Link accused of playing games after reporting slightly higher revenue guidance

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Morningstar analyst Gareth James, who has a ‘buy’ rating on PEXA shares, said the profit upgrade announcement was barely material and “a little bit concerning”.

“For me, it smacks of desperation a little bit,” Mr James said. “It’s not necessarily great news to do better than very low expectations.”

Link underperformed last year as it was hit with regulatory headwinds and surprise legislation that eroded its earnings, including the federal government’s early release of super scheme that forced it to process roughly half of the $35.9 billion in withdrawals.

Officially, the PEP offer is still on the table. Link knocked back the proposal, describing it as materially under-valuing the company, but still gave the consortium access to its books and records in the hope of a higher bid coming through.

“These aren’t game-changing announcements by any means,” Mr James said. “I think they are keen to have a good news story.”

Link’s shares closed up 1.7 per cent to $4.82 compared to a 0.8 per cent rise for the broader market.

“I don’t think anything has materially changed from the company’s operating business perspective,” Mr James said, adding the bigger questions around Link’s operations were related to the future of PEXA could be sold or spun off on the ASX.

Link group chief executive Vivek Bhatia said PEXA continued to build on its strong business model. “Pleasingly, the business continued to perform well through December 2020.”

Mr James said these comments were intentionally vague. “There are a lot of games going on at the moment.”

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Source: Thanks smh.com