Stock markets are a game of timing. At every given time, the price and valuation are best consideration for investment portfolio stocks. This strategy offers an opportunity to invest in stocks having better intrinsic value because ultimately this gets aligned to the market valuation.
Aristocrat Leisure Limited (ASX: ALL)
Aristocrat Leisure Limited (ASX: ALL) posted robust financial results for the six months ended March 31, 2024. The company reported a 6% increase in group revenue to $3.3 billion, with EBITDA rising by 18% to $1.2 billion. Notably, the EBITDA margin expanded by 3.6 percentage points to 36.6%. Normalized NPATA surged by 16% to $764 million.
In the realm of Aristocrat Gaming, North America witnessed a $22.3 million profit boost, despite a slight margin decline due to investment in refurbishing. Rest of World revenue climbed 7%, driven by strong performance in Asia, leading to a 29% profit increase. In ANZ, Aristocrat retained its market leadership with a 38% ship share. Pixel United's margin surged by 560 basis points to 35%, with a 20% increase in Average Bookings Per Daily Active User (ABPDAU). Aristocrat Interactive saw a remarkable 49% revenue rise, fuelled by CXS revenue growth and iGaming expansion in North America and Europe.
Earnings per share (EPS) saw a significant uptick of 19.5% to 112.2 cents. Aristocrat's strong free cash flow generation facilitated a return of $608 million to shareholders through on-market share buy-backs, totalling approximately $1.4 billion returned from a program size of up to $1.5 billion. Maintaining a robust balance sheet with a net cash position of $366 million and liquidity of $3.4 billion, the company authorized an interim fully franked dividend of 36 cents per share ($228 million) for the period.
With a strong track record of successful acquisitions and integrations, such as Big Fish Games and Plarium Global, Aristocrat has expanded its digital offerings and strengthened its resilience. Now, with Aristocrat Interactive joining Aristocrat Gaming, the company aims to seize opportunities in regulated gaming content, including Social Casino through Product Madness.
Aristocrat's continued leadership in the US market, demonstrated by its exceptional portfolio strength and performance, along with Pixel United's maintained leading positions in key gaming genres, underpin the company's strong market position and competitive advantage.
Whitehaven Coal Limited (ASX: WHC)
Whitehaven Coal Limited, on 16 May 2024, announced that the Full Federal Court had dismissed an application brought by the Environment Council of Central Queensland Inc. regarding the Environment Protection and Biodiversity Conservation Act (EPBC) approval process for Whitehaven’s Narrabri Stage 3 Extension project. This judgment paves the way for the Federal Minister for the Environment and Water to make a final determination on the EPBC application for the Narrabri Stage 3 project, which is expected to extend the mine's life from 2031 to 2044.
The company previously released its quarterly results for the period ended 31 March 2024. With the acquisition of BMA’s Daunia and Blackwater coal mines, Whitehaven has been transformed into a leading metallurgical coal producer.
The company is committed to expanding its operations through key projects currently under the capital allocation framework. One noteworthy project is the Vickery early mining project, which has made significant progress.
The company having a strong growth trajectory and financial profile are corroborated by the significant revenue growth achieved over the years, remarkably growing from $1.72 billion in 2020 to $6 billion in 2023.
Additionally, the company's earnings have experienced exceptional growth, rising from $30 million to $2.66 billion. This impressive growth is expected to continue in both the short and long term, thanks to key expansion plans in Whitehaven's pipeline that will lead to enhanced production rates. It is important to note that this Financial Growth has surpassed the growth in stock prices, resulting in an undervalued position for the company.
Corporate Travel Management Limited (ASX: CTD)
Corporate Travel Management Limited, in its 1H24 financial report released on 21 February 2024, displayed robust financial performance and regional dynamics.
The company experienced a substantial 25% increase in revenue and other income, reaching $363.7 million, coupled with a remarkable 96% growth in underlying EBITDA, totalling $100.7 million. The underlying NPAT attributable to owners of CTM also saw a notable surge, soaring by 162% to $57.9 million compared to the same period in the previous year.
The company declared an interim dividend of 17 cents per share (unfranked) and continued its on-market share buy-back, contributing to a remarkable 183% increase compared to 1H23. CTM's balance sheet remains robust with no drawn debt and a substantial cash reserve of $131.3 million.
CTD has demonstrated consistent financial growth since 2019, with notable increases in revenue, EBITDA, and NPAT. The company has successfully reduced total debt while increasing cash flow from operations annually, showcasing prudent financial management. Net margins have improved significantly, shifting from negative in FY20 to an impressive 12% in FY23, highlighting the company's effectiveness in cost control and revenue generation.
CTM's strength lies in its robust diversification across geography, industries, and client sizes. It outlines a robust financial strategy with a focus on cash generation and shareholder returns over the next five years. The business anticipates a solid long-term average operating cash conversion of 85-90%, ensuring a significant cash position.
Source: Company's Report
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