Today’s Headlines

• ASX 200 continues rally as results cheer, up 45 to 5996
• High 6003 Low 5956.
• Results the focus. Volatility again.
• Joyce quits as Deputy PM.
• Banks rally as CBA brushes aside concerns AUSTRAC.
• Resources bouncing back.
• AUD slips a little to 78.22c
• Bitcoin starts to slip US$9,840.
• US futures up 66 points.
• Asian markets modestly higher with Japan up 0.36%. China up 0.03%.

STOCK STUFF

Movers and Shakers

• MQG -0.73% slips on US Infrastructure company contract loss.
• DMP +1.11% company clarifies CEO sales
• AX1 +18.54% good results.
• BAL +8.05% recovery on track.
• S32 +6.69% shorts covering.
• MLB +6.39% director buying.
• OZL +4.79% broker upgrades following result
• KDR +5.60% lithium plays back.
• LOV +8.47% broker upgrades.
• STO -0.19% reappoints Comet Ridge as agent for Mahalo block.
• APA -trading halt – entitlement offer.
• WTC +7.85% bounce is in on broker confidence.
• PTM -11.76% Neilson to step back.
• TGR +8.52% good results.
• IRE -2.46% broker downgrades.
• APT -4.52% profit taking.
• YOJ -2.27% falls on GSW issues.
• MEA +8.33% appoints Geoff Lucas CEO.
• PHK +14.55% promising report.
• BUB +11.18% broker confidence after JD.com deal.
• BIG remains suspended
• Speculative stock of the day: Resapp (RAP) +30.00% been in the wilderness for some time. Seems nothing special but big volume.
• Biggest risers – NXT, MYX, LOV, REG, BAL and WTC
• Biggest fallers – NAN, CIA, PTM, SXL, APT and IMF

TODAY

• NextDC (NXT) +10.36% 1H result. The company has reported a better than expected result on the back of higher utilisation levels and project fees allowing for a guidance upgrade. Revenue up 32% to $77.5m, underlying EBITDA up 41% to $33.6m and profit after tax came in at $8.4m, down 54% from last year’s $19.3m however 1H17 profit after tax included a one off $11.3m benefit. FY18 Revenue guidance was upgraded to between $152m-$158m from between $146m-$154m, and underlying EBITDA guidance to $58m-$62m from $56m-$61m.
• Woolworths (WOW) –2.60% 1H interim results. Total revenue $30.0bn, up 3.8%. EBIT $1.4bn, up 9.9%. Group Net profit $969m, up 37.6%. EPS 69.7c, up 13.7%. Australian Food comparable sales up 4.9%. Endeavour Drinks up 4.8%. Big W sales up 1.1%. Hotels up 4.0%, petrol up 5.1%. Overall customer satisfaction increased to 84% from 80% on the pcp. WooliesX was successfully rolled out to over 1,000 Australian food sites. The company said it is set to accelerate in the 2H. Dan Murphy’s posted strong sales however Endeavour Drink’s gross margins declined 13bps to 23% due to a competitive market environment, a change in sales mix and minor reclassification of costs. Big W’s gross margin declined 30bps to 31.8% reflecting price reductions and planned markdowns in apparel. Meanwhile, Hotels gross margin increased by 178bps due to favourable changes in business mix and better buying. CEO said there will be a moderation in sales growth for the 2H on the back of the company cycling a strong 2H17. He went on to say investment in IT, digital and data is the key to the company’s transformation.
• MYOB Group (MYO) +2.13% Full year results. Revenue +12.4% pcp to $416.5m, Underlying EBITDA +10.8% pcp to $189.9m and NPAT +16.3% pcp to $60.7m. The final dividend of 5.75c represents a pay-out ratio of 66% and brings the final dividend to 11.5c . The company said it achieved 60% subscriber growth in the year and is on track to reach 1m online subscribers by 2020.
• Mayne Pharma (MYX) +10.71% CEO Scott Richards said the 1H performance reflected a challenging generic environment and a disappointing specialty brands result. Revenue down 17% to $243.3m and adjusted EBITDA came in at $70.2m, down 36%. The net loss after tax of $174.2m was driven by asset impairments, stock obsolescence, restructuring expenses and restatement of deferred tax assets and liabilities following the US tax rate change.
• Automotive Holdings Group (AHG) +4.93% 1H results. NPAT was down 2.4% pcp to $39.9m, revenue was up 7.5% to 2.87bn. Interim dividend of 9.5c. The company said that the focus on restructure and margin improvement has allowed them to make the most of challenging and competitive market conditions whilst it will continue to review performance of different business segments and whether there is a need to divest or restructure them. The managing director went on to say the FY18 outlook will be dependent on the timing of the sale of the refrigerated Logistics business but the broader market for vehicle sales looks positive.
• Platinum Asset Management (PTM) -11.76% CEO Kerr Neilsen will step down.
• Shaver Shop (SSG) +3.12% 1H result. Total sales +19% to $93.4m, NPAT up 9.2% to $6.9m, fully franked interim dividend up 12.5% to 1.8c. CEO Cameron Fox commented that strong online sales growth and increasing exposure to female customers helped offset a weaker December. The company plans on continuing its focus on e-commerce and the female demographic into FY18.
• Nanosonics (NAN) – 12.08% its net profit for the six months to December 31 fell to $2.2m, from $22 million in the year-ago period and sales declined to $30m from $36.1ma year ago. Full year operating expenses are now expected to be around $48m, with the figure reflecting an increase in research and development expenditure in the second half.
• Commonwealth Bank (CBA) +1.09% rejected most of AUSTRAC’s additional allegations and has “categorically denied” allegations in a class action that it breached continuous disclosure laws.
• Billabong International (BBG) +0.52% reaffirmed is full-year underlying earnings guidance to be just above last year, while reporting a first-half net loss of $18.3m due to lower sales and earnings in two of three regions. The company is under takeover currently with a cash bid of 100c. Grant Samuel noted the underlying equity value of Billabong is between $190m and $239m, equivalent to 96c -120c per share.

ECONOMIC NEWS

• Nothing today
• Barnaby Joyce resigns as leader of the Nationals.

BOND MARKET UPDATE

ASIAN MARKETS

• Japan’s national consumer price index came in at 1.4% y/y versus 1.3% expected. Excluding fresh food, prices rose 0.9% y/y versus 0.8% expected. Finally, removing food and energy, inflation was 0.4% versus 0.3% expected.
• The Chinese government will take over Anbang Insurance Group for a year and prosecute founder Wu Xiaohui. Wu, who was the company’s chairman, was detained by authorities in June.
• US regulators have blocked the $580m acquisition of a semiconductor test equipment maker by a state-backed Chinese fund.

EUROPE AND US MORNING HEADLINES

• With just slightly over a year to go before the UK leaves the EU, it continues to look like a ‘dogs breakfast’. The clock is ticking, and PM May is struggling to get the party behind her.
• This is how silly the markets have now become. Kylie Jenner tweets she no longer uses Snapchat and the company share price gets wiped out with a drop of U$1.6bn in value. Hope she was short. Meanwhile creator Evan Spiegel looks to be in line for a US$638m payday making him the best paid in 2017.
• Looks like the UK tax authorities are going after the multi-national tech giants again as the HMRC is looking at taxing revenues rather than profits with a VAT style payment. Not going to happen but interesting thought bubble.
• US regulators have blocked the $580m acquisition of a semiconductor test equipment maker by a state-backed Chinese fund.

 

And finally……………

Paddy goes into a bar and orders seven shots of tequila and one Guinness.

The barman lines up shots and goes to get the Guinness.

When he comes back with the pint, all seven shots are gone.

The barman says: “Wow! You sure drank those fast.”

Paudie explains: “You would drink fast too if you had what I have.”

The barman asks: “What do you have?”

The guy reaches into his pocket and says: “Fifty cents!”

 

 

Gerry Connors walked his dog through the village every day.

One day Mr Connors is on his walk without the dog.

His pal Billy sees him and asks: “Where is your dog?” Mr Murphy answers: “I had to have him put down.” “Was he mad,” asks Billy.

“He wasn’t too pleased,” Mr Murphy replies.

Have a great weekend …may the Dow be with you.

Clarence

XXX