Let’s have a look at some billion-dollar companies, which have been most discussed among investors this reporting season. The benchmark S&P/ASX200 declined 1.0% in a day trading session to close at 6483.3 points on Wednesday, 21 August 2019.
Brambles Limited (ASX: BXB)
Brambles Limited disappointed investors on its FY20 outlook, in which the industrial sector giant confessed its expectation of sales revenue growth to be at the lower end of its mid-single digit growth objective, taking into account the ongoing slowdown in global economies and the automotive industry.
The bleak outlook coupled with a 13% decline reported in FY19 Profit After Tax (continuing) immediately sent the investors to press the sell button on ASX. Brambles’ share price crashed 9.608% to last trade at $11.760 on 21 August 2019.
On Wednesday, Brambles released its full year result for the 12 months ended 30 June 2019. The company reported its FY19 profit after tax from continuing operations of US$454.1 million, down 13% at constant currency basis compared to the previous corresponding period.
However, on the top-line front, Brambles reported a growth of 7% in sales revenue to US$4,595.3 million at constant currency compared to FY18. It reflects a price growth of 3% and volume growth of 4%, largely driven by expansion with new customers in the European and US pallets businesses.
In May 2019, Brambles completed the sale of its IFCO RPC business as a part of the company’s strategy to focus solely on its core CHEP business. The company received US$2.5 billion gross proceeds on the sale of IFCO, which it intends to utilise towards capital management initiatives including on-market share buy-back.
Profit after tax including discontinued operations stood at US$1,467.7 million, up 120% on the prior year at constant currency, largely due to the recognition of the US$945.7 million post-tax gain on the sale of IFCO which has been recognised in discontinued operations.
The Board declared a final dividend of AU14.5 cents, 30% franked, in line with both the 2019 Interim and 2018 Final dividends. As per the company’s information, this final dividend is payable on 10 October 2019 to shareholders on Brambles’ register as on 12 September 2019. The ex-dividend date is 11 September 2019.
With respect to future dividend policy, the company announced a policy which will target a payout ratio of 45-60% of Underlying Profit after finance costs and tax which is in line with historic payout levels of ~55%.
The company further confirmed that its operational investment programmes and pricing initiatives in CHEP Americas is on track to progressively improve US margins and mitigate higher cost-to-serve in the region.
Domino’s Pizza Enterprises Limited (ASX: DMP)
Domino’s Pizza misses out on a market expectation of reporting hefty returns for the year ended 30 June 2019. On Wednesday, Domino’s reported a decline of 4.6% in its statutory net profit to $115.9 million, despite achieving a top-line growth of 24.4% during the year.
The news carved out 4.796% from DMP’s stock price in a day trading session on Wednesday, 21 August 2019. The stock last traded at $42.280, with a price to earnings multiple of 32.820 and a market capitalisation of $3.8 billion.
But there is a lot to catch on the success story of Domino’s in Fiscal 2019!
Domino’s, one of the favourite pizza brands of consumers, reported a global food sales of $2.9 billion, up 11.9% or $308.4 million on the prior year. Full-Year EBIT grew 7.2% to $220.8 million; online sales surged up by 18.2% to $1.9 billion, and the company’s market share continued to grow across all regions.
In FY19, Domino’s expanded its market footprints by acquiring the rights to expand into Denmark and Luxembourg, with the first stores in Denmark already opened. Besides, the company opened d 179 new Domino’s stores and successfully converted the remaining Hallo Pizza stores in Europe to the Domino’s brand during the year. On segmental front, Domino’s performance stood as follows:
Australia and New Zealand- ANZ underlying EBITDA declined by 4% to $127.9 million, with positive Same Store Sales growth of +2.4%.
During the year, the company achieved a milestone with the opening of Australia’s 700th store. Its ANZ sales increased 4.6% to $1,169.0 million.
Australia/New Zealand CEO Nick Knight said domestic growth was softer than anticipated, and management was focused on delivering improved performance led by higher sales.
Europe- Domino’s new menu initiatives, digital innovations and strong operational performance across all countries in Europe lifted total network sales 15.1%, to $1136.9 million. This delivered underlying EBITDA 9.3% higher at $81.9 million, on Same Store Sales growth of 3.1%.
Also, the company marked a record number of organic store openings in FY19, with 77 new stores across Europe.
Japan- In Japan region, Domino’s total network sales increased by 22.2% to $591.4 million, an increase of +8.4% on a Same Store Sales basis.
President and CEO of Domino’s Japan division Josh Kilimnik stated that Domino’s sales growth in Japan has come from new customers, improved unit economics, and a market-leading digital operations.
FY20 Trading Update
For the first trading weeks of FY20, Domino’s reported an increase of 4.7% in same store sales. Whereas, looking 3-5 years ahead, Domino’s expects its Same Store Sales growth to be within the range of 3- 6% annually at a group level, and store count growth to be between 7-9% annually at a group level.
Seven Group Holdings Limited (ASX: SVW)
Seven Group Holdings Limited reported an increase of 27% in its trading revenue to $4.1 billion for the 12 months ended 30 June 2019. The underlying earnings before interest and tax (EBIT) stood at $695 million, up 40% on the previous corresponding period.
Managing Director & Chief Executive Officer of Seven Group Ryan Stokes stated that the strong underlying result reflects the growth achieved across three core areas including mining production, infrastructure investment, and east coast gas demand.
Underlying earnings per share (EPS) increased 47% to 143 cents per share, with operating cash flow up 62% to $411 million.
SVW financial results in FY2019 (Source: Company Announcement)
The Board announced a fully-franked final dividend of 21 cents per share, payable on 11 October 2019. It comes in addition to the interim dividend of 21 cents per share announced previously in FY2019.
SVW stock price surged up 2.698% to last trade at $17.130 on 21 August 2019. The stock closed at a price to earnings multiple of 17.250x with a market capitalisation of $5.66 billion.
Bapcor Limited (ASX: BAP)
Consumer Discretionary company, Bapcor Limited achieved a solid growth in its Trade and Specialist Wholesale businesses in both Australia and New Zealand, with revenue from continuing operations moving up 4.8% to $1,297 million for the year ended 30 June 2019.
The Specialist Wholesale segment, consisting of thirteen Specialist Wholesale business units, increased revenue by 13.4% and EBITDA by 20.0% reflecting good growth, particularly in the auto- electrical/engine management businesses, as well as the impact of the new Commercial Truck Parts businesses.
On 3 July 2018, Bapcor divested its TRS New Zealand business. Excluding the impact of the divestment of TRS, Bapcor New Zealand’s revenue in FY19 increased by 7.4% and EBITDA increased 13.8%. Bapcor New Zealand’s largest business, the BNT trade business, achieved same store sales growth of 5.3% while EBITDA margin grew by 80 basis points compared to FY18.
The group’s pro-forma EBITDA from continuing operations increased to $164.6 million, up 9.8%, taking the pro-forma Net profit after tax from continuing operations to $94.3 million, an improvement of 9.0% on the previous corresponding period.
Bapcor’s financial results for FY2019 (Source: Company Announcement)
A fully franked final dividend of 9.5 cents per share has been declared taking the total dividends in relation to the FY19 financial year to 17.0 cents per share, up 9.7% compared to the FY18 dividend.
BAP stock price surged up 7.143% to last trade at $6.750 on 21 August 2019. The stock closed at a price to earnings multiple of 18.260x with a market capitalisation of $1.79 billion.
Over the past 12 months, the stock has declined by 10.76% despite a positive price change of 10.14% in the past three months.
Spark New Zealand Limited (ASX: SPK)
For the 2019 financial year, Spark New Zealand Limited reported net earnings of $409 million, up 12.1% on a reported basis, or 2.2% when the prior year result is adjusted for implementation costs incurred in support of its Quantum business improvement programme.
Overall, Spark New Zealand has delivered stronger operating margins, profit growth, and market share gains on the back of strong performance of its mobile, wireless and cloud services, with increased focus on productivity in FY19. Further, the company is making substantial investments in mobile capacity and networks to prepare for Rugby World Cup and a collaboration with Emirates Team New Zealand, which is planning to use 5G services from mid-2020 in its defence against the America’s Cup.
Spark announced an H2 FY19 total dividend per share of 12.5cents, which includes a special dividend of 1.5cents. This brings the total FY19 dividend to 25cents per share.
SPK stock price last traded at $3.960, up 3.937%, on 21 August 2019. The stock closed at a price to earnings multiple of 20.480x with a market capitalisation of $7 billion. Over the past 12 months, the stock surged up 6.67% including a positive price change of 5.54% in the past three months.
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