Coca Cola Amatil, Stockland, QUBE Holdings, Healthscope and Fairfax Media - First Impressions from Reporting.

Bell Potter


Coca Cola Amatil (CCL):  Divisional highlights:Australia Beverage volumes down 2.1%. EBIT down 1.8% to $455.3m, EBIT margin up 0.3ppts to 17.1%; NZ & Fiji volumes up 9.6%. EBIT up 6.9% to $105.6, EBIT margin down 02ppts to 19.1%; Indonesia and PNG volumes up 6.2%. EBIT up 42.9% to $69.6m, EBIT margin up 2.1ppt to 6.6% -helped by new route-to-market strategy); Alcohol and Coffee EBIT up 31.1% to $44.7m, EBIT margin up 0.6ppts to 8.4% (Strong performance from Paradise Beverages in Fiji also helped sales and profit growth. | Net operating cash flow up 23.6% to $774.8m. | On Market buyback $350 million: The company announced $350 million share buyback, which equates to 4.6% of shares outstanding based on 21st February 2017 close of $9.91. Commences from late March 2017 and will be valid for 12 months. Outlook: Management reiterated mid-single digit EPS growth target. Management anticipates that future dividends would have lower franking than current levels.


Stockland (SGP):   Funds from operations per security up 6.2% to 15.4 cents | NTA up 3.4% to $4.00 (current price $4.57) | Total Commercial Property FFO up 7.3% to $312m; Commercial Property achieved comparable FFO growth of 3.7%, occupancy 96.1%. Total MAT up 2.7%, driven by
2.5% growth in specialties | Logistics and Business park comparable FFO growth 2.9% following strong leasing activity. Portfolio occupancy increased from 94.6% in 1H16 to 96.1% in 1H17 | Office comparable FFO growth 6.6%, occupancy 93.5% down from 95.4% in pcp | Residential operating profit up 1.4%, 2853 lots settled- up 3% on pcp. | Outlook: On track to return FY17 Distribution Per Security (DPS) of 25.5 cents, up 4.1% on FY16. Guidance for FFO growth tightened to 6-7% per security in FY17, which is at the higher end of previous guidance of 5-7%, assuming no material decline in market conditions.


QUBE Holdings (QUB):   Segment EBITA: Logistics up 8.9% to $36.7m; Ports &Bulk up 3.6% to $35m; Strategic Assets down 90.8% to $2.9m. | Moorebank potential customer in next 6-9 months is ahead of expectations AND Weaker than expected performance of Patrick Terminals. | Net operating cash flow down 1% to $115.2m. | Outlook: Management has maintained guidance of earnings growth from both operating divisions in FY17, as well as increase in underlying NPAT. Delivery of Patrick cost efficiencies is in-line with prior expectations.


Healthscope (HSO):   Operating cash flow increased to $224.5m (1HFY16: $179.4m) representing an Operating EBITDA to cash flow conversion ratio of 103.5% | Hospitals Operating EBITDA up 2.2% to $186.7 million. Hospital margins improved 93 bps to 18.6% (Labour, procurement and revenue initiatives as well as cost control). | New Zealand Pathology Operating EBITDA growth of 31.5% to $30.5 million, margin down 50bps to 21.9%. | Outlook: “At this stage, we expect ongoing variability in the hospitals sector to continue in the near term. If current trends continue, we expect the rate of growth in Hospitals Operating EBITDA in the second half to be similar to the first half.”


Fairfax Media (FXJ):   Segment EBITDA: Domain down 12.8% to $57.3m; Aust Metro Media down12.2% to $27.7m; Aust Community Media down 4.7% to $43.1m; NZ Media dow n6.2% to $25.9m; Macquarie Media up 11.2% to $13.3m. | Cost reduction programs underpinned a 5% decline in operating expenses to $758.4m. | Net operating cash flow up 3.4% to $82.5m. | Outlook: “Trading in the first two weeks of February saw revenues around 6% below last year. Trading in January saw revenues around 10% below last year in a slower than usual start across the media industry. New real estate listings have seen some early signs of improvement in February following the weak FY17 H1 performance.”



Bell Potter Securities is a leading Australian stockbroking, investment and financial advisory firm that provides a comprehensive offering of financial services to a diversified client base that includes individuals, institutions and corporations.

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