Research notes

The FY26 result was soft but largely pre-flagged with EBITA -11% YoY and NPATA -17%. All verticals declined and the fade accelerated in 2H. This softness is expected to continue into 1H27 and pick up thereafter due to the phasing of projects. Backlog fell to $13.8bn from $16.7bn at 1H26, though this was partly FX related. While we make only minor changes to our EBITA forecasts in FY27-28 (-3%), the ~40% rise in the cost of debt YoY drives a 6-8% cut to our NPATA forecasts in each year. With the outlook for energy and chemicals capex still subdued, we remain HOLD with a $9.80 target (from $10.80).

MTO delivered a strong headline FY26 result: revenue +21.3% (+5% LFL), GM +172bps and NPAT +43% on the pcp and +8% ahead of our expectations. The group holds a dominant market position (19.6% share, ex CFMOTO) and is continuing to show gradual PBT margin recovery (+70bps yoy to 4.6%, 2H 4.9%). A commendable result in tough conditions and another year of growth. Inorganic initiatives have added meaningful scale (+16%), whilst MTO has delivered solid LFL growth (+5%). Challenging sector and consumer conditions have weighed on broader peer updates; however, MTO’s diverse revenue base (led by Mojo) has enabled ongoing growth. With strong balance sheet optionality (A$13m net cash), expanding PBT margins (+70bps yoy) and sustained Mojo momentum, we view FY27 as another year of growth for the stock (+11% FY27F EPS). BUY maintained.

SFR resumed dividends with a 35cps final dividend (+86% vs expectations) and we see scope for this to build further as its cash balance continues to grow with no drawn debt, supported by a favourable base metals price environment. SFR's asset quality, management quality and balance sheet strength, alongside emerging growth optionality, underpin its case as a core copper exposure for long-term investors, though the stock appears fully valued at current prices. Move to HOLD (previously ACCUMULATE) with a $23ps target price.

ATA's FY26 result was in line with company guidance but a modest miss against MorgansE. The FY27 outlook commentary guides to "record revenue, EBIT and underlying EBITDA”, but lacks specific numbers. It is also coupled with a larger than normal 2H EBITDA weighting due to accelerated investment in 1H27. We reduce our forecasts by ~13% as the company lifts investment initiatives in FY27. We see ATA shares as materially undervalued. However, we move to a HOLD recommendation, from Buy. In doing so we now set our Target Price at a material discount to our valuation. The move to a Hold reflects our view that the marginal buyer is more likely to wait for proof points of return on incremental investment, rather than buy ahead of a relatively softer 1H27 result which will be impacted by incremental investment.

NEU's 1H26 result highlighted continued commercial momentum, supported by record 2Q26 DAYBUE net sales from partner Acadia, upgraded CY26 DAYBUE guidance and ongoing uptake of the STIX powder formulation in the US. The European Commission approval of DAYBU is a material de-risking event, creating a pathway for first European commercial sales from Germany in early 4Q26 and a US$35m milestone to NEU following first commercial sale. Royalty income increased 17% to A$33.2m, while R&D costs rose to A$27.4m as the Koala Phase 3 trial progressed. Cash and short-term investments were A$286.5m at period end. NEU also introduced its first dividend policy and declared a maiden fully franked interim dividend of 15.0 cents per share, payable on 7 October 2026. The Koala Phase 3 trial had 15 sites activated across the US and Canada, with more than 100 potential participants referred to active sites or awaiting activation of closer sites.

Unilever (ULVR.LSE) is a global consumer goods company whose origins date back to 1929 when Dutch margarine producer Margarine Unie merged with British soap maker Lever Brothers. Headquartered in London, the company owns a portfolio of leading brands across beauty and wellbeing, personal care, home care and foods, including Dove, Vaseline, Rexona, Hellmann’s, Knorr, Lifebuoy and Sunsilk, with products sold in more than 190 countries and used by billions of consumers. Unilever’s household brands hold particularly strong positions across emerging markets.

SK1 delivered a strong maiden result, ~5% beat to prospectus NPAT forecasts. Pro forma NPAT of $9.0m was up 41% yoy. Sales growth was up 29% driven by 9.6% LFL, 22 new store openings, stable gross margins and delivered operating leverage even with cost investment. EBIT margins expanded 120bps (15.3%). Key growth priorities remain on track: 1) store rollout in FY27 expected to be 18-20 stores with a target of 180-210, 2) improving store economics and 3) international expansion well progressed with first opening expected in 2H FY27. We have increased our NPAT forecasts by ~5% in FY27/28 respectively. Our valuation increases to $3.10 (from $2.90), driven by earnings revisions. We retain our BUY recommendation; we are forecasting ~30% NPAT growth p.a. over the next few years, which we think more than justifies the >22x PE multiple.

A predictable result, largely in-line with expectations. No change to short-term guidance. Immaterial forecast changes, target price set at $5.43/sh. While we appreciate DBI’s quality, yield and growth drivers, at current share prices the potential TSR is sufficiently compressed at c.7% to retain a HOLD. Management’s acknowledgement of its interest in the Port of Newcastle sale unsettles the thus-far dormant risk of M&A value destruction.

ACE delivered a solid FY26 result, a small beat vs MorgansF/consensus, with Revenue of $86.2m (+45% yoy) modestly ahead of MorgansF of $85.5m and Underlying EBITDA (pre-SBP) of $8.5m (up +49% yoy) above ACE’s FY26 EBITDA guidance range of $7.2-8.2m, representing a ~6% beat vs. MorgansF $8.0m. FY27 guidance for revenue growth of 16-23% is largely underpinned by ~$97m of already contracted revenue. ACE remains well progressed across a number of tenders, representing potential catalysts into FY27. Given ACE’s guidance, our EBITDA forecasts remain unchanged, with conversion of further opportunities being incremental. We retain our Speculative Buy rating on ACE with a blended price target of $2.00/sh.

SDR’s FY26 result was slightly below at the topline (A$266m, +22% c/c vs the pcp) and ~6% under at underlying EBITDA (~A$28m, +96% on pcp). Key business metrics however remain robust (LTV/CAC of 6.6x, ARR +24% c/c and Rule of 40 of 25.9%). Of note was SDR's first multi-year framework, guiding to a mid-20s adjusted EBITDA margin by FY30 (10.6% in FY26) on ARR compounding at a CAGR in the 20s. We lower our FY27/FY28 EBITDA ~7%/~5% and our price target to A$5.45 (from A$5.90). We retain our BUY recommendation.