Motley Fool Australia

ASX 200 drops 0.2%, Scentre soars

ASX 200
Credit: Cimexus

The S&P/ASX 200 Index (ASX: XJO) dropped by 0.22% today to 6,060 points.

Here are some of the highlights from the ASX today:

Scentre Group (ASX: SCG) and Mosaic Brands Ltd (ASX: MOZ)

The Scentre share price went up by 5.4% today and the Mosaic Brands share price grew by 17.7%.

Mosaic announced that after successful negotiations with Scentre, all non-Victorian stores in Westfield shopping centres have now reopened.

But the commercial terms of the agreement remain confidential. Victorian stores remain closed because of stage 3 and stage 4 restrictions.

Mosaic will continue to negotiate with landlords nationally to achieve “commercially sound lease terms consistent with the fundamental shift the Group sees in the retail rental market”.

The retail company will seek to minimise future store closures, but it still anticipates closing 300 to 500 stores over the next 12 months to two years.

Mosaic chair Richard Facioni said: “We’re pleased to have reopened our Westfield stores over the weekend following a mutually agreeable outcome to our negotiations with Scentre Group.

“We have had a long-standing relationship with Westfield enabling us to reach a solution that worked for both parties. This is a good outcome for Mosaic and, in particular, the 400 affected team members. As we noted last week, shuttered stores work for no one.”

IOOF Holdings Limited (ASX: IFL)

IOOF announced its FY20 result and a large acquisition today.

Underlying net profit after tax (UNPAT) was down 34.9% to $128.8 million. UNPAT from continuing operations fell 32.3% to $124 million.

Statutory net profit after tax rose 414.6% to $147 million. Total funds under management, administration and advice (FUMA) grew 46% to $202.3 billion.

The diversified ASX 200 financial business declared a final dividend of 11.5 cents per share.

IOOF also announced that it’s going to acquire MLC from National Australia Bank Ltd (ASX: NAB) for $1.44 billion. The acquisition is expected to deliver more than 20% of earnings per share (EPS) accretion on an FY21 pro forma basis including $150 million of targeted pre-tax synergies, excluding transaction and integration costs.

The acquisition price of $1.44 billion represents 7.4 times pro forma UNPAT including the targeted synergies, though it’s 16.2 times pro forma UNPAT excluding synergies.

If the acquisition goes ahead IOOF will be the number one retail wealth manager by FUMA with $510 billion and the number one advice business by the number of advisers with 1,884 advisers.

IOOF CEO Renato Mota said: “The opportunity to acquire a highly complementary business of the quality and size of MLC is compelling. MLC is a natural fit with IOOF and presents a unique opportunity to create value from synergies for the benefit of clients, members and shareholders. This is a once in a generation opportunity to create the leading wealth manager of the future.”

AGL Energy Ltd (ASX: AGL)

ASX 200 business AGL has announced it has entered into a binding agreement to acquire Click Energy from Amaysim Australia Ltd (ASX: AYS). The acquisition price is $115 million.

The acquisition includes 215,000 energy service customers and increases AGL’s total services provided to 4.2 million services. It’s aiming for 4.5 million customer services by 2024.

AGL said that its cost to serve is below that of Click Energy’s and that means AGL believes it can help Click Energy’s lower its cost base. Around 97% of Click Energy customers already use online billing, so AGL believes it can improve their service after its investments in its digital customer service.

AGL expects the acquisition to be “modestly accretive” to AGL’s underlying earnings. The acquisition will be financed from AGL’s existing debt facilities.

There will be approximately $40 million of transaction and integration costs. The ASX 200 company will recognise this as a significant item in FY21.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Scentre Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Related Articles…

Latest posts by Tristan Harrison (see all)