ASX 200 drops 83 points to 6440. Late 30-point rally helping. US Futures off the lows down 168. The market fell heavily on the open as expected, but spent the rest of the session relatively steady at the lower levels in quietish trade. No panic and relatively calm. Results once again took centre stage with BLD hitting multi-year lows on disappointing numbers and a pessimistic outlook. The stock finished down 20.56%. GEM also suffered as its results pointed to a softer outlook down 16.06% at the close. Elsewhere the market was hit broadly across all sectors with energy stocks feeling the brunt of the selling. WPL fell 3.69% and STO down 2.50%. Miners under pressure led by BHP down 2.1% and FMG reported today bumper profits but slipped 5.3% on the dividend and rising costs. The one bright spot was the gold miners which had a stellar day as gold in AUD terms neared $2300. NCM jumped 4.6%, EVN rose 9.0% and NST soared 8.7%. A good day for golds. In other company news, IFL showed its scars from the Royal Commission falling 6.9% on remediation and other issues. AYS dropped 23.13% on underwhelming results as the mobile market continues to take its toll. In Asia, a relatively calm yuan fix helped steady the nerves although Asia market were under pressure as HK turns nasty again. Japan down 2.3% and China down 1.4%. Nothing on the economic front, and the AUD was slightly weaker at 67.32c. 10 -year bond yields fall 9 bps to 0.88%.
- ASX 200 down 83 points to 6440.
- High 6489 Low 6410. Surprisingly quiet and steady.
- Banks and miners lead market lower.
- Opening falls sustained. Results dominate.
- AUD steady at 67.32c. No huge moves.
- 10-year yields 0.88%
- 7.1446 yuan per US dollar. Some calm descends.
- Aussie gold soars to $2291
- Bitcoin slightly higher to $10307
- US futures down 190
- Asian markets slide with Japan down 2.3% and China down 1.4%
- BYE +28.26% positive drill results. More to come.
- WGX +20.20% RSG +10.34% SAR +9.51% gold shines.
- PME +5.72% good bounce following results.
- Z1P +2.37% debt funding deal.
- CGC -4.42% block trade of 1.24m at 298c.
- BLD -20.56% results plastered.
- WOR -7.99% broker downgrades.
- PET -7.29% profit taking.
- PLS -6.49% broker downgrades.
- AYS -23.13% outlook weighs.
- ADT -6.33% drilling results.
- KPO +11.11% presentation.
- Speculative stock of the day: Chesser Resources (CHZ) +70.00% High grade gold discovery confirmed at Diamba Sud.
- Biggest Risers: WGX, RMS, RSG, BUB, PME and CDA. Plenty of other gold miners too.
- Biggest Falls: BLD, GEM, MYX, EBO, WOR, VEA and PET
- AMA group (AMA) –5.04% Full-year results; normalised NPAT from continuing operations fell short of estimates at $28.1m vs consensus of $29.9m. Revenue from continuing operations missed expectations at $616.2m vs consensus of $629.7m. Normalised EBITDA from continuing operations beat expectations at $58.2m vs consensus of $57.6m. A final dividend of 2.25c per share was declared. Group chairman Ray Malone to step down from board, Anthony Davis named as replacement chairman, effective September 1.
- Adairs (ADH) +11.78% Full-year results; NPAT came in ahead of estimates at $29.6m vs consensus of $29.3m. Revenue beat expectations at $344.4m vs consensus of $342.5m. EBIT also beat estimates at $43.4m vs consensus of $42.8m. A final dividend of 8c per share was declared. In FY20 ADH expects revenue in the range of $360-375m, EBIT in the range of $43-46m and capex in the range of $8-10m. Over the first seven weeks of FY20, Adairs has generated LFL sales growth of +4.8% across its business with online continuing to grow strongly with sales up +26.9% on the same period last year. Top line growth is anticipated to remain strong throughout the rest of the year.
- Boral (BLD) –20.56% Results: FY NPATA $486m vs forecast $468.7m. Revenue $5.86bn vs forecasts $5.91bn Adjusted EBITDA $1.04bn vs expectations of $1.05bn. Final dividend 13.5c (50% franked). Full year Headwaters synergies of US$32m slightly ahead of plan; with total synergies of US$71 million now delivered at end of year two. Outlook for NPAT (before significant items) to be around 5-15% lower in FY2020 relative to FY2019. Net debt at 30 June 2019 was $2.193bn down from $2.453bn at 30 June 2018 BLD also announced that it has entered into an agreement with Knauf to form an expanded plasterboard joint venture in Asia and for Boral to return to 100% ownership of USG Boral Australia & NZ, Boral will acquire Knauf’s 50% stake in USG Boral Australia & NZ for an acquisition price of $200m, returning Boral to 100% ownership. Boral’s direct funding requirement of $335m will be met through debt and proceeds from recent divestments.
- Codan (CDA) +3.21% reports FY underlying NPAT $45.7m vs $43.2m expected. Revenue $270.8m vs $257.4m expected. Final dividend cps, special dividend 2.5cps. A strong set of numbers which were ahead of expectations. The market should like the special. The outlook was also upgraded, with base business sales now expected to be $200-220m vs prior A$180-200m, and base-business NPAT now expected to be $28-33m vs prior $25-30m.
- Fortescue Metals (FMG) -5.28% Record net profit after tax (NPAT) of US$3.2bn and a fully franked final dividend of 24c per share bringing total FY19 dividends to 114c per share. Record Underlying EBITDA of US$6.0bn, 90% higher than FY18. C1 costs of US$13.11 per wet metric tonne (wmt). Interest expense on borrowings was US$218m, a decrease of 36% compared to FY18 following the repayment and refinancing of the debt capital structure on improved terms and conditions, lowering the overall cost of capital. Net debt is currently US$2.1bn (FY18: US$3.1bn). Guidance: 170-175mt in shipments, inclusive of 17-20mt of West Pilbara Fines product. Total capital expenditure of US$2.4bn.
- G8 Education (GEM) -16.06% Revenue of $430.6m, an increase of 9% above prior corresponding period. Net Profit After Tax (NPAT) reduced 20% on pcp to $19m, impacted by the implementation of changes to accounting standards. Underlying EBIT of $51.6m for the half, in line with consensus forecasts and 7% above pcp. CY19 H1 fully franked dividend declared of 4.75c, being a 0.25c increase on the prior year H1 dividend. The second half growth rate will not have the benefit of the CCS stimulus that commenced on 1 July 2018. CY19 like for like occupancy growth is expected to be in the mid 1%pts. Underlying EBIT range for CY19 is $140m – $145m.Consensus was for around $151m.
- IOOF (IFL) -6.92% Underlying NPAT (UNPAT) $198.0m up 3.4%. Statutory NPAT $28.6m, down 67.7%, inclusive of provision for financial advice remediation. Advice review undertaken – provision of $182.7m for remediation and program costs of $40.4m. Fully franked final dividends of 19c. IFL reaffirmed its dividend payout ratio target of 60-90% of UNPAT. The company will update the market on capital management issues once clarity is achieved on the ANZ P&I transaction. This could take the form of various capital management initiatives, including buyback(s) and additional special dividend(s).
- MACA Limited (MLD) -unch- reports FY NPAT $20.6m vs $20.6m expected. Revenue $665.7m vs $641.7m expected. EBITDA $70.7m vs $67.0m expected. Fully franked final dividend of 2.5c per share; record 5/9/19, payment 20/9/19. A nice set of numbers with solid beats on revenue and EBITDA lines. Outlook is for FY20 revenue of $720m.
- McGraths (MEA) -unch- NPAT loss of $15.6m vs year-ago a loss of $63.1m. Revenue $82.7m vs year-ago $99.2m. Underlying EBITDA (A$6.4M) in line with company guidance. Net assets worth $30.8m, with no debt and $10.3m cash.
- Meridian Energy (MEZ) +0.66% reports FY underlying NPAT NZ$333m vs NZ$326.9m expected. EBITDAF NZ$838m vs NZ$666m a year ago. Final ordinary dividend declared of 10.72 cps, 86% imputed. Brings FY19 full-year ordinary dividend to 16.42 cps. Nice growth in earnings but profit a slight miss.
- Monash IVF Group (MVF) –3.52% Full-year results; underlying NPAT was in line with estimates at $152m. Adjusted EBITDA missed expectations at $37.8m vs consensus of $38.3m. Revenue also fell short of expectations at $152m vs consensus of $153.4m. A final dividend of 3c per share was declared. NPAT in FY20 will be hit by costs ($1.5m-$2.5m) related to the exit of five Victorian based fertility specialists.
- Chorus (CNU) –2.86% Full-year results; EBITDA was in line with company guidance and ahead of market estimates at NZ$636m vs consensus of NZ$634.5m. Revenue fell short of expectations at NZ$970m vs consensus NZ$975.8m. NPAT missed estimates at NZ$53m vs consensus of NZ$57.2m. A final dividend of 13c per share was declared. In FY20 CNU expects EBITDA in the range of NZ$625m-NZ$645m and a full-year dividend of 24c per share.
- MMA Offshore (MRM) -9.23% reports FY NPAT (A$27.0M) vs (A$36.3M) a year ago. Revenue $239.3m vs $200.4m a year ago. Operating EBITDA $27.8m in line with guidance of $27m. OK numbers showing improvement over last year. Outlook is positive with the company expecting utilisation to continue to increase across the course of FY20 with some modest improvement in day rates on more specialised vessels this financial year. MRM also expects a continuing improvement in EBITDA during FY20 as the market continues its recovery.
- oOh!media (OML) -4.59% reports H1 underlying NPATA $18.2m with the result largely in line with the 16-Aug preliminary release. Revenue $304.9m. Underlying EBITDA $56. Interim 2019 dividend 3.5cps vs 3.5 cps a year ago. Paid 30-Sep-19.
- OM Holdings (OMH) -4.62% reports H1 NPAT $50.0m vs $106.4m a year ago. NPAT attributable to owners $47.8m vs $90.4m a year ago. Revenue $534.6m vs $828.3m a year ago. Adjusted EBITDA $109m vs $174.5m a year ago. Interim dividend 1 cps. Record 8-Nov-19; Payment29-Nov-19. Consolidated cash position of $56m as at 30-Jun-19 as compared to $91.8m as at 31-Dec-18.
- Viva Energy Group (VEA) –7.89% Half-year results; underlying NPAT on a replacement cost basis (RC) was in line with company guidance and beat market estimates at $78m vs consensus of $76m. Underlying EBITDA (RC) was in line with company guidance although missed market expectations at $171.6m vs consensus of $172m. A final dividend of 2.1c per share was declared. Total sales volumes in H2 are expected to remain broadly in line with sales volumes achieved in H1. If retail margin weakness persists in H2, Retail earnings are unlikely to improve from the Underlying EBITDA (RC) result achieved in H1.
- “MARTIN Has Its Place: A Macroeconometric Model of the Australian Economy” paper released by RBA. Title is an economist joke. Click here for the full report.
- 2 – year bond yields down 5bps to 0.69%
- 3 – year bond yields down 5bps to 0.65%
- 10 – year bond yields down 9bps to 0.88%
- China’s top trade negotiator sought to lower tensions with the U.S. saying the dispute between the world’s biggest economies should be resolved through ‘measured dialogue’.
- Hong Kong protests see live firing for first time.
EUROPEAN AND US NEWS
- UK Holiday. Boris admits trade deal with US is ambitious.
- G7 meeting continuing in Biarritz.
- Arise Sir Ben Oakes. England goes mad for Ben.
And finally…Good to be English this morning!! Get in!
Will Rodgers words of wisdom…
- Never slap a man who’s chewing tobacco.
2. Never kick a cow chip on a hot day.
3. There are two theories to arguing with a woman. Neither works.
4. Never miss a good chance to shut up.
5. Always drink upstream from the herd.
6. If you find yourself in a hole, stop digging.
7. The quickest way to double your money is to fold it and put it back into your pocket.
8. There are three kinds of men:
The ones that learn by reading.
The few who learn by observation.
The rest of them have to pee on the electric fence and find out for themselves.
9. Good judgement comes from experience, and a lot of that comes from bad judgement.
10. If you’re riding’ ahead of the herd, take a look back every now and then to make sure it’s still there.
11. Lettin’ the cat outta’ the bag is a whole lot easier’n puttin’ it back.
12. After eating an entire bull, a mountain lion felt so good he started roaring.
He kept it up until a hunter came along and shot him.
The moral: When you’re full of bull, keep your mouth shut.