The Courier-Mail

Sweet out­look for Capi­lano

- JACINDA TUTTY

AUS­TRALIAN shares are off more than 11 per cent since their April peak but Queens­land’s Capi­lano honey has emerged as a mar­ket dar­ling.

It is Queens­land’s top per­form­ing stock since April 27 when the ASX 200 hit its high for the year of al­most 5983 points.

Shares in the honey pro­ducer have soared 62 per cent since then, to $18.50 on Fri­day, ac­cord­ing to the Deloitte Queens­land In­dex.

In­vestors were ex­cited by the pos­i­tive earn­ings growth, a fall­ing Aus­tralian dol­lar and strong ex­ports into Europe and the Mid­dle East prov­ing Capi­lano has a lot of legs yet.

“The agri­cul­tural in­dex has been out­per­form­ing the ASX by 63 per cent in 2015 and Capi­lano is a ma­jor part of that,” IG mar­ket strate­gist Evan Lu­cas said. “It’s be­com­ing the com­pany many peo­ple hoped it would be.”

Since stocks shot out of the blocks at the start of the year, with the ASX 200 post­ing is best first quar­ter per­for­mance since it was founded in 2000, Queens­land shares have taken a beat­ing amid China’s stock­mar­ket chaos. De­spite mar­ket jit­ters in re­cent months, some Queens­land stocks have made stel­lar ad­vances.

Collins Foods share price has soared 35 per cent to $3.30 since April 27 on the back of a strong earn­ings in­creases for its KFC stores.

Devel­oper Wat­pac (up 14.4 per cent to 87.5¢ in the past four months) per­formed par- tic­u­larly well, as the con­struc­tion sec­tor has ramped up.

“It’s good to see Wat­pac turn around, they’ve had some con­tracts fall by the way­side but with a few new projects they should pick up,” Mr Lu­cas said.

Casino group Echo En­ter­tain­ment, which plans to change its name to The Star En­ter­tain­ment Group, has also re­warded in­vestors, with its shares up 6.7 per cent to $4.91 since April 27. Ear­lier this year, Echo won the right to de­velop Bris­bane’s pres­ti­gious Queen’s Wharf pro­ject.

“Queens­land is go­ing to be a big fac­tor in Echo’s suc­cess as they at­tempt to at­tract Asian high-rollers,” Mr Lu­cas said.

“Although Syd­ney is a pre­mium lo­ca­tion it doesn’t have as good a cli­mate and with so many Echo En­ter­tain­ment projects up and down the coast its go­ing to be a big draw card over ri­val Crown.”

The re­tail sec­tor faced head­winds in re­cent months, as con­sumers wor­ried about how the econ­omy would cope with the min­ing down­turn and China slow­down.

Domino’s con­tin­ued to de­liver strong sales growth, push­ing its share price up more than 6 per cent to $40.07 since April 27. The stock hit an all­time high of $43.30 ear­lier this month ahead of its an­nounce­ment of a 40 per cent jump in full year net profit to $64 mil­lion. It also an­nounced plans to roll­out a new GPS driver tracker app and a 15 and 20-minute de­liv­ery guar­an­tee.

But Su­per Re­tail Group strug­gled to boost prof­its with the restruc­tur­ing of Rays Out- doors and Work­out World, and its shares dropped al­most 11 per cent to $8.90 over the four months. Shares in Flight Cen­tre have slipped 17.5 per cent to $36.40 since April 27.

Mor­gans an­a­lyst Tom Sar­tor said the per­for­mance of re­tail­ers, bank­ing and min­ing stocks in re­cent months have given “a re­ally good in­sight into cus­tomers”.

“Although they have re­ported be­nign growth, rel­a­tive to last year, it is a real health check for the Queens­land econ­omy which is look­ing a lot worse to­day,” Mr Sar­tor said.

“It sig­nals that the min­ing boom is com­ing to a close ... we’re see­ing soft com­modi­ties like fresh food, pow­dered milk and honey get­ting a pos­i­tive rerat­ing and a de­r­at­ing of hard com­mod­ity ex­ports.”

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