Investment Matters

Company News: Healius, Origin, Worley, Moreton Resources & Threat Protect

Healius has announced two senior executive changes, as part of an organisational restructure. CFO Malcom Ashcroft and CEO of Pathology Wes Lawrence will be departing the company. Succession plans for these two roles are well advanced and the announcement of new appointments are expected shortly.  We see this as a positive development as part of the company’s organisational re-design, which will see it simplify its management structure.

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Origin released its activity report for the June quarter.  Attributable revenue for the company’s integrated gas business (APLNG) increased by 36% overall in FY-19 vs FY-18, on the back of strong LNG prices.  This has resulted in net cash received from APLNG of $943m in FY-19 vs $363m in the previous year.  However, volumes for the company’s Energy Markets business (electricity and natural gas sales) have shown a slight decline in FY-19 (-3%).  Pleasingly, the company’s Beetaloo Basin project continues to progress, with two appraisal wells planned in CY2019.  The company also announced it will be redeeming €1 billion in notes which we anticipate will be refinanced at a lower interest rate. 

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Worley announced that is has been awarded a contract with BP.  As part of the contract Worley will be responsible for hook-up and commissioning integration services for the Mad Dog 2 project and the Argos deep water platform in the Gulf of Mexico.

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Moreton Resources announced that the Federal Court has found in favour of its appeal against a decision by the Administrative Appeals Tribunal (AAT).  The decision made last year determined Moreton’s activities in financial years 2012, 2013 and 2014 did not qualify for an R&D tax incentive.  That decision will now be set aside, with the matter to be resolved in an AAT hearing or through negotiation with AusIndustry.  We expect the resolution of the matter to have a significant positive financial impact on the company.

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Threat Protect released its activity report for the June quarter.  There has been a significant increase in monitoring revenue, post the company’s acquisition of On-Watch, with monitoring revenue up by $4.8m in the quarter.  Monitoring revenue for the year has grown by 75.4%, while operating revenue for the company has grown by 45.7%.  Subsequently, the company has increased the utilisation of its monitoring capacity to approximately 45% (from ~35% in Q4 last year) which has begun to flow through to higher operating margins.