2024/11/07

Pro Medicus (PME) share price is at $200, what’s driving the share price?

PME has demonstrated consistent performance, maintaining healthy earnings growth and return on equity (ROE) over the past several years. The company has strategically acquired contractors in the U.S., its largest revenue market. With no debt, a strong base of repeat customers, and an emerging focus on artificial intelligence, PME is well-positioned for future growth. This trajectory has instilled significant confidence among investors, resulting in the company trading at an extraordinary price-to-earnings (P/E) ratio of 250.
https://youtu.be/Bl7iRYdClTw

2024/10/15

Ansell CFO to leave by second quarter 2024.

Ansell has gone through a lot of changes recently—from job cuts to acquisitions and now the CFO’s exit. The company is leaning into automation, cutting costs, and trying to get back on a path of profitable growth. As the market normalizes post-pandemic, it’ll be interesting to see how Ansell navigates the challenges ahead and whether this leadership change will help or hurt its recovery.
https://youtu.be/QagUF_oU_hk

Pro medicus - update 2024/10/07

PME secures a 8 year, $96 M, contract

Pro Medicus has secured long-term contracts, like the recent $96 million renewal in the U.S., which highlights its ability to retain and expand business with large healthcare providers. This provides a solid revenue base and increases the likelihood of further international expansion, particularly in the U.S., where healthcare systems are increasingly relying on advanced imaging technologies like Pro Medicus' Visage software.
https://youtu.be/hTQxFIH9vg8

RPMGlobal Holdings  Ltd - (RUL) - market update 2024.07.02

ٱلسَّلَامُ عَلَيْكُمْ 
RPMGlobal Holdings Limited is an Australia-based company specializing in software licensing, consulting, implementation, and support, as well as technical, advisory, and training services. The company offers consulting and advisory services and technology solutions to the global mining industry through its Software and Advisory Divisions.
The Software Division delivers all software offerings, including support (maintenance), training, and implementation services to mining companies. Focusing on advanced mining technology and deep domain expertise across the mining lifecycle, RPMGlobal guides global miners towards more efficient and sustainable operations. 

RPMGlobal’s software solutions cover the entire mine lifecycle, including scheduling, asset management, finance, and operations.
RPMGlobal leads the market in enterprise solutions from mine planning to execution, offering the industry's most advanced scheduling tools along with top-tier simulation, costing, and execution solutions in both production and maintenance, all built on the industry's only Enterprise Planning Framework (EPF).

The Advisory Division provides consulting and advisory services, including technical and economic analysis and assessment of mining activities and resources. RPMGlobal’s consulting and advisory expertise covers all key mining regions, methods, and commodities worldwide. They partner with mining clients, investment firms, OEMs, battery cell manufacturers, and offtakers to provide bespoke, independent insights and advice based on a strong understanding of the mining industry’s needs and challenges, including environmental, social, and governance (ESG) factors.

The company continues to expand its ESG service lines with a focus on assisting mining clients with their decarbonisation and mine closure plans. Large mining studies in Europe, the Middle East and Asia provided a strong foundation for their mining and geology teams to open opportunities to cross sell the company’s software products and advisory services into new markets.

RPMGlobal has been a business that relies heavily on the fortunes of the mining industry, and it is impacted by the fluctuation of commodity prices which underlie its clients' core product base. Its software sales have slowly moved away from the legacy business of selling license services to a subscription-based model for their software services. This transition has resulted in periods where upfront revenue has shifted to ongoing subscription-based revenue, impacting the bottom line.
The company has also improved its business disclosures, making the annual reports cleaner and easier to follow. RPMGlobal turned a profit last financial year, with positively forecasted revenue and profit for FY24 as well. The company bought back $7.6 million of its own shares between 1 July 2022 and 30 June 2023. As of 30 June, the group had cash reserves of $34.8 million and no bank debt. RPMGlobal falls within a market cap where all the software and services it provides can add value and offer cost savings for a company considering a takeover.

With the recent update released yesterday, RPMGlobal's subscription licenses increased, which is the preferred strategy of the company’s sales teams as it delivers stable and predictable recurring revenue reported over multiple financial years. However, this has led to a significant drop in perpetual license revenue, decreasing by over 1.6 million year on year. Consequently, this has resulted in lower than forecasted profitability. It is also worth noting that the value of subscription license revenue reported within the financial year is directly related to the timing of when the contract is signed. The majority of software subscription licenses sold during the second half of FY2024 were concluded in the last month of the year. This timing profile has shifted $1 million of expected subscription revenue from being recognized in FY2024 to future reporting years. RPMGlobal stock fell as much as 21.7% to A$2.17, on the open at the back of the update.

Listen to our comments: https://youtu.be/lF_JTHDBpN4

Request further assistance

Technology One - (TNE) - market update 2024.05.21

ٱلسَّلَامُ عَلَيْكُمْ 
TechnologyOne (TNE), Australia's premier ERP Solution as a Service (SaaS+) provider, delivers vital software solutions to various sectors including local government, higher education, healthcare, community services, asset management, project-intensive industries, and financial corporations. Introducing SaaS Plus, they revolutionize the implementation process, eliminating the complexities, costs, and risks associated with traditional methods. By significantly reducing implementation time, TNE ensures quicker time-to-value for customers, all bundled into a single SaaS Plus package.
Technology One's first-half revenue surpassed expectations, driving up shares despite market softness. Total revenue for the six months ending March reached A$244.8 million (US$163.2 million), a 16% increase from the previous year. First-half annual recurring revenue climbed 21% to A$423.6 million, aligning with market forecasts of 15%-20% growth.
The robust revenue performance allayed concerns about transitioning legacy customers to subscriptions, a process known as "software-as-a-service flips." While these flips had been a major driver of annual recurring revenue in the past, the completion of this process was now factored into expectations.

Looking ahead 
Technology One's shift to SaaS promises increased earnings visibility, with optimistic prospects for the UK market. They anticipate net profit before tax growth of 12%-16% for FY24 compared to FY23, with a corresponding expansion in net profit before tax margin. Targeting total annual recurring revenue surpassing A$500 million by FY25, they foresee sustained revenue growth supported by a 10-year compound growth rate of 10%.

As the company invests more in research and development, with a 26% increase in investment from past years, they remain open to expansion efforts, particularly in the UK. SaaS customers are expected to drive revenue growth through increased product penetration.

Technology One's strategic focus on SaaS Plus and other growth areas will reduce reliance on traditional project implementation business, impacting short-term revenue and profit in FY24 but aligning with long-term goals of growing the recurring revenue base.

Regarding doubling every five years, it's challenging to predict how long this growth trajectory can be sustained without more specific data on factors like market saturation, competitive dynamics, and technological advancements. However, Technology One's strategic initiatives and market positioning suggest continued growth potential in the foreseeable future.

Listen to our comments: https://youtu.be/rhlXR-lvOsc

Request further assistance

Sonic Healthcare Ltd - (SHL) - market update 2024.05.21

ٱلسَّلَامُ عَلَيْكُمْ 
Sonic Healthcare (SHL) is a provider of medical diagnostic services, The Group provides specialised pathology/clinical laboratory and diagnostic imaging (including radiology) services to clinicians (GPs and specialists), hospitals, community health services, and their patients.

Market update:Organic revenue growth continues to be strong at 6% for the 4 months to 30 April 2024 (following 6% in H1 FY 2024). However, profit growth has been lower than expected, in part due to inflationary pressures on the business, and exacerbated by currency exchange headwinds. 
In addition, a number of margin improvement initiatives planned for completion in H2 FY 2024 have been slower to deliver than expected and will contribute to further earnings growth in FY 2025. They expect FY24 EBITDA of A$1.6 bln ($1.07 bln), compared with previous forecast of A$1.7 bln to 1.8 bln

Based on preliminary forecasts, on a FY 2024 forecast constant currency basis, Sonic expects to achieve EBITDA of approximately A$1.70 – 1.75 billion in FY 2025. The FY 2025 forecast includes the negative impacts of the potential USA PAMA fee cut (A$15m), initial losses on the UK Hertfordshire & West Essex NHS contract (A$10m), and an equity accounted loss for Franklin.ai (A$5m). Guidance for FY 2025 will be updated/confirmed at Sonic’s full year results’ release in August 2024.

On a positive note:
The 2024 financial year has been one of transition for Sonic Healthcare, moving away from pandemic conditions into a more normal business environment. Our current robust topline growth, organic and non-organic, in a setting of inflationary cost pressures, have combined to delay the completion of our programs to align labour costs more closely with post-pandemic conditions. These unique business conditions have also made forecasting our earnings unusually difficult this year.

FY 2024 has also been a year of investment for future growth. In particular, the sizeable acquisitions of SYNLAB Suisse and Dr Risch (Switzerland), PathologyWatch (USA) and the Hertfordshire & West Essex contract win (UK), while initially earnings and/or margins dilutive, will all yield strong earnings growth and returns on investment into the future.

Overall, the company remains in a very strong position, both financially and in terms of market positioning. They remain well set for growth in revenues and earnings going forward, including realising over the next two years the synergies and enhanced returns from the investments made this year. 

Listen to our comments: https://youtu.be/drqONFPWS78

Request further assistance

Duratec Ltd - (DUR) - market update 2024.05.20

ٱلسَّلَامُ عَلَيْكُمْ 
Duratec Limited (DUR) stands at the forefront of Australia's contracting industry, specializing in the evaluation, safeguarding, restoration, and enhancement of diverse assets and infrastructure. Leveraging a comprehensive skill set spanning various disciplines, the company seamlessly integrates engineering prowess with adept project management, augmented by an array of proprietary assessment technologies, such as 3D scanning and predictive analytics. Based in Wangara, Western Australia, Duratec operates through a network of 20 branches strategically positioned across the nation's major urban hubs and regional centers. Its extensive service portfolio encompasses key sectors like Defence, Commercial Construction & Façades, Infrastructure (Water, Transportation & Maritime), Mining & Industrial, as well as Power and Energy.

update:Todays update was a downgrade, where . Revenue guidance has been reduced to a range of $550 - $565m from $570 - $610m as a result of delays in expected project awards. . EBITDA guidance has been tightened to a range of $46 - $48m from $45 - $52m previously
The decrease in revenue guidance is attributed to the delay in anticipated project awards across the Defence, Mining, and Energy segments. These tendered opportunities are currently held in the Company's tender section, with the expectation that the awards for these tenders will now occur in the first half of FY25.
On a positive note:The Company has demonstrated solid performance in the second half of FY24, marked by increasing EBITDA margins attributed to robust project execution across all sectors. The integration of Early Contractor Involvement (ECI) projects has notably contributed to Duratec's delivery of enhanced project outcomes.Duratec maintains a robust order book valued at $377 million, with the Company consistently securing contracts ranging from small to medium scale, alongside annuity-style projects, in line with historical success rates. The Pre-Contracts team's efforts continue to bolster Duratec's project pipeline, resulting in a 40% surge in tendered work to $1.47 billion and a $200 million increase in the overall pipeline to $3.95 billion.In addition to stellar project performance, margin improvement, and heightened tender and pipeline activity, the Company's cash generation has shown positive strides, buoyed by the receipt of several contract milestone payments. Furthermore, bonding facilities have expanded in accordance with anticipated awards, ensuring sufficient headroom for future endeavors.
Factors to consider: Securing contractors, particularly specialists, for remediation sites can pose considerable challenges. Additionally, collections from certain projects may suffer setbacks due to completion delays and tardy payments. Moreover, fluctuations in interest rates prompt clients to withhold payments, thereby affecting the bottom line. Analysts, foreseeing potential declines in work volume or pace, may adjust their forecasts accordingly. Duratec (DUR) must vigilantly monitor receivables and prioritize cash generation, with special attention given to milestone completion in project cycles.
Listen to our comments: https://youtu.be/gbclx_IcmQw

Dicker data Ltd - (DDR) - market update 2024.05.17

ٱلسَّلَامُ عَلَيْكُمْ 
Dicker Data (DDR), an Australian-founded and ASX-listed enterprise, specializes in distributing a comprehensive range of technology solutions, encompassing hardware, software, cloud services, cybersecurity, access control, and surveillance. Our tailored offerings cater to the diverse needs of our clientele.
Operating exclusively as a distributor, we prioritize serving our extensive network of valued partners, spanning over 12,300 resellers throughout Australia and New Zealand (ANZ). Dicker Data proudly represents a diverse array of products sourced from top-tier global technology providers, including industry giants like Cisco, Citrix, Dell Technologies, Hewlett Packard Enterprise, HP, Lenovo, Microsoft, and other leading brands.

Market update released on the 17th of May 2024
• Revenue experienced a 10.4% decline, attributed to the substantial invoicing of a backlog from FY22 during Q123, as supply chain challenges alleviated. Over $300 million worth of backlogged orders were expedited, with the majority invoiced in Q1 2023. By the close of FY23, their backorder book had normalized to around $200 million.
• Net profit before tax settled at $24.6 million, reflecting a decrease of $0.8 million or 3.1%, primarily influenced by elevated interest expenses during the period.

On a positive note:
• Despite a subdued market environment, the Company demonstrated strong performance in the first quarter of FY24. Quoting activity and pipeline strength in Q124 remained consistent with the previous year, positioning the Company favorably as it enters the second quarter. The quarter-on-quarter revenue decline primarily stemmed from the invoicing of a significant backlog in Q123.
• Several new vendors, including Adobe and Hikvision, were introduced during the quarter, with expectations of scaling their operations in the latter half of the year.
• The Company further solidified its standing as a leader in the Artificial Intelligence (AI) market. In Q124, it secured the exclusive distributorship of NVIDIA's end-to-end solutions in the ANZ region, enhancing its position in AI software. Currently, the Company ranks as the top distributor for Microsoft Copilot in both Australia and New Zealand, reaffirming its leadership in the AI software 

Listen to our comments here: https://youtu.be/ueLBIo9Lcpw

ٱلسَّلَامُ عَلَيْكُمْ 
IDP Education Limited facilitates the enrolment of students in educational institutions across Australia, the United Kingdom, the United States, Canada, New Zealand, and Ireland. Its range of services encompasses counselling, application processing, pre-departure guidance, student placement and exam assistance, English language teaching, client relations, online student recruitment, as well as exam support and shared services. 

Additionally, the company oversees the distribution and administration of International English Language Testing System (IELTS) tests for educational, professional, and migration purposes. It also operates English language schools and offers digital marketing and event services. Founded in 1969, IDP Education Limited is headquartered in Docklands, Australia.

•Today share price movements were up almost 8% and come at the back of an independent review of the UK's graduate route which recommended a status quo of the program which allows international students to stay in the UK for two years after graduation

•Despite good results in the first half of 2024 (revenue up 15%, NPAT, up 23%), IDP shares have been struggling. IDP derives about 64% of its revenues from IELTS, the International English Language Testing Service, the most widely accepted English language equivalency test in the world. IELTS revenue was down 12% while it made 33% more on student placement services and 20% higher from digital marketing and the ambassador program, in 1H24.•IDP Education experienced significant impact from the COVID-19 pandemic, facing challenges due to border closures that limited international student mobility. However, the company swiftly recovered, surpassing pre-pandemic revenue and profit levels in the fiscal year 2022.•However, IEL has also suffered a setback domestically as the Australian govt. has now set limits on enrolment of international students by each university in yesterday’s federal budget•Analysts View restrictive international student policies as a continued risk, and see downside risk to consensus FY25 estimates, predicting an unfavourable investment in IDP and volatility in the short to medium term. 

We have seen some turmoil in the share price due to the appointment of a new CEO in 2022 and now a new CFO in March 2024. All this coming at the heels of Canadian changes to testing rules which opened up its market for other players such as Pearson testing to allow English language testing for Canadian international students,  besides IELTS.Company has done strategic acquisitions in the past such as the British council in india, the Ambassador platform in UK, Intake in Africa and Asia, and owning 20% stake in HCP Ltd China, strengthening the core values of the brand and streamlining focus on student placement, English language teaching and testing services.

Despite all the negativity and gloomy market sentiment, IDP shares may still benefit from a strong tailwinds in 2025 if it sees the following:• Increasing university enrollments from emerging economies • Global mobility of international students • Easing of immigration policies for overseas students.

Listen to our comments here: https://youtu.be/s7gsbC1XwuU

ٱلسَّلَامُ عَلَيْكُمْ 
REA Group Ltd is a multinational digital advertising business specialising in property. REA operates Australia’s leading residential and commercial property websites, realestate.com.au and realcommercial.com.au , as well as the leading website dedicated to share property, Flatmates.com.au and property research website, property.com.au. 

REA Group owns Mortgage Choice Pty Ltd, an Australian mortgage broking franchise group, PropTrack Pty Ltd, a leading provider of property data services and Campaign Agent Pty Ltd, Australia’s leading provider in vendor paid advertising and home preparation finance solutions for the Australian real estate market.

In Australia, REA Group holds strategic investments in Simpology Pty Ltd, a leading provider of mortgage application and e-lodgement solutions for the broking and lending industries; Realtair Pty Ltd, a digital platform providing end-to-end technology solutions for the real estate transaction process, and Arealytics, a provider of commercial real estate information and technology in Australia.

Internationally, REA Group holds a controlling interest in REA India Pte. Ltd. operator of established brands Housing.com and PropTiger.com. REA Group also holds a significant minority shareholding in Move, Inc., operator of realtor.com in the US, the PropertyGuru Group, operator of leading property sites in Malaysia, Singapore, Thailand and Vietnam and Easiloan, a technology platform for end-to-end digital processing of home loans in India.

REA Group’s digital platform, realestate.com.au, stands as the premier choice for individuals seeking to purchase, sell, or lease real estate. The surge in prices across all segments of the property market has propelled significant growth in revenue and earnings, fueling a remarkable increase in REA Group’s stock value.

REA Group’s shareholders reap the rewards of a robust and advantageous network effect. With the highest number of properties listed for sale, the company naturally draws the largest pool of prospective buyers. Conversely, its extensive buyer base reinforces its position as the leading platform for property listings. This symbiotic relationship simplifies the task of real estate agents in selling properties, as listings on realestate.com.au attract more attention, without incurring any cost to the agents themselves as the expenses are covered by the property vendors. 

The Group provides mortgage broking services, where the service provided by the Group is to establish a loan contract between financial institutions and the borrower. This does not pass our Shariah complaint filters where: if company has halal primary business activities, but the peripheral activities involve non-halal elements, then we check, if, 

(Income from prohibited activities – interest income) / Total revenue <= 5%

In REA’s case this is over 22%. Until it focuses on its core activities of generating revenue from property listing and online advertising services such as Subscription, Listing depth, Banner and performance advertising or data and transactional services, and passes through our Shariah filters, we would not be looking at investing in the company.
Listen to our comments here: https://youtu.be/WGKg2LkYj4Q

ٱلسَّلَامُ عَلَيْكُمْ 
Lindsay Australia Limited (LAU) is involved in transporting refrigerated and regular freight, providing logistics services for importing and exporting horticultural products, and selling rural supplies. The Lindsay Australia Group includes Rural, Transport, and Fresh Logistics divisions.

In the market update released today, Lindsay Australia expects FY24 underlying EBITDA to be between A$88 mill and A$94 mill, compared with earlier forecast of between A$102 mill to A$108 mill, which has resulted in the stock price falling by over 8% and hitting a 14-month low.

The reasons cited by the management team were lower horticultural volumes in seasonal products due to wet weather, and disrupted freight flows which impacted its 2HY24 forecasts. The company said volumes remained subdued after the Easter period due to a soft demand and adverse weather conditions. 

Despite these short-term challenges, the outlook remains positive within Lindsay’s market segments. Favourable soil moisture profiles and water storage in key irrigation regions provides positive conditions for the horticultural sector going forward. 

The refrigerated logistics sector will continue to be supported by increases in population and immigration growth, changing consumption habits and demand for efficient road and rail services, reflected in 2H2024 commercial freight volumes forecast to grow by approximately 6% compared with 2H2023. 

Lindsay have also continued to invest in its operations, network, and fleet throughout the year, adding additional capacity to support future growth.  

Listen to our comments here: https://youtu.be/PnZ85v7PutE

Important disclaimer:
These posts/articles were written without taking into account your objectives, needs, or financial situation, and they do not constitute financial advice nor a buy/sell/hold recommendation. Therefore, you should consult a financial advisor and determine whether the information mentioned in these posts/articles is appropriate for your financial circumstances, goals, and needs before acting on it. While every reasonable attempt has been made to ensure the correctness of the information shared, we cannot guarantee its accuracy, completeness, or currency. No legal responsibility is assumed for any mistakes or omissions, whether they were made intentionally or not. Read the full disclaimer 

Member Services - Market Updates

2024/08/30

Is (DDR) good for dividend investment?

2024/11/07

Pro Medicus (PME) share price is at $200, what’s driving the share price?

2024/10/18

Why is the stock price for ARB not showing any growth?

2024/10/15

Ansell CFO to leave by second quarter 2024.

Pro medicus - update 2024/10/07

PME secures a 8 year, $96 M, contract

Auckland international airport

AIA - market update 20240916

2024/09/19

FED cuts rates by 50 basis points.

RPMGlobal Holdings Ltd - (RUL) - market update 2024.07.02

Technology One - (TNE) - market update 2024.05.21

Sonic Healthcare Ltd - (SHL) - market update 2024.05.21

Duratec Ltd - (DUR) - market update 2024.05.20

Dicker data Ltd - (DDR) - market update 2024.05.17

IDP Education Limited - (IEL) - market update 2024.05.16

REA Group - (REA) - non-compliant investment - market update 2024.05.12

Lindsay Australia - (LAU) - market update 2024.05.07