The ASX 200 fell 13 points to 6060 for a gain of 133points this month. Dow Futures up 110 points. A bit of a mixed bag today as ex dividends weighed, RBA tomorrow keeping some players on the sidelines with Banks slipping, CBA down 1.2% and the Big Bank Basket down to $122.03. Miners were steady as FMG lost 100c in dividends. Healthcare under the knife as CSL bled 1.3% and FPH down 2.1%. Energy stocks though did ok with STO up 3.7% and WPL up 2.3% on some bargain hunting. Industrials mixed, SYD rose 3.8% and TCL up 1.2% on better casualty numbers, but A2M slipped 2.6% and WES down 1.5% together with ALL down 1.3% on a stronger AUD. Tech saw a procession of BNPL wannabes announce results as SZL fell 9.4%, OPY dropped 8.1% and SPT up 1.6%. The big daddy though APT up 3.0% and XRO doing better up 1.0%. The All Tech Index rose 1.1%. In corporate news, TPW up 18.0% on its results. In July it crossed the milestone of 500,000 active customers. IFL in a trading halt as it looks to raise $1.04bn to fund its purchase of NAB’s MLC. It announced a final dividend of 11.5c, down from 12c in FY19. MOZ is up 17.7% after reopening Westfield stores over the weekend. On the economic front. private sector credit for July fell -0.1% over the month, in line with estimates. Company operating profits for the June quarter lifted 15% vs estimates of a 6% fall. Inventories -3% vs estimates of -1%.10 -year yields saw a bump lower to 0.97%. In Asian markets, Japan up 1.4% and China down 0.5%

Today’s Highlights

• ASX 200 down 13 to 6060
• Up 150 points for the month.
• High 6094 Low 6060. Narrow range.
• Last day of results.
• Big Bank Basket falls to $122.03
• All Tech Index up 1.12%
• 43 trading days until the US election.
• Dow Futures up 115.
• Gold firms to AUD$2678.
• 10-year bond yield down to 0.97%
• AUD firms to 73.50c
• Bitcoin rallies to $11684
• In Asian markets, Japan up 1.4% and China down 0.5%

STOCKS

• EOS -10.16% no news on contracts.
• SZL -9.44% results underwhelm.
• FMG -7.68% ex dividend not helping.
• PBH -6.93% profit taking.
• DMP -4.60% profit taking.
• TPW +18.03% cocooning is the word.
• HSN +8.31% profit upgrades.
• EML +6.56% broker reports.
• PAR +7.55% broker report.
• 5GN +23.08% just keeps on going.
• SWF +12.78% Robinhood effect.
• KLL +10.34% change of director’s interest.
• BYE +7.55% Gulf of Mexico hit not significant.
• FZO -15.74% broker downgrades.
• Speculative Stock of the Day: Forbidden Foods (FFF) +% new IPO listed today. FFF is a well-established eponymous brand which covers lines such as black rice and gluten free grains and is sold in Woolworths and IGA. Forbidden sells flours and powders derived from plants such as apple, banana hemp flower – anything high in protein, nutrients and fibre.
• Biggest Rises: TPW, HSN, PAR, SPL, RED, SLK and EML, DE
• Biggest Falls: ORE, EOS, SZL, FMG, PBH, DMP and UWL

TODAY

• Zimplats Holdings (ZIM) +3.04% Full-year NPAT US$261.8m vs year-ago US$144.9m. Revenue US$868.9m vs year-ago US$631m. No dividend.
• Amaysim Australia (AYS) -0.70%To sell its energy business to AGL Energy for $115m. Completion is subject to AYS repaying $53.05m of debt to amend its banking facilities. Launches a competitive tender for wholesale mobile network services which would apply after its current Network Services agreement (NSA) with Optus expires on 30 June 2022.
• OM Holdings Ltd. (OMH) +1.52% First half EPS 184c vs year-ago 649c. Revenue $386.5m vs year-ago $534.6m. Adjusted EBITDA $53.1m vs year-ago $109m. Balance of FY19 final dividend of 0.5c/share previously deferred to be paid out on November 27. Capital intensive projects temporarily postponed to conserve cash.
• Sezzle (SZL) -9.44% H1 NPAT -US$8.2m vs year-ago -US$4.8m. Revenue US$20.8m vs year-ago US$4.3m. EBITDA -US$6.1m vs year-ago -US4.2m. Net transaction margin US$5.1m vs year-ago -US$0.2m. Underlying merchant sales US$307.4m vs year-ago US$70.2m. The company reiterates its underlying merchant sales guidance of achieving an annualized run rate in excess of US$1.0bn by the end of 2020.
• Perpetual (PPT) – 1.24%Completes $50m share purchase plan at 3030c/share. The SPP was oversubscribed and upsized to A$50M from A$40M.
• Southern Cross Electrical Engineering (SXE) +4.60% Full-year NPAT $10.9m vs consensus $10.9m Revenue $415.1m vs consensus $430m. EBIT $16.4m vs consensus $16.4m. Orders $440m. Currently over $900m of submitted tenders with clients pending decision. Final dividend 3.0c/share, fully franked. In FY21, expects revenue $400m. Actively pursuing acquisition opportunities having suspended such activity at the start of the pandemic.
• Orocobre (ORE) -10.34% Completes oversubscribed institutional placement, raising $126m at 252c/share.
• oOh!media (OML) +3.52% Appoints Cathy O’Connor as Managing Director and CEO, effective from early 2021.
• Mosaic Brands (MOZ) +17.71% Re-opens Westfield-based stores following successful negotiations with Scentre Group.
• GrainCorp (GNC) -1.60% Appoints Ian Morrison as CFO, Morrison had been interim CFO since July.
• Downer EDI (DOW) +3.22% Awarded Unified Field Operations contract by NBN valued at an estimated $320m over a maximum term of eight years.
• Service Stream (SSM) +5.79% Secures multi-year operations agreement with NBN (terms undisclosed). The agreement is for an initial period of four years and includes a provision of two x two-year extension options, at nbn’s election.
• Dubber Corp (DUB) –3.14% Full-year NPAT -$18m. Revenue $11.8m vs year-ago $7.4m. Annualised recurring revenue (ARR) $16.1m vs year-ago $8.2m. Users 193K vs year-ago 95k. Cash and cash equivalents at the end of the year $18.4m. Enters FY 2021 with strong expectations regarding its continued commercial growth.
• IOOF Holdings (IFL) – Full-year UNPAT (continuing operations) $124m vs guidance $123-125m. Final dividend 11.5c, fully franked vs 12c in FY19. Revenue rose 10% to $1.2bn. Average funds under management, administration and advice reached $136.7bn, up 21.3%. To acquire NAB’s wealth management business, MLC for $1.44bn. IFL Will fund the transaction via $1.04bn equity raising, $250m in senior debt, $200m in a subordinated loan note issued to NAB and $40m of existing cash. Launches 1 for 2.09 entitlement offer to raise $588m, and a $452m placement, together raising $1,040m priced at 350c/share. Entitlement offer and placement will result in 297m new shares being issued, representing 85% of IOOF’s existing issued capital.
• Bubs Australia (BUB) – Full-year NPAT -US$7.8m vs year-ago -US$35.5m. Gross Revenue $61.7m vs year-ago $46.7m. Normalised EBITDA -$9.1m vs year-ago -$5.7m.
• Openpay Group Ltd. (OPY) -8.09% Statutory NPAT -$36.4m vs consensus -$38.3m. Revenue $18.3m vs year-ago $11m and consensus $18. EBITDA -$30.1m ex-items vs consensus -$36.9m. Strong momentum continuing into FY21, with demonstrated growth across all key metrics as at end July 2020. Total transaction value (TTV) grew to a record $192.8m, up 98%, with a significant shift to online.
• Temple & Webster (TPW) +18.03% Full-year NPAT of $13.9m. Revenue $176.3m, in line with the preliminary announcement. Adjusted EBITDA $9.4m, in line with the preliminary announcement. FY21 has started strongly with revenue growth of 161% vs year ago. Growth was consistent across July and August, with both months trading ~+160% on pcp. Contribution margin tracking above 15%. EBITDA for July/August (2-month period) will be ~$6m. In July crossed the milestone of 500,000 active customers.
• Cooper Energy (COE) –1.49% Full-year underlying NPAT -$6.6m vs consensus -$4.7m. Revenue $78.1m vs consensus $80.5m. Underlying EBITDAX $29.6m vs consensus $34.6m. Non-cash impairments, non-cash restoration expense charges and liquidated damages income $79.4m. Expects substantially increased production and sales as a result of a full-year contribution from the Sole gas field. The extent of this increase will depend upon the timing and rate of build-up of production at the Orbost Gas Processing Plant, which is still undergoing commissioning.
• Amaysim Australia (AYS) –0.70% Full-year underlying EBITDA $40.1m vs guidance $33-39m and consensus $36.6m. Revenue $490.5m vs year-ago $508.3m and consensus $491.6m. Underlying NPAT $1.8m vs year-ago $6.8m and consensus $5.5m. Mobile subscriber growth has continued in July and August, with the recurring subscriber base totalling 836,000 as at 27-Aug-20.
• Electro-Optic Systems (EOS) –10.16% First half NPAT -$14.3m vs year-ago -$7.5m. Revenue $75.4m vs year-ago $57.4m. Underlying EBIT -$15.1m vs year-ago $9.1m. Backlog $570m. Risked pipeline $3.1bn. Un-risked pipeline $12.9bn. Revenue deferred into H2 2020 and 2021. Reaffirms EBIT $20-30m. Underlying EBIT margin ~10%.
• Sealink Travel Group (SLK) +6.74% Full-year normalised NPATA $37.2m vs year-ago $25.3m. Revenue $623.7m vs consensus $615.6m. Normalised EBITDA $71.7m vs consensus $68.8m. Declared a 4.5c fully franked final dividend vs year-ago 8.5c. Overall, FY21 has started in line with expectations. Expects that a large bus tender contact in Melbourne will be taken to market in the second or Q3 of FY21.
• Lendlease Group (LLC) +3.84% Targeting annual development production rate $8bn+. Will look to increase investments earnings from ~30% towards 40%. Will shift to operating earnings as the key earnings metric. Aims to redirect more than $1bn of capital to focus on areas of urbanisation and investments. Exit US telecommunications. Down weight Retirement. Exit Services.

ECONOMIC NEWS

• Private sector credit for July fell -0.1% over the month, in line with estimates.
• Company operating profits for the June quarter lifted 15% vs estimates of a 6% fall. Inventories -3% vs estimates of -1%.

COVID-19 NEWS

• Covid-19 infections worldwide surpassed 25m, as India set a global record for daily cases.

Brazil recorded 16,158 new cases, the fourth consecutive decline in daily numbers, according to the Health Ministry.

• California reported 6,070 new virus cases on Sunday, the most in a week.
• Cases in the U.K. rose by 1,715, the most since June 4.

BONDS

ASIAN NEWS

• TikTok’s assets are not able to be sold without Chinese government approval.
• China has started an anti-subsidy investigation into wines in containers holding two litres or less from Australia.

• In total, China’s more than 1,000 commercial banks posted a 24% decline in second quarter profits, with non-performing loans hitting a record 2.7 trillion yuan.

US and EUROPEAN NEWS

• Warren Buffet has bought himself some cowboy outfits for his 90^Th birthday present by buying into Japanese trading houses Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo.5% in each. Very democratic, a US$6bn investment. The five targeted are major players in the nation’s energy and raw-materials industries, trade at less than book value and offer higher dividend yields than the Topix.
• Strong open expected for European markets. UK closed tonight for bank holiday.
• In UK, housing demand is very strong and houses now taking 30% shorter to sell than pre CV19.
• Zoopla at its strongest in five years. Interestingly 50% of UK home owners have no mortgage. Bigger houses in demand.
• Trump hails Abe as best Japanese PM ever.

And finally…

 

Clarence

XXX