Reporting season closes with a whimper!
Clarence on Sky Biz with Ingrid Willinge and Greg McKenna
- ASX 200 fails to fire on weak leads down 41 points to 6016
- High 6051 Low 6013. Summer ends with a wimple.
- TLS ex dividends. Banks and Resources slip.
- Results season finishes with some serious disappointment.
- Gerry Harvey fires back.
- Chinese PMI data weaker than expected.
- AUD slips on Chinese data down to 77.89c
- Bitcoin continues to climb US$10936
- US futures down 26.
- Asian markets weaker with Japan -0.95% and China CSI down 1.2%
Movers and Shakers
- PLS +10.84% signs agreement with POSCO.
- SGH +6.08% results cheer. Limited liquidity.
- MSB +4.09% results and drug trial success.
- QAN +3.33% broker upgrades. Oil slips.
- RFG – trading halt as dog seems to have eaten its homework.
- SM1 +7.69% recovering on A2M outlook.
- CGC +6.28% smashing it on broker upgrades.
- GXY +6.38% lithium bounces.
- BUB – 12.63% results show a long way to go with revenue.
- SDA +6.35% recovering on positive broker comments.
- ABC -5.87% results disappoint and restructure.
- HVN -12.45% dairy investment questioned again as results miss.
- VAH -3.85% dashes privatisation hopes.
- WHA -7.58% revenue of only $661k.
- AGI -6.39% result slate yesterday not great.
- BUD +12.12% announces Nestle deal. Revenue still an issue. Lack of it.
- GSW -11.03% ASIC launches inquiry.
- Speculative stock of the day: Patrys (PAB)+ 100%-8.01%after announcing its PAT DX1 has been able to cross the blood brain barrier to significantly reduce tumour size in animals using human trial explants. Interesting change in substantial holdings yesterday with a number of doctors buying just before the ann.
- Biggest risers – PLS, SM1, SDA, CGC, NGI and IPH.
- Biggest fallers – HVN, SKT, BGA, VAH, AGI and ABC.
- Vita Group (VTG) – Net profit A$11.2m, down 48% on year. Revenue $329.6m, down 4%. EBITDA from continuing operations $20.0m, down 43%. The result came in line with upgraded company guidance announced in January to reflect a stronger October – December trading quarter. Group revenues of $329.6m declined 4% thanks to a lag in consumer demand for the new Apple iPhone and shipments. Total operating expenses declined by 11%. NIMA acquisition, Clear Complexions is on track to deliver $10m in revenue for FY18. An interim dividend of 4.7c was declared.
- Adelaide Brighton (ABC) -5.87% Annual profit down 2.3% to $182m, one-off items offset a lift from higher prices and volumes, and major road-building projects. Underlying EBIT was up 7.8% to $288.8m on the back of price increases and strong demand for products. A final dividend of 12c has been declared, bringing the full year payout to 20.5c. The company will also pay a special dividend of 4c.
- Virgin Australian (VAH) -3.85% Revenue A$2.8bn, up 6%. Statutory profit $270.6m. The company said it improved its Revenue Passenger Kilometres by 2.4% and its Revenue Passengers by 2.3%. Increase in fuel costs was partially offset by the impact of favourable foreign exchange movements with a stronger AUD. Tigerair Australia was affected by the impact of its unscheduled exit from Bali last year. Virgin Domestic was strong, with segment EBIT up 91.4%. Virgin International Segment EBIT was flat, reporting a decline in Revenue Available Seat Kilometres of 1.2%. The company said it will not pay a dividend. Looks like the rumoured privatisation is off and minority shareholder will be given a share buy-back mechanism to get out. Not really investment grade at all. Never was. Avoid.
- Ramsay Healthcare (RHC) -5.75% 1H results. ‘Core’ Net profit was up 7.5% on year to $288m excluding a $23.9m restructuring charge. Revenue was up 3% to $4.45bn, falling short of consensus estimates at $4.63bn. EBITDA also fell short of consensus forecasts, coming in at $663.8m up 2.3% on year, expectations were for $709m. The company said it expects core earnings per share to grow by around 8-10% in the current fiscal year, reaffirming previous guidance.
- Macquarie Atlas Roads (MQA) +1.84% Reported a statutory net profit of $519.6m which was largely the result of a revaluation of its 50% interest in Dulles Greenway of $375.6m. The company announced a 20c distribution and guided to a 24c distribution next year. The management of the business is now transitioning to an internalised model rather than the Macquarie management. An update in May at the AGM.
- Noni B Group (NBL) +5.61% Revenue $193.2m, up 35.1%. Statutory NPAT $11.8m, up 379.5%. Underlying EBITDA $22.1m, up 54.5%. Like-for-like sales up 3%. Online sales increased to 4.9% of total sales, up 68%. The group expanded its store network by a net 28 stores. Guidance was reaffirmed, the company saying it is confident it is well placed for the 2H. It will pay a fully franked dividend of 9c.
- GetSwift (GSW)-11.03% said today that it has been served with a notice to produce documents to ASIC.
- Harvey Norman (HVN) -12.45% Not a good result. Net underlying profit of $296.08m up by a mere 0.8%. Profit before tax was $293.61m down 19.8%. The result was impacted by a reduction in net property revaluation by almost $53m, in addition to an impairment loss of $20.67m for its investment in the Coombooma Holdings JV. The company revealed it was in dispute with its Coomboona JV partner over the repayment of $18.5m in debt. Earnings from company-operated stores overseas rose 8.4% to $61.82m. But earnings from Australian franchised stores fell 2.9% to $167.2m despite solid same-stores growth as higher wage costs added to pressure on margins from widespread industry discounting. Earnings from property also declined, falling 3.4% to $68.52m. HVN’s property portfolio now represents 62% of its total asset base, so becoming more a property play than anything else. The company declared a 12c fully franked dividend.
- Downer EDI (DOW) +1.91% Has been awarded a $600m contract to provide mining services at Blackwater coal mine located in central Queensland.
- Crown (CWN) -1.53% Has sold its 62.5% stake in bookmaker CrownBet to Toronto-listed company, The Stars Group for $150m. Crown said in December it intended to sell the business as part of a $700m asset sale.
- The Federal government has ordered the recall of 2.3m cars with Takata airbags. Good luck with that.
- Westpac has upgraded its forecasts for the Australian dollar against the US dollar and it now expects the Aussie to hold around the 77c level to June, from a previous forecast of around 76c.
- NAB has altered its interest rate projections for Australia today, and now expects one rate hike this year compared to its previous forecast for two hikes.
BOND MARKET UPDATE
ASIAN MARKETS NEWS
- The manufacturing purchasing managers index dropped to 50.3 from 51.3 the prior month, missing the 51.1 forecasts
- The non-manufacturing PMI slipped to 54.4 from 55.3 the prior month, the National Bureau of Statistics said Wednesday
- The composite index covering services and manufacturing fell to 52.9 from 54.6 in January.
- Manufacturing output dropped to 50.7 from 53.5
- Factory employment declined a fourth month, to 48.1
- The 44.8 reading for small businesses was the weakest in two years
- Steel industry PMI fell to 49.5 from 50.9 as output and new orders both deteriorated
- New export orders fell to 49 declining for a second month.
EUROPE AND US MORNING HEADLINES
- Risk building in Europe with Italian elections this weekend and questions to be answered in German which still has no government.
- Beast of the East hits UK and Europe. Gas prices have surged from an average price of £51.45 per megawatt hour in November to £62.50/MWh.
- Toys R Us on the brink of bankruptcy with 3200 jobs on the line.
- Jamie Dimon from JP Morgan has called shareholders meetings a waste of time.
Two blondes are walking in the park and come up on a set of tracks
One blonde says I think these are bear tracks, the other blonde argues they are deer tracks
They were still arguing when the train hit them.
A monkey is sitting in a tree, smoking a joint, when a lizard walks past.
The lizard looks up and says to the monkey “Hey! what are you doing?” The monkey says “Smoking a joint, come up and join me, my cold-blooded friend.”
So the lizard climbs up and sits next to the monkey and they have another joint. After a while the lizard says his mouth is ‘dry’, and that he’s going to get a drink from the river.
At the riverbank, the lizard is so stoned that he leans too far over and falls in. A Crocodile sees this and swims over to the stoned lizard, helping him to the side.
He then asks the lizard, “What’s the matter with you?!”
The lizard explains to the crocodile that he was sitting in the tree, smoking a joint with his new monkey friend.
He then explained how his mouth got dry, and that he was so wasted that, when he went to get a drink from the river, he fell in!
The inquisitive crocodile says he has to check this out. He walks into the jungle and finds the tree where the monkey is sitting, finishing a joint. He looks up and says “Hey, MONKEY!” The Monkey looks down and says “F****K, DUDE……. how much water did you drink?”