Azzet reports on three ASX stocks with notable trading updates today.
Insignia drops double-digits after Bain pulls offer
Shares in Insignia Financial (ASX: IFL) were down around 13% at the open after the wealth manager and superannuation provider told the market that private equity firm Bain Capital’s $5 a share takeover offer was now off the table.
Citing macro uncertainty, Bain is the second bidder to withdraw its offer for the ASX200 stock after Brookfield abandoned its crack to take the company out back in March.
Insignia attempted to soften the news to shareholders today by reminding them that there’s still one player left in the original three-party bidding war which started last December.
Insignia remains in discussions with CC Capital which has lodged a separate $5-a-share offer to take the company out.
There is no certainty whether discussions with CC Capital will amount to anything.
However, CC Capital is expected to make a binding bid for the company over the coming weeks.
Takeover talks aside, Insignia was recently hit by a cyber-attack that impacted a small number of superannuation members on its Expand platform.
While the incident had no financial impact on members, it was described as a "malicious third-party” attack involving “credential stuffing” where an unusual number of login attempts targeted the platform.
During its 3Q update, Insignia disclosed that funds under management and administration decreased by $5.0 billion (-1.5%) to $321.8 billion.
Insignia has a market cap of $2.3 billion; the share price is 48% in one year and down 2% year to date.
The stock’s 200-day moving average is trending higher and there is significant evidence that the bullish trend is near an end.
Consensus is Hold.
Aristocrat tanks on missed earnings
Shares in Aristocrat Leisure (ASX: ALL) were down around 14% at noon after the pokie machine maker’s 1H FY25 earnings missed earnings expectations.
Despite a dividend boost, investors were more focused on the group’s normalised earnings, which while 13% up on the previous period at $1.25 billion, failed to reach consensus expectations of $1.32 billion.
While up 8.7%, normalised operating revenue of $3.03 billion also failed to hit market expectations of $3.3 billion.
Jefferies’ analysts attribute the 6% group earnings miss against the $1.12 billion estimate to unexpectedly large fee per day headwinds plus $15 million in legal costs.
The group announced an interim unfranked dividend of 44 cents per share - up 22.2% - which will be paid out on 1 July.
Putting a brave face on today’s result, CEO Trevor Croker told investors that it demonstrated the group’s ability to grow in different operating environments while also investing in the future.
“We completed the divestiture of Plarium in the reporting period and refocused our mobile operations around our core Product Madness Social Casino business, in line with Aristocrat's refreshed growth strategy,” said Croker.
“We also invested in aligning technology and product strategies and took important steps to set up Aristocrat Interactive to accelerate its performance and allow us to extract more benefit and momentum from our scale and capabilities.”
Looking forward, Croker expects operating momentum to accelerate in 2H FY25 as the group capitalises on product rollouts and technology initiatives across its portfolio.
Aristocrat’s market share is $37 billion making it the ASX’s 16th largest stock; shares are up 47% in one year and down 13% year to date.
While the stock’s 200-day moving average is trending upwards and highlights long-term investor interest in the stock, the 20-day moving average is falling as upward momentum wanes.
Consensus is Strong Buy.
Core Lithium flies on resource update
Shares in Core Lithium (ASX: CXO) were up around 30% at noon after the Australian hard-rock lithium small-cap flagged the imminent restart of mining activities at its Finniss Lithium Project in the Northern Territory.
The miner’s restart study confirms the potential for an attractive 20-year mine life.
Underscoring today’s announcement is the word confidence – appearing 29 times – with Core CEO Paul Brown reminding investors that updated ore reserves support potential for a longer mine life and highlight the significant resources across its broader tenement packages.
In summary, today’s update includes a doubling of the Grants Reserve to 1.15 million tonnes (Mt) while a move to underground mining is expected to denote both greater access to material and reduced costs.
While mining costs are expected to be cut by 40% reduction to $63 to $72 per tonne from $120 per tonne previously, processing costs are expected to be cut by 33% to $40 to $46 per tonne from $69 per tonne.
Overall cost reductions are expected to lead to unit operating costs of $690 to $785 per tonne, which would make Finniss one of the competitive global spodumene operations.
What’s equally noteworthy for investors is pre-production capex which has – as a result of recent updates - been reduced by 29% from $175 million to $200 million.
Highlighting the strength of the company’s reconfigured operations, there is an estimated free cash flow of $1.2 billion.
Core Lithium reported a cash balance of $30 million at the end of March.
Core Lithium has a market cap of $200 million; the share price is down 41% over one year and up 5% year to date.
The stock’s shares appear weak with little demand.
Consensus is Hold.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.
