Global markets were mixed overnight with shares on Wall Street more or less flat as a slide in technology companies offset a rally in bank shares.
Closer to home, it was another big day in terms of stocks reporting under our research coverage. Announcements were made by companies including Air NZ, Auckland Airport, Ebos, Sky TV, Coca-Cola Amatil & Qantas. While we touch on the news-flow below, we will release full updates on the stocks in our weekly report. Earnings season so far has been mixed across Australasia.
Stock in Focus: EBOS Group (EBO:NZX / EBO:ASX)
Shares in Ebos hit a new record high yesterday as it indicated “a significant increase” in earnings this year following a flat result for the year ended June. Ebos spent $93.6 million on acquisitions and raised $175 million in fresh capital during the year. Ebos have an impressive track record of value accretive acquisitions.
“2019 has been a year of high activity and strategically important for the group as it has set the foundation for the next wave of growth,” chief executive John Cullity says in a statement. The Chemist Warehouse Group contract, which will add about $1 billion to sales, kicked in from July 1 and Ebos says the “big bang” start to supplying the group’s more than 450 stores across Australia has transitioned smoothly.
We currently have a BUY recommendation on Ebos.
Members should look out for a full update on Ebos to be released in our weekly report.
Australia & New Zealand Market Movers
The Australian market was higher yesterday (ASX 200 index +0.29%) as earnings dominated the market movements.
Coles was among the market leaders as it reported its first full-year results since its demerger from Wesfarmers. Despite a fall in earnings, the company said it would pay shareholders an 11.5¢ per share special dividend. Santos and Origin Energy both firmed on Thursday after reporting their earnings. On the flipside, Webjet shares slid after warning an uncertain year lay ahead as a result of the US-China trade war, Brexit and "perceptions of over-tourism". Qantas full year earnings were broadly in-line as Qantas International and Domestic segments beat expectations while Jetstar and Loyalty were weaker. Management remains relatively upbeat on the international market, partly due to expectations of competitors cutting capacity. Coca-Cola Amatil jumped as it is making progress in its objective to return to mid-single digit earnings growth in 2020 – NZ, Alcohol & Coffee, PNG and Fiji were solid while the top line in Australia is improving.
The New Zealand market was a touch higher on Thursday (NZX 50 index +0.15%) as the domestic earnings season continued, with Ebos Group and Air New Zealand meeting investors' expectations. Air New Zealand beat earnings estimates and maintained dividend payments in the face of a slowing tourism market and more expensive jet fuel, while Auckland International Airport projected flat earnings as it invests more on infrastructure and copes with softer passenger growth.
Sky Network Television sank to a record low after the pay-TV operator dropped its final dividend while reporting a $608 million loss as it wrote down the value of goodwill and impaired other assets in an effort to preserve funds ahead of some large battles for premium sports rights. Its underlying earnings fell less than expected to $97.4 million.
3 Things Markets Will be Watching this Week
- Australasian earnings season gathers momentum this week with a number of major companies set to make profit announcements.
- Minutes from the Reserve Bank of Australia's latest meeting are released Tuesday.
- Minutes from the last US Federal Reserve Meeting are also published on Tuesday.
Have a Great Day,