Corporate Results Monitor

FNArena's All-Year Round Australian Corporate Results Monitor.

Currently monitoring September 2020-January 2021.

Figures shown as at 01 October 2020

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TOTAL STOCKS:

13

Beats

2

In Line

5

Misses

6

Total Rating Upgrades:

2

Total Rating Downgrades:

1

Total target price movement in aggregate:

9.59%

Average individual target price change:

2.22%

Beat/Miss Ratio:

0.33

Previous Corporate Results Updates

Company Result Upgrades Downgrades Buy/Hold/Sell Prev Target New Target Brokers Commentary
BKW - Brickworks BEAT 1 0 3/0/0 18.23 19.91 3

A -31% decline in earnings for Brickworks in FY20 was not as bad as feared given Building Products Australia put in a strong second half and Property also beat forecasts. Solid cost management also contributed. While risks remain to activity in NSW and Victoria, outlook comments in regard to BPA were cautiously optimistic. Property is expected to remain resilient and Building Products North America should benefit from rationalisation efforts and recent acquisitions. Morgans believes Industrial Property Trust tailwinds, an asset heavy balance sheet and attractive dividend yield will provide investors ongoing valuation support until a cyclical recovery in the operational business occurs, and upgrades to Buy.

CLV - Clover Corp IN LINE 0 0 1/1/0 2.79 2.65 2

Clover Corp's result beat UBS (Hold) but was in line with Ord Minnett (Buy), who was disappointed by guidance. We'll net that all out to in-line. Both brokers are nevertheless impressed with European sales following a regulatory change. While cognisant the first half of FY21 will remain challenging, both brokers highlight structural tailwinds in the form of demand for the company's market-leading DHA (omega-3 from tuna oil) products and new product potential. Ord Minnett is increasingly confident in the opportunity for DHA to be included in infant formula brands in China. With more than 50% of the world's infant formula consumed in China, the regulation could set a minimum level for DHA in formula globally.

FSF - Fonterra MISS 0 0 0/2/1 0.00 0.00 3

Fonterra Shareholders Fund reported at the top end of guidance but the "beat" was of low quality as far as UBS (Hold) is concerned. Credit Suisse (Hold) suggests the company still needs to make allowance for the pandemic-related uncertainty that is affecting the food services business, while the result simply missed Macquarie's (Sell) forecast. Food services volumes are expected to recover in FY21 with covid restrictions easing. The company has guided to better outcomes over the next five years, but the pace of recovery is expected by brokers to be slower than hoped. A review of capital structure is ongoing and a priority, while the significant range in earnings guidance continues to highlight the volatility and lack of visibility in the business, upon which all brokers agree.

KMD - Kathmandu BEAT 0 0 1/1/0 1.15 1.15 2

Kathmandu Holdings' operating earnings and net profit were ahead of expectations in FY20 and also beat guidance. No dividend was declared, but the company expects dividends will resume in FY21. Based on current forward orders, management anticipates second half wholesale orders will be in line with pre-pandemic levels. Gross margins are also expected to improve by the second half. Credit Suisse (Buy) now expects Kathmandu will be net cash in FY21. Wholesale order books for Rip Curl and Oboz are improving for the second half and the Kathmandu brand will resume offshore expansion post the pandemic. Macquarie (Hold) is wary because of industry feedback regarding the highly competitive and brand-centric outdoor consumer segment offshore.

LVT - Livetiles MISS 0 0 0/1/0 0.30 0.25 1

LiveTiles’ FY20 result points to a slowdown in organic revenue growth in the second half, Citi notes. The decline, driven by the lower subscription revenue, was offset by an increase in services revenue driven by the Wizdom and CYCL acquisitions. The June quarter was adversely impacted by enterprise customers. Citi expects trading conditions to improve with economies opening up. With IT budgets under pressure in the near term, the broker prefers to be cautious and has lowered its FY21-22 revenue forecasts to reflect a slower conversion of annual recurring revenue to revenue.

MYR - Myer MISS 0 0 1/1/0 0.29 0.25 2

Myer's reported loss was weaker than expected, indeed Ord Minnett (Hold) had forecast a profit. The difference was mainly due to a worse than expected second-half gross margin contraction due to falling sales and rising costs. Key positives for Citi (Buy) were online growth, a clean inventory position and a net cash balance sheet featuring a recently refinanced bank facility. Citi believes the current share price incorporates the risk of a dilutive equity raising which the broker does not see as inevitable. But even with a turnaround underway and accelerating online growth, both brokers consider the external environment challenging and the shape of the recovery uncertain.

NHC - New Hope Corp MISS 0 0 0/2/1 1.41 1.20 3

New Hope Corp's profit came in well below all expectations on higher than expected costs and write-downs related to the New Acland project. A lack of any dividend surprised no one. While Bengalla remains key in the short term, and recent moves in the thermal coal price should help return the company to a free cash flow position, approval of New Acland stage 3 is required to drive any re-rating. That approval remains in limbo and stage 2 is ramping down. No new news was offered. Valuation is undemanding for Hold raters but Macquarie (Sell) still sees downside risk to thermal coal prices.

NVX - Novonix IN LINE 0 0 0/1/0 1.09 1.33 1

The FY20 result for Novonix was in line with Morgans' expectations. The company has stated it has enough funding to expand its anode material production to 2,000tpa (the Phase 1 target) by the end of 2021. Morgans believes additional funding will be required to pursue Phase 2 and 3 production plans. Some were disappointed by the lack of a collaboration announcement between Tesla and the company on battery day, but technologies highlighted on the day could play to the company’s strengths. Morgans acknowledges recent share price strength, but sees potential for volatility until earnings grow and a baseline is established for margins.

NUF - Nufarm IN LINE 0 0 5/2/0 4.77 4.96 7

Nufarm had pre-released its number earlier in the month and while they were below broker forecasts, no one was much surprised. FY20 was a very difficult year for a company totally reliant on the weather, and in the wash-up a drought in Europe proved even more of a drag than the drought in Australia that was still entrenched at the beginning of the financial year. The official result met guidance. Brokers agree FY20 will likely mark an earnings trough, with performances in A&NZ, North America and Asia already on the improve, and weather conditions more assumed to be normal in FY21 in both Australia and Europe. Add in lower input costs and the stock draws five Buys.

PMV - Premier Investments IN LINE 0 0 2/3/0 19.25 20.82 5

Premier Investments' result was pre-guided so no surprises. No outlook commentary was provided. Smiggle disappointed due to reduced retail footfall, school closures and slower wholesale door growth, offset by a strong performance from Peter Alexander and solid momentum in apparel brands. Online penetration is expected to increase in FY21, driven by store closures, investment in online and a soft outlook for shopping centres. While uncertainty is high, UBS (Buy) believes the company is well placed given its net-cash balance and asset backing. In the medium-term, opportunities include the rollout of Smiggle globally, consolidation in apparel and improving online margins. Caution keeps others on Hold.

SIG - Sigma Healthcare IN LINE 1 0 2/1/0 0.68 0.71 3

Sigma Healthcare posted a reduction in FY20 earnings, as brokers had expected. It was a solid result under the circumstances, Credit Suisse suggests. No dividend was declared and no formal guidance offered, although management stated the second half should be much stronger than the first half. Retail pharmacy wholesale revenue growth was materially above expectations, UBS (Hold) notes. Credit Suisse forecasts 21% compound earnings growth over FY20-23 driven by cost-outs, the full ramp-up of the Chemist Warehouse contract and continued above-market growth in retail, aided by diminished regulatory headwinds, and upgrades to Buy. The end of the company's capex investment cycle leaves sufficient balance sheet capacity for growth.

SM1 - Synlait Milk MISS 0 1 2/2/0 4.90 5.53 4

Synlait Milk's FY20 result was in line with guidance albeit slightly below some broker forecasts, but more notably FY21 guidance is materially below expectation, suggesting flat infant formula sales and no contribution from recent major capacity expansion until FY22. UBS (Buy) believes the investment case for Synlait Milk has become a lot less straight forward due to reduced infant formula demand from a2 Milk. Credit Suisse points to a reported new global customer for packaged products, which should have a positive contribution from FY23 onwards and provide some offset to the tail risk from a2 Milk, but downgrades to Hold. There is disagreement over whether the balance sheet remains a risk or not.

SOL - Washington H Soul Patt MISS 0 0 0/1/0 20.04 23.32 1

Washington H Soul Pattinson released its FY20 result with the headline numbers impacted by several moving parts, including investments in the cyclical New Hope Corp and TPG Telecom. The latter merged with Vodafone during the period. The company’s investment portfolio remained resilient, on Morgans observation, outperforming the All Ordinaries index by around 7% in the 12 months to July 31, 2020. Morgans lowers FY21 and FY22 profit forecasts by over -35%, mainly due to the cyclical nature of earnings for New Hope and cross-shareholding Brickworks. The broker continues to like the story and the company’s long history of dividend distributions.

Total: 13

ASX50 TOTAL STOCKS:

0

Beats

N/A

  

In Line

N/A

  

Misses

N/A

  

Total Rating Upgrades:

N/A

Total Rating Downgrades:

N/A

Total target price movement in aggregate:

N/A

Average individual target price change:

0.00%

Beat/Miss Ratio:

N/A

ASX200 TOTAL STOCKS:

4

Beats

1

 25.0% 

In Line

2

 50.0% 

Misses

1

 25.0% 

Total Rating Upgrades:

1

Total Rating Downgrades:

0

Total target price movement in aggregate:

10.79%

Average individual target price change:

9.43%

Beat/Miss Ratio:

1.00

Yet to Report

Indicates that the company is also found on your portfolio

Monday
28 September
Tuesday
29 September
Wednesday
30 September
Thursday
1 October
Friday
2 October
Monday
5 October
Tuesday
6 October
Wednesday
7 October
Thursday
8 October
Friday
9 October
Monday
12 October
Tuesday
13 October
Wednesday
14 October

earnings result


Thursday
15 October
Friday
16 October
Monday
19 October
Tuesday
20 October
Wednesday
21 October
Thursday
22 October
Friday
23 October

Listed Companies on the Calendar

Date Code
14/10/2020BOQearnings result