Yovich & Co. Market Update - 13 October 2020
Oct 13, 2020 | Commentary
13 October 2020
New Zealand Equities
COVID-19 Message Yovich & Co provide an essential service so are able to provide ongoing advice regardless of the Alert Level and place trades on market as usual.
In summary, last week the NZ50G saw 3 companies on the downside, 1 remained unchanged and 46 on the upside. Last week the NZ50G increased 3.86% and reached a record high at 12280.54, while this week the upwards trend is surpassing last week’s record; at time of writing the NZ50G is at 12416.28. The ANZ Truckometer has reported that the Light Traffic Index bounced back 12.3% in September while the Heavy Traffic lifted 4.1%. Both indexes are higher compared with a year ago, reflecting catch-up activity rather than an economy running hot. But still, it’s encouraging.
Has announced a $25m Unit Purchase Plan (UPP); this forms part of the $150m capital raise of which $125m was allocated in an underwritten placement to institutional investors. The UPP is open to existing Vital unitholders who were recorded as having a registered address in New Zealand on Vital's register as at 5.00pm (NZ time) 6 October 2020. Eligible unitholders will be able to apply for up to a maximum of $50,000 of new units per unitholder at an issue price equal to the lower of:
a) $2.80 per new unit (being the same issue price as the Placement undertaken on 7 October 2020 (a 6.0% discount at close unit price of NZ$2.98 on 6 October); or
b) a 2.5% discount to the volume weighted average price of Vital units traded on the NZX during the five trading days up to, and including, the end of the UPP offer period.
Opening date for the UPP is 13 October, closing date 5.00pm 28 October 2020. The theoretical ex rights price is $2.90.
Current Share Price: $2.92, EPS: $0.12, PE ratio: 22.73, Gross dividend yield: 3.43%.
Has announced up to NZ$125m of senior secured fixed rate green bonds (ARG030.nz). With the discretion of additional NZ$25m (for oversubscription). The seven-year bond is to mature 27 October 2027. Interest (coupon) payments are paid quarterly at a minimum coupon rate of 2.20%. The proceeds of the offer are intended to be used to refinance existing bank debt that supports Green Assets. To be eligible to be a Green Asset under the Green Bond Framework, the project or building must be certified as obtaining or targeting: A Green Star "Built" rating of at least 4 Stars; or A NABERSNZ "Energy Base Building Rating" or "Energy Whole Building Rating" of at least 4 Stars.
Current Share Price: $1.44, Gross dividend yield: 4.90%, Target price: $1.51, Rating: Neutral.
Announced their results for the first four months of trading (1 June to 30 September 2020) for the FY21. Abano’s businesses have continued to recover strongly, with year on year growth in same practice revenue, new and existing patient numbers and appointments. Forward bookings for both Maven and Lumino are also above prior period numbers. Lumino same practice revenue growth is +11% compared to the same period last year, while Maven same practice revenue is up +3%. Unaudited gross revenue is $124.6m with Underlying EBITDA of $14.7m (pre-NZ IFRS 16) plus net Government wage subsidies of $10.6m, totalling $25.3m1. Abano’s latest forecast is for FY21 Underlying EBITDA of $32m. On the back of this news the Scheme price has increased from $4.45 to $4.75 per share. The increased Scheme price remains subject to the specified price reductions, up to a maximum of 75 cents per share, if any one of a number of defined Adjustment Events occur. Implementation date is expected to be mid December 2020. Current Share Price: $4.24, Scheme Offer: $4.75.
Takes the lead with digital home loans starting from 1.99% p.a. 1-year fixed, 2.35% p.a. 2 year fixed and 2.45% p.a. 3 year fixed and floating rate of 2.95% p.a. As Heartland Bank focuses on being a fintech bank it is relaunching its self-serve digital application which allows customers looking to buy or refinance a home to apply and receive approval without needing to make an appointment, visit a broker, or arrange a house call.
Current Share Price: $1.43, Gross dividend yield: 6.75%, Target price: $1.51, Rating: Neutral.
Link Market Services
Has received a conditional, nonbinding indicative proposal from a consortium comprising Pacific Equity Partners, Carlyle Group and their affiliates (Consortium) to acquire 100% of the shares in Link Group by way of a Scheme of Arrangement. The indicative cash price offered to shareholders under the Proposal is AU$5.20 per share. The Proposal is subject to a number of conditions, including due diligence, negotiation and execution of transaction documentation, securing debt financing, final investment committee approval from the relevant Consortium committees, and certain regulatory and other approvals, including the Foreign Investment Review Board. Perpetual, which currently holds 9.65% of Link Group, has sent a letter to the Consortium, stating that it intends to vote any shares held at the time of any meeting in favour of the Consortium acquiring 100% of Link Group at a share price of no less than AU$5.20, should one proceed. Current Share Price: AU$5.01.
Has acquired Cryomed Aesthetics for $14mn, which is a leading independent distributor of aesthetic devices and consumable products in Australia. The acquisition will be funded from existing facilities and is expected to be immediately EPS accretive to EBOS shareholders. At the annual meeting Ebos presented Q1 FY21 data: Revenue growth up 6.1% (Healthcare), 14.1% (Animal Care) and 6.55% (Group); EBITDA 9.2%, 18.7% and 9.0% respectively; NPAT growth for the Group up 15.0%. Ebos reiterates its policy of declaring dividends of not less than 60% of NPAT. Ebos share price is now at a record high and up 20.76% since Yovich & Co last mentioned Ebos in August.
Current Share Price: $26.05, EPS: $1.07, PE ratio: 24.30, Gross dividend yield: 3.26%.
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