Investment Matters

Company news: TZ Limited, Primary Health Care, Centuria, Paragon and more

TZ Limited released a positive trading update.  Over the last ~6 weeks, TZ has:

 

  • entered into a new distribution agreement with Novitex, which will provide a new sales channel for smart lockers in the US
  • had a number of new tender wins for smart lockers in US universities
  • signed a development and licencing agreement with a major automotive manufacturer (not named because of commercial confidentiality)
  • obtained accreditation from the global security division of a major US technology provider (also not named because of commercial confidentiality)

 

The Chairman also announced his retirement, taking effect at the 2018 AGM.  This continues the Board renewal program.

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Primary Health Care noted difficulties in GP recruitment at its AGM.  Recruitment has not been as high as planned this year, and margins are under pressure when this is combined with the new financial model for GPs.  However, the company’s Pathology division has had a solid start to FY-18, and Imaging is performing above FY-17.  The company also noted the investment it is currently making, which will provide benefit in the future - including in IT and IVF services.

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The Centuria Metropolitan Property REIT (the old 360 Capital Office Fund) was sold from clients' equity portfolios this week.  The majority of this holding was sold in mid-October, along with the investment in the Centuria Industrial Property REIT.   As noted then, the Centuria Metropolitan Property REIT has delivered great returns for clients over the time of ownership.  However, with it now trading around its net asset value, and with slow (flat at best) medium-term distribution growth outlook, it no longer meets the return requirements of the equity portfolio in the medium term.

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Paragon Care noted that it has a positive outlook for FY-18 at its AGM.  EBITDA guidance was $18-$19 million (vs $17.1 million for FY-17).  It did note that sales would be skewed to H2, because of the budgeted spending patterns by customers (but there is confidence this will occur based on back orders).  This guidance is either in line or above current consensus estimates.   

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South32 was frank about the conditions and issues facing its business at its AGM.  It acknowledged the benefit commodity prices had in FY-17, and it noted that market conditions remain generally positive in FY-18. 

It also advised public policy remains challenging, particularly in South Africa.  It is taking action to address the operational issues at Illawarra Coal in NSW.  It is also looking a three greenfield opportunities.

The company highlighted rising raw material costs (which will impact full-year results if it persists).

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360 Capital’s takeover offer for securities in the Asia Pacific Data Centres ended, with 360 Capital obtaining 67.3% of the REIT’s securities.  The minority security holders are now NextDC (tenants of the three properties APDC currently owns) owning 29.1%, and 379 other parties.

360 Capital has now taken control of the Board and will proceed with a strategic review.  This will include implementing the cash distribution, finding opportunities to grow APDC (acquire new assets), and reinstating the quarterly distribution.