Company Updates

In this note, we take a look at the health of the Australian banking sector and how it is positioned to absorb the invariable rise in credit costs as businesses shutter and unemployment rises.

We provide an update following 1H20 results and settlement of Noosa Civic Shopping Centre

We provide an update following government mandated shutdown of non-essential services.

We provide an update following recent results from Sunland.

We look at the RBA’s latest series of decisions and implications.

On 28 February 2020, Pioneer Credit Ltd. released its financial results for the six months ended 31 December 2019 which were impacted by funding constraints that were placed on the Company during the period.

IMF’s 1H20 results provided very few surprises, underpinned by a number of case wins, with gross proceeds from litigation cases of AUD143m. We also note that as of 5 March, 2020, IMF officially changed its name to Omni Bridgeway Limited.

On 27 February 2020, Zip Co Ltd released results for the first six months ended 31 December 2019. Momentum remains strong, with asset quality also remaining sound.

On 28 February 2020, CML Group Limited (CML) released results for the first six months ended 31 December 2019. Overall performance was sound and largely in line with expectations.

We provide an update following NextDC’s 1H20 results.

We provide an update on David Jones following 1H20 results, which were comparatively softer owing to 1H19 following lower foot traffic from bushfires and softer consumer confidence.

We provide an update following 1H20 results from Ovato.

We provide an update an update on Seek following 1H20 results.

On 17 February 2020, Elanor Investors Group (Elanor, Company) announced 1H20 results. During 1H20, Elanor grew funds under management (FUM) by acquiring new real estate assets and establishing new funds, including Elanor Wildlife Park Fund. Growth in FUM supported core earnings growth, as Elanor receives fees for meeting performance hurdles of managed assets. On a like-for-like basis, costs were broadly in line with 1H19 and the Company remains compliant with all its covenants.

On 14 February 2020, Maurice Blackburn (MB, Company) announced 1H20 results for the six months ended 31 December 2019. Total revenue, consisting of service and litigation revenue, was broadly in line with 1H19. However, MB reported lower NPAT in 1H20, owing to a large one-off adjustment which related to how the Company calculates exit payments in 1H19. Given the seasonality in revenue we expect 2H20 to be stronger for MB. Furthermore, we expect stronger free cash flow generation driven by improvements in working capital, as the Company is expected to experience a significant reduction of work in progress.

We provide an update on Next Generation following FY19 results and commencement of construction at Doncaster.

On 14 February 2020, Mercer International (Mercer, Company) announced FY19 results. Results were mixed, with the Company reporting growth in revenues. However, increased maintenance downtime and higher operating costs led to sharp declines in EBITDA and a net loss for FY19. While liquidity remains sound, Mercer reported softer credit metrics.

On 13 February 2020, AMP Limited (AMP, Company) reported its full-year results for the year-ended 31 December 2019 (FY19). The Company reported a headline net loss after tax of AUD2.5bn, stemmed from a predominantly non-cash impairment of AUD2.4bn previously announced.

On 12 February 2020, Centuria Capital Group (Centuria, Group) announced its 1H20 results. Results were relatively stronger, representing significant growth in Centuria's assets under management. While reducing debt, the Group also recorded growth in revenues, net operating profit and cash flow from operations. Centuria also announced it had entered into an agreement to acquire a real estate funds management company in New Zealand.

On 13 February 2020, The Geo Group Inc (GEO, Company) announced FY19 results for the 12 months ended 31 December 2019. Despite headwinds in the form of political scrutiny and reduced support from financial institutions, results were sound. GEO reported revenue growth whilst improving its credit metrics. Additionally, the Company entered into new contracts with government departments whilst broadly maintaining the number of revenue generating beds.