Tag: Recommendations

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Shares Technology Stocks

Vivo Is Turning the Corner on Growth as Network Investments Bear Fruit

But the market faces several challenges, including stiff competition, a fragmented fixed-line industry, and general economic weakness that has also hurt the value of the Brazilian real. The plan to carve up Oi’s (Brazilian mobile network operator) wireless assets promises to significantly improve the industry’s structure, cutting the number of wireless players to three. Vivo also holds the largest, and fastest growing, fiber network footprint in Brazil, which should allow the firm to stabilize and ultimately grow broadband market share. While results will likely remain volatile, it is expected that Vivo will prosper as Brazilians continue to adopt wireless and fixed-line data services.

Vivo is the largest wireless carrier in Brazil by far, holding 34% of the wireless market, including 38% of the more lucrative postpaid business. The firm generated about 60% more wireless service revenue in 2020 than America Movil or TIM, its closest rivals. The three carriers have agreed to split up the wireless assets of Oi, the distant fourth-place operator that has been in bankruptcy protection. If successful, the transaction could remove a sub-scale player from the industry.

Financial Strength:

The fair value estimated is USD 11.00, which is mainly because revenue growth will average about 5% annually over the next five years.

Vivo’s financial health is excellent, as the firm has rarely taken on material debt. The net debt load increased to BRL 4.4 billion following the acquisition of GVT in 2015, but even this amounted to less than 0.5 times EBITDA. Cash flow has been used to allow leverage to drift lower since then. At the end of 2020, the firm held BRL 3.0 billion more in cash than it has debt outstanding, excluding capitalized operating leases. Even with the capitalized value of operating lease commitments, net debt stands at BRL 7.4, equal to 0.4 times EBITDA. Parent Telefonica has control of Vivo’s capital structure. While Telefonica’s balance sheet has improved markedly in recent years, the firm still carries a sizable debt load and faces growth challenges in its core European operations. The dividend is set to decline another 2% in 2021 based on 2020 earnings. These cuts have come despite ample free cash flow generation.

Bulls Say:

  • Vivo is the largest telecom carrier in Brazil and benefits from scale-based cost advantages in both the wireless and fixed-line markets. 
  • The firm is well-positioned to benefit as consumers demand increased wireless data capacity. Its network in Brazil is first-rate and its reputation for quality is second-to-none. 
  • Owning a high-quality fiber network enables Vivo to offer converged services throughout much of the country, while buttressing its wireless backhaul, improving network speeds and capacity.

Company Profile:

Telefonica Brasil, known as Vivo, is the largest wireless carrier in Brazil with nearly 80 million customers, equal to about 34% market share. The firm is strongest in the postpaid business, where it has 45 million customers, about 38% share of this market. It is the incumbent fixed-line telephone operator in Sao Paulo state and, following the acquisition of GVT, the owner of an extensive fiber network across the country. The firm provides Internet access to 6 million households on this network. Following its parent Telefonica’s footsteps, Vivo is cross-selling fixed-line and wireless services as a converged offering. The firm also sells pay-tv services to its fixed-line customers.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Funds Funds

AMP Capital Specialist Property and Infrastructure Fund: A fully listed real assets portfolio

The AMP Capital team also decides on strategic weights to each manager and allowable tactical deviations. Managers are assessed on such criteria as business structure; experience of the team; their alignment of interest, investment merit, and performance; and capacity and fees. The team is also responsible for portfolio review and rebalancing. Portfolio monitoring is undertaken using FactSet and Cortex risk systems.

Portfolio:

AMP Capital Specialist Property and Infrastructure is a multimanager portfolio designed to bring together a mix of Australian and global managers to produce a diversified portfolio of listed real estate and infrastructure. The strategy removed its last direct property asset in May 2021. The portfolio’s composition of the underlying managers had been fairly stable since its inception in 2014, but an October 2019 strategic asset allocation review spurred the decision to remove exposure to unlisted property from its prior 15% allocation (increasing the global listed infrastructure by 15%). AMP Capital has shown strong conviction and patience with the underlying strategies in the listed space, with listed investments now comprising the total portfolio. Both global listed property and global listed infrastructure are represented by internal AMP Capital managers, with allocations of 32% and 47%, respectively, as at July 2021. Australian listed real estate exposure of 20% is managed by passively in the UBS property index. This vehicle makes a suitable supporting holding, and it managed around AUD 259 million as at 31 July 2021.

People:

AMP Capital’s multimanager team sits within the shop’s Multi-Asset Group. MAG is headed by CIO Anna Shelley, who joined in AMP Capital in July 2021. Duy To was appointed head of public markets in August 2021. Day-to-day management of the strategy lies with Rebecca Liu and Trent Loi, who is also portfolio manager for the International Share strategy. External consultant Willis Towers Watson is used at times to work on specific projects and provide research on existing and potential strategies.

Price:

Analysts find it difficult to analyse expenses since it comes directly from the returns. The fees levied by the share class is under middle quintile. Analysts expect that it would be difficult to generate positive alpha relative to its benchmark index for this fund.

Performance:

AMP Capital Specialist Property and Infrastructure lagged its blended benchmark after fees to June 2021 since its December 2014 inception. The passive Australian listed property strategy (UBS Australian Property Index) has closely closely tracked the S&P/ASX 200 AREIT Index over time. The AMP Capital global property securities portfolio has delivered returns ahead of the FTSE EPRA NAREIT Developed TR AUD Hedged Index over the trailing three and five years to June 2021.

(Source: Factsheet from https://www.ampcapital.com/)


(Source: Factsheet from www.schwabassetmanagement.com)           (Source: Morningstar)

About the Fund:

While AMP Capital Specialist Property and Infrastructure’s move to a fully listed real assets portfolio is well received, a period of team instability continues to hinder. This is a multimanager strategy combining Australian and international property and infrastructure managers to build a diversified core portfolio of real assets. The managers are assessed on various criteria such as business structure, team and its alignment, performance track record, and fees and capacity. Its inception date is 01 July, 2014. Total Assets under this fund are 264.9 AUD Million.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Dividend Stocks Shares

Snap-on Continues to Benefit From Strengthening Vehicle Repair Demand

a strong brand reputation among repair professionals. Customers value Snap-on’s high-quality and strong performing products, in addition to its high-touch mobile van network. 

The company’s strategy focuses on providing technicians, shop owners, and dealerships a full line of products, ranging from tools to diagnostic and software solutions. Increasing vehicle complexity will be a tailwind for diagnostic sales as auto manufacturers are already tapping the company to develop new tools to service new EV models. We think repair work will shift away from engines to batteries, sensors, wiring, and advanced driver assistance systems. 

Snap-on has exposure to end markets that have attractive tailwinds. In automotive, we think demand for vehicle repair work will be strong in the near term, largely due to vehicle owners taking in their cars for overdue servicing. Additionally, we believe the high average age of vehicles will support demand for repair work to keep them on the road. On the commercial and industrial side, end markets are starting to pick up in activity; which we think means an increase in repair work for heavy-duty vehicles, planes, and heavy machinery.

Financial Strength

Snap-on maintains a sound balance sheet. The industrial business does not hold any debt, but the debt balance of the finance arm stood at $1.7 billion in 2020, along with $2.1 billion in finance and contract receivables. In terms of liquidity, we believe the company’s solid cash balance of over $900 million can help it quickly react to a changing operating environment as well as meet any near-term debt obligations from its financial services business. In addition, we also find comfort in Snap-on’s ability to access $800 million in credit facilities. Snap-on’s solid balance sheet gives management the financial flexibility to run a balanced capital allocation strategy going forward that mostly favors organic growth but also returns cash to shareholders via dividends and share repurchases.We believe Snap-on can generate solid free cash flow throughout the economic cycle. We expect the company to generate over $800 million in free cash flow in our midcycle year, supporting its ability to return its free cash flow to shareholders through dividends and share repurchases. 

Bulls Say

  • The growth in vehicle miles driven increases the wear and tear on vehicles, requiring more maintenance and repair work to keep them on the road, benefiting Snapon. 
  • Auto manufacturers continue to tap Snap-on to create new tools and products to service new EV models. This alleviates concerns that EV adoption will threaten Snap-on’s viability. 
  • Sales representatives can add new customers on their designated service routes, increasing revenue per franchise.

Company Profile

Snap-on is a manufacturer of premium tools and software for professional technicians. Hand tools are sold through franchisee-operated mobile vans that serve auto technicians who purchase tools at their own expense. A unique element of its business model is that franchisees bear significant risk, as they must invest in the mobile van, inventory, and software. At the same time, franchisees extend personal credit directly to technicians on an individual tool basis. Snap-on currently operates three segments—repair systems and information, commercial and industrial, and tools. The company’s finance arm provides financing to franchisees to run their operations, which includes offering loans and leases for mobile vans.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Shares Technology Stocks

Aristocrat outspends rivals on research and development improving its competitive position

Aristocrat’s research and development expenditure is unmatched by peers. This investment is the lifeblood of any electronic gaming manufacturer, especially given rapidly changing technology, and allows Aristocrat to maintain game quality, differentiate products from lower-end competitors, and defend its narrow economic moat.

Aristocrat is among the top three global competitors in the highly competitive EGM market, alongside International Game Technology and Scientific Games. EGM sales have been particularly hard-hit as coronavirus-induced shutdowns, social distancing measures, and travel restrictions weigh on the firm’s customers. With less turnover likely up for grabs in the near-term, heavy discounting could weigh on Aristocrat’s profitability in the fiercely competitive electronic gaming machine industry. Aristocrat operates in a market protected from new entrants as stringent regulatory licensing requirements in major markets create barriers to entry for new players.

Financial Strength:

The fair value of Aristocrat has been increased by the analysts by 9% to AUD 36.00 following the announcement of a AUD 5 billion acquisition of U.K.-listed Playtech, AUD 1.3 billion equity raising, and virtual release of fiscal 2021 results.

Aristocrat Leisure is in strong financial health. At March 31, 2021, the company had AUD 1.3 billion net debt, equating to net debt/EBITDA of 1.2- down from AUD 1.6 billion in net debt, equating to net debt/EBITDA of 1.4 at Sept. 30, 2020. EBITDA interest cover is comfortable at over 9 times. With the AUD 1.3 billion capital raising, Aristocrat’s balance sheet is well-capitalised to absorb the AUD 5 billion acquisition of U.K.-listed Playtech, with pro forma net debt/EBITDA of 2.6. Aristocrat is expected to return to paying out dividends from approximately 30% of underlying earnings from fiscal 2021, ramping back up to 40% by fiscal 2022.

Bulls Say:

  • Aristocrat operates in a market protected from new entrants as stringent regulatory licensing requirements in major markets create barriers to entry for new players. 
  • Unlike the mature electronic gaming machine industry, the fast-growing mobile gaming market provides an avenue of strong growth for Aristocrat. 
  • Already boasting a portfolio of highly regarded electronic gaming machines, Aristocrat outspends rivals on research and development allowing the firm to improve its competitive position and protect its narrow economic moat.

Company Profile:

Aristocrat Leisure is an electronic gaming machine manufacturer, selling machines to pubs, clubs, and casinos. The firm is licensed in all Australian states and territories, North American jurisdictions, and essentially every major country. Aristocrat is one of the top three largest players in the space along with International Game Technology and Scientific Games. Through acquisitions of Plarium and more recently Big Fish, Aristocrat now derives a significant proportion of earnings from the faster growing mobile gaming business.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Dividend Stocks Shares

M&T Bank reported solid third quarter earnings; Aims to create value via acquisition with People’s United

efficient operations, and savvy acquisitions. The bank’s main stronghold is its commercial real estate operations in the northeast. M&T has a history of good underwriting and deep, on the ground relationships. M&T has also recently announced it will acquire People’s United Bank, further expanding its geographical reach in the northeast and its product offerings. We like the pricing of the deal and expected cost savings, and hope the acquisition will lead to some added organic growth in the future as well. 

M&T derives about two thirds of its income from net interest income, and with the bank’s cheaper deposit base, it is more sensitive to movements in interest rates. The remaining one third of revenue comes from non banking businesses like wealth management or deposit service fees. Much of the company’s loan book is composed of commercial loans.

The bank has an especially strong position within its commercial real estate operations in the northeastern United States. M&T has one of the largest CRE exposures under our coverage, and this has come under more scrutiny as the pandemic has developed. While certain CRE assets have come under unique pressure, M&T’s underwriting remains solid, and we expect losses to be very manageable.

M&T Bank reported solid third quarter earning; the acquisition and integration of People’s United remains the next catalyst for value creation for M&T Bank

M&T Bank reported solid third-quarter earnings. The bank beat the FactSet consensus estimate of $1.64 per share with reported EPS of $1.90. This equates to a return on tangible common equity of 17.5%. M&T Bank benefitted from a provisioning benefit once again as chargeoffs remain exceptionally low and the bank released some additional reserves.

Nonperforming assets remained stable. Expenses, however, came in a bit hotter than expected, up roughly 9% year over year during the quarter. Management attributed most of this to higher incentive based compensation, which is understandable. On the positive side, fees have done quite well.  Net interest income, meanwhile, was essentially in line with our expectations.

The acquisition and integration of People’s United remains the next catalyst for value creation for M&T Bank.

Key attraction of the transaction 

  • Unique strategic position and enhanced platform for growth: The merger will create the leading community-focused commercial bank with the scale and share to compete effectively.
  • Shared commitment to local communities: Both companies have been long recognized for their community commitments and longstanding support of civic organizations.
  •  Compelling financial impacts: M&T expects the transaction to be immediately accretive to its tangible book value per share. It is further expected that the transaction will be 10-12% accretive to M&T’s earnings per share in 2023, reflecting estimated annual cost synergies of approximately $330 million. 

Financial Strength 

We think M&T is in good financial health. The bank withstood the crisis better than peers and has maintained a credit cost advantage over the current economic cycle. Deposits fund roughly three fourths of total assets. We believe the bank is adequately capitalized, with a common equity Tier 1 ratio over 10% as of September 2021.

Bull Says

  • M&T’s acquisition of People’s United was at a good price and should drive additional future growth. 
  • A strong economy, higher inflation, and potentially higher rates are all positives for the banking sector and should propel results even higher. 
  • M&T has loyal customers, and good management, and investors shouldn’t have to worry much about being burned by bad underwriting.

Company Profile 

M&T Bank is one of the largest regional banks in the United States, with branches in New York, Pennsylvania, West Virginia, Virginia, Maryland, Delaware, and New Jersey. The bank was founded to serve manufacturing and trading businesses around the Erie Canal.

 (Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Technology Stocks

Best Buy Co possess sound long-term strategy in spite of the fact that the future of retail is in flux

quick fulfillment across channels, and tech solutions to more problems than ever before. As a result, Best Buy’s “Building the New Blue” strategy continues to resonate, with the firm leveraging its physical footprint for fulfillment and post-sale services, emphasizing its differentiated service offering, and experimenting with newer store formats, as the “one size fits all” retail model across trade areas appears antiquated. 

With more than 40% of sales coming through digital channels in calendar 2020, the firm’s recent supply chain and e-commerce investments look prescient. Next-day delivery now covers 99% of U.S. zip codes, allowing the firm to compete on more level ground against e-commerce competitors, like wide-moat Amazon-as buy-online-pick-up-in-store (BOPIS) volumes, at 40% of e-commerce sales, remain challenging for online-only stores to replicate.

Best Buy Health remains intriguing, with lower price elasticity and auspicious tailwinds from an insurer pay model. However, competition in the space remains rife, as a number of moaty firms with extensive healthcare aspirations (Google, Microsoft, Amazon, Apple, Facebook) have invested heavily in the segment, as well.

Financial Strength:

The fair value of Best Buy has been increased by the analysts from $101 to $116 reflecting a longer horizon for excess returns, the time value of money, and the impact of high-single-digit anticipated comparable store sales growth through 2021. It also implies forward price/earnings of 12.1 times and an EV/2022 EBITDA of 5.4 times.

Best Buy’s financial strength is sound, with the firm maintaining a net cash position at the end of the second quarter of fiscal 2022 and an investment-grade credit rating. With leverage well under 1 turn (0.4 debt/EBITDA at fiscal 2021 year-end), strong interest coverage (46 times at year-end 2021), and no meaningful maturities until 2028, very little financial risk is seen for the firm in the near to medium term. Access to a $1.25 billion credit facility adds a further degree of insulation.

Best Buy pays an attractive dividend, with a 2.6% yield at current market prices, and we anticipate 12.8% average growth over the next five years as the firm returns to its historical dividend payout ratio target (35%-45% of earnings).

Bulls Say:

  • With digital sales volumes projected to remain roughly double pre-COVID-19 levels, Best Buy should better compete for online volumes that it historically ceded to online-only competitors. 
  • Improving route densities should improve the margin profile of small parcel e-commerce sales, with 35% of store “hubs” now handling 70% of ship-from-store volume. 
  • The Best Buy Beta program should increase touchpoints with the firm’s best customers, increasing spending relative to pre-program behavior.

Company Profile:

With $47 billion in 2020 sales, Best Buy is the largest pure-play consumer electronics retailer in the U.S., with roughly 10% share of the aggregate market and nearly 40% share of offline sales, per our calculations, CTA industry, and Euromonitor data. The firm generates the bulk of its sales in-store, with mobile phones and tablets, computers, and appliances representing its three largest categories. Recent investments in e-commerce fulfillment, accelerated by the COVID-19 pandemic, have seen the U.S. e-commerce channel roughly double from prepandemic levels, with management estimating that it will represent a mid-30% mix of sales moving forward.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Technology Stocks

Zoom and Five9 Terminate Merger Agreement; FVE Remains unchanged

LONDON, UNITED KINGDOM: Analysts work on the trading floor at Goldman Sachs in London, 22 March 2004. AFP PHOTO / ODD ANDERSEN (Photo credit should read ODD ANDERSEN/AFP via Getty Images)

It provides video telephony and online chat services through a cloud-based peer-to-peer software-platform and is used for teleconferencing, telecommunication, distance education and social relations. Zoom is a recognized market leader in meeting software and is disrupting and expanding the $43 billion video conferencing market with its ease of use and superior user experience. 

Zoom relies mainly on a low-touch e-commerce model that lends itself to viral adoption, but it has also established a direct salesforce to gather and serve larger, more strategic customers. The company has been adept at adding users, especially during COVID-19-induced lockdowns, and it also has several related products to upsell. Even as the lockdowns are loosening, customer retention has been better than expected.

With the 2019 introduction of Zoom Phone, which it does not plan to sell to customers who do not already have Zoom Meetings, Zoom Apps and OnZoom, the portfolio is expanding meaningfully. The company’s focus is squarely on adding as many users as possible. This starts with generating buzz and familiarity with free users, while the direct salesforce sells to enterprise accounts. Customers are growing rapidly, with larger customers numbering more than 1,999, while smaller customers total approximately 497,000.

Zoom and Five9 Terminate Merger Agreement; $252 FVE unchanged

Our $252 fair value estimate is unchanged after no-moat Zoom announced that it was terminating its $14.7 billion merger agreement for Five9. This is not entirely surprising after the Sept. 17 news that Institutional Shareholder Services recommended to Five9 shareholders that they vote against the merger coupled with the announcement several days later that the Department of Justice was investigating the acquisition. We view this as unfortunate, as the acquisition would have expanded the portfolio while deepening switching costs and creating cross-selling opportunities. We suspect that the company will continue to pursue smaller deals but believe national security issues will creep up again in larger transactions.

At the time of the announcement, we viewed the deal as strategically sharp, so we similarly view the cancellation as less than ideal. Fortunately, at its investor day on Sept. 13, Zoom announced the Zoom Video Engagement Center for customer engagement would launch in early 2022, with initial use cases targeting wealth management, doctor visits, and retail shopping. Two weeks ago, we wondered how the company would integrate this solution with Five9 when that acquisition closes. In short, we now think Zoom has the makings of an organic contact center solution, and still has a long-standing partnership with Five9 to leverage in the near term. With the rapid success of Zoom Phone as a test case, swollen coffers and strong margins, we expect the company to develop VEC relatively quickly.

Bulls Say

  • Both the Zoom user base and the company’s revenue have grown rapidly and are expected to continue to do so over the next several years. 
  • Zoom offers a disruptive technology that is designed from the ground up as a video-first collaboration platform. Customer satisfaction is well above video conferencing peers.
  •  Zoom’s low-touch, low-friction model should eventually drive strong margins. The company has already produced a full year of positive GAAP profitability, which is well ahead of other high-growth software.

Company Profile

Zoom Video Communications provides a communications platform that connects people through video, voice, chat, and content sharing. The company’s cloud-native platform enables face-to-face video and connects users across various devices and locations in a single meeting. Zoom, which was founded in 2011 and is headquartered in San Jose, California, serves companies of all sizes from all industries around the world.

 (Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Shares Small Cap

Super Retail’s attractive loyalty program with 8 million member

Shot of elegant smart businesswoman explaining a project to his colleagues with statistics on the computer on coworking place.

Investment Thesis

  • Trading below our valuation and on attractive trading multiples and dividend yield. 
  • Strong tailwinds/fundamentals in SUL’s four core segment. For instance, sales for vehicle aftermarket continue to remain strong (with increase in secondhand vehicle sales (Supercheap); travelers seeking social distancing and hencemoving away from public transport (Supercheap); with Covid lockdown measures in forced, more people are spending their holidays domestically (BCF; macpac), utilising their vehicles (Supercheap); growing awareness of fit and healthy lifestyles (rebel). 
  • Solid capital position. 
  • Strong brands in BCF, macppac, rebel and Supercheap with solid industry positions in largely oligopolies and solid store network. 
  • Transitioning to an omni-channel business. Whilst previously the business has been modeled on like-to-like store numbers, management now thinks of business metrics based on club members and has been able to grow the active club membership much faster than store numbers (store numbers in last 5 years have grown +2% CAGR vs active club members at +10% CAGR), providing it with an opportunity to expand customer base and therefore revenue base without significant capex for investment in stores (most of the customers are omni channel). 
  • Management continues to push towards expanding its online sales (Covid-19 added to this tailwind), with online sales penetration of ~13-15% of total sales currently and expected to reach 20-25% over the next 5 years. 
  • Attractive loyalty members program, with over 8 million members.

Key Risks

  • Rising competitive pressures.des 
  • Any issues with supply chain,especially as a result of the impact of Covid-19 on logistics which affects earnings. 
  • Rising cost pressures eroding margins (e.g. more brand or marketing investment required due to competitive pressures). 
  • Disappointing earnings update or failing to achieve growth rates expected by the market could see the stock price significantly re-rate lower.

FY21 Results Highlights

  • Total Group sales of $3.45bn, up +22% (Group like-for-like sales growth of +23%).Online sales of $415.6m, up +43% and nowaccounts for ~12% of total sales. On the impact of Covid -19 lockdowns, management noted its “omni-retail capability enabled it to pivot to online channels to meet consumer demand through both Click & Collect and home delivery”.
  • Segment EBIT of $476.8m was up +80%. 
  • Segment normalised PBT of $435.8m, up +108%.
  • Normalised NPAT up +107% to $306.8m. Basic EPS up +139% to 133.4cps.
  • The Board declared a fully franked final dividend of 55.0cps, bringing the full year dividend to 88.0cps, significantly higher than 19.5cps in FY20. Dividend equates to 65%, which is in line with SUL’s 65% payout ratio policy.
  • Management guided capex in FY22 of $125m to fund expanded store development and investment in omni and digital capability.

Company Profile 

Super Retail Group (SUL) is one of Australasia’s Top 10 retailers. SUL comprises four core segments. (1) BCF: Australia’s largest outdoor retailer focused on selling Boating, Camping and Fishing products. (2) macpac: retailer of apparel and equipment with their own designs focused on outdoor adventurers. (3) rebel: retailer of branded sporting and leisure goods and equipment for casual and serious fitness enthusiast. (4) Supercheap Auto: specialty retail business which specialises in automotive parts and accessories. 

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
LICs LICs

Metrics Income Seeks to Raise up to $152m through Institutional Placement and Unit Purchase Plan

Currently, their Annual Yield is 6.98 percent and their dividend amount is 0.009. Metrics Income’s P/E Ratio is 13.8 percent. 

Metrics Income Opportunities Trust’s Revenue is 30.70 million till June 2021. Their last traded price is $2.05. The trust targets a cash yield of 7 percent p.a. which is intended to be paid monthly with a total target return of 8 percent p.a to 10 percent p.a in each case net of fees and expenses.

Their Net Asset Value is $407,156,629. Metrics Income Opportunities Trust ((MOT)) announced on August 26, 2021, that they intend to raise $52.86 million by issuing 26.04 million new fully paid ordinary MOT units to wholesale investors at a price of $2.03 per unit. 

Furthermore, the Trust announced a Unit Purchase Plan (UPP) for existing eligible unit holders to purchase up to $30,000 in new units at a price of $2.03. The Trust hopes to raise up to $100 million through the UPP. Excessive applications may be scaled back on a pro rata basis. The UPP is set to open on September 6, 2021, and close on September 30, 2021.

The offer price of $2.03 corresponds to the NAV at the time of the announcement, with the UPP allowing unit holders to acquire units at a 1.9 percent discount to the unit price at the close of the trading day preceding the announcement (25 August 2021).

The proceeds from the institutional placement and the UPP will be invested in accordance with MOT’s investment mandate and target return.

Company Profile 

Metrics Income Opportunities Trust seeks to provide investors exposure to a portfolio of private credit investments. The Investment Objective of the Trust is to provide monthly cash income, preserve investor capital and manage investment risks, while seeking to provide potential for upside gains through investments in private credit and other assets such as Warrants, Options, Preference Shares and Equity.

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
LICs LICs

Sandon Capital Declares Special Dividend and Further Aligns Interest with Shareholders

Market Capitalisation of Sandon Capital Investments Limited $111.99 Million. Their last trade was 1.01 on 22nd September 2021.

Net profit is 37.3 Million. Their Annual Revenue is 56.5 Million. 

Sandon Capital Investments Limited (SCN) has declared a fully franked special dividend of 1cps in addition to the full franked FY21 final dividend of 2.75cps. 

The Board anticipates paying an interim FY22 dividend of 2.75cps, fully franked, subject to the Company having sufficient profit reserves, franking credits and it is within prudent business practices. 

This would represent a 10% increase on the FY21 interim dividend. SNC currently has 32.1cps in profits reserves and more than 9cps in franking credits.

In addition to this, the Manager announced that from FY22 onwards, the Manager intends to invest at least 50% of the after-tax proceeds of performance fees earned from SNC in SNC shares. 

Shares will be purchased on-market and will be acquired after the payment of the relevant performance fee where SNC’s share price is trading at a discount to its after-tax NTA. 

The Manager and entities associated with its directors and shareholders currently have in excess of $7.3m invested in funds managed by Sandon Capital Pty Ltd, including 2.1m SNC shares.

Company Profile 

Sandon Capital Investments Limited is an investment company. The Company is engaged in investing activities, including tangible assets, marketable securities or cash. The Company will seek to invest in securities, which Sandon Capital Pty Ltd (the Manager) considers to be under-valued and where the Manager considers there to be opportunity to encourage changes to unlock what the Manager has identified as intrinsic value. The Manager may also invest, from time to time, in market-based investment opportunities, such as placements, merger arbitrage and other investments it considers appropriate. Sandon Capital Pty Ltd is the investment manager of the Company.

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.