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02 September 2016 | Insights

Weekly Review 02/09/2016

Weekly Review

From the start of the new financial year up until the beginning of this week the market had added 7.7%. This week however, the trend was finally bucked with the S&P ASX 200 index falling 2.59% to 5372.8 as investors locked in profits. The push lower was driven by the banks as well as the energy and mining sectors, with the Commonwealth Bank of Australia (CBA.ASX), Westpac Banking Corporation (WBC.ASX) and BHP Billiton Limited (BHP.ASX) all falling by more than 3% over the week.

On Monday, James Packer sold down his Crown Resorts Ltd (CWN.ASX) stake, trimming it to slightly under 50%. The move was the latest step in cutting down his involvement in the country’s top casino company. After the announcement of his sale, shares fell close to 3% between Monday and Wednesday but a recovery in the share price on Thursday and Friday saw Crowns shares finish down 1.33% for the week, at $13.34.

Monday also saw law firm Slater & Gordon Limited (SGH.ASX) report, with the company posting a full year net loss of$1.02 billion. The company had a profit of $62.4 million last year, and while the loss had been mostly factored in by the market, the company’s shares fell by another 20% for the week, closing at 42c per share. Slater and Gordons full year revenues from ordinary activities were $908.2 million versus $598.2 million last year, with the company highlighting a better second half performance from its U.K Division

In more positive news, Wednesday saw South Australian based Codan Limited (CDA.ASX) announce that Minelab Electronics, a wholly owned subsidiary of theirs, were awarded a $6.7m contract by the Department of Defence. The funding received under the contract is to further develop a dual sensor metal detector which incorporates ground penetrating radar. It will partially offset the development costs of the product, and the project is expected to be completed by 2018.

Staff at Baker Young spoke with several company’s during the week, beginning with a conference call with SmartTrans Limited (SMA.ASX) CEO & Managing Director, Brian Carr. During the call, Brian discussed the company’s most recent quarterly report, as well as the partnerships that the company has announced in the past six months. SmartTrans mobile payments technology has been in hot demand from Australian retailers looking for an efficient online entry into the Chinese market, from which Brian expects an uplift in the company’s revenue. Brian also spoke to the potential of the partnership the company recently announced with a Chinese lottery operator. The operator is seeking approval to host online lotteries in China, and will utilise SmartTrans mobile payments platform upon success.

Staff also spoke with Adslot Ltd’s (ADJ.ASX) CEO, Ian Lowe to discuss the company’s FY16 Results Presentation and outlook. The Group’s key Trading Technology Revenues were up 59% on FY15 to $4.228m, showing consistent growth with group revenue up 19% on FY15 to $7.735m. On the 19th of August, Adslot announced it had signed a global, multi-year deal with groupm, the world’s largest media buyer. We gathered from the call that value of media executed via Symphony is expected to increase from circa $3 billion per annum to circa $7 billion per annum over the next 2 – 3 years. This should be ahead of the markets prior expectations on the rate of growth of work on platform, giving a positive outlook for the company going forward.