Wotif.com Holdings (WTF) is an online travel services business, which represents 23,500 in more than 67 counties. The group’s main website is wotif.com, but it also operates under lastminute.com.au, travel.com.au, Asia Web Direct, LateStays.com, GoDo.com.au and Arnold Travel Technology.

WTF, through the aforementioned websites, offers a variety of services that include flights, insurance, car rental, and travel accommodation and packages across hotels, motels, serviced apartments, resorts, guesthouses and bed & breakfasts. The service allows customers to book rooms at a heavy discount and at the same time help hotels better manage their vacancies.

FY12 impress, while 1H13 disappoints

At first glance WTF’s FY12 results looked good, however when placed in the context of the weak domestic travel market, the results were fantastic. Revenue over the year was up 5%, to $145.3 million. Net profit was $58 million, up 13.8% on the FY11 result.

The results were driven by an increase in accommodation rates and sales, and also some significant growth in WTF’s flight booking service. WTF’s operating profit margin also increased from 56% to 59%, with the group demonstrating good cost control whilst expanding revenue.

On a more disappointing side, WTF said the first quarter of fiscal year 2013 continues to reflect economic weakness. The 1Q13 performance was in line with the 1Q12 and likely to continue for the remainder of 2012.

The group is essentially saying that it expects little revenue or margin growth for the 1H13 as the operations continue to endure a period of prolonged weakness.

The good news

The AGM was not all bad news with WTF announcing its plans to lift its booking commission rate by 1% from 1 January 2013. This will be followed by a further lift of the same amount on 1 January 2014.

The group had $1.16 billion worth of transactions in FY12, and a 1% increase in commissions on this figure would increase of $11.6 million in revenue.

If the group’s strong operating profit of 59% stays consistent, the increased commissions would equate to a pre-tax profit increase of $6.8 million.

Even with flat transaction growth over the next two years, the two sets of increased commissions suggest the company still has the ability to grow earnings.

Outlook

WTF’s FY12 results showed a company that is able to grow earnings even in a tough environment. We think that the increase in commissions starting 1 January 2013 will negate the effect of continued weakness within the domestic accommodation market.

We would also expect some of the increased revenue to be redirected towards expanding into the less mature flight and holiday letting businesses, which has already started to show promising signs. Given the aforementioned factors we feel WTF has plenty of scope to continue growing its earnings, providing further support for the share price.

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Telstra (TLS) Finalises Deal For NBN Network

Telstra Corporation Limited is a full service domestic and international telecommunications provider for Australia.

The Company provides telephone exchange lines to homes and businesses, supplying local, long distance and international telephone calls and supplying mobile telecommunications services. Telstra also provides data, internet, on-line services and directory services.

Telecommunications Stock Telstra announced that it has finalised its $11 billion agreement with the federal government and NBN co for the rollout of the National Broadband Network (NBN).

The agreement will see Telstra receive close to $11 billion over the life of the agreement, which ensures that the company’s infrastructure will be used by the NBN.

CEO David Thodey said that Telstra has concluded almost three years of intense and complex negotiations and is pleased to deliver this positive outcome for customers and shareholders.

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QBE First State Negotiations For two Bolt On Acquistions

QBE Insurance Group Limited is an insurance company which underwrites most forms of commercial and industrial insurance policies, as well as individual policies.

QBE also manages Lloyds syndicates and provides investment management services. The Company provides its services both domestically and internationally.

Financial Stock QBE Insurance announced that it is in the final stages of negations to acquire two ‘bolt on’ acquisitions.

The acquisitions are expected to contribute up to US$500 million in annual written premium to the QBE business.

The company which recently raised $450 million from an institutional capital raising said that it will pay for the acquisitions from internal resources.

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AWE Limited (AWE) Company Announcement

AWE Limited (AWE) is a small oil and gas explorer and producer. The majority of its operations are located in Australia and New Zealand, though the company is becoming increasingly interested in international operations.

The company’s major projects are the onshore Casino gas field (Otway Basin, SA), Cliff Head project (Perth Basin, WA) and the BassGas project (VIC & TAS) and now, in the Perth Shale Gas Basin. AWE is listed on the Australian Stock Exchange and is a member of the S&P/ASX 200.

AWE announced that it has it has been advised that the Western Australian Minister of Environment has dismissed the states EPA appeal against its operations in the Perth Basin.

The company said that based on current availability of equipment, it expects that the hydraulic stimulation activities on all three wells will commence during the second quarter of 2012.

Managing Director Bruce Clement said that he is pleased with the decision, and looks forward to test the potential of the wells.

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Metcash Limited (ASX:MTS) is a leading marketing and distribution company operating in the food and other fast moving consumer goods categories. MTS operates via three business units: IGA Distribution (retail), Campbells Cash & Carry (wholesale) and Australian Liquor Marketers (ALM; liquor wholesale).

Metcash today released its first half results, which showed a 14% decrease in 1H profit to $94.4 million.

The company said the decrease was due to grocery price deflation, economic uncertainty and a cut in margins due to increased competition.

Metcash said it expects low-to-mid single digit earnings growth for the full year.

MTS will pay an interim dividend of $0.115.

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UGL Limited (formerly known as United Group), (ASX:UGL) is an engineering and services company providing industrial maintenance, manufacturing, engineering, transport facilities management and corporate real estate services to blue chip companies and governments throughout Australia, New Zealand, Asia, US and the UK.

Industrials stock UGL, today announced that it has successfully secured approximately $200 million in new contracts, while renewing several old contracts.

Managing Director and CEO, Richard Leupen said that strong momentum of contract wins is consistent with UGL’s strategy of maintaining and growing a stable base of recurring revenue.

Mr Leupen also added the business remains healthy and is well positioned to support the growth outlook within the business.

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News Corporation (ASX:NWS) is a diversified media conglomerate with interests in all geographic locations around the world, and in all facets of the media. The principle activities of the company include printing and publishing, books and magazines, television broadcasting and production including both free to air and pay television, and film production and distributions.

Today, ASX 200 listed News Corp reported 1Q12 revenue of US$7.96 billion, up  7% from  a year ago. However net profit for the quarter came in at US$738 million, down from US$775 in the previous quarter.

The fall in earnings was partially due to the $68 million, or 38%, decrease of operating income in the publishing segment. This reflected the impact from the closure of The News of World in the U.K.

The Cable Network Programming, Filmed Entertainment and Direct Broadcast Satellite Television segments all recorded double digit revenue increases compared to the prior corresponding quarter.

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Sundance Resources (ASX:SDL) is an Australian-based international iron ore company developing the Mbalam Project in the Republic of Cameroon in the central west coast of Africa.

Today SDL entered into another trading halt amid reports the Foreign Investment Review Board has delayed Hanlong’s bid for the group.

The delay relates to an ASIC investigation into allegations of insider trading by Hanlong’s executives.

FIRB is waiting on the investigation’s findings before making a decision on the bid.

The delay is likely to provoke some doubts on the takeover’s success, making SDL one the stocks to watch.

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Northern Star Resources (ASX:NST) explores and develops mineral resources in the highly prospective Kimberley region.

NST is an emerging gold producer and explorer with a market capitalisation of around $180 million.

Its main project is the Paulsens gold mine which it purchased for $40 million.

The miner expects to release a resource upgrade later this month and a new mine plan for Paulsens this year.

NST recently acquired the 668,000 ounce (oz) Ashburton Gold Project which is close to the Paulsens mine.

Precious metal speed hump

We saw gold and silver futures slide recently as investors reacted to hikes in margin requirements for the contracts.

The CME Group raised margin requirements for both initial and existing positions in gold, copper and silver.

Margins are money investors must put up to be able to trade and hold futures contracts.

Gold lost more than US$100/oz on the announcement, printing a low of around US$1533/oz.

However, gold prices have since recovered from that low and are currently hanging at around US$1665/oz.

The fact of the matter is, the underlying fundamentals behind the gold price rally over the past year are still intact and we are likely to see gold continue to rise.

Ashburton acquisition

NST agreed to purchase the Ashburton Gold Project from Sipa Resources which will be paid for via a royalty on future production.

The deal includes 668,000oz resource and the Mt Olympus Gold Mine, which has previously produced 340,000oz.

This puts NST in a prime position to increase production rates, project life and create shareholder wealth through exploration.

Ashburton is a strategic asset for Northern Star Resources as it provides an immediate resource boost to the miner’s resource base.

High grade drilling results from Ashburton announced last week show NST is on track to grow production to 200,000ozpa.

Results

NST recently posted FY11 profit before tax of $20 million. This profit came after deducting $22 million for the acquisition of Paulsens gold mine and $24 million in depreciation and amortisation expenditure.

The result was aided by record production at Paulsens of 87,069oz at $588/oz cash cost.

NST has $30 million in cash on hand as at 27 September 2011 and is on track to exceed calendar 2011 forecast of $40 million surplus cash, 75,000oz production.

A resource upgrade is set for early 2012 with increases in mine life, production and cashflow expected.

The miner repaid the $40 million acquisition of Paulsens in just seven months.

Being unhedged, NST has maximum exposure to the strong gold prices and as a result it was one of the hot stocks over the course of 2011.

With strong cashflow and a robust balance sheet, NST is in a good position to grow.

Outlook

Gold is set to recover after recently suffering a setback from the CME’s decision to raise margin requirements.

NST’s strong financial position leaves it well placed for further acquisitions in line with its objective of building a major mining house.

With the potential for further acquisitions and strong gold prices backing the unhedged miner, we feel NST will be one of the stocks to watch in coming months.

Recent weakness presents an excellent opportunity for fresh entries.

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