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ITX Group Limited (ITX) will go ex dividend on 16/8/2010. The current dividend payment is 4.25 cents and it is 100% franked. The record date is 20/8/2010 and the dividend will be paid on 26/8/2010. Based on the full year payment the dividend yield is 5.6%.
*Current Yield: 3.4% Franking: 100% DRP Discount: Not Available
*Yield has been calculated on the closing price on the 23/7/2010. Current yield is based on the current dividend payment only.
Australian Foundation (AFI) will go ex dividend on 13/8/2010. The current dividend payment is 13 cents and it is 100% franked. The record date is 19/8/2010 and the dividend will be paid on 1/9/2010. Based on the full year payment the dividend yield is 4.3%.
*Current Yield: 2.7% Franking: 100% DRP Discount: 5%
*Yield has been calculated on the closing price on the 23/7/2010. Current yield is based on the current dividend payment only.
Westfield Group (WDC) will go ex dividend on 10/8/2010. The current dividend payment is 32 cents and it is 0% franked. The record date is 16/8/2010 and the dividend will be paid on 31/8/2010. Based on the full year payment the dividend yield is 6.4%.
*Current Yield: 2.6% Franking: 0% DRP Discount: 2.5%
*Yield has been calculated on the closing price on the 23/7/2010. Current yield is based on the current dividend payment only.
Coal & Allied (CNA) will go ex dividend on 9/8/2010. The current dividend payment is 450 cents and it is 100% franked. The record date is 13/8/2010 and the dividend will be paid on 27/8/2010. Based on the full year payment the dividend yield is 8.1%.
*Current Yield: 4.5% Franking: 100% DRP Discount: Not Available
*Yield has been calculated on the closing price on the 23/7/2010. Current yield is based on the current dividend payment only.
The MAC Services Group Limited (MSL) has secured contracts for an additional 1,050 rooms to be installed at The MAC’s Bowen Basin accommodation villages at Moranbah, Dysart, Middlemount and Nebo. The village expansion program will run through FY11, with the majority of the new rooms being installed in the second half of the financial year.
The MAC’s Chief Executive Officer, Mark Maloney, said: “We announced these potential village expansion plans at the half year and can now confirm that all the additional rooms have been contracted. Based on those contracts, we are proceeding with the manufacture and install program. We expect to have this program largely completed by the end of the current financial year.”
“The additional rooms reflect increased demand for our Bowen Basin villages and will give us an additional 1,050 contracted rooms to service the increasing demand in this region. That delivers on our previously stated growth plans for the current financial year. The installation of 400 of the additional rooms remains subject to local development approval, and we are working through that process”, he said.
In addition to this village expansion program, The MAC has also renewed 3 major accommodation contracts at its villages at Moranbah, Dysart and Nebo. The renewed contracts cover a total of 2,050 existing rooms at these villages. “We are pleased our key customers continue to renew their accommodation contracts in our Bowen Basin villages. That is a real endorsement of our unique accommodation and services package”, said Mr Maloney. He added, “These renewals for 2,050 existing rooms, plus the additional 1,050 new rooms that have been contracted, improve our already strong contracted forward revenue profile”
iiNet Limited ( IIN) is pleased to announce that it has entered into a binding agreement, subject to iiNet shareholder approval, to acquire the AAPT Consumer Division from Telecom New Zealand (TEL). This has been accompanied by the completion of an underwritten block-trade to institutional and sophisticated investors of Telecom New Zealand’s (TNZ) 18.2% shareholding in iiNet. iiNet’s Chief Executive Officer, Michael Malone said the acquisition strengthens the company’s position as the clear leading challenger brand in the Australian telecommunications market.
Acquisition of approximately 113,000 broadband subscribers and over 251,000 other active services to bring iiNet’s broadband subscribers to more than 652,000 and total active services to more than 1,326,000; EPS accretive in FY11; Expected post-synergies EBITDA of $20m in first full year after acquisition in addition to the $10m EBITDA expected contribution from Netspace in FY11; $60m acquisition price represents 3x expected post-synergies EBITDA multiple; Approximately 25,000 subscribers expected to be migrated to iiNet’s network; Consistent with iiNet’s strategy to grow through consolidation; Extension of the existing Wholesale Agreement with AAPT; Acquisition to be 100% cash and debt funded, avoiding shareholder dilution; and Comfortable debt profile post acquisition.
Mr. Malone said that while it had only been a short time since the acquisition of Netspace, the AAPT Consumer Division represents a unique opportunity to acquire a subscriber base of scale in an increasingly consolidated market and to strengthen the five year old Alliance Agreement with PowerTel, now the wholesale division of AAPT. Synergies are expected to be achieved from a rationalisation of marketing expenditure, on-net migration and cost rationalisation. The AAPT brand will not be acquired. Additional value will be derived through applying iiNet’s strong brand and quality customer service to drive customer retention.
http://www.traderdealer.com.au/Fundamentals/iin
Advanced Braking Technology (ABV) has announced it has entered into a Pre- Production Contract that will enable completion of the final stage of the project to develop its next generation garbage truck braking system. Successful completion of the development activities under the contact is the last step prior to commercialising the braking technology in the waste collection industry. The project is designed to expand ABT’s patented Sealed Integrated Braking System (SIBS™) into a highly attractive new market sector. This represents a major growth opportunity for the Osborne Park, WA-based company. ABT’s patented technology is already widely used in the mining industry in Australia and overseas delivering cost, safety and environmental benefits.
This contract follows the proof of concept sign off in March 2010 that verified that after a two year $2 million research and development phase that key program functional objectives for the new SIBS™ brake design were met. These being: vastly superior pad/disc wear characteristics, comparable stopping performance and achievement of regulated international brake performance standards and acceptable pedal feel characteristics.
This next stage of the project will involve a range of in-field and bench tests to ensure the SIBS™ brake design meets all reliability, servicing and performance requirements over an extended period and across a range of operating conditions. A key part of the test program is to accumulate at least 7,500 hours of field service on a fleet of 5 trucks equipped with the SIBS™ brake. Separately other trucks and brake components will be tested in extreme conditions and be subjected to repetitive tests cycles to confirm component life and reliability. The program is designed to last 18 months however a mid – point assessment after 9 months will give an early indicator of performance sufficient to begin the preparation for the commencement of commercial sales.
Under the contract with Brake Developments Ltd, the investors in the project, will provide development funding of $250,000 per quarter to support the project. The ABT truck brake has been designed to significantly reduce the maintenance cost of garbage truck brakes and also completely eliminate brake squeal and airborne particles from the brakes. Following proof of concept sign off in March 2010, ABT has continued the operation of the test truck fitted with SIBS™ brake design gathering further valuable information. Now after 450 hours of operation only a microscopic increase in brake pad wear has occurred with still with just 1% of their maximum design wear limit (0.06mm of a 6mm wear limit) being recorded. Conventional brakes would be at least 50% worn with this amount of service. Other activity included the installation of a brake cooling package to the test truck aimed at further increasing the benefits of the product in extreme operating condition.
ABT’s Managing Director, Mr Ken Johnsen, added: “I am pleased that the Company is now able to commence this next phase of this very important project for ABT. It places the company just one step away from penetrating a mainstream market with global potential. Brake systems for the mining industry will remain an important part of ABT’s business however the garbage truck market is a significantly larger opportunity with large fleets of trucks in major cities across the world.”
http://www.traderdealer.com.au/Fundamentals/abv
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Overseas markets generally traded higher this week after the successful completion of the ECB Bank “stress tests”. Banks benefited, trading higher this week. Markets are generally trading above their 200 day moving average, with the exception of China and Japan, and Copper has again been a highlight, rising to a 10-week high.
The positive sentiment resulting from the earnings season has been tempered this week, as economic data in the U.S. pointed towards a slowing economy. Consumer confidence has slumped and durable goods orders dropped last month, raising concerns that the economic rebound is slowing as the government unwinds stimulus programs. This may be confirmed if the U.S. gross domestic product data, due out tonight, shows growth has slowed (the forecast is for a GDP of 2.6 percent in the second quarter). Overnight the Dow closed down -0.3% at 10,467, while in the broader market the S&P 500 index was down -0.4% at 1,102 and the tech-heavy Nasdaq ended down -0.6% at 2,252.
European stocks advanced this week on the back of the successful completion of the ECB Bank “stress tests”. The results showed only 7 out of 91 banks failed the test which was fewer than expected, but analysts questioned whether the tests were tough enough, as they only showed $US3.5 billion needed to be raised to prop up capital adequacy (previous estimates had ranged from $75 to $85 billion). The UK economic data was also positive showing the economy grew at the fastest pace in four years in the second quarter as rebounding services, manufacturing and construction, supported more bullish sentiment. The Swiss banking giant UBS, upgraded its weighting on European equities to neutral from underweight. There appears to be a rotation to more positive sentiment in Europe as shown by the Euro being up above $US1.31, its highest since May. Overnight in London the FTSE 100 index closed down marginally, -0.1% at 5,314, the German DAX was down 0.7% at 6,135, while in France the CAC was down -0.5% at 3652.
Asian markets had a solid week. Chinese equities continued to rise as the Central Bank said China’s economic fundamentals are “good”. The Chinese index is up 11 percent from its yearly lows, as the jump in industrial profits and the prospects for increased spending and tourism boosted the domestic economic outlook. Japan is also in focus this week with the reporting season starting off well, sending the index to its biggest gains in 3 weeks. The Yen reached its lowest level against the Euro since May. This helped exporters rise, and overnight in China the SSE Composite closed up 0.6% at 2,648, while in Hong Kong the Hang Seng Index was flat at 21,094 and in Japan the Nikkei 225 Index was down -0.6% at 9,696.
Copper continued to shine this week, rising to an 11-week high on signs that growth is sufficient in China and the U.S. to spur demand. Copper prices rose to new monthly highs, above the key $US3.00 a pound, up 1.4% (or 4.4 cents) at $US3.2850 a pound. Oil prices held up this week with the benchmark crude NYMEX for September delivery rising 1.7% (or $US1.37) to settle at $US78.36 a barrel. Gold broke below key support. Overnight August gold was up $US8.80 at $US1,171.20 an ounce.
The election dominated the news this week, but there were few surprises. Overseas market movements have dictated Aussie investor sentiment. Improvements in China have seen commodities prices continue to rise, while in Europe sentiment in improving.
Our View
Markets have again drifted higher as trading volumes continued to pick up this week. There does not appear to be a catalyst that will push markets through current key levels. China and Japan have been positive for Asian markets. The U.S. economic data is disappointing while Europe appears to be improving.
Overseas markets are keenly anticipating the U.S. GDP report and the European unemployment and consumer price index due out tonight. China also report their PMI data on Sunday. The outcome of these reports will set the tone for next week.
The S&P ASX200 is currently trading around 4485. The key support level on the ASX is still around 4,200 and the key levels for our index next week are 4600 and 4350, with pivot at 4450. The pending elections will have a dampener on the markets near term.
By Michael Hevern
Head of Research
This is the second installment of a three-part special on the leading indicators for mining stocks, brought to you by our research department.
As mentioned in our first installment, the stock markets have been difficult in recent times as the bulls and the bears have been wrestling for control. We have identified some leading indicators that will give investors an edge in identifying the potential direction of the specific share price movements.
The materials sector has continued to underpin the performance of the broader Australian market. It lead the recovery back in early 2009, but has weighed on the markets as a result of the uncertainties from the proposed Resources Super Profits tax.
Commodity prices can be used as a leading indicator for share price movements. We have reviewed key mining stocks that are highly liquid and respond well to movements in commodities. Please note that the commodity prices are recorded in Aussie dollar terms.
Last week we reviewed BHP and now continue by examining a premium gold stock, Newcrest.
Newcrest (NCM) is the highest quality, low cost gold producer in the Australian market, with positive growth and strong exploration upside.
Until the recent proposed merger with Lihir Gold, almost all its value has come organically through exploration. Newcrest is predominantly Australian based, offering low sovereign risk and its trades have much lower multiples than its overseas peers. Newcest is reported to be a perennial takeover target, though the strong performance of current management should deter any would-be acquirers.
The Gold price has pulled back nine percent from its recent all-time highs and is continuing to show weakness, trading below its 50 and 100 day moving averages, last trading at $US1,160.40 an ounce. This week Gold has broken key support levels.
The chart below illustrates how closely correlated Gold and NCM are. The chart shows that back in late 2008 the gold price foreshadowed a recovery in the NCM share price by about six weeks, while in early 2009 the gold price gave a confirmation of turnaround in NCM’s share price, as it did again in late 2009.
Gold is as a leading indicator for Newbrest (NCM) share price movements
The correlation has held tight throughout 2009 to 2010, however in the past quarter the gold price surged ahead, but NCM share price did not follow. This may be because of the volatile Aussie dollar moves and the proposed merger between Newcrest and Lihir. The Gold price is currently under pressure as investors are looking to liquidate their gold positions in order to add risk to their portfolio. This will be a negative for our gold stocks near term. Once the merger with Lihir is bedded down, we would expect the strong correlation between the gold price and Newcrest to resume.
The Trade
Commodity prices can be used as a leading indicator for share price movements, however you need to convert the pricing to Aussie dollar equivalents for the best results. We have reviewed key mining stock(s) that are highly liquid and respond well to movements in commodities. Note that it is important to check the US ADRs for overnight share price movements as well.
Look out for the third installment of this three part special next week, when we take a look at Newcrest Mining Limited (NCM). To make sure you don’t miss out, sign up to receive our weekly newsletter.
By Michael Hevern
Head of Research
You can receive more fundamental information on Newcrest Mining on our website.
The information provided within this blog is general advice only and you should consult the services of a financial professional in order to ascertain whether the information is applicable to your investment strategies and risk profile.
