Yovich & Co. Market Update - 15 December 2020
Dec 14, 2020 | Commentary
In summary, last week the NZ50G saw 20 companies on the downside, 2 remained unchanged and 28 on the upside. Another positive week for the NZX50G and all other indices that we follow. The NZD/USD is still holding strong at 0.7103. Brexit is back in the newsroom; both Boris Johnson and Ursula von der Leyen are committed to go the extra mile to remove the immediate threat of UK-EU trade talks collapsing, the final date is looming at December end. If no deal is approved, then trade agreements will revert to World Trade Organisation rules. ASB are predicting that if a deal is reached, GBP/USD will soar towards 1.3600 or if it isn’t, and a hard Brexit becomes the most likely outcome, GBP/USD slumps towards 1.2800. Pfizer’s COVID-19 vaccine has been approved by the F.D.A. for distribution in the US. An initial shipment of about 2.9 million doses of the vaccine will be sent around the United States over the next week. Thursday will be a busy announcement day with the latest NZ migration print due along with Q3 GDP and the business confidence survey. Remember only 11 more days until Christmas. Next week’s newsletter will be the final for 2020.
Received a non-binding indicative offer of $7.43 per share from Australia’s largest pension fund “AustralianSuper”. The offer is to purchase 100% of Infratil’s outstanding shares. Infratil’s Chief Executive, Marko Bogoievski, said, “Both proposals were unsolicited and materially undervalue our significant renewable energy and digital infrastructure platforms. We expect some of the additional value to be demonstrated in the near term with the recently announced strategic review of Tilt Renewables, which will continue, and ongoing appreciation of the value of CDC Data Centres”. Infratil’s share price has increased 19.24% on the back of the announcement. An investment company Hobson Wealth Partners have valued Infratil at $10.60 per share.
Current Share Price: $7.15, Gross dividend yield: 3%.
Auckland Real Estate Trust
An Australian based company formally known as “Quattro RE Limited”, made its debut on the NZX December 9, 2020 as Auckland Real Estate Trust, as a means of expanding business and gaining investors. It currently has 6 properties in Auckland, including a handful around the Viaduct Harbour, and one in the United States which will be sold next year. As at 30 June 2020, Quattro’s net tangible assets (“NTA”) was $1.11 per unit (30 June 2019: $0.97). The increase in NTA is attributable to a capital raise of $24,352,000 in December 2019, and the increase in the total fair value of the property portfolio at 30 June 2020. The total value of the property portfolio at 30 June 2020 was $165m - an increase of 52% (30 June 2019: $108m). The increase in the value of the property portfolio was attributable to the acquisition of 87 Albert Street, Auckland for AU$34m in October 2019, refurbishment and upgrade works spent during the period across the property portfolio, and the increase in the fair value of investment properties at 30 June 2020. No shares have been traded yet with current bids at 81 cents
Current Share Price: $0.82
The Scheme of Arrangement proposed by Adams NZ Bidco Limited was approved by shareholders at the special meeting held on 25 November 2020. With shareholders representing 65% of total Abano shares on issue, of the votes cast, 95% were in favour of the scheme. On 9 December 2020, the High Court granted final Court orders approving the Scheme. Abano has also applied to NZX to suspend trading in Abano shares ahead of the record date for the Scheme and to de-list the company from NZX on implementation of the Scheme. The last day of trading in Abano shares will therefore be 14 December 2020. Subject to a limited number of customary conditions, payment of the headline Scheme price ($5.20 per share) is expected on 22 December 2020.
Current Share Price: $5.16.
Advises that the sale and lease back of approximately 100 hectares of its Australian kiwifruit orchard portfolio has been approved by the Australian Foreign Investment Review Board [FIRB]. Accordingly, the AUD$26.5m sale is now unconditional and is scheduled for settlement on 15 December 2020. Seeka has lifted its earning guidance for a profit before tax between $15m and $17m compared to previous guidance of between $9m and $12m. Net Bank Debt is expected at 31 December 2020 to be between $75m and $85m, compared to $116.8m at the same date in 2019.
Current Share Price: $4.28, Gross dividend yield: 3.25%.
Briscoe Group Limited
Have resolved to pay shareholders a special gross dividend of 8.33 cents per share with an ex-dividend date of December 23 and is payable Wednesday 20 January 2021. The Group’s cash position is very strong as a result of the previously cancelled $28 million dividend back in March but also from the continued exceptional trading experienced since New Zealand came out of lockdown in May. Black Friday promotions produced record sales for the Group which augurs well for trading in the lead-up to Christmas and through to our year-end on 31 January 2021. Group Managing Director, Rod Duke said “I am confident that with the current trading momentum we can produce a full-year result in excess of the $62.6 million reported for the year ended January 2020”.
Current Share Price: $4.91, Gross dividend yield: 2.55%.
Radius Residential Care
Is a new listed player in the residential aged care sector. On December 11 Radius Care, listed on the NZX at the opening price of $1.55, reaching an intraday high of $1.82 to close at $1.75. The current portfolio composition of Radius is 4.2% Units (Includes both Independent Living Units and Serviced Apartments) and 95.8% care beds, thus making it the 6th largest aged care provider on the NZX, at 4.7% market share. The future brownfield composition is to be 20% units and 80% care beds, with long term focus of 30% units, 10% care suites and 60% care beds. Radius Care operates 22 aged care facilities nationally, comprising more than 1,700 aged care beds owning 3 of these facilities with 19 currently leased from 3rd party property investors. It also owns two retirement villages comprising 76 units. The Board current intention is to pay an interim dividend in respect of 1HY2021 in February 2021. As such, Radius Care intends to pay three dividends across the 2021 calendar year, expected to comprise of: A February 2021 dividend and a June 2021 dividend in relation to FY2021, equal to 50% of adjusted funds from operations (AFFO) and separately a December 2021 dividend in relation to 1HFY2022, in line with its dividend policy of 50% to 70% of AFFO.
Current Share Price: $1.49.
My Food Bag
Is planning an initial public offering (IPO) before the end of 2021. Co-Founders Cecilia and James Robinson mentioned that this has been part of a three year plan. Jarden has been tapped to help with the IPO. Jarden’s equities desk has booked a bunch of fund managers to meet the company this week.
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