ASX 200 gives back yesterday and more falling 61 (-0.9%) to 6778 as banks and miners flop. Dow futures sliding 76 points. After a tepid start, selling accelerated as risk-off behaviour in growth stocks permeated into the broader market. Results were punished and brokers more circumspect on pushing ahead. Miners slipped as commodity prices fell, BHP down 3.1% and RIO off 2.7%, with NST dropping 3.6% after a leadership loss. Energy stocks modestly lower with WPL off 1.1% and STO down 0.4%. BNPL and tech hit hard as APT dropped 3.0% taking the All–Tech Index down 2.9%, XRO slipped too off 3.2% together with CPU off 3.7%, WTC tried hard to keep its head above water after results spurt early. Finished up only 1.0%. Banks underwater with CBA down 0.6% and ANZ down 0.7% with the only winner in the space NAB up 0.2%. Corporate results were once again the focus, but it seemed to be sell first and analyse later. HUM was a significant casualty falling 18.2%, after announcing an international expansion into the UK and Canada. Some winners in the Media space following the FB stoush, NEC up 9.7% in results and SWM doing well up 4.6%. IEL and AX1 the standouts with results, up 7.2% and 4.4% respectively. NAN down 8.1% missing expectations and APX under pressure on results down 12.0%. On the economic front, the seasonally adjusted wage price index rose 0.6% in Q4 vs estimates of 0.3%. The seasonally adjusted estimate for total construction work done fell 0.9% to $51,170.6m in the December quarter, missing estimates of a 1% lift. 10-year bond yields edging higher at 1.60% and the AUD 79.16c. Asian markets saw selling with Japan down 1.62% and China down 1.49%.
- ASX 200 down 61 to 6778. Off lows
- High 6824 Low 6763
- Big Bank Basket dipped to $158.36
- All Tech Index smacked 2.9%
- Dow Futures down 76 points
- Gold steady at AUD$2284
- 10-year yield higher at 1.60%
- AUD steady at 79.11c
- Bitcoin rebounds to US$50749. Cathie says buy
- Asian markets saw selling with Japan down 1.62% and China down 1.49%
- NST -3.59% Bill Beament leaves after VXR investment.
- VXR +233.33% Strategic funding package.
- SLK +13.74% positive result.
- UWL +2.38% solid broker reactions.
- HUM -18.18% Ho Humm results.
- SEK -7.80% no respite after Narev takes helm.
- APX -12.05% results accelerate selling.
- AEF -10.17% underwhelming results.
- BD1 -14.51% lawsuit from founders.
- BTH -8.67% rattling around on disappointing numbers.
- SOR +15.56% volatility continues.
- CAJ +13.33% very positive results. Expect upgrades.
- WOW +1.05% Endeavour Drinks plan.
- IOU +24.49% dips below placement price and bounces.
- AQS -14.94% reverses wins.
- Speculative Stock of the Day: Carawine Resources (CWX) +58.14% good volume. Positive announcement. Multiple high grade gold hits above 20g/t at Hercules in Tropicana North Project. Could have been VXR with strategic funding secured from Bill Beament (NST) at 8c. 1 for 7 will be offered at the same terms including free option..
- Biggest Winners: SLK, NEC, IEL, PTM, BKL, BGA, VEA and BGL.
- Biggest Losers: HUM, APX, AEF, NAN, JMS,AVZ, SEK and NVX..
- SEEK (SEK) -7.80% To sell part of its stake in Zhaopin for $697m to a consortium led by Primavera Capital Group. SEEK’s Zhaopin stake to reduce from 61.1% (undiluted) to 23.5% (fully diluted). In lieu of an interim dividend, the board intends to declare and pay a dividend of ~20c/share after it receives the proceeds from the sale.
- Platinum Asset Management (PTM) +6.42% First-half profit $90.4m vs year-ago $79.1m and consensus $60.9m.Revenue $166.6m vs year-ago $153.6m and consensus $135.4m. Main contributor of the increase in revenue and profit was the mark to market gains on seed investments, including dividends of $36.2m before tax vs year-ago $7.7m. Interim dividend 12cps, fully franked.
- Accent Group (AX1) +4.42% First-half profit $52.8m vs consensus $48.3m. Revenue $478.1m vs consensus $495.0m. EBITDA $97.5m in line with $95-98m guidance. Interim dividend 8c, fully franked. Opened 50 new stores during H1 and closed 5 stores where required rent outcomes could not be achieved and expects to open at least 90 stores in FY2021 across all banners. Given the continuation of COVID-19 and the likelihood of ongoing lockdowns, the Group will continue applying JobKeeper funds to keep our team members employed and further adds that no JobKeeper funds have or will be used in the calculation or payment of management bonuses or dividends. No guidance for FY21.
- Spark New Zealand (SPK) –0.23% First-half profit NZ$148m vs year-ago NZ$167m. Revenue NZ$1.80bn vs year-ago NZ$1.82bn and consensus is NZ$1.77bn. Interim dividend 12.5cps. FY Guidance (Jun 2021): FY21 revenue likely to be broadly flat vs prior year’s NZ$3.62bn. EBITDAI NZ$1.10-1.13bn vs prior guidance NZ$1.09-1.13bn. Total FY21 Dividend Guidance confirmed at 25.0cps vs prior guided Ordinary 23-25cps.
- Michael Hill International (MHJ) +2.14% First-half profit $39.0m vs year-ago $21.4m and consensus $30.4m. Revenue $319.9m vs year-ago $329.5m and consensus $318.3m. Group same store sales +6.3%. EBIT $58.9m vs guidance $56-60m. Interim dividend 1.50cps. Outlook: Encouraged by the strong start to H2 with same store sales for the group of +11% for the first eight weeks.
- Perseus Mining (PRU) -3.46% H1 NPAT (attributable) $36.1m vs consensus $30.0m. Reports H1: Revenue $286.7m vs consensus $259.0m. EBITDA $125.9m vs consensus $111.0m.
- IDP Education (IEL) +7.20% First-half profit $29.7m vs year-ago $57.7m. Revenue $269.1m vs consensus $229.7m. EBIT $47.3m vs year-ago $86.9m. Unfranked interim dividend of 8.0cps.
- Medibank Private (MPL) –3.46% First-half profit from continuing operation $226.4m vs $228.6m. Revenue $3.44bn vs consensus $3.51bn. EBIT $255.2m vs consensus $250.3m. Underlying profit $203.4m vs year-ago $179.4m. Interim dividend 5.8c/share, fully franked. Craig Drummond will retire as CEO on 30-Jun-21. Outlook: Aim to increase market share and achieve total policyholder growth in excess of 3%, including an expectation of growing the Medibank brand by ~1% during FY21. Targeting $20m in productivity savings in FY21 and an additional $30m planned during FY22-FY23. Management expenses are expected to be ~$530m for FY21. Dividend payout ratio expected to be towards the top end of our target range of 75%-85%. Targeted inorganic growth for Medibank Health and Health Insurance remain areas of focus.
- Mayne Pharma (MYX) –4.84% First-half profit -$181.3m vs year-ago -$18.2m. Impairments -$214.5m, related largely to generic intangibles. Revenue $208.8m vs consensus $211.8m. Adjusted EBITDA $39.9m vs consensus $43.6m
- Woolworths Group (WOW) +1.05% First-half profit $1.14bn vs year-ago $887.0m and consensus$1.16bn. Revenue $35.85bn vs year-ago $32.41bn and consensus $35.72bn. EBIT $2.09bn vs year-ago $1.76bn and consensus $2.07bn. Interim dividend 53c. The Endeavour Group separation is now expected to take place in June 2021, most likely via a demerger. Looking ahead to rest of FY21, expect sales to decline over March to June period compared to prior year in all businesses, with exception of Hotels where venues were closed for much of final four months last year, as cycle last year’s COVID surge. Group sales for the first seven weeks of H2 FY21 has remained strong, benefiting from continued at-home consumption, Australians not travelling abroad, and a weaker prior year where sales were impacted by bushfires on the east coast of Australia. However, growth rates have continued to moderate over the period in line with the overall market. COVID costs for the seven weeks also continued to decline as restrictions ease.
- Appen (APX) –12.05% Full-year underlying profit $64.4m vs consensus $51.9m. Revenue $599.9m vs $623.6m. Adjusted EBITDA $108.6m vs consensus $107.4m. Final dividend of 5.5cps and interim dividend of 4.5cps, both 50% franked. Year-to-date revenue plus orders in hand of ~$240m in February 2021, consistent with prior year methodology and timing. Outlook: 1H21 earnings growth will be impacted by the near-term challenges, a greater skew in timing of project delivery to 2H21, and the lower pcp cost base. Underlying EBITDA for FY21 is expected to be in the range of $120-$130m at constant currency representing growth of 18-28% on FY20 underlying EBITDA (ex. FX gain) of $101.8m.
- Nanosonics (NAN) –8.10% First-half profit $1.5m vs consensus $3.6m. Revenue $43.1m vs consensus $51.5m. Cash and cash equivalents of $87.9m. Outlook: Based on current market improvements the company is anticipating ongoing growth in total revenue and profitability into H2, driven by increasing installed base growth and increased usage of consumables across all regions. With COVID-19 vaccination programs underway, the company is optimistic that overall market conditions, in particular access to hospitals, are likely to continue to improve. Total operating expenses for the year are now expected to be at the lower end of the $75m to $78m range indicated previously.
- City Chic Collective (CCX) +0.75% First-half profit $13.1m vs consensus $11.9m. Revenue $119m vs consensus $121.4m. Underlying EBITDA $23.3m vs consensus $24m. No dividend, to be reviewed at the full-year results. FY21 Outlook: Strong positive comparable sales growth in H2 to date.
- Nine Entertainment Co. (NEC) +9.74% reports first half NPAT of $186.9m against expectations $157.2m. Revenue $1.16bn vs $1.18bn expected. EBITDA $355.4m vs expectations of $339.2m. Interim dividend A$0.05, fully franked; record 5-Mar, payable 20-Apr. A very solid set of numbers and a decent outlook; the BVOD market is expected to continue to grow strongly through H2, Nine Radio is expected to improve into FY22 as the radio market begins to recover, recent subscriber momentum is expected to continue at Stan driven by the launch of Stan Sports, Domain trading for the start of 2021 has been encouraging, albeit with the continuation of atypical seasonal patterns.
- Regis Healthcare (REG) +1.55% H1 Net Profit after tax $11.0m ex-items vs consensus $13.6m. Reports H1: Revenue $353.3m vs year-ago $332.2m. Adjusted EBITDA $42.6m vs year-ago $43.1m. Interim dividend 2.0c, 50% franked. Management comments: Continue to focus on business performance improvements centred on occupancy and earnings uplift strategies. The sector is heavily reliant on the response by Government to the Royal Commission’s final report due to be released this week. Confident that acquisition and development opportunities will arise post the Royal Commission and are well-placed to take advantage of any sector consolidation opportunities that may arise. Given the imminent release of the threshold Royal Commission findings into Aged Care Quality and Safety and the anticipated Government response, the board does not believe it to be appropriate to put forward any earnings guidance.
- Home Consortium (HMC) -2.36% H1 Net Profit after tax (NPAT) -$34.6m vs year-ago -$12.4m. Reports H1: NPAT consensus is $15.0m. Revenue $41.9m vs year-ago $33.7m. Funds from Operations (FFO) $0.073 vs consensus $0.07. Interim FY21 dividend of 6.0 cps (100% franked) declared. FY Guidance: FFO guidance of no less than $35.0m (12.9 cps). FY21 dividend guidance of 12.0 cps.
- Japara Healthcare (JHC)- H1 Net Profit after tax (NPAT) -$9.0m vs consensus -$3.1m. Reports H1: Revenue $212.7m vs consensus $232.2m. EBITDA $8.0m vs consensus $15.7m. In light of the financial results, no interim dividend has been determined. Outlook: The FY2021 cost and revenue implications from COVID-19 remain uncertain. The funding environment is unclear and occupancy, although stabilising, remains weakened. In this environment it is difficult to provide reliable earnings guidance. Recently completed developments are expected to contribute to EBITDA with interest and depreciation expenses also increasing. RAD inflows are expected from new Homes ramping up and as occupancy recovers.
- BigTinCan Holdings (BTH) -8.67% H1 Net Profit after tax (NPAT) -$7.9m vs year-ago -$4.0m. Reports H1: Revenue $18.9m vs year-ago $14.3m. Adjusted EBITDA -$3.6m vs year-ago -$1.9m. ARR $48.4m vs year-ago $32.4m. Repeats FY Guidance (Jun 2021): ARR to be at the top end of $49-53m. Revenue $41-44m, with stable retention.
- InvoCare (IVC) +0.36% FY operating Net Profit after tax $27.3m vs consensus $20.8m. Reports FY: Revenue $476.2m vs consensus $448.5m. Operating EBITDA $102.6m vs consensus $100.4m. Final dividend 7.0c/share, fully franked.
- Vocus Group (VOC) +1.40% H1 underlying Net Profit after tax $45.4m vs year-ago $51.1m. Reports H1: Underlying NPAT consensus is $45.7m. Revenue $897.4m vs year-ago $901.9m. Adjusted EBITDA $192.7m vs year-ago $190.2m. Statutory NPAT $19.1m vs year-ago $12.8m. FY Guidance (Jun 2021): Reaffirms adjusted EBITDA $382-397m vs consensus $389.1m. Capital expenditure $185-200m vs prior A$160-180m. NZ IPO on track for dual listing on NZX/ASX before the end of FY21.
- McMillan Shakespeare (MMS) -1.54% H1 Underlying Net Profit after tax (UNPAT) $42.7m vs year-ago $37.8m, company guidance $42.7m. Reports H1: Revenue $247.6m vs consensus $255.1m. EBITDA $68.1m vs consensus $69.2m. Interim dividend $0.302, fully franked. Outlook: First volumes expected to be in June 2021, initially small. Gradual increase in warehouse financing during FY22, although will take some time to increase to longer-term levels.
- humm group (HUM) -18.18% H1 cash Net Profit after tax (NPAT) $43.4m vs year-ago $34.5m. Reports H1: NPAT consensus is $42.4m. Gross income $225.2m vs year-ago $240.7m. No dividend. FY Guidance (Jun 2021): H2 cash NPAT lower vs year-ago.
- Wisetech (WTC) +1.02% reports H1 underlying NPAT $43.6m vs expectations of $35.6m. Revenue $238.7m vs $241.9m expected. EBITDA $89.2m vs expectations of $80.5m. Interim dividend 2.7cps, fully franked; record 15-Mar, payable 9-Apr. Guidance is unchanged for revenue ($470-510m), whilst EBITDA was upgraded to $165-190m from prior guidance $155-180m.
- Scentre Group (SCG) –1.05% Full-year funds from operation $0.15 vs consensus $0.15. Profit $763.4m vs consensus $769.3m. Receipts from operations $2.36bn. Final distribution 7c, in line with guidance. FY21 outlook: distribution of at least 14c. The Distribution is expected to continue to grow in future years. The group plans to retain earnings to cover operating and leasing capital expenditure, fund strategic initiatives and reduce net debt.
- Sydney Airport (SYD) +2.53% Full-year profit -$145.6m vs year-ago $403.9m and consensus -$238.4m. Revenue $919.4m vs consensus $744.1m. Adjusted EBITDA $623.8m vs consensus $436.1m. No distribution for 2020. Outlook: Given the uncertainty that remains with respect to the recovery in 2021, no distribution guidance will be provided at this point in time.
- Australian Ethical Investment (AEF) –10.17% First-half underlying profit $4.9m vs year-ago $4.4m. Operating revenue $25.6m vs year-ago $23.3m. Cost-to-income ratio 74% vs year-ago 74%. Interim dividend 3c vs year-ago 2.5c.
- Blackmores (BKL) +6.25% First-half underlying profit $19.4m vs consensus $15.9m. Revenue $302.6m vs consensus $306.9m. EBIT $30.8m ex-items vs year-ago $26.8m. Interim dividend 29cps, fully franked. Outlook: H2 revenue growth in Asia will continue with positive signs of health and economic recovery underway. Cost savings programs and pricing from October 2020 will begin to improve our gross margins from H2 FY21. Challenging market conditions in Australia will continue as international borders remain closed and will lead to revenue for H2 being lower than H1.
- Monash IVF Group (MVF) +3.25% First-half adjusted profit $12m vs consensus $11.4m. Revenue $90.8m vs consensus $87m. EBITDA $28.7m vs consensus $22.2m. Interim dividend 2.1cps (fully franked). FY Guidance: Adjusted profit $21-23m.
- Bega Cheese (BGA) +6.22% H1 normalised profit $29.7m vs year-ago $15m. Revenue $708m vs year-ago $741m. Normalised EBITDA $73m vs year-ago $48.5m. Interim dividend 5c/share, fully franked. Outlook: Strength in the Bulk segment has been partially impacted by COVID-19 particularly in the infant formula category. Customers have been impacted by trading conditions in key markets and the effects of COVID-19 on international travel and the Daigou channel. The outlook for this category remains challenging and Bega Cheese continues to respond through diversification in its revenue streams through product innovation and new customer and channel development. To date there has been minimal impact to direct supply chain however some of customers have been experiencing difficulty with reduced cross border movement.
- Eagers Automotive (APE) – Full-year underlying operating profit $209.4m vs guidance $209.4m.Revenue7.30% $8.84bn vs consensus $8.84bn. Underlying EBITDAI $284.2m vs consensus $269.4m. Final dividend of 25.0cps, fully franked. Reinstates dividends after no interim dividend was paid and the final dividend for 2019 was reduced by half. Company priorities: Continuing to rebalance our property portfolio. Driving growth in its fixed price pre-owned vehicle business. Delivering optimised vehicle finance solutions.
- IOOF Holdings (IFL) +3.35% First-half underlying profit $65.9m vs year-ago $26.5m and consensus $64m. Fully franked interim dividends of 11.5cps with ordinary dividend of 8.0cps within the target 60-90% dividend payout range. Outlook: “IOOF remains well-positioned to deliver on all synergy targets and key milestones for FY21.
- In the December quarter of 2020 the seasonally adjusted wage price index rose 0.6% vs estimates of 0.3%, to be up 1.4% over the year vs estimates of a 1.1% lift. The private sector rose 0.7% and the public sector rose 0.3% in the quarter.
- The seasonally adjusted estimate for total construction work done fell 0.9% to $51,170.6m in the December quarter. Building work done rose 0.6% to $29,373.9m. Engineering work done fell 2.8% to $21,796.6m.
- With 56,000 cases in the US every day, is there anyone that hasn’t had it?
- AstraZeneca Plc sees its vaccine gaining emergency-use authorization in the U.S. in April.
- Vaccine Tracker: 213m doses in 95 countries. 6.11m a day. In US 1.28m doses a day. 65m in total.
- Reuters reported that AstraZeneca is expected to deliver about half the Covid-19 vaccines it had committed to supply the European Union in the second quarter. Sounds like fewer than 90m compared to the promised 180m.
- Ireland’s government will maintain its strict lockdown regime until at least April 5.
- Hong Kong budget out today. The Financial Secretary has pledged HK120bn of fiscal support with the economy set to grow by 3.5% to 5.5% in 2021.
- Hyundai Motors is recalling its EV as they are prone to battery fires. Could cost US$900m.
US AND EUROPEAN HEADLINES
- Cathie Wood backs Bitcoin and up it goes again. Square buys another US$170m in Bitcoin bringing its balance sheet holdings to 5%.
- Mitt Romney says Trump would win 2024 nomination if he runs.
- Invesco’s CEO is seeing good opportunities in China but thinks there is risk in Bitcoin and the SPAC craze.
- The Texas grid fiasco has a victim as Ercot director quits.
- Tiger Woods in a car crash.
- US considering Russian sanctions following the cyber-attack on SolarWinds.
- Madison Square Garden reopens to fans after a year in lockdown. Food and merch delivered to your seat. It could catch on!
A few pearls of wisdom!
• Borrow money from pessimists . . . they don’t expect it back.
• Half the people you know are below average.
• 99% of lawyers give the rest a bad name.
• A conscience is what hurts when all your other parts feel so good which is why a clear conscience is usually the sign of a bad memory.
• OK, so what’s the speed of dark?
• When everything is coming your way, you’re in the wrong lane.
• Eagles may soar, but weasels don’t get sucked into jet engines.
• What happens if you get scared half to death twice?
• I intend to live forever. So far, so good.
• A conclusion is the place where you got tired of thinking.
• The hardness of the butter is proportional to the softness of the bread.
• To steal ideas from one person is plagiarism; to steal from many is research.
• The problem with the gene pool is that there is no lifeguard.
• If at first you don’t succeed, skydiving is not for you.