Daily Brief Australia: Johns Lyng, DigiCo Infrastructure REIT, S&P/ASX 200, DUG Technology Ltd, Pureprofile Ltd, IGO Ltd, Amaero International Ltd and more

• On the 11th July, PEP offered A$4/share for integrated building services provider Johns Lyng (JLG AU), a 77% premium to undisturbed. CEO Scott Didier, JLG’s largest shareholder (17.62%), was supportive.
• Pricing is okay. The absence of a final year fully franked dividend, which was teased at the onset, was ostensibly disappointing.
• The Scheme Booklet is now out, with a Scheme Meeting on the 8th October, and expected implementation on or before the 23rd October. The IE (Kroll) says “fair & reasonable“.

• DigiCo Infrastructure REIT (DGT AU) will be added to a global sector index at the close on 19 September while HealthCo REIT (HCW AU) will be deleted.
• Estimated passive buying in DigiCo Infrastructure REIT (DGT AU) is US$32m while the passive selling in HealthCo REIT (HCW AU) is estimated to be US$7m.
• Shorts have increased in both stocks. There could be short covering in DigiCo Infrastructure REIT followed by new shorts, while shorts could look to cover HealthCo REIT as passives sell.

• The Johns Lyng (JLG AU) IE considers PEP’s A$4.00 offer fair and reasonable as it is within its A$3.72-4.42 valuation range.
• The offer requires regulatory (FIRB and US) and shareholder approvals. The scheme vote should pass as no disinterested shareholder comes close to holding a blocking stake.  
• The offer is reasonable as the timing of an earnings recovery is highly uncertain. At the last close and for a 23 October payment, the gross/annualised spread is 1.5%/11.0%. 

• In our latest ASX200 insight, posted on Aug 22nd, we wrote: “The index could rally one more week (next week), that should be the end of this rally“. 
• The rally ended last week, as predicted: the S&P/ASX 200 (AS51 INDEX) is falling this week,  it has already reached OVERSOLD support levels according to our model.
• Attached you can find an Excel file with all the data (key supp/res level with probabilities, check row # 12), our new forecast in detailed in the insight.

DUG Technology has been awarded a significant contract with Petronas to provide software and HPCaaS services for a minimum three-year term. After paying a managed services partner to undertake part of the contract, the net minimum contract value of $18.2m is equivalent to c $6m revenue per annum. We have upgraded our forecasts factoring in a small contribution in FY26 before run-rate revenue is reached in FY27.

• Full transcript of post results interview with Pureprofile’s CEO Martin Filz and COO/CFO Melinda Sheppard.

• Context: The IGO (IGO AU) vs. Iluka (ILU AU) price-ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
• Highlights: Going long IGO (IGO AU) and short Iluka Resources (ILU AU) targets a 12% return to the one standard deviation level.
• Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.

• Pureprofile Ltd (ASX:PPL) is a data analytics and consumer insights company underpinned by proprietary technology, servicing business decision makers in brands and media companies as well as market researchers.
• Pureprofile has confirmed its audited results for FY25 including a 1,531% uplift in reported NPAT to $1.54m, a 50% jump in adjusted NPAT to $1.9m, previously reported revenue growth of 19% to $57.2m and an 18% uplift in EBITDA to $5.2m.
• The latter two were both measures within the company’s FY25 guidance range for FY25 revenue to fall between $57m and $58m and for EBITDA, excluding significant items, to be between $5.2m to $5.8m (company release 28 January).

• Amaero Ltd (ASX:3DA) is a global specialist in advanced materials manufacturing for the defence, aerospace and other industrial sectors, developing a critical metals alloy powder manufacturing facility in Tennessee, USA.
• The company has announced new revenue guidance for FY26 in the range of A$30-35m with a 40/60 split to H1/H2.
• The revenue guidance was given during a webinar following the announcement of a five-year exclusive supplier and development agreement with Titomic (ASX:TTT) for refractory and titanium alloy spherical powders.