Marcus Today End Of Day Report

By Henry Jennings | More Articles by Henry Jennings

 Today’s Headlines

  • ASX 200 up 6 to 6345.
  • High 6358 Low 6338. Narrow range.
  • Politics and results overpower early enthusiasm.
  • Banks ease on franking concerns.
  • Materials finding support on trade talk.
  • Staples ease on results.
  • AUD steady at 73.02c.
  • Bitcoin slightly better to US$6493.
  • Aussie Gold firms slightly to $1617.
  • US futures up 35.
  • Asian markets mixed with Japan down 0.32% and China up 0.46%.

FUTURES AND HIGHS AND LOWS

MT STUFF

  • MARCUS CALL – Not sweating the small stuff and some of the bigger themes to take note of.
  • TRADING IDEAS – No new trades. Two stop losses raised.
  • SMALL COMPANIES – Results continue with a resource update from CVN adding to the mix. We have added a couple of stocks to the portfolio as macro risks begin to fade.

POINTS

STOCK STUFF

  • ECX +16.36% takeover approach from SGF. Knocked back.
  • GXL -2.13% early gains evaporate.
  • APT +5.36% steps on afterburners.
  • BRG +4.09% broker upgrades.
  • CDD -13.26% results disappoint.
  • BWX -6.25% acquisition prospects wane.
  • DMP -1.69% ex dividend.
  • SIV -14.98% lost its way. Guidance and dividend announcement.
  • MMM -4.35% slips on volume.
  • IRI -4.18% broker downgrades.
  • CVN -14.29% Dorado underwhelms.
  • AYS -3.74% bid speculation easing.
  • VOC +1.26% telcos back in favour.
  • RFG +4.85% rally continues.
  • PDL +0.44% departure of JOHCM CEO.
  • 4DS +14.94% pushing ahead. Again.
  • MEA +2.63% results in focus.
  • NWL +4.34% funds rally.
  • PGH +1.65% bargain hunting continuing.
  • Speculative stock of the day: First Growth Fund (FGF) +10.00% the Acudeen token will be listed on BTCEXA on 24th August. FGF has secured 20% of the tokens and will convert to AUD asap.
  • Biggest risers – ECX, HUB, UPD, SLC, HT1 and APT.
  • Biggest fallers – CDD, ANN, BWX, AJM, PPH and BPT.

TODAY

  • Woolworths (WOW) –0.64% FY18 results. NPAT grew 12% for the year to $1.72bn, EBIT from continuing operations grew 9.5% on year driven by a 9.6% growth in its key division, Australian Food. Australian Food sales were however impacted by the recent removal of single use plastic bags. The CEO highlighted they are starting to turn around BIG W and expect further reductions in losses into FY19. A final dividend of 50c was announced, in line with last year but a special 10c dividend will be distributed, taking full year distributions to 103c, 22% up on last year. In the outlook statement, the company expects improvements in sales momentum in the first half and that further capital management would also be considered pending the successful exit of the petrol business.
  • Ansell (ANN) -7.23% Ansell’s net profit after tax was up 228% to US$484.3m (AUD$668m) but there was a one-off after-tax gain of US$345m stemming from the sale of its condom business. Total revenue from continuing operations was up 8.4 per cent to US$1.49bn. The dividend will be paid on September 13. The final dividend is up 5% to US25¢ as profit.
  • Fortescue Metals (FMG) +1.19% Underlying EBITDA of US$3.2bn. The US$6.88bn of revenue was lower than the US$7.04bn expected by analysts, while net profits and dividends were also below analyst consensus. A 12c final dividend, taking the total dividends for 2018 to 23c. Net debt of US$3.1bn, including US$863m cash on hand at 30 June. Guidance: 165-173mt in shipments. US$12-13.00/wmt C1 cost. A 60% iron content product, named West Pilbara Fines, will be produced in the second half of FY19.
  • Beach Energy (BPT) –4.56% A 49% drop in profits to $198.8m. Profit before one-time items was up to $301.5m which is a slight miss on forecasts of $307m. 1c dividend. Sales jumped to $1.267bn after the Lattice Energy acquisition.
  • Primary Health (PRY) – Profits rose to $92.3m slightly below estimates for $94m. Free cash flow of $146.6m. A final dividend of 5.5c, 100% franked, has been approved. Total dividends for the year were 10.6c, representing a payout ratio of 60% of Underlying NPAT. Importantly the company is raising $250m through a non-renounceable entitlement offer with a 1 for 5.21 at 250c. Primary currently expects underlying NPAT in FY 2019 to be at or above FY 2018 underlying NPAT of $92.3m. Trading halt currently.
  • Nib Holdings (NHF) +0.46% FY18 results. NPAT was up 11% on year to $132.4m, underlying revenue was up 11% to $2.3bn and a final dividend of 11c will be paid, taking full year distributions to 20c per share, a 5.3% increase on last year. The outlook statement said Australian and NZ markets remain difficult with modest growth expected and that the Federal opposition’s premium 2 year cap rate of 2% would add to margin pressures. In FY19, net margins are expected to be 5%-6%, Statutory operating profit expected to be around $159m, one-off transactions and costs expected to be $11m and the dividend pay-out ratio is expected to be 60%-70% of NPAT.
  • Sydney Airport (SYD) –0.55% Traffic numbers saw 2.6% growth for the month of July, driven by 5.4% growth in international passengers due to additional seat capacity. Nationals from India, the Philippines, Japan and the US saw the most growth.
  • oOh!Media (OML) -0.62% Net profit of $9.2m, up 3.4% from the same period last year, while revenue jumped 11% to $192m and earnings before interest, tax, depreciation and amortisation rose 13.8% to $36.3m. Interim dividend of $0.035 per share, down 22% from prior period. The company remains on track to meet full-year guidance for FY18.
  • Cardno (CDD) -13.26% Net profit falls to $8.579m from $14.02m. Revenue in the year ended June 30 fell 5.5% to $1.117bn from the year-earlier $1.118bn. No interim or final dividend has been declared.
  • McGrath (MEA) +2.63% Full year loss of $4.87m from a profit of $63.1m last year. There is no financial dividend "declared or proposed to be paid for the period." Revenue down 23% to $99.18m from $129.36m last year.
  • HUB24 (HUB) +9.05% FY18 Results. Statutory net profit down 61% to $7.4m due to the first-time recognition of $15.9m of deferred tax assets. Revenue up 36% to $84m, with operating cashflows of $12.2m, up 201%. They will continue to focus on investment in opportunities that arise across the industry going forward. An inaugural dividend of $0.035 has been announced.
  • Eclipx (ECX) +16.36% the company has confirmed it had received a takeover approach from rival SG Fleet (SGF). The terms were for 200c in cash and 0.15 SGF shares which valued the company at around 252c. ECX has rejected the offer.

RESULTS TODAY

BEST AND WORST

ECONOMIC NEWS

  • Overseas arrivals and departures for June. The trend estimate is that short-term visitors are up 3.1m in June 2018 compared to June 2017 with 765,000. Seasonally adjusted, 0.3m more tourists arrived in Australia in June than May.

BOND MARKETS

ASIAN MARKET NEWS

  • Pork producers in China have tumbled after an outbreak of African Swine Fever was discovered in one province.

  • Apple has removed thousands of gambling apps from its China app store.
  • Thailand’s gross domestic product growth came in slightly ahead of expectations in the second quarter despite slower growth from the country’s manufacturing industry.
  • Beijing has ordered banks to lend more to exporters.

EUROPEAN AND US HEADLINES

  • FTSE expected to open 5 lower, DAX up 20 and CAC 13 up.
  • Shots have been fired at the US Embassy in Turkey in Ankara.
  • Italy is now set to spend EUR80bn in infrastructure spending. So much for austerity. The government’s plans are also at odds with budget demands from the European Commission. Sub par growth outlook.

  • German PPI today expected to be unchanged.
  • Finally, Kevin Spacey’s new film took $126 at the box office on its weekend opening. $126. Worse opening ever.

ANNOUNCEMENTS

MARKET MAP

 
Henry Jennings

About Henry Jennings

Henry Jennings has been involved in financial markets for over 35 years as both a trader and a broker in London and Sydney. Starting his career in London trading derivatives and moving to Australia in 1989, Henry eventually settled at Macquarie Group, rising to become a Divisional Director responsible for Equity Trading in Australia. For the last decade, Henry has been involved in private client broking and now writes exclusively for the renowned financial newsletter Marcus Today. Henry regularly appears on ABC TV and Sky Business as a market analyst, commentator and strategist and has presented at various conferences most recently for the AIA on the Gold Coast.

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