Blackmores greenlights $1.8b Kirin takeover, Kogan remains profitable as sales soften and Megaport reveals higher EBITDA guidance

Shares in Australia’s largest health supplement group Blackmores (ASX: BKL) surged this week after it revealed Japan’s Kirin had made a $1.8 billion offer.

Blackmore’s board and major shareholder Marcus Blackmore have given the acquisition the green-light.

Mr Blackmore had an 18% stake in the company his father founded, and sold his holding to Kirin this week following the bid’s announcement.

Under the scheme of arrangement, shareholders have been offered $95 cash per share held.

The bid effectively gives Blackmores an equity value of $1.88 billion and an enterprise value of $1.84 billion.

It represents a 23.7% premium to Blackmores last closing price of $76.79 prior to the offer and a 30.5% premium to its one-month volume weighted average price of $72.80.

Blackmores board has recommended the offer with chair Wendy Stops saying its an “attractive, all-cash” transaction.

Tokyo Stock Exchange listed Kirin’s businesses span food and beverage, pharmaceuticals and health science sectors and it has a current market cap of about $22.9 billion.

Kin aspires to become a leading health science entity in the Asia Pacific region and will continue to invest in Blackmores, its brands and its foundations to accelerate growth.

Kogan remains profitable amid softening sales

Amid softening sales, online retailer Kogan.com (ASX: KGN) this week announced it had returned to “consistent” and “sustainable” profitability and launched an on-market buy-back to reclaim up to 10% of its shares on issue.

For the March quarter (Q3 FY2023), the retailer grew its net cash to $49.4 million compared to a deficit of $6.3 million in the previous corresponding period.

Adjusted EBITDA for the period came in at $4.4 million – up from a $800,000 loss in Q3 FY2022.

It was Kogan’s third consecutive month of positive adjusted EBITDA.

The positive performance comes amid subdued sales as interest rates and inflation impact consumer spending.

Sales for Q3 FY2023 totalled $188.7 million – down from $262.1 million in the prior corresponding period.

However, Kogan.com founder and chief executive officer Ruslan Kogan said the company was implementing further operational efficiencies.

The online buy-back of up to 10% of issued ordinary shares will begin on 12 May 2023 and run through to 10 May 2024.

Megaport impresses with higher EBITDA guidance

Cloud connectivity provider Megaport (ASX: MP1) impressed investors this week after it revealed normalised EBITDA would be “materially above” previous projections of $9 million in FY2023 and $30 million in FY2024.

The company now expects to achieve normalised EBITDA of $16-18 million in FY2023, and $41-46 million in FY2024.

News of the higher-than-expected earnings spurred Megaport’s share price up more than 46% during trade on Friday – causing it to close 42% higher at $5.64.

Contributing to the better forecast are rising cash receipts from customers, which totalled $40.9 million in Q3 – up 14% on Q2 FY2023 levels.

This comprises a $1.2 million net benefit from the Cloud VXC price increase on existing services and reductions in operational expenditure and debts.

The improved outlook follows a leadership shuffle during the March quarter along with a organisational review, which will see the workforce headcount reduced by 50 roles and result in about $10 million in annualised savings.

Mineral Resources’ lithium output drops

Resources major Mineral Resources (ASX: MIN) has posted lower lithium production and battery chemical sales for Q3 FY2023.

The result comes in-line with delayed progress of its Mt Marion expansion project in the Pilbara, where work is now expected to begin in mid-May.

Meanwhile, spodumene concentrate production from Mt Marion is expected to come in at the lower end of the guidance of 160,000-180,000 dry metric tonnes of material.

The reduced production guidance reflects the delayed plant expansion and mine sequence and has resulted in the draw down of contact ore stockpiles, which has increased costs from $850-900 per tonne free on board to $1,200-$1,250/t FOB.

Expected FY2023 lithium battery chemical sales have also been lowered from 8,500-9,500t to 5,000-6,000t.

Another languishing business division was Mineral Resources’ Mining Services, where volume guidance has been dropped from 270-280Mt to 245-255Mt, due to delays in approvals and new contract awards.

Mirvac dampens FY2023 earnings expectations

Property group Mirvac (ASX: MGR) announced a lower earnings estimate for FY2023 on Friday, with the subdued outlook expected to continue into FY2024.

Mirvac attributed the reduced guidance to “adverse weather” which impacted residential settlement timelines and delayed expectations at Aspect North, which is the company’s new industrial estate in New South Wales.

In its Q3 report, Mirvac’s FY2023 earnings per share guidance was dampened to 14.7 cents per share from 15.5cps.

FY2023 residential settlements are for the estate are now expected to come in at 2,200 lots – down from the previous estimate of 2,500.

The remaining lots are anticipated to settle in FY2024.

Mirvac chief executive officer Campbell Hanan said the company had around $18 billion of external assets under management, and it has a “clear strategy” to grow its funds management platform.

“We’ve had a clear focus on increasing the quality of our investment portfolio over the past 10 years, and we now have one of the most modern, sustainable portfolios in the country.”

“It is essential we continue to improve the cash flow resilience of our investment portfolio so that we can deliver superior investment returns and growing dividends to our security holders,” he added.

Distribution for FY2023 is now expected to come in at 10.5cps, which was previously the lowest estimate.