Coca-Cola Amital Expects First-Half Net Profit To Grow By 4%-5%

Coca-Cola Amatil Limited manufactures, distributes and sells carbonated soft drinks along with still and mineral waters, fruit drinks, ready-to-drink coffee and tea and flavored milk drinks. The Company also rents and services commercial refrigeration equipment to food/beverage manufacturers. The company is listed on the Australian Stock Exchange under CCL.

Coca-Cola Amital has announced that it expects its first-half net profit to grow by around 4%-5% for FY12, before significant items.

Managing Director Terry Davis said in a statement “Given the difficult trading and consumer environment we are pleased with the operating performance in the year to date.”

Mr Davis also made reference to very strong growth in the groups Indonesia and PNG businesses.

Leighton (LEI) Reaffirms Half Year Guidance

Leighton Holdings Limited offers a variety of project development and contracting services to public and private sector clients in the Asia-Pacific region.

Leighton provides design management, civil engineering construction, building, mining, process engineering, telecommunications, waste management and infrastructure operation and maintenance and property development and management. Leighton is listed on the Australian Stock Exchange and is a member of the S&P/ASX 200.

Leighton reaffirmed its guidance of $100- $150 million in underlying net profit for the six months to 30 June 2012. The group also confirmed its full year profit of $400-$450 million.

The company noted that for the March quarter it expects a loss of $80 million due the performance of Airport Link and the Victorian Desalination Project.

CEO Hamish Tywhitt said that “the Leighton Group’s diversification strategy, underlying strength and positive outlook is reflected in our work in hand which remains around $45 billion with a further $11.5 billion that runs out beyond five years”

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Weekly Buy Recommendations: Crown (CWN)

Crown (CWN) manages a variety of gaming and entertainment facilities, including, bars, restaurants, nightclubs, cinemas and retail outlets. It also develops hotels and conference centre facilities.

The company wholly owns and operates two integrated resorts; the Crown Entertainment Complex in Melbourne and Burswood Entertainment Complex in Perth. Mr James Packer currently owns a 48.09% stake in the group.

CWN also has an interest in several different projects including:

• 33.65% interest in Melco Crown entertainment, which is based in Macau
• 50% interest in online gambling site Betfair
• 24.5% interest in Cannery Casino Resorts in the US
• 50% interest in Aspers Holdings (UK) which operates three regional casinos in Newcastle Swansea and Northampton

The company also recently increased its stake in Echo Entertainment to 10%.

Latest Results

CWN’s 1HFY12 results were impressive considering the challenging consumer environment.

The company reported normalised NPAT of $211.6 million, which was an increase of 28% on the prior corresponding.

CWN’s Australian casinos reported revenue growth of 10.7% to $1,387.9 million, with normalised EBITDA up 5.2% to $362.4 million.

A breakdown of the two main facilities showed that Crown Melbourne’s normalised EBITDA added 3.7% to $269.4 million, whilst Burswood EBITDA gained 8.7% to $116.6 million.

The company declared an interim dividend of 18 cents, which equates to a health yield of over 4%.

CMJ and Echo Entertainment

Today it was reported that James Packer will sell his controlling stake in Consolidated Media Holdings (CMJ).

Whilst it is just a rumour, a takeover is looking like happening sooner rather than later given CWN’s increased 10% stake in Echo Entertainment (EGP).

EGP’s assets include Sydney’s Star City and Jupiter’s Hotel and Casino in Queensland; however it is Star City that would be the most appealing to CWN.

Star City is CWN’s major, if not only, rival in the highly coveted VIP segment. A merger of the two companies would alleviate any pressure aggressive competition would have on the segment’s margins.

Looking forward

CWN”s results speak for themselves, they were able to grow earnings in a tough consumer environment.

The reported move of James Packer selling his controlling interesting in CMJ has already sparked further takeover rumors in regards to EGP.

Mr. Packer also increased his own personal stake in CWN from 46% to 48.1%, showing his confidence in the company.

We believe that the takeover of EGP would be seen as a positive move for CWN.

As such we think CWN is a stock to watch in the coming months.

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Alesco Corporation Takeover Offer from Dulux Group

Alesco Corporation Limited is small cap stock that is involved in the marketing and distribution of industrial products to the building and renovations, construction and mining, scientific and testing and automotive industries.

The Company distributes products such as cabinets and panelling, earthmoving and truck tires, garage door openers and laboratory testing equipment.

Alesco Corporation has received a $188.4 million takeover offer from Dulux Group.

Dulux Group currently holds almost 20% of Alesco shares and has offered $2.00 a share for each remaining share.

The offer represents a 42.9% premium from Alesco’s last closing price and will only proceed if the Dulux gain 90% of share on issue.

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Weekly Buy: Aristocrat Leisure (ALL) Reported An FY11 EBIT of $110.8 million

Aristocrat Leisure (ALL) develops, manufactures, and distributes gaming machines and systems in Australia, New Zealand, the Americas, Asia Pacific, South Africa and Europe.

The group has two divisions Gaming Machines Manufacturing and Gaming Machine Services.

ALL is the largest gaming machine company in Australia and the world’s second-largest slot machine maker.

The company has been a basket case over the past few years amid weak consumer spending and a surging Australian dollar, as well as industry and operational problems.

However ALL’s FY11 results showed a return to growth and the company’s earnings finally look to have bottomed out.

Super results

ALL FY11 were extremely impressive when compared to FY10.

ALL reported an FY11 EBIT of $110.8 million, which was up 30.8% on a normalised basis. EPS was up 19.4% to 10.3 cents per share at.

More impressive were the results that were reported on constant currency terms. EBIT was $119.7 million, up 41.3%, whilst EPS was up 32% to 13.6 cents per share.

Operating cash flow increased from $73.6 million in FY10 to $108.2 million in FY11, a 47% increase.

In reflection of a healthier balance sheet, the company was able to decrease its debt by 18.8% to $232 million.

Outlook

ALL did not provide any specific guidance for the coming year, but did state it expects strong growth in normalised full year net profit after tax in FY12.

Since 2008 ALL’s EBIT has contracted significantly on an annual basis, but last year was the first year since then that group has shown growth.

The business grew on a normalised basis, but more importantly, on a constant currency basis. As such, any weakness in the Australia dollar will have a positive effect on ALL’s earnings.

The RBA appears to have moved to an easing bias, and with the probability of further monetary easing in the US diminishing, a weaker Aussie dollar compared to US dollar is becoming a likely outcome, thus benefiting ALL.

The company also looks well placed to take part in any cyclical rebound, which we think is already evident in the latest results.

We believe that market sentiment towards the stock has improved drastically in recent times, especially given the spectacular FY11 results.

If ALL continues its growth trend we believe there is plenty of near-term upside on the horizon.

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Seven Groups WesTrac Agrees To Buy Bucyrus Distribution

Seven Group Holdings (SVW) is a diversified operating and investment group listed on the Australian Stock Exchange. The operating business encompasses WesTrac, a global top five Caterpillar dealership. It also is a minority holder in Seven West media and major shareholder National Hire.

Seven Groups said that its WesTrac division has agreed to buy the Bucyrus distribution and support businesses from Caterpillar in several parts of Australia for about US$400 million.

The group will purchase the Bucyrus units in Western Australia, New South Wales and the Australian Capital Territory, in a deal to be funded via a new five-year debt facility.

CEO Jim walker said “the Bucyrus product line and large installed base are a logical addition to our current range of Cat product, and will provide us with significant opportunities for future growth with our mining customers.”

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Asciano is transport infrastructure and operations company, formed from a de-merger from Toll Holdings in June 2007.

Asciano Fails To Reach Agreement To MUA

Asciano announced that it has been unable to reach an agreement with the Maritime Union of Australia over a new workplace agreement for container terminal employees.

This is the third time the parties have failed to reach an agreement via a conciliation process involving workplace umpire Fair Work Australia.

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The group said that local agreements have been struck with employees at Melbourne and Brisbane ports, except on a national dispute resolution procedure clause

Foxtel To Purchase Austar

Austar United Communications Limited provides subscription television services such as digital satellite services to customers in regional and rural areas of Australia.  The Company also offers dial-up internet and mobile phone services.

The ACCC said that it won’t oppose pay television company Foxtel’s 1.9 billion Australian dollar takeover of fellow pay television company Austar United Communication.

Foxtel said that it will undertake a court-enforceable undertaking which prevents it from buying exclusive internet protocol television rights for a range of TV shows and movies.

The Foxtel-Austar tie-up is due to go to Australia’s Federal Court on April 13 for approval.

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Leighton Holdings (LEI) Slashed Profit Guidance By 25%-38%

Leighton Holdings Limited offers a variety of project development and contracting services to public and private sector clients in the Asia-Pacific region.

Leighton provides design management, civil engineering construction, building, mining, process engineering, telecommunications, waste management and infrastructure operation and maintenance and property development and management. Leighton is listed on the Australian Stock Exchange and is a member of the S&P/ASX 200.

Leighton Holdings has slashed its full year profit guidance by 25%-38% to between $400 million and $450 million.

The company said that a quarterly review of its operations had uncovered a significant deterioration in performance since its December review.

The company specifically blames unforseen problems from troubled Australian toll road and desalination plant projects.

Brambles (BXB) Expects Outcome For Recall In Four To Eight Weeks

Brambles Limited is a global support services group which provides pallet and plastic container pooling services and information management services.

Brambles announced that it expects to get an outcome for the sale of its Recall document-management business within four-to eight weeks.

The company had previous said it expected an outcome by the end of March.

It has been suggested Brambles could get as much as two billion Australian dollars for the business.

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