through investments in resources.

Products Division

Reportedly, the segment accounted for revenues of $9.132 million, up by 62.8% over the pcp. The focus on South Australian facilities has been on products representing more than half of the revenues, and the rest of the portion was achieved through contract manufacturing of products.

Meanwhile, the company expects the segment would benefit from the investment in human capital and equipment, and improved output backed by the commissioning of LaserBond® cladding system. Therefore, it is expected that the growth in revenues from the segment would continue to improve.

Technology Division

As per the release, the company has developed global recognition in laser cladding solutions, and the components were exported to the US, Canada, South America, South Africa, Europe and Asia. Laserbond’s historical experience in research & development of an application that enables the best wear performance results to have the edge over the new players in the market. Meanwhile, the company executed technology sale to multi-billion-dollar international manufacturer. Also, training & support would continue across a seven-year duration. Presently, the equipment is completely installed and operational for license fee returns beginning in FY2020 period.

Four Year Plan (Source: LBL’s Investor Presentation to Finance News Network, May 2019)

Outlook: Reportedly, the company is targeting double digit revenue growth from services & product divisions, and the increasing customer base for equipment, licensing and consumables from the technology division. It is expected that net profitability rates would remain similar to those achieved in FY2019.

Meanwhile, the board of the company also remains focused on the strategic plan to achieve $40 million in revenue in three years. In order to achieve this, the company would restructure the organisational hierarchy to provide successful management team, which would reduce reliance on Executive Directors for operational matters.

Besides, the company intends to increase the capacity and capabilities of all the facilities via an improved shop floor shift structure to increase capacity & optimising burden on select staff. Process optimisation would improve machine running time and efficiency along with ongoing improvement of the skill, capabilities of the operational staff.

Further, it would emphasise on international business development, and continued investment in resources, acquisitions opportunities to tap growth or development of additional greenfield sites in strategic domestic & international locations.

On 21 August 2019, LBL’s stock was trading flat at A$0.565 9 (at AEST 12:43 PM).  Over the last one-year period, the stock has given a positive return of 213.89%.

Digital Wine Ventures (ASX: DW8)

On 20 August 2019, the company updated on the launch of solution service. Accordingly, the company would be launching its innovative supply chain solution (WINEDEPOT) as the principle sponsor partner of the Wine Industry IMPACT Conference scheduled for 17-18 September in Orange, NSW.

Australian Wine Market (Source: DW8’s Investor Update, July 2019)

Reportedly, the company expects to commence onboarding consumers in the upcoming weeks, and revenue generation is expected to start in the second half of 2019. Surprisingly, there has been interest from the craft spirit, beer and cider producers, who are willing to utilise the platform as an end-to-end supply chain solution.

Besides, it represents substantial demand in the beverage industry catering towards direct-to-consumer market, and as more brands recognise ecommerce as brand building & sales channel. Further, Dean Taylor, CEO of the company, is confident that the platform would not only serve the local wine industry but the international brands as well. Particularly, the New Zealand wine producers could use the platform, as New Zealand accounts for almost half of the wine imports in the country.

Dean Taylor, CEO of Digital Wine Ventures, stated that the company has only initiated advertising & marketing, and the initial response has been very positive, and the enquiries have been coming up from all sides of the industry. He mentioned that in the just two weeks duration, over fifty suppliers have had pre-registered, and these suppliers include small boutique micro producers to some of the largest wine businesses in the nation.

He further anticipates numerous online retailers & marketplaces to utilise the WINDEPOT for improving the customer service levels, expansion of their ranges and cutting down the amount of carried inventory. The platform allows suppliers to deliver 85% of the orders nationally within 24 hours at a cost that could easily absorb in their margins.

On 21 August 2019, DW8’s stock was trading flat at A$0.007, flat (at AEST 12:59 PM).


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