Azzet reports on three ASX stocks with market-moving updates to share today.
Iress up double-digits after disclosing potential takeover offer
Shares in Iress (ASX: IRE) were up over 10% at the open after the financial services technology company revealed it is in the early stages of making sense of a potential bid to be taken out by New York-based private equity giant Blackstone and its fellow American private equity firm Thoma Bravo.
In response to media speculation, Iress confirmed that it had considered a prior approach at a price of $10.50 cash per share from Blackstone in relation to a potential acquisition.
While that offer – which valued the company at $1.94 billion - was subsequently withdrawn, Iress also made the customary acknowledgment that a proposal or offer may not be forthcoming from either party, or that any offer, if received, will lead to a binding transaction.
What we know so far is that an offer north of $10.50 barely represents a 10% upside to today’s share price of $9.49, which would not set the world on fire for shareholders.
Based on the stock’s current market of around $1.7 billion, shareholders may not look favourably at any offer that doesn’t provide at least a 30% premium – valuing the business north of $2.2 billion.
While Blackstone and Thoma Bravo have been circling Iress for some time, Sweden’s EQT made three indicative bids in 2021 - the highest of which reached $15.91 per share - when Iress was valued at $2.3 billion.
While Iress chairman Roger Sharp last year told the market he wanted to overhaul the business rather than flog it off, shareholders may have other plans.
Iress’s offerings include software and services for trading and market data, financial advice, investment management, life and pensions, and data intelligence across regions such as Asia-Pacific, North America, Africa, the UK, and Europe.
At the full year ended 31 December 2024, Iress made a net profit of $88.7 million in 2024, a $226.2 million increase on the prior year’s loss of $137.5 million, which was materially affected by asset impairments.
The company guided to FY25 net profit of $54 million to $62 million, 80-106% higher than 2024.
The stock’s shares appear to be in a strong near-term rally within a longer-term bearish trend.
Consensus is Strong Buy.
Nick Scali soars after pledging ‘pathway to profitability’ in UK
Shares in Nick Scali (ASX: NCK) were up, trading 9% higher heading into lunch after the market overlooked the reported FY25 profit slump and focused on the furniture retailer’s strong second-half trading result in Australia/NZ and promised upside in the ailing UK operation.
Sales Australia/NZ for July were up 7.7%, and the group expects sales for the first quarter of FY26 to rise compared to the same period 12 months earlier.
While revenues for the last year were up 5.8% to $495.2 million, earnings fell from $129.5 million in the previous period to $105.7 million.
Meantime, what saw the company post a 28% slide in annual profit to $56.7 million was its loss-making business in the UK, where it now has 21 stores.
Nick Scali UK – which was rebranded from its former moniker Fabb - posted an $11.2 million loss.
Store disruptions, closed for refurbishment and the clearance of its existing Fabb product range, saw the company deliver $33.9 million in sales orders in the UK.
So far, the 12 British stores to have been rebranded delivered a gross profit margin of 58% in May and June, compared to 42% at acquisition.
The market clearly took its cue this morning from CEO Anthony Scali’s confidence that with the right sales team, there would be a lift in UK sales.
While long-term growth upside in the UK store network has not yet been confirmed, the company has identified a long-term opportunity of up to 86 Nick Scali stores and 90-100 Plush stores.
In light of sluggish trading conditions earlier this year in Australia/NZ and the significant losses in the UK, Sam Teeger, an analyst at Citi, said the result was a “great outcome” for the company.
The company has declared a final dividend of 33¢, which will be paid on October 17, taking the total payout this year to 63¢ per share.
In a mid-July note to investors, Macquarie confirmed its Outperform rating on Nick Scali shares. It also kept its 12-month target price unchanged at $19.90.
In addition to being encouraged by strong foot traffic data for Nick Scali in the A/NZ, the broker continues to see upside in gross margin driven by products in its UK stores.
Equally encouraging, the rebranded stores in the UK were the top three performing stores in Jan-25 for written sales orders.
Nick Scali is currently trading at $20.91.
The stock has a market cap of $1.7 billion; the share price is up 41% over one year and over 15% in the last month.
The stock appears to be in a long-term bullish pattern confirmed by multiple indicators.
Consensus is Moderate Buy.
VRX Silica rallies on green light for milestone at Arrowsmith
Shares in VRX Silica (ASX: VRX) were trading over 12% higher at noon after the ASX-listed silica sand small-cap received approval from the WA Department of Mines, Petroleum and Exploration for its Arrowsmith North Silica Sand Project.
As well as bringing long-term economic benefits, including employment and royalties, to WA’s Mid-West region project, today’s approval positions the project as a major contributor to the foundry and glass markets in Asia.
Backed by Wilhelm Zours’ Sparta AG, an early supporter of Azure Minerals and Spartan Resources (ASX:SPR) among numerous other ASX explorers, VRX raised $5 million in a placement last December to support early development costs of Arrowsmith North.
Located 270km north of Perth, Arrowsmith North contains a proved and probable reserve of 221Mt at 99.6% SiO2, with a potential mine life of more than a century.
A BFS suggested it would cost $66.8 million to build at a scale of 2Mtpa, generating $650 million in cash flow after finance and tax over an initial 25-year life.
Silica sand use has increased worldwide due to clean tech, with the flat glass market growing to service solar PV and e-glass installations.
Less than 1% of the output from the global sand mining industry has the correct properties to go into these high-end industries.
VRX Silica has a market cap of $70 million; the price is up 213% in one year and up 118% year to date.
The stock is in a long-term bullish pattern, confirmed by multiple indicators.
Consensus does not cover this stock.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.