Sydney Property

I saw this on the internet today:

Tony Abbott must be happy to own a property there.

Spotless (SPO.AX)

From the AFR this morning.

UBS is attracted to Spotless Group's growth potential and says "buy" with a $2.20 price target. "SPO announces a conditional agreement to acquire Utility Services Group (operating under the Skilltech, Fieldforce and Utility Asset Management brands), with annual service revenues of about $200 million and around 1500 employees nationally.

The business is a leading provider of retail meter reading and installation services in the electricity, gas and water sectors (around 50 per cent mkt share), as well as offering asset management services (eg maintaining poles and wires, clearing vegetation etc) in electricity distribution. Whilst no detail on earnings or acquisition price was included, we would expect this is a relatively lower margin business than the existing SPO businesses (but with relatively high predictability of earnings, as well as high renewal rates). We see this acquisition as further diversifying SPO's customer base, gaining them access to the key utilities sector, with work they already do (albeit in smaller scale when it comes to meter reading, and with different customers in defense and resources when it comes to asset management), and gives SPO the ability to cross sell other services to these utility customers."

Deutsche Bank retains a "hold" with a target price at $2.14 from $2.06 previously. Macquarie Wealth Management rates the stock an "outperform" with a target price at $2.35, saying "this looks a strategically sensible acquisition".