Azzet reports on four ASX stocks with market-moving updates to share today.
Lindian Resources flies after disclosing strategic partnership with Iluka
Lindian Resources (ASX: LIN) was trading a whopping 38.3% higher at the open after the Perth-based company focused on rare earth projects announced an agreement to supply Iluka Resources (ASX: ILU) with rare earths feedstock from its Kangankunde project in Malawi.
Meanwhile, Iluka’s decision to look to Lindian for its long-term (15-year) supply of rare earths concentrate saw the stock trade 1.2% higher at the open.
Lindian’s strategic partnership with Iluka includes a construction term loan and a 15-year offtake agreement for rare earth monazite concentrate.
Iluka has entered into a US$20 million loan facility agreement with a five-year term at an interest rate of secured overnight financing rate (SOFR) +11%per annum, with interest capitalised for two years during construction.
However, the loan is subject to Iluka completing due diligence, Kangankunde being fully funded, and after other construction funding has been spent.
Under the agreement, Lindian is to supply Iluka with six kilo tonnes of rare earth concentrate annually as feedstock for Iluka’s Eneabba rare earths refinery – which represents around 10% of the facility’s capacity.
Currently under construction and scheduled for commissioning in 2027, Eneabba is expected to be Australia’s first fully integrated rare earths refinery and will produce separated light and heavy rare earth oxides.
Commenting on today’s update, Lindian told the market that the agreement consolidates the company’s position in the rare earth industry by securing long-term revenue and aligning with WA’s strategic hub for rare-earth processing.
The partnership also includes a right of first refusal for Iluka on future production expansions, providing a foundation for further growth.
“This is a pivotal milestone for Lindian and is a major step towards accelerating the development of Lindian’s globally significant Kangankunde Rare Earths Project in Malawi,” said Lindian’s executive chairman Robert Martin.
“The floor price protection, no financial ratio covenants, and offtake-linked terms are fit-for-purpose for the Company, ensuring the long-term interests of shareholders are enhanced.”
Martin also told investors today that the funding and offtake agreements represent a major de-risking milestone for Stage 1 of the Kangankunde Rare Earths Project, while creating a clear pathway to production.
The larger Stage 2 production expansion has also been significantly de-risked, with Iluka having a right of first refusal (ROFR) for up to an extra 25,000 tonnes per annum of product if it makes an offer to fund 50% of the capital cost.
Last Friday Lindian reported accelerated development of its Kangankunde Rare Earths Project over the quarter ending in June, with construction ahead of schedule and key leadership appointments bolstering project execution.
Lindian also secured full ownership of the Lelouma Bauxite Project in Guinea, acquiring the remaining 25% interest.
Lindian Resources has a market cap $153 million; the share price is up 24% over one year and up 66% year to date.
The stocks shares have been in a downtrend, confirmed by multiple indicators. In the medium-term, the 5-day moving average is beneath the 50-day moving average. Near-term, the 20-day moving average is falling.
Consensus does not cover this stock.
TPG Telecom falls on mix-up before halting: Infomedia soars
Shares in TPG Telecom (ASX: TPG) were down over 4% at the open after misleading reports pegged the telco to a $651 million takeover of automotive aftermarkets software platform group Infomedia (ASX: IFM).
In response to a mix-up by the market operator, TPG shares were placed in a trading halt 15 minutes after the market opened this morning.
While it’s true that Infomedia is being bought out, the acquirer is U.S. private equity firm TPG, a global asset manager with US$258 billion in assets under management.
Meantime, on the strength of today’s news, shares in Infomedia were trading around 27% higher heading into lunch.
Three years after multiple failed bids, Infomedia has agreed to be taken over for $1.72 a share, which is close to the offers made by potential U.S. buyers in 2022.
The cash consideration has an implied equity value of $651 million and an enterprise value of $579 million and represents a 41% premium to Infomedia’s 3-month volume average weighted price.
Meanwhile, the Infomedia board is urging shareholders to accept TPG’s offer at its meeting in November.
Commenting on today’s announcement, Infomedia Chairman Jim Hassell told the market that the all-cash offer delivers certainty of value in an increasingly uncertain environment.
“The Board considers that the proposal appropriately reflects the strength of Infomedia’s platform, the execution of its strategy to date, and the growth opportunities it has created,” he said.
“While we remain confident in the long-term outlook for the business, the Scheme enables shareholders to realise full and fair value now, without the risks and uncertainties associated with continued execution as a standalone listed company."
The agreement is with McQueen BidCo, an entity fully owned by funds managed or advised by TPG Capital Asia.
TPG’s ANZ head Joel Thickens believes the buyer is “well positioned to further accelerate Infomedia’s global expansion across the Asia Pac region, EMEA and the America’s, building on TPG’s track record of creating multi-regional platforms of scale.”
At the half year Infomedia’s net profit after tax increased by 11% to $10.5 million and total revenue increased by 2% to $71.2 million.
The group has a solid balance sheet with $78 million cash on hand and no debt, providing flexibility for continued growth.
Infomedia has a market cap of $636 million; the share price is up 2.5% in one year and up 30% in the last week.
The stock’s shares appear to have been in a long-term bearish trend, confirmed by a falling 200-day moving average.
Consensus is Moderate Buy.
REA Group jumps on robust FY25 result and outlook
Shares in REA Group (ASX: REA) were up around 8.6% at the open after the real estate advertising business posted its FY25 results.
While the market couldn’t find fault with the group’s clean set of numbers, it was management's robust outlook that clearly captured investors’ imagination today.
With so many stocks entering reporting season with myriad headwinds, it was refreshing for investors to be reassured that property market conditions remain healthy, with strong employment and expectations of further interest rate cuts likely to continue to support buyer demand and vendor confidence.
On the numbers front, revenue from core operations were up 15% to $1.673 billion, comprising $1.544 billion (up 14%) in REA Australia and a further $129 million (up 25%) from REA India.
The real estate advertising business also reported a robust 23% increase in net profit after tax of $564 million and an increase in earnings (excluding associates) of 18% to $969 million.
Reflecting strong cash generation in FY25 and sale proceeds from PropertyGuru, the group paid a final dividend of $1.38 per share, fully franked, an increase of 35% from FY24.
Driven by higher employee costs, higher performance-related incentives, rising technology costs and greater data usage, Australia and Group operating costs increased by 12%.
Due to revenue-related costs attached to Housing Edge's Pay on Credit offering and higher marketing spend, India's operating costs increased by 13%.
Commenting on today’s FY25 update, REA's Group CEO, Owen Wilson told investors that increased property buyer activity, plus the first interest rate cuts in four years, has accelerated the number of enquiries on its site to a three-year high over the past quarter.
"Australian property fundamentals remain strong, and expectations of further interest rate cuts are supporting buyer demand and steady house price growth,” he said.
“These are favourable conditions for sellers to bring their properties to market. Our increasing investment in in talent, technology, and improved consumer experiences, positions REA Group for continued growth in FY26.”
While national residential Buy listing volumes are expected to be broadly in line with last year's healthy market, Q1 listings are likely to be lower due to strong comparables, with July listing volumes down 8% year-on-year.
Meanwhile, the group continues to target double-digit residential Buy yield growth, plus a 7% national average Premiere+ price rise, reflecting the additional value delivered to customers.
Due to continued strategic investment and COGS attached to strong expected growth in Audience Maximiser, the group has flagged high single-digit group core operating cost growth.
Other key numbers announced today:
- Earnings per share (EPS) $4.27, up 23% year on year.
- Residential revenue increased 16% to $1.156 billion.
- 14% increase in yield and a 1% increase in national listings.
- Rent revenue was driven by an 8% average price rise.
- Commercial and Developer revenue increased 10% to $218 million.
- 12.1 million people visited each month on average, with 6.4 million people exclusively using realestate.com.au.
- 2.3 million average monthly realestate.com.au buyer enquiries, up 2% year on year.
REA Group has a market cap of $33.7 billion; the share price is up 35% in one year and up 9.5% year to date.
The stock’s shares appear to be in a near-term downtrend, confirmed by its 20-day moving average.
Consensus is Moderate Buy.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.