Azzet reports on three ASX stocks with notable trading updates today.
Johns LYNG Group soars on PEP’s confirmed buyout
Shares in Johns LYNG Group (ASX: JLG) were up around 23% at the open to $3.90 following revelations that this building services giant is the next ASX large cap – sitting just outside the ASX300 – the destined fall into private ownership.
The group has agreed to an attractive takeover deal that private equity group Pacific Equity Partners’ subsidiary Sherwood BidCo put on the table back in May.
With the deed of implementation now signed, Sherwood will proceed to pay $4 per share – up 77% on the 17 May trading price, the day prior to the offering being made.
Based on yesterday's close price of $3.18, the takeover offer represents a premium of 26%.
The price values the group at $1.1 billion and implies an enterprise value of $1.3 billion.
While management and staff can elect to receive some or all of their windfall in scrip, the group’s largest shareholder and CEO Scott Didier – who owns 17.64% - stands to receive a potential cash-scrip bonanza of $199.7 million.
Didier is understood to have paid $2.30 per share to buy $250,000 worth of stock six weeks prior to the offer being made.
The board has unanimously recommended the deal to shareholders who are yet to vote on it in October, but it will still require regulatory approvals from both ASIC and the FIRB.
At face value, shareholder approval appears to be little more than a rubber stamp.
However, while the offer may represent an attractive valuation for some shareholders - including a transaction multiple of FY 2025 forecast EV/earnings of 10.3x – it still represents a discount of around 35% to the stock’s 52-week high.
Commenting on the takeover agreement today, the company's chair, Peter Nash told the market that the independent board committees' unanimous recommendation was based on a thorough evaluation of a range of factors including the stock’s intrinsic value under different scenarios and the potential medium-term share price without the scheme.
What the offer also takes into account, adds Nash is the group’s underlying business performance over the last two years and current business momentum.
What Nash may have been alluding to is the group’s dismal half-year results and revised its full-year guidance for FY25, which saw the share price tank 25%.
Johns Lyng's first-half result included:
• Revenue at $573.1 million, a 6.1% drop year over year.
• Business-as-usual (BaU) revenue increased by 9% to $534.3 million.
• Catastrophe insurance (CAT) revenue dropped sharply, falling 67.7% year over year to $38.8 million.
• Pre-tax earnings for the first half tallied $54.2 million, a 15.4% decrease compared to last year.
• Net profit of $20.8 million, down from $31 million this time last year.
• Declared a fully franked interim dividend of 2.5 cents per share, a payout of around 49% of net profit.
Management also reduced expectations for this year and now expects FY25 revenue to total $1.167 billion, down 5% from previous guidance of $1.228 billion.
It also projects pre-tax earnings of around $126.5 million, a 4.5% reduction.
Johns Lyng’s market cap is $1.1 billion; the share price is down 34% over one year and up over 53% in the last month.
The stock’s shares appear to be in a long-term bearish trend confirmed by a falling 200-day moving average. However, there are rallies occurring in shorter time frames.
Consensus is Moderate Buy.
Ora Banda tanks following production updates
Shares in Ora Banda (ASX: OBM) were down around 13% at the open after the large-cap gold miner updated the market on its robust expectations for FY26.
At face value, today’s update appeared to be positive news.
But in light of the challenges it confronted during the June quarter, the market clearly remains sceptical of reassurances from managing director Luke Creagh the miner is well positioned to meet ambitious production targets.
“Despite the previously announced challenges in the June quarter, the operations and OBM team are set up well going into FY26,” said Creagh.
“This has set a strong platform as FY26 commences our next phase of growth, with production anticipated to increase over 60% to between 140 and 155 thousand ounces, and strong cash flow underpinning capital investment to right-size our infrastructure, including a feasibility study to increase processing capacity to approximately 3Mtpa.”
The miner expects a substantial increase in gold production, projecting an output of 140,000 to 155,000 ounces in the fiscal year 2026.
This target represents a significant leap from the 92,400 ounces the company produced in FY25.
All-in sustained costs are expected to be in the range of $2,800 to $2,900 per ounce.
Closing cash for FY25 of $84.2 million included $57.4 million in free cash flow and was increased by $3.5 million in the June quarter.
In FY25 Ora Banda achieved a 32% increase in gold production.
What may have given the market cause to question today’s robust outlook are the ramp-up issues flagged by the miner.
What hampered June quarter production for FY25 – which came in at 21.9 kilo ounces well below the expected 24 kilo ounces – was a slower-than-expected ramp up of its processing mill and mining delays at the Riverina Underground.
What remains unclear is whether these issues are now behind it.
Meanwhile, Creagh told the market today that the most exciting element of FY26 is the $73 million allocated to exploration and resource development drilling.
This is aiming to extend mine life at Riverina and Sand King, as well as rapidly advance other key prospects including Little Gem, Waihi and the Round Dam trend.
Ora Banda has a market cap of around $1.2 billion; the stock is up 62% in one year and down around 40% in the last month.
The stock’s shares are in a downtrend confirmed within multiple periods. In the near-term, the 5-day moving average lies beneath the 20-day moving average.
Consensus is Strong Buy.
Ventia falls following market update
Shares in Ventia Services Group (ASX: VNT) were trading around 1.6% lower at $5.135 heading into lunch after the essential infrastructure services provider announced an amendment to its new fibre upgrade contract with NBN.
The amendment, awarded to Ventia subsidiary Visionstream Australia is expected to add another $280 million in revenue over the next three to four years and increase revenue from the contract from $800 million to $1.08 billion.
This contract involves upgrading 43,400 premises to Fibre to Premises technology in a new geographical area, the Australian Capital Territory - North region.
This marks a new geography for Ventia for this scope of work which management believe further strengthens its role in delivering critical telecommunications infrastructure across Australia.
These contracted works are expected to commence mid-July 2025.
Commenting on today’s update, Ventia’s group CEO Dean Banks told the market that today's update reflects the trust placed in Ventia’s capability to deliver complex infrastructure programs and redefine service excellence.
Ventia’s business model is underpinned by long-term contracts with governments (which represent 75% of revenue) and corporates such as BHP Group (ASX: BHP), Chevron, and Telstra Group (ASX: TLS), which contribute the remaining 25%.
The company holds around 7.8% market share of a total addressable market (TAM) estimated at $73.5 billion in the Maintenance Service market.
Since listing on the ASX at an IPO price of $1.70 in November 2021, Ventia has delivered a two-year compound annual growth rate (CAGR) for revenue and underlying earnings of 11.1% and 10.7%, respectively.
The company has delivered EPS growth over the last 3 years of around 39%.
However, earnings margins for remained fairly unchanged over the last year despite revenue growth for the period of 7.6% to $6.1 billion.
Ventia has a market cap of around $4.2 billion; its share price is up 23% in one year and up 42% year to date.
The stock is in a strong bullish trend confirmed by multiple indicators. Specifically, a 5-day moving average of the stock price is above the 50-day moving average.
Consensus is Strong Buy.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.
