Supply Network Ltd (ASX: SNL)
Supply Network Ltd (ASX: SNL) had a solid year in FY2024, with revenues surpassing $300 million, reflecting a growth of approximately 20%. The company achieved a steady profit after tax (PAT) margin of 10.9%, with PAT amounting to $33 million. This result was supported by strategic investments in customer service and network expansion. Fully franked dividends totaling 56 cents per share were declared, marking a 16.6% increase from 2023, with a strong uptake of 83% in the dividend reinvestment plan. Although revenue growth is expected to moderate to historical levels of around 14% in FY2025, the company remains optimistic about its strong market position.
The company’s network expansion continued in FY2024, though at a slower pace. Yatala in Queensland was the only new branch opened, and it has exceeded expectations since its launch. Looking ahead, a new branch is planned for outer north Perth in March 2025, alongside an expansion of the Illawarra branch, which is expected to double in size. Additionally, construction on a new distribution center in Truganina, Victoria, is underway after delays in development approvals. These expansions aim to support the company's target of achieving $400 million in revenue annually.
In terms of operational growth, SNL saw a strong 21% revenue increase in Australia, outpacing initial forecasts, while New Zealand grew by 15%. The company’s growth is largely driven by increasing road freight volumes, vehicle complexity, and market share gains. Investment in system improvements, including new technologies for better customer service, is expected to continue over the next two years. As part of its strategy, SNL joined TEMOT International to enhance its supply chain and parts catalogue. These efforts, combined with ongoing network intensification and new expansion projects, are poised to maintain the company’s growth trajectory moving forward.
Tabcorp Holdings Limited (ASX: TAH)
Tabcorp Holdings Limited (ASX: TAH) has unveiled significant organizational and strategic initiatives aimed at navigating near-term challenges while positioning for sustainable long-term growth. Key changes include the creation of a Chief Wagering Officer role, consolidating core functions such as digital, retail, trading, marketing, and product innovation. Additionally, a Chief Commercial and Media Officer role will optimize media assets (Sky Racing), retail operations, and the Gaming Services division. These changes aim to drive stronger revenue growth and operational synergies. FY24 results reflect a challenging market environment, with revenue down 3.9% to $2,338.9 million, EBITDA declining 18.7% to $317.7 million, and NPAT falling sharply by 66.8% to $28.0 million. Non-cash impairments, primarily related to NSW and South Australian wagering assets, resulted in a significant net loss after tax (NLAT) of $1,359.7 million. In response, the Board adopted a cautious capital management approach, reducing the final dividend by 43.5% to 0.3 cents per share.
Despite these setbacks, Tabcorp remains financially stable, supported by a pro-forma leverage ratio of 2.0x, $380 million in undrawn facilities, and $314 million in cash. The newly secured 20-year Victorian Wagering Licence is a transformative milestone, expected to deliver a pro-forma EBITDA uplift of $115 million in FY24 under the new terms. Investments in digital capabilities, including the high-performing TAB app, have enhanced customer engagement and turnover, particularly in cash wagering. The stock appears to be in momentum, with an uptrend supported by strategic milestones and operational improvements. Tabcorp’s omni-channel strategy, coupled with ongoing structural reforms in key states like Victoria and Queensland, positions the company for continued growth. Although regulatory costs and inflationary pressures are anticipated to impact FY25 margins, cost-saving measures and the Genesis program are expected to offset some of these challenges. With robust liquidity, no debt maturities until FY28, and enhanced digital and retail competitiveness, Tabcorp offers a compelling medium- to long-term investment opportunity. The company’s strategic initiatives and operational transformation underscore its potential for sustained value creation, positioning it well for an upward trajectory as market conditions stabilize.
Source: Company’s Report
Veye Pty Ltd(ABN 58 623 120 865), holds (AFSL No. 523157 ). All information provided by Veye Pty Ltd through its website, reports, and newsletters is general financial product advice only and should not be considered a personal recommendation to buy or sell any asset or security. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation, or needs. You should look at the Product Disclosure Statement or other offer document associated with the security or product before making a decision on acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Any recommendation contained herein may not be suitable for all investors as it does not take into account your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure accuracy of the content and that the information is gathered and processed from reliable resources, we strongly recommend that you seek professional advice from your financial advisor or stockbroker before making any investment decision based on any of our recommendations. All the information we share represents our views on the date of publishing as stocks are subject to real time changes and therefore may change without notice. Please remember that investments can go up and down and past performance is not necessarily indicative of future returns. We request our readers not to interpret our reports as direct recommendations. To the extent permitted by law, Veye Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss, or data corruption) (as mentioned on the website www.veye.com.au), and confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report. Veye Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services.