Portfolio News

October 5, 2018

 

We are pleased that many of the stocks held in our portfolio continue to receive good press coverage. The recent performance and future plans of companies such as Emeco Holdings (ASX: AHL) and Afterpay (ASX: APT) positions our portfolios well for future growth. Here is an update on recent news:

 

Emeco Holdings (ASX: EHL)

Emeco was moved into the ASX200 Index this week which prompted a strong rally in the share price as index funds scrambled for stock.

 

Over the past couple of weeks, we have been a little surprised to see the stock sold off, particularly in light of our discussions with numerous mining and mining-related stocks which unanimously agreed that a shortage of mining-related equipment has quickly emerged.

 

Given Emeco’s position as Australia’s leading renter of such equipment we expect its utilisation and charge rates to continue to climb, as they have done over the last year.

 

Link to an article: https://www.morningstar.com.au/Stocks/SignalGNews/20181004/435356

 

Leigh Creek Energy Ltd (ASX: LCK)

This energy producer’s shares have been halted to assist it in managing its continuous disclosure obligations ahead of a material announcement in relation to the initiation of gasification at the Leigh Creek Energy Project. The company has been held up firstly because of a last-minute court claim from an indigenous group (which failed) and then because drilling mud the company had put down the hole for initial gasification had hardened during the initial delay.

 

From what we understand the gasification will take place this weekend and we should see an announcement early next week. Successful gasification will be a major milestone for the company and a big step towards commercialisation. Its shares are expected to return to trade on Monday.

 

Link to an article: https://www.fool.com.au/2018/10/05/why-wesfarmers-ltd-asxwes-and-these-shares-are-in-trading-halts-today/

 

Macmahon settles Hope Downs action (ASX: MAH)

Macmahon Holdings has reached an agreement to settle a class action over a 2012 construction project blowout for iron ore major Rio Tinto that was launched by shareholders in the Federal Court of Australia in November 2015. The settlement amounted to around $7m including all costs, which is a blip in the ocean for the company.

 

Link to an article: https://www.miningnews.net/regulation/news/1348072/macmahon-settles-hope-downs-action

 

APN Outdoor Group Announces Approval Received (ASX: APO)

APN Outdoor Group announced that the Overseas Investment Office provided consent under the Overseas Investment Act 2005 for the proposed acquisition of a 100% interest in the Company by JCDecaux. Shareholders now have to vote for the scheme of arrangement.

 

GC1 acquired shares in APO because of the franking credits attached to the scheme’s generous dividend distribution.

 

Link to an article: https://www.morningstar.com.au/Stocks/SignalGNews/20181004/435354

 

Rebecca Minkoff taps Australian platform Afterpay to attract younger shoppers (ASX: APT)

We became aware recently that global fashion and lifestyle brand Rebecca Minkoff announced a partnership with Australian payment platform Afterpay. This was recently publicised in the US press as a significant deal.

 

Most importantly for us is that Afterpay replaces the competing product, Klarna, which Rebekka Minkoff was previously using. Klarna had been sprouting Rebecca Minkoff as a poster-child for its product. The switch is a significant endorsement for the Afterpay brand in the US (and a bit of a kick in the face for Klarna).

 

Link to an article: http://au.fashionnetwork.com/news/Rebecca-Minkoff-taps-Australian-platform-Afterpay-to-attract-younger-shoppers,1020988.html#.W7a7JnszZhE

 

Shine Lawyers back on the acquisition horse. (ASX: SHJ)

It has taken a couple of years and a serious restructure, including the return of the founder, but Shine now finds itself confident enough to begin growing by acquisition again. The company has changed the parameters around which it selects candidates, limiting itself to 3-5x ebitda and only buying hard assets, with no up-front payments and a demanding return criteria.

 

It has acquired the NSW-based class action business, ACA Lawyers, which brings increased diversity, experience and capacity.

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