Azzet reports on three stocks with market-moving updates today.
COG Financial Services jumps after expanding salary packaging footprint
Shares in NSW-based COG Financial Services (ASX: COG) were up 7.1% by 1:45 pm AEST (3:45 am GMT) after the finance broker aggregator and equipment leasing company announced it has bought unlisted salary packaging business and novated leasing business EasiFleet for A$40 million.
The buyout is via its salary packaging subsidiary Paywise and is at a multiple of six times its financial year 2024–25 earnings on a post-synergies basis.
Deferred payments of up to a maximum of $4.6 million are also payable between June 2027 and June 2029, subject to the extension of the Fringe Benefits Tax exemption for electric vehicles.
It’s understood that around $37 million will be funded through COG’s cash resources, debt facility and minority shareholders.
The transaction is expected to be completed on or before September 20.
COG’s CEO, Andrew Bennett, told the market that the acquisition meant Paywise now held contracts with the WA, Tasmanian, Queensland, Northern Territory, and ACT governments.
“This national coverage enables the group to provide novated leasing and salary packaging services to a significant proportion of the Australian public sector workforce,” he said.
To the uninitiated, COG has two complementary business divisions: Finance Broker & Aggregation and Lending.
While the former provides aggregation services to independent brokers and brokers, the latter provides origination of new chattel mortgage products.
Today’s update follows the release of COG’s mixed FY25 results last week, with revenue missing analyst estimates by 29%, while earnings per share (EPS) beat analysts’ estimates by 16%.
Underscoring the 12-month revenue was the finance broking & aggregation segment, which contributed total revenue of $233.5 million - 63% of total revenue – while the largest operating expense was sales & marketing costs, amounting to $163.9 million - 62% of total expenses.
Commenting on the FY25 result, Bennett said underlying performance was up 4% on the prior year after allowing for the diminished contribution of COG’s TL Commercial operating lease business in run-off.
“This is a pleasing result which affirms the COG business model through different economic cycles,” he said.
“We remain encouraged by the continued strong momentum in the Group’s Novated Leasing segment.”
Management expects ongoing organic growth in FY26 as it continues to capture opportunities, driving uptake with current partners, assisted by current government incentives on electric vehicles.
In future periods, COG advised that performance analysis will focus on earnings rather than the historic focus on net profit after tax.
COG Financial Services has a market cap of $371 million; the share price is up 80% in one year and down 1% in the last month.
The stock appears to be in a long-term uptrend confirmed by multiple indicators.
Consensus is Moderate Buy.
Flagship Minerals soars on Pantanillo gold growth upside
Shares in Flagship Minerals (ASX: FLG), formerly Pan Asia Metals, were up 17.2% on the strength of the small-cap miners' review of the extensive dataset it acquired from Anglo American for the 1.05Moz Pantanillo Gold Project in Chile.
Regarded as a game-changer for Flagship, the acquisition of Anglo American’s dataset comprises over 700 files containing 10,000-plus documents, plus over 100 tonnes of core, pulps and samples.
Management told the market it is now in the process of re-evaluation, including the updated drill intercepts herein.
“What we’re seeing are multiple long runs of +100 gram-metre intercepts in oxide material — with outstanding results such as 116m at 1.5g/t and 142m at 1.13g/t gold, as well as several +300m intersections at >0.50g/t gold,” said Flagship Minerals’ managing director, Paul Lock who believe this data confirms Pantanillo’s credentials as a large, scalable heap leach opportunity.
“With the full dataset in hand, we’re now in a strong position to fast-track conversion of the current 1.05Moz foreign estimate to a JORC Mineral Resource and, with adjusted cut-off grades and updated economics, we expect to bring in additional ozs without additional drilling.”
Given the heightened global interest in gold - with gold breaking US$3,600/oz, a record high – investors clearly believe Flagship is well positioned with an advanced gold project which is located in a neighbourhood demonstrating low capital intensity and AISC outcomes.
It’s understood that the drillhole database contains 183 holes for a total of 30,370.2m of drilling and comprises 18,865 assayed samples across 29,848.5m of drilling.
The bulk of this drilling has been conducted at Pantanillo Norte, where 1.05Moz of Au @ 0.69g/t Au has been defined QFE of mineralisation.
Flagship will use this drillhole data and other supporting information to prepare a JORC (2012) Mineral Resource estimate for the Pantanillo Norte deposit.
Flagship has also acquired around 14,000m of diamond drill core from 48 holes drilled at Pantanillo Norte.
This core, as well as a large amount of assay pulps and reject samples from the previous diamond core and RC drilling, are available for analysis.
"What sets Pantanillo apart is its maturity. The current resource is based on conservative assumptions — a US$1,035 gold price and a relatively high cut-off grade — providing a clear pathway to increase ounces when we convert to JORC,” noted Lock back in July.
Cash at bank at the end of the June quarter was $308k.
Flagship Minerals has a market cap of $20 million; the share price is up 43% year to date.
The stock’s shares appear to be in a near-term uptrend, confirmed by its 20-day moving average.
Consensus does not cover this stock.
Platinum AM dips on AUM organic decline
Shares in Platinum Asset Management (ASX: PTM) were trading 6% lower after Morningstar analyst Shaun Ler backed its expected merger with L1 Capital.
Assuming shareholders give the deal the thumbs-up when they vote on 22 September, Platinum will be rebranded as L1 Group and will be 74% owned by L1’s current shareholders and oversee around $16 billion of assets.
At face value, there’s nothing within Shaun Ler’s comments to derail market sentiment.
However, today’s share price dip could be a delayed reaction to revelations late Monday that a large client is pulling $580 million in funds by November following a review.
This marks the third major client withdrawal this year, following an exit of an institutional mandate worth $958 million in May and a smaller one worth $360 million in the same month, which led the month’s net outflows to reach $1.6 billion.
This was the largest volume of monthly net outflows from the company in over a year.
Unsurprisingly, over one year to 30 June, the Platinum International Fund has returned 3.4% compared to gains of 18.4% by its benchmark of the MSCI World index.
In the face of the organic decline that Platinum is facing, Shaun Ler thinks the merger is sensible – given the challenges in outperforming consistently - and ultimately a good deal for shareholders.
It’s this backhanded compliment by Ler that the market may have struggled to make sense of.
“The merger with L1 Capital would arrest Platinum’s earnings decline by combining with another asset manager with better-performing products enjoying inflows, while allowing duplicate costs to be cut,” he said.
Meanwhile, another avenue for value creation, adds Ler, comes from L1 Capital taking control as investment adviser of Platinum’s underperforming products – notably the flagship Platinum International Fund, which comprises up to 44% of Platinum’s funds under management.
Based on Ler’s numbers, the combined entity has a valuation range of 58c and 73c per share.
Platinum Asset Management has a market cap of $416 million; the share price is down 27% in one year and up 8% in the last month.
The stock appears to be in a Medium-term rally, confirmed by multiple indicators.
Consensus is Hold.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.
