The coronavirus pandemic is one of the biggest challenges the world economy has faced in the last decade. The virus is predicted to have a cascading effect on the global economy. With the struggling stock markets around the globe, countries and companies are looking for the best possible ways to tackle the situation by mitigating the associated risk.
Midst of this situation, fortunately, some sectors have had minimal downgrade owing to the demand for their products and services. The industries that have done reasonable well include Consumer Discretionary, Health Care, Real Estate, Industrials, and Materials.
Let’s have a look at five stocks from different sectors with a revival in their stock price and some of their recent activities.
Premier Investments Limited (ASX:PMV)
The consumer discretionary company Premier Investments Limited mentions that despite the uncertainty surrounding coronavirus, it is positive due to the following factors:
- Plans to continue investing in technology, customers and marketing initiatives to deliver an enhanced experience for its customers.
- Well experienced board with an excellent management team.
- Holds distinctive brands which have delivered a significant result in HY 2020.
Strong financials with $199.8 million of cash on hand:
This increase in the share price might relate to the positive sentiments amongst investors due to the release of its interim report. On 20 March 2020, the Company declared a dividend distribution along with half-year report FY 2020 for the period ended 25 January 2020.
The snippets of the performance are as mentioned below.
- Revenue from ordinary activities stood at $733.9 million, an increase of 7.53 per cent compared to the previous corresponding period (pcp).
- Net profit increased by 12.15 per cent on the pcp, from $88.8 million to $99.7 million.
- Fully franked dividend distribution of 34 cents per security was declared as compared to 33 cps in the pcp. For determining the entitlements to the declared dividend, the record date is 31 July 2020 followed by the payment date of 30 September 2020.
- Net tangible assets per ordinary security were $3.53 as compared to $3.48 in pcp.
- Basic earnings per share were 62.87 as against 56.17 on the previous year
- Total assets stood at $6 million comprising $431.6 million of total current assets.
- Net cash flows from operating activities increased from $104.5 million to $223.9 million.
Stock performance commentary:
- PMV stock was trading at $9.155 on 23 March 2020 (at 03:19 PM AEDT), a steep decline of 23.261 per cent. On the previous trading day, the stock had closed with a significant upsurge of 15.043 per cent to reach $11.93.
- The stock had attained a 52-week high price of $21.560 on 14 February 2020. However, the stock has fallen significantly ever since.
CIMIC Group Limited (ASX:CIM)
An ASX-listed, industrial sector player, CIMIC Group Limited is into the business of construction, engineering, mining, public-private partnerships and services.
CIM was trading at $20.680 on 23 March 2020 (at 03:19 PM AEDT), an increase of 5.242 per cent from its previous closing price. The recent activities of the Company are mentioned below:
Share buy-back update:
On 11 March 2020, CIM had settled an ASIC Form 281 “Notice of intention to carry out a share buy-back”.
It allows the Company to resume the buy-back of shares after a 14-day waiting period. Earlier on 13 December 2019, the CIM’s Board had agreed to conduct on?market buy?back of the share of up to 10 per cent of its fully paid ordinary shares.
Rail contracts awarded to UGL:
CIM’s business arm, UGL is a specialist in providing services in asset solutions. UGL was awarded two rail sector contracts for the upkeep and operations of Adelaide’s North-South bus network.
The consortium entails UGL, Transit Systems as well as John Holland. The tenure of this contract is for eight years starting from July 2020 and is expected to generate a total revenue greater than $180 million.
Regional Transport Infrastructure Projects to CPB:
CPB Contractors is the Company’s business arm which deals in the construction business and includes two contractors, namely Broad and Leighton Asia. On 2 March 2020, CPB Contractors was elected by the government of South Australian to provide three key projects under the Regional Projects Alliance.
The alliance includes Aurecon Australasia, the Department of Planning, Transport and Infrastructure, CPB Contractors and GHD.
Under the alliance, CPB Contractors would deliver:
- Joy Baluch AM Bridge Duplication in Port Augusta
- Port Wakefield Overpass and Highway Duplication
- Augusta Highway Planning Project located between Port Augusta and Port Wakefield
The South Australian and Australian governments provide the funding of the projects. CPB Contractors are likely to incur revenue of nearly $236.8 million.
Scentre Group (ASX:SCG)
An ASX-listed real estate company, Scentre Group owns and operates the Westfield in New Zealand and Australia.
Stock performance: The SCG stock was trading at $1.450 on 23 March 2020 (at 03:19 PM AEDT), a decline of 10.217 per cent from its previous closing price. The stock had ended the previous trading day in the green with an upsurge of 7.667 per cent.
Midst of coronavirus outbreak, Scentre updated the market that operations at all of its Westfield centres will remain open. On 18 March 2020, SCG supported the statements delivered by the Hon Scott Morrison MP, Australia’s Prime Minister, that all those shopping centres which provide essential products and services will be operating under normal business. SCG’s CEO Peter Allen acknowledged PM’s statement and mentioned that its stores provide essential items such as grocery stores, supermarkets, retail stores and food markets to the Australian community.
Scentre Group is positive regarding its market position as it maintains a robust financial position and has enough liquidity to meet all its 2020 debt maturities. The available liquidity with SCG as at 31 December 2019 was $1.8 billion. Other key factors are FFO to Debt of 10.3 per cent, interest cover at 3.6 times, and balance sheet gearing of 33 per cent.
On 20 March 2020, SCG declared that all attributes to FY 2020 Guidance are suspended due to coronavirus pandemic and current volatility in the markets around the globe.
Vicinity Centres (ASX:VCX)
A retail property group, Vicinity Centres owns a fully integrated asset management platform.
VCX stock was trading at $0.975 on 23 March 2020 (at 03:19 PM AEDT), a decline of 14.097 per cent compared to its previous closing price.
VCX’s business scenario:
VCX has a strong hold in the market with retail assets under management of $26 billion spread across 63 shopping centres. The Company has maintained a solid balance sheet with $1.3 billion of undrawn facilities. Also, VCX mentions that it has a strong desire to sustain the credit rating of ‘single A’. Currently, Vicinity Centres is operating fine within their covenants and have undrawn facilities of $1.3 billion.
VCX holds the flexibility to defer CapEx on its major projects until coronavirus uncertainties are settled.
As a part of the Company’s pragmatic approach to managing capital and under the prevailing market conditions, the buy-back program of securities has been suspended.
Vicinity Suspended Distribution Guidance and Earnings FY 2020:
VCX mentioned that with the amplified impact of coronavirus, there is a deterioration in the operating environment and retail trading. With this, the Company announced the withdrawal of FY 2020 earnings and distribution guidance.
Goodman Group (ASX:GMG)
ASX-listed industrial property group Goodman Group owns and manages properties including, logistics facilities, business parks and warehouses.
GMG was trading at $10.510 on 23 March 2020 (at 03:19 PM AEDT), a decline of 8.129 per cent compared to its previous close.
Unfranked dividend distribution: The Company declared a dividend of 15 cents per security for the six months ended 31 December 2019 which was dispatched to its shareholders on 25 February 2020. This is consistent with the capital management strategy and the company’s guidance.
A Snippet of 1H20 performance: The Company showcased strong interim financial results with an increase of 14.1 per cent (compared to 1H19) in operating profit at $530.4 million. Operating earnings per share increased by 12.9 per cent on HY 2019, and statutory profit stood at $810.6 million.
FY 2020 growth forecast: On 13 February 2020, Goodman provided an upgraded FY 2020 forecast:
- Operating EPS is likely to increase by 11 per cent on the prior year, to reach 57.3 cps.
- FY 2020 distribution per security according to previous guidance was indicated at 30 cps.
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