June 30 is the most important date of the financial year in Australia and an important one for many other countries and economies such as the US, Japan, China, the UK and across Europe.
From banks like the CBA and Bank of Bendigo Adelaide, to retailers like Woolies, Wesfarmers, JB Hi Fi and The Reject Shop to miners like BHP, Northern Star Resources next Saturday rules off what has been a year dominated by external events – Donald Trump and solid global growth and firmer commodity prices, as well as local factors (such weak consumer spending but a solid labour market).
Industrials reporting will include such as insurer, IAG, CSL, Navitas, investors like AFIC, Argo Investments, Milton Corp, Greencross, AGL, Amcor, GWA, News Corp, Fairfax Media, Southern Cross, Nine Network, Seven West Media, Seven Group Holdings and more.
Telstra’s results and more guidance data will be one of the most eagerly awaited results in August, along with the CBA. Both will not be good.
Telstra will be hit by weak revenues and hundreds of millions of dollars in losses while the CBA will have the $700 million AUSTRAC fine and hundreds of millions of other costs to account for.
Telstra says its final dividend is OK but the CBA? It paid a final of $2.30 for 2016-17 and it will be one to watch in early August.
Other companies will rule off their half years – QBE, Rio Tinto, APN Outdoor for example as well as OZ Minerals, Woodside and Santos and industrials such as Coca Cola Amatil. Many other companies will release short quarterly updates – some of the banks for example.
Resource companies, especially oil and gas groups should produce very solid results – the best for three or four years. BHP and Rio have already revealed solid figures (Rio for the full 2017 year), BHP for the first half. Higher dividends are expected.
For mining companies its also a time for 4th quarter and full year production and exploration reports (BHP etc) or second quarter and first half reports (Rio, Woodside, OZ Minerals). Most of these will come in July and August.
If the recent performance of the ASX is any guide then the profit season should be a good one – the ASX 200 jumped 2.2% last week in one of its strongest week’s for months.
The index hit a series of 10 year highs – the session a week ago last Friday was the strongest fore 11 months and the ASX 200 is heading for a 3% plus rise in June for a solid end to the financial year which could reach 10% (8.9% up to last Friday).
Woolies is expected to do well, Myer will be a disaster (it balances at the end of July as does Premier Investments, Brickworks, Soul Patts and TPG).
Listed car dealers, AP Eagers and Automotive holdings will be under pressure from weakening demand for vehicles this half and higher costs as regulators crack down on financing and other activities.
The absence of disasters and higher bond yields should help QBE back towards its target insurance margin for the year after the problems and losses of 2017. IAG has been selling assets and like QBE, an absence of natural disasters here will help earnings and margins.