ASX 200 down 41 to 7491 (0.5%).
- HIGH 7529 LOW 7477 Still relatively narrow range. Waiting for Jackson.
Winners: FCL BKL CCX HMC UNI ACL OCL CXL
Losers: APX LNK A2M IFL JIN PTM ORE REH
- POSITIVE SECTORS: Defensives. Banks.
- NEGATIVE SECTORS: Miners.
- BIG BANK BASKET: Down at $182.98
- ALL -TECH INDEX: Down 0.8% APT down 1.0%
- GOLD: Slips to AUD $2461
- BITCOIN: US$47426 Off highs.
- AUD: Firms to 72.63c. 10-YEAR YIELD: Rallies to 1.18%
- ASIAN MARKETS: Tokyo flat% Hong Kong down 1.2%, China down 0.6%.
- US FUTURES: Dow futures down 22. NASDAQ down 25
STOCKS ON THE MOVE
- ALG +21.63% results cheer.
- SWP +20.23% results boost.
- FCL +15.45% results.
- CXL +5.52% bouncing back post investor briefing.
- HMC +8.39% going really strongly still. Becoming an asset manager.
- APX -21.42% AI turns sour on results.
- A2M -11.81% strategic review as China still an issue.
- JIN -10.18% acquisition
- BET -6.56% Ladbroked.
- REH -7.44% broker downgrades.
- IEL +2.18% huge shareholder sell down.
- WTC +0.39% holds gains.
- KGN -1.39% slipping again.
- APT -0.95% Z1P -0.98% BNPL under a little pressure.
- IFL -10.43% bit hard done by?
- SM1 -4.69% follows A2M down.
- PTM -9.63% broker downgrades.
- Speculative Stock of the Day: Kuniko (KNI) +183.66% Crazy times in this one after announcing that the exploration program in Norway was kicking off. This is fast becoming the meme stock. Hit 360c and a low of 85c today following its 20c IPO listing just Tuesday. A sign of something.
- a2 Milk Co. (ATM) -11.81% Reports Full-year net profit NZ$80.7m vs consensus NZ$93.4m. Revenue NZ$1.21bn vs consensus NZ$1.23bn. EBITDA NZ$123.4m vs year-ago NZ$545.3m. The board has carefully considered capital management initiatives and has decided not to return capital to shareholders at this point in time, preferring instead to preserve balance sheet strength having regard to market volatility and potential opportunities to reinvest in growth and supply chain. Outlook: The outlook for FY22 remains challenging and uncertain and it will take time to recover. FY22 gross margin is expected to be broadly similar to FY21 (excluding FY21 stock write-downs and before consolidating the MVM business in FY22). Strategy review: The company recognises the need to change its approach in light of the significant market changes and a comprehensive process to review its growth strategy is underway.
- Endeavour Group (EDV) -2.22% Reports Full-year net profit $445m vs consensus $444.7m. Group sales $11.60bn vs consensus $11.53bn. Online sales $859m, +34.7% on the year. EBIT $899m vs consensus $858.9m. Final dividend 7.0cps. Management comment on outlook: Entering the new year with a robust balance sheet and a significant number of opportunities to create value, including growing our digital engagement, expanding and enhancing our network and optimising our business through a focus on profitability and capital management.
- Flight Centre (FLT) +4.04% Reports Full-year underlying PBT -$507m vs consensus -$488.5m. Revenue $396m vs consensus $483.5m. Group TTV $3.95bn vs year-ago $15.30bn. Outlook: Targeting a return to monthly profitability in both corporate & leisure during FY22. Requires circa 50% of historic TTV in corporate, circa 40% in leisure. May increase short-term expenditure in leisure and/or corporate as year progresses to capitalise on opportunities & create longer-term value. Not in a position to provide FY22 guidance given uncertainty.
- Ardent Leisure Group (ALG) +21.63% Reports Full-year net profit -$86.9m vs year-ago -$136.1m. Net profit consensus was -$102.3m. Revenue $390.7m vs year-ago $398.3m and consensus of $353.9m. EBITDA $67.3m vs year-ago $25.3m and consensus of $54.6m.
- Qantas Airways (QAN) +3.49% Reports Full-year underlying loss before tax -$1.83bn vs consensus $1.82bn. Underlying EBITDA $410m vs company guidance $400-450m. Net profit -$1.73bn vs consensus -$1.86bn. Revenue $5.93bn vs consensus $5.75bn. No dividend will be paid. Restructuring program: Group’s COVID recovery plan targets at least A$1B in permanent annual savings from FY23 onwards. Progress is ahead of schedule, with $650m in benefits delivered in FY21; this is targeted to increase to $850m by the end of FY22. Outlook: Recent outbreaks and associated domestic and trans-Tasman border closures are expected to have an impact in the order of A$1.4B on the group’s Underlying EBITDA in 1H22. Unfortunately, the extended border closures will also extend the stand-downs of domestic crew and airport staff beyond the eight weeks previously announced – however, no job losses are expected.
- Ramsay Health Care (RHC) +1.77% Reports Full-year statutory net profit $449m vs year-ago $284.0m. Revenue $13.33bn vs consensus $12.99bn. Adjusted EBITDA $2.05bn vs consensus $2.01bn. EBIT $1.13bn vs consensus $1.13bn. A fully franked final dividend of 103.0cps was determined taking the FY21 full year dividend to 151.5cps equivalent to the pre COVID FY19 full year dividend. Outlook: Surgical back logs and latent demand for non-surgical services are expected to continue to drive volumes as countries emerge from lock-downs. The EBIT impact of lock-downs in July in Australia was approximately -$13m (inclusive of the higher costs associated with COVID). Due to the introduction of surgical restrictions on 23rd August 2021 at seven of Ramsay’s hospitals in Greater Sydney the total EBIT impact in FY22 is forecast to be significantly more material and will depend on the duration of the restrictions. In the absence of lock-downs, earnings are expected to improve as peak COVID costs decline and further business efficiencies are identified.
- Woolworths Group (WOW) +0.42% Reports Full-year net profit $1.97bn ex-items vs consensus $2.04bn. Revenue $67.28bn vs consensus $66.85bn. EBIT $3.66bn ex-items vs consensus $3.71bn. Final dividend 55c/share, fully franked. Trading update and outlook: COVID will continue to have a profound impact in F22 but making any further predictions about year ahead remains very difficult. Strong sales growth in first eight weeks of F22 in Australian Food (+4.5%). BIG W sales impacted by restrictions. FY22 operating capex of $2bn due to supply chain and eCommerce investment. Expect continued progress in F22 on strategic priorities and growing retail ecosystem but Delta creating volatility on a day-to-day basis. Launches $2bn off-market buyback.
- Link Administration Holdings (LNK) -12.62% Reports Full-year operating EBIT $141.4m vs consensus $147.8m, launches $150M share buyback. Statutory net profit -$162.7m vs consensus $41.5m (Includes impairment charge of -$182.8m). Revenue $1.16bn vs consensus $1.19bn. Final dividend 5.5cps, fully franked. Outlook: FY22 low single digit revenue growth. FY22 Operating EBIT broadly in line with FY21. To deliver stronger revenue growth in FY23 relative to FY22. Growth in Operating EBIT expected to resume in FY23.
- Australian Ethical Investment (AEF) +4.04% Full-yar underlying profit $11.1m vs guidance $10.7-11.2m. Operating revenue $58.7m vs year-ago $49.9m. Cost-to-income ratio (post performance fee) 74% vs year-ago 74%. Full-year dividend 5.0c, includes special dividend of 1.0c.
- City Chic Collective (CCX) +10.42% Full-year underlying profit (pre-AASV-16) $24.9m vs consensus $25.0m. Revenue $258.5m vs consensus $258.0m. Adjusted EBITDA $42.4m vs consensus $45.2m. Decided to not declare a dividend. First eight weeks of FY22 has continued to deliver strong top-line and comp sales growth.
- Cedar Woods Properties (CWP) +0.45% Full-year profit $32.8m vs guidance $32m and consensus $29.5m. Revenue $299.8m vs year-ago $260.7m. Final dividend 13.5c/share, fully franked. National property market conditions remain buoyant and Cedar Woods starts FY2022 in a strong position with $478m in presales expected to settle over FY22 and FY23.
- Costa Group Holdings (CGC) -4.42% First-half underlying profit attributable to shareholders $44.4m vs consensus $43.2m. Revenue $612.4m vs year-ago $612.4m. EBITDA $124.4m vs year-ago $119.3m. Interim dividend 4.0c/share, fully franked. Full year forecast is confirmed in line with 2PH capital raise disclosure. CY21 EBITDA and NPAT to be marginally ahead of CY20, excluding any contribution from 2PH. Significant domestic activity still to occur over H2, with positive momentum driving the remainder of the citrus season and the main berry season expected to deliver healthy growth versus pcp.
- IOOF Holdings (IFL) -10.43% Full-year underlying profit $147.8m vs consensus $140.7m. Revenue $1.33bn, +24%y/y. Final dividend 9.5c, fully franked and special dividend 2.0c, fully franked.
- Polynovo (PNV) -4.23% Full-year profit -$4.6m vs consensus -$3.7m. Revenue $29.3m vs consensus $29.7m. EBITDA -$3.3m vs consensus -$2.6m. Cash on hand $7.7m. The business will continue to reinvest cash flows to expand market share in existing markets, enter new markets, and develop new products.
- Whitehaven Coal (WHC) +4.95% Full-year profit -$87.3m ex-items vs consensus -$70.4m. Revenue $1.56b vs consensus $1.53bn. EBITDA $204.5m vs consensus $209.7m.
- Appen (APX) -21.42% First-half adjusted EBITDA US$27.7m vs consensus US$32.1m; to acquire Quadrant Global for $25m upfront with $20m in earnout potential. Underlying profit US$12.5m vs year-ago US$19.3m and consensus US$18.7m. Revenue US$196.6m vs consensus US$216.6m. Interim dividend of AU 4.5 cents per share, partially franked.
- Atlas Arteria (ALX) +0.48% First-half underlying profit $86.0m vs year-ago $9.1m. Toll revenue $43.1m vs year-ago $49.6m. Distribution guidance of 15.5c.
- Private capital expenditure (capex, business investment) June quarter, 2021: +4.4% vs market estimates of a 2.6% rise.
- NSW hits over 1000 for the first time ever. Not the sort of record you want.
- Japan has halted 16m CV19 vaccine shots on fears of contamination for the Moderna jab.
- Western Digital is in talks to merge with Kioxia in Japan. The deal could be worth more than $20bn.
- Seems supply chain issues are not going anywhere. One example is Ribuik’s Cubes where the cost of the magnets have risen by around 50% leading the manufacturer to question if it can make a profit on them. Total production costs up 7%.
- Bottlenecks at US ports continue with CV19 issues in China also shutting down hubs.
- Bank of Korea hikes rates by 0.25% to 0.75%. Says debt risk is bigger than Delta.
US AND EUROPEAN NEWS
- European markets opening slightly weaker.
- Kamala Harris finishes up her Asian tour.
- US investors are cutting leverage. Borrowings dropped from record US$882bn to lowest since March.
- One month to go until the German elections. September 26th and Merkel will be gone. SPD leads in the polls.
- Delta Airlines will impose a US$200 surcharge on staff that are unvaccinated.
- Google and Microsoft unveil huge spending plans to shore up US defences.
- T Rowe Price fund manager David Giroux cuts stocks exposure.
- Watch out for the Greenwash where major companies ‘exaggerate’ their ESG credentials.
- Jackson (Zoom) Hole kicks off tonight. Jerome speaks tomorrow. Theme is “Macroeconomic Policy in an Uneven Economy.” Show stopper.