Market Murmurs: TNE, BAP, NST, LNK

On what was a pretty slow Tuesday on the ASX, here are four bits of news from TechnologyOne (ASX: TNE), Bapcor (ASX: BAP), Northern Star (ASX: NST), and Link Group (ASX: LNK).


Shares in Brisbane-based Technology One eased yesterday after it released solid full year results.

They finished the day down 2.8% at $12.55

Total revenue for the year to the end of September was up 4% to $312 million.

Total annual recurring revenue (ARR) was up 16% to $257.5 million and software-as-a-Service (SaaS) ARR rose 43% to $192.3 million.

Directors said in the earnings release that the company’s “SaaS business continues to grow quickly. The quality of this revenue stream is exceptionally high, given its recurring contractual nature, combined with our very low churn rate of ~1%.”

“Combined with our announcement of the end of our On-Premise business, this is driving our Annual Recurring Revenue growth.”

“Our Total ARR is $257.5m, up 16%. We are on track to hit our target of $500m+ ARR by FY26.

“Given the current ARR is $257.5m, this is an additional $242.5m of annual recurring revenue in the next 5 years.

“Our ARR stands at 90% of Total Revenue which means the majority of our revenue is locked-in at the start of the financial year. This positions us well to achieve strong continuing growth in the new year,” it added.

That all saw the company reported a 19% lift in profit before tax to $97.8 million, the top end of its guidance range.

The company said it expected more growth is expected in 2021-22 after lifting full year dividends 8% to 13.91 cents a share.


Shares of auto parts retailer Bapcor fell nearly 10% yesterday after the company sprang a big surprise by announcing that long-time CEO Darryl Abotomey will retire on February 28 next year

Mr Abotomey, who has led the company for ten years and took the company public in 2014, will remain available to the company until the end of next June and non-executive director Mark Powell will take the helm if a replacement can’t be found by the time Mr Abotomey retires.

The stock dropped more than 10% to a low of $7.42 and ended the day down 9.5% at $7.46.

Analysts said they were surprised that no succession plan seems to have been in place with a successor named straight away once the long-time CEO had decided to go.

Mr Abotomey said in the statement that the company’s strong operating performance and financial position made it an appropriate time in the company’s journey to step back and retire,”

The Board said there was no change to previously issued financial guidance.

For the 2021-22 year the market is expecting to see Bapcor report revenue of $1.8 billion, earnings before interest, tax, depreciation, and amortisation (EBITDA) of $284.2 million, and post-tax profit of $129 million, up from $119 million in 2020-21.


Northern Star Resources will buy a power business from Newmont Corp. for $95 million, giving the Australian miner greater control over its power supply at the big pit near Kalgoorlie.

Northern Star on Tuesday said it has entered a binding sale agreement to acquire all of Newmont’s shares in GMK Investments Pty. Ltd., which owns a 50% interest in the Parkeston Power Station at Kalgoorlie in Western Australia state.

Northern Star already paid $25 million for an option to buy the Newmont power unit in its purchase of the Colorado-based miner’s 50% stake in the Big Pit’s owner Kalgoorlie Consolidated Gold Mines Pty. Ltd.

The company will pay the $70 million balance when the deal completes next month.

Northern Star says the purchase will give it the base to investigate renewable power sources.

The shares fell 2.7% to $9.79 after gold prices slid more than 2% on the news that President Biden would nominate Fed chair, Jay Powell to a second term.


Link Group shareholders are a very unhappy lot – after all, a happy bunch wouldn’t have whacked the company as hard as they did at Tuesday’s AGM.

Despite a solid pre-meeting guidance update for full-year ‘low single digit growth’ the board copped a massive 63% vote against its remuneration report.

Shares closed at $4.93 up 0.6%.

That small rise was no doubt due to Link announcing a potential in-specie distribution of at least 80% of its shareholding in PEXA, the property exchange platform that floated on 1 July at $17.13 per share. Link still holds 42.7% of PEXA.

“In particular, the Link Group will seek a ruling to obtain tax roll-over relief for shareholders under the demerger relief provisions,” Link told shareholders this morning.

If this happens, the current putative bidder, Carlyle Asia Partners might not have any use for Link.

Carlyle has suggested it may offer $5.38 per Link share for 100 per cent of Link shares after it has checked out the company’s finances.

Link has given Carlyle access to a virtual data room and Link’s senior executives. Carlyle was part of a private equity consortium that backed away from a $5.40 per share offer for Link earlier this year.

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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