Why are investors looking at these stocks - AFC, NTL, IKE, and MFT?

  • Jul 11, 2020 NZST
  • Team Kalkine
Why are investors looking at these stocks - AFC, NTL, IKE, and MFT?

Summary

  • Companies with FY2020 ended 31 March 2020 have recently released their results which has shifted the focus of market players from COVID-19 to Company financials.
  • AFC Group Holdings reported a drop in the revenue by 53% to NZ$1.235 million.
  • ikeGPS Group delivered record revenue growth of 23% to ~NZ$9.8 million. Continuous improvement in the performance seen in Q1 FY2021.
  • Mainfreight noted an increase in operating revenue by 4.8% to NZ$3.10 billion.

Several companies listed on the NZX have started coming up with their annual results which have made investors think on things other than the coronavirus outbreak. As annual reports provide updates on the status of a Company, their financial position, and how the Company funded the business and generated revenue, the focus of the market players shifts when companies declare their annual results. This supports them in developing new strategies and updating their existing portfolio.

In this article, we would be looking at four NZX-listed companies from diverse sectors who have recently declared or have updated on the FY2020 results.

AFC Group Holdings Limited (NZX:AFC)

AFC Group Holdings Limited is a diversified group that focuses on food research and development, manufacturing, marketing, and cross-border trade.  The group has a sales network across New Zealand, Australia, and China.

Preliminary Announcement of AFC Group:

On 29 June 2020, AFC Group updated that its financial statements were still under audit for the FY2020 ended 31 March 2020.

Brief Financial Highlights:

  • Revenue from continuing operations declined by 53% to NZ$1.235 million.
  • Net loss for the period was NZ$1.171 million, compared to NZ$0.98 million in FY2019.

The decline in profit was due to the loss of sales in China during the Chinese New Year COVID-19 lockdown along with a rise in the provision of inventory.

The net assets for the period were NZ$2.56 million, and net cash and cash equivalent stood at NZ$0.2 million.

Outlook:

In FY2021, AFC is aware of how uncertain the period will be. Hence, the Company plans to continue with its strategy to become a link bridge amongst New Zealand and China. On that front, the Company has formed a list of action plans that would support the revenue growth and revenue value to its shareholders.

Some of them include:

  • Implementation of new Livestreaming selling strategy in China.
  • Negotiated landlords to reduce 25% reduction in rent for three months.
  • Started the restructure process to cut costs.
  • All directors will take a 30% reduction in remuneration.

Stock Information: On 10 July 2020, AFC stock ended the day’s trade at NZ$0.002, in line with the previous close.

New Talisman Gold Mines Limited (NZX:NTL)

New Talisman Gold Mines Limited is a gold mining company, and it holds mining and exploration permit over the Talisman Gold mine project in the Hauraki Gold Field. The miner holds a 100% stake in the Rahu exploration project.

The Company was under discussion because of the allotment of shares under an SPP and the release of its FY2020 results. Let us discuss them one by one.

Allotment of the shares under the SPP:

On 8 July 2020, New Talisman Gold Mines announced the allocation of over 100 million ordinary shares under the loyalty share allocation linked to the 2019 Share Purchase Plan (SPP) under which the Company was able to raise NZ$3.6 million.

FY2020 Results (12 months ended 31 March 2020)

On 29 June 2020, the Company released its full-year results and reported a 54% drop in the revenue to NZ$39,511 (FY2019: NZ$86,734). There was a significant rise in loss from ordinary activities attributable to members at NZ$3.71 million (FY2019: NZ$1.20 million). Total net expenditure increased by 34% to NZ$4.83 million.

Loss from ordinary activities attributable to members consists of impairment of prospecting costs of NZ$2.76 million because of the ambiguity concerning access to land.

FY2020 Highlights:

  • First gold and concentrate produced from the pilot plant.
  • Completed NZ$3.6 million capital raising.
  • Finalized the refurbishment of the underground workings.
  • Metallurgical test work got completed.
  • Planning and designing of a larger volume plant initiated.
  • Mineral resource assessment and peer evaluation by AMC finalized.

Stock Information: On 10 July 2020, NTL stock ended the day’s trade at NZ$0.007, up 16.67% from its previous close.

ikeGPS Group (NZX:IKE)

ikeGPS Group designs, manufactures, and markets integrated data-capture tools and associated software solutions to companies in the utilities and communication space.

On 29 June 2020, the Company released its FY2020 results for the year ended 31 March 2020 and also updated on the performance for Q1 FY2021 ended 30 June 2020

FY2020 Results (Period ended 31 March 2020)

  • Delivered record revenue during the period, up 23% to ~NZ$9.8 million.
  • Gross margin for the period was ~NZ$7 million, up 30% on pcp.
  • Operating loss for the year was ~NZ$5.6 million against FY2019 figure of NZ$5.1 million.
  • By the end of 31 March 2020, the Company had net cash of NZ$5.8 million. There was no debt by the end of FY2020.

The revenue mix of the Company was from its core Communications & Utility segment, and it continued to trend positively during the period. Around 70% of the revenue was from the transaction & recurring sources.

Image Source: LKE

Q1 FY2021 Highlights:

  • IKE delivered an impressive performance in Q1 FY2021 despite the COVID-19 effect across North America.
  • The Company expects to attain revenue of NZ$2 million during the quarter, down 15% to 20% as compared to FY2021
  • IKE projected its total Cash & Receivables of NZ$5.2 million by the end of Q1 FY2020.

Stock Information: On 10 July 2020, IKE stock ended the day’s trade at NZ$0.700, down 4.11% from its previous close.

Mainfreight Limited (NZX:MFT)

Mainfreight Limited is a global supply chain company with more than 250 branches worldwide. The logistics provider offers managed warehousing and freight forwarding services around the globe.            

Announcement of FY2020 Results (period ended 31 March 2020):

On 26 June 2020, the Company released its FY2020 Annual Report for the FY2020 ended 31 March 2020. Let us look at the financial highlights:

  • Group Operating Revenue improved by 4.8% to NZ$3.10 billion.
  • Group Net Profit before Abnormals grew 10.6% to NZ$156.1 million.
  • The net profit for the period was NZ$167.330 million.
  • Declared total dividend of 59 cents per share, up 5.4% as compared to the previous corresponding period.

Performance Highlights During FY2020:

  • In Australia and Europe, the Company’s network continued to find expansion.
  • The US and Asia were the key markets for the Company, and the Company still feels to take advantage of the growth available.

Mainfreight and COVID-19:

During COVID-19, the Company’s focus was to keep the people safe, deliver vital supplies to the marketplace, operating as effectively as possible and address operating cost-effectively. During the COVID-19 crisis, the Company tried to ensure to retail positive cash flow and preserve the employment of the people.

The Company has faith in its strategies, network, and people to deliver improved results. Post the relaxation in lockdown restrictions, the Company repositioned its overhead cost structure, its management of freight movement and simultaneously highlighted its resourcefulness to function more efficiently and cost-effectively. Its sales team renewed vigour and are discovering new customer prospects, as businesses look to obtain high-quality services, from effective & reliable logistics operators.

Stock Information: On 10 July 2020, MFT stock ended the day’s trade at NZ$40.800, up 2.26% from its previous close.

 


Disclaimer
The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. The above article is NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) under discussion. Kalkine does not in any way endorse or recommend individuals, products or services that may be discussed on this site.

 

   
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