2 dividend-payers that slipped on ASX – Suncorp Group and Automotive Holdings Group

Update on new programs: Suncorp Group Ltd edged slightly lower on ASX on September 21, 2017 as the group provided an address from its CEO along with a market update. The group’s FY17 NPAT of $1,075 million represented a 3.6% increase over 2016; and the good top line growth, disciplined management of margin, and a sensible balance between reducing overheads and investing in the future led a healthy foundation for time ahead. SUN’s Insurance business also achieved an underlying result well ahead of the prior year 2016. The group has been able to mitigate the impact of major events like Cyclone Debbie, to a great extent in FY17 with the help of reinsurance programs; and has extended those arrangements into FY18. The generous dividend payments and ability to come-up with better products among peers can help Suncorp flourish further. Given this, the group has shed light on its two significant programs of work that include Business Improvement Program (aiming to digitise the customer experience, optimise sales and service, end-to-end process improvement, claims redesign and smarter procurement) to deliver net benefits of $10 million, $195 million and $329 million over the next three years, and acceleration of the Marketplace to deliver benefits faster. The group has also signalled to increase the dividend payout ratio for the period in view of the additional one-off investment associated with the programs. SUN will revert back to the 60-80% target range in FY19.

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Telstra witnessed a stock price slump of 6% on August 30 Traded ex-dividend

raded ex-dividend: Telstra witnessed a stock price slump of 6% on August 30, 2017 while the stock traded ex-dividend. Further, the group updated that the proposal to monetise a portion (worth between $5-5.5 billion) of its locked-in recurring nbn receipts, which was announced to the market on 17 August, did not receive technical consents from nbn co. The proposal was basically subject to agreement and a number of steps including approvals and consents from investors, the Commonwealth Government and nbn co. The proposal was well supported by equity and debt investors while nbn co did not approve of it. The nbn recurring payments have been expected to grow to about $1 billion annually by the end of nbn’s migration period. As per the company, proposed transaction showed the significant value in Telstra’s core underlying telecommunications infrastructure. Meanwhile, TLS had announced about their intention to combine Foxtel and Fox SPORTS Australia into a new Company, one that is well positioned to deliver premium sports as well as homegrown, original and international entertainment in a rapidly evolving and competitive marketplace. In this regard, TLS and News Corp will work to finalise the transaction, including obtaining regulatory approval, to be completed in the first half of 2018. Although there are challenges in the near term, the group’s efforts are expected to reap benefits in the long-term.

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Should you pocket these 2 Big Stocks – Telstra and Boral

raded ex-dividend: Telstra witnessed a stock price slump of 6% on August 30, 2017 while the stock traded ex-dividend. Further, the group updated that the proposal to monetise a portion (worth between $5-5.5 billion) of its locked-in recurring nbn receipts, which was announced to the market on 17 August, did not receive technical consents from nbn co. The proposal was basically subject to agreement and a number of steps including approvals and consents from investors, the Commonwealth Government and nbn co. The proposal was well supported by equity and debt investors while nbn co did not approve of it. The nbn recurring payments have been expected to grow to about $1 billion annually by the end of nbn’s migration period. As per the company, proposed transaction showed the significant value in Telstra’s core underlying telecommunications infrastructure. Meanwhile, TLS had announced about their intention to combine Foxtel and Fox SPORTS Australia into a new Company, one that is well positioned to deliver premium sports as well as homegrown, original and international entertainment in a rapidly evolving and competitive marketplace. In this regard, TLS and News Corp will work to finalise the transaction, including obtaining regulatory approval, to be completed in the first half of 2018. Although there are challenges in the near term, the group’s efforts are expected to reap benefits in the long-term.

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Eight Defensive Stocks – Should you pay a heed?

Growth in Funds from Operations: For H1FY17, Scentre Group reported 3.5% growth for Funds from Operations (FFO) at $638 million representing 12.01 cents per security (cps), and distribution of 10.86 cents per security, up 2%. Excluding the impact of transactions, FFO growth would have been approximately 5%. For the six months to 30 June 2017, profit for the group was $1.4 billion, including $929 million of revaluation gains driven primarily through continued growth in operating income across the portfolio and the completion of the Westfield Chermside redevelopment. Further, Scentre Group commenced $900 million (SCG share: $625 million) in developments with expected total returns of more than 15%. The group successfully completed the $355 million development at Westfield Chermside, setting a new benchmark in creating extraordinary retail and lifestyle destinations. Further, the group announced that it will extend its current practice to grow distributions at a lower rate than earnings growth until it reaches a payout ratio at 85% of FFO. The distribution is targeted to grow at 2% per annum until the target payout ratio of 85% is achieved.

 

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Rio Tinto Limited Better than expected second quarter performance

Better than expected second quarter performance: Rio Tinto Limited (ASX:RIO) reported Pilbara iron ore shipments of 77.7 million tons in the second quarter of 2017 (100 per cent basis), which is a decrease of 6% as compared to the prior corresponding period. This decline was mainly on the back of accelerated rail track maintenance. The group expects Iron ore shipments to be around 330 million tons for FY17 which is lower end to their earlier forecasts of 330 to 340 million tons. On the other hand, the group reported a solid bauxite production of 12.9 million tons, an increase of 7% as compared to the prior corresponding period (pcp) boosted by Weipa and Gove production. Despite Mined copper production recovery from last quarter, it fell 6% as compared to the pcp on the back of ongoing ramp up in Escondida after the labor strike.  Titanium dioxide slag production enhanced 34% from pcp showing improving market demand. The group chose Yancoal Australia as its preferred buyer of Coal & Allied, as they enhanced their offer from $2.69 billion, and expects to finish the sale by the third quarter of 2017.    

 

 

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APRA advised that the bank’s Common Equity Tier 1 APRA’s reasonable 2020 CET1 target reiterated the confidence on the stock

APRA’s reasonable 2020 CET1 target reiterated the confidence on the stock: APRA advised that the bank’s Common Equity Tier 1 (CET1) ratio need to reach at least 10.5% by January 2020. However, the bank is on track to achieve this target with their CET1 ratio already reaching 10.1% on an APRA basis, as of March 31st, 2017. Moreover, the bank declared a $1.1997 distribution amount, while the reasonable APRA’s target wiped off the concerns over the bank’s ability to pay dividends. NAB is offloading 55% interest in its complementary asset consulting business (JANA) to the JANA senior management team. The bank recently launched a new product to enable Australians manage their superannuation in the lead up to and during retirement.

 

 

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Rio Tinto Limited (ASX: RIO) has reported a solid quarter for production, including record output at bauxite operations.

Rio Tinto Limited (ASX: RIO) has reported a solid quarter for production, including record output at bauxite operations. Iron ore production was in line with last year, although iron ore shipments were impacted by an acceleration in its rail maintenance program following poor weather in the first quarter. Pilbara operations produced 157.0 million tons (Rio Tinto share 128.7 million tons) in the first half of 2017, 2% lower than the same period of 2016 reflecting adverse weather conditions in the first quarter. Second quarter production of 79.8 million tons (Rio Tinto share 65.0 million tons) was slightly lower than the same quarter of 2016 and 3% higher than the first quarter. At the Silvergrass project, earthworks for the plant have been completed, installation of the conveyor is underway, and full commissioning remains on target for the fourth quarter of this year. Rio Tinto expects Pilbara shipments to be around 330 million tons in in 2017 (previously between 330 and 340 million tons) on a 100% basis.   

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