Avon – Moody’s revise outlook to negative
Moody's Investors Service has affirmed Avon Products Inc.'s and Avon International Operations Inc’s (AIO) Corporate Family Rating and the rating of its senior unsecured and senior secured notes. Avon and AIO's outlook was changed to negative from stable. "The change in the outlook to negative reflects Avon's weak operating performance in 2018 and Moody's expectation that cash flow generation will remain under pressure in 2019, with leverage staying at a level not commensurate with the B1 rating. Failure to stabilize sales and to restore profitability in the next few quarters could lead to further negative rating pressure".
Dell 4Q18 and Full Year Results
On 28 February 2019, Dell Technologies (Dell) reported strong fourth quarter and full year results. Revenue for 4Q18 was USD23.9bn, up 9% on 4Q17 figures. Over the quarter, the company generated operating income of USD331m which compares favourably to the USD69m operating loss in 4Q17. During the quarter, cash flow from operations was approximately USD2.4bn.
For the full year, Dell reported double-digit revenue growth across all three of its business units: ISG, CSG and VMware. Full year revenues were up 15% on the prior year at USD90.6bn and Dell reduced its operating loss by 92% to USD191m. During the year, the company’s net loss decreased 25% to USD2.1bn and Adjusted EBITDA increased 13% to USD10.3bn. Dell ended the year with a cash balance of USD9.7bn and net debt of USD43.8bn.
Moneytech 1H19 Update
Moneytech recently provided an update on its year-to-date performance, with (unaudited) management accounts showing the company reported a net profit after tax of AUD0.63m in 1H19. This compares with a net loss after tax of AUD (0.3m) in FY18. We noted in our update on 22 January 2019 that Moneytech had returned to profitability in March 2018, following two years of losses, stemming primarily from increased investment in staff and other operating expenses. We also note that despite headline losses in FY17 and FY18, the underlying profitability of Moneytech’s main operations had been positive, and improving.
Demand for Moneytech’s primary business--trade and debtor finance—was again strong in 1H19, with the flow of new business up 78% on the prior corresponding period (pcp) at AUD390m. Outstanding receivables were 28% higher at AUD80m, while 30-days past due were very low and down marginally on the pcp at 0.5%.