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The financial statements of a company are considered to be very useful in determining the profitability for shareholders and assess the company's stock price. Such statements contain several key performance indicators that might be of interest to investors planning to invest in a company. These key indicators include net profit, Earnings per share (EPS), net sales, cash flow, assets and liabilities and many others. Another crucial metric that is used by an investor to evaluate a companyâs performance is its Dividend Payout Ratio, which measures a company's financial stability, growth and returns paid to its shareholders. Companies with reliable earnings are more likely to sustain dividend payouts relative to the one with inconsistent earnings.
In this regard, let us talk about two ASX-listed companies that have recently announced their full year results and dividends:
BINGO Industries Limited
Australiaâs leading waste management and recycling and company, BINGO Industries Limited (ASX: BIN) operates across Victoria and New South Wales. The company functions across commercial & industrial (C&I) and building & demolition (B&D) waste streams with competencies across processing and recovery, waste collection and disposal and bin manufacturing.
FY19 Full Year Results
BINGO has recently published its full year results for the year ended 30 June 2019. FY19 was a transitional year for the company, supported by the acquisition of DADI and most of the completion of its development program.
On an operational front, BINGO completed the acquisition of Dial-A-Dump Industries in March this year which resulted in a significant expansion of its post-collections operations footprint comprising landfill disposal in New South Wales. The company informed that the contribution from DADI to BINGO since its acquisition was in-line with expectations.
The company made substantial progress in its development program during the year, which was announced soon after its IPO in 2017. Under the development program, BINGOâs first recycling centre was opened in April 2019 in West Melbourne and Victoria. The company also officially opened Patons Lane Recycling facility in New South Wales subsequent to the period end, in July 2019.
The network capacity target exceeded in FY19 to 3.4 million tonnes per annum, following the completion of DADI acquisition and announced development program.
On the financial front, BINGO delivered healthy FY19 results with a growth in its net revenue by 32.4 per cent to $402.2 million. The companyâs underlying EBITDA improved 13.2 per cent to $106.1 million during the period, in-line with the guidance. The underlying EBITDA included $13.6 million from DADI and $92.5 million of EBITDA from the BINGO business.
BINGOâs net revenue and underlying EBITDA improved while its Statutory NPAT declined by 41.4 per cent on pcp to $38.0 million. The company reported solid growth in its operating free cash flow of 31 per cent to $116.5 million with 109.8 per cent cash conversion for the 12 months ending 30th June 2019.
BINGOâs Collections revenue and Post-Collections revenue also increased by 20.7 per cent and 41.3 per cent to $213.5 million $243.8 million, respectively in FY19. Collections Underlying EBITDA was 7.8 per cent down on pcp at $38.4 million while Post-Collections Underlying EBITDA was 37.9 per cent up on pcp to $67.2 million.
Dividend Announcement
Along with FY19 full year results, BINGO also declared a final fully franked dividend amounting to 2.0 cents per share for the half year ending 30th June 2019. With this, the companyâs total dividend for the year now totalled 3.72 cents per share, including the half year dividend of 1.72 cents per share paid in March 2019. The dividend is payable on Monday, 30th September 2019.
FY20 Outlook
BINGO is likely to deliver cost synergies of $15m over 2 years from FY20, backed by its transformational acquisition of DADI. The companyâs network reconfiguration plan in NSW is expected to return $80 million from the capital recycling of non-core assets and divestment of the Banksmeadow facility in FY20. Banksmeadow divestment is expected in September 2019, taking out annualised earnings contribution of approximately $10 million in EBITDA. BINGO believes that its price rise, which was initiated from 1 July 2019 is likely to deliver margin expansion in Collections in the next financial year.
Stock Performance
As at 2:07 PM AEST on 22nd August 2019, BIN is trading lower at AUD 2.205 on the ASX with a fall of 7.74 per cent relative to the last closed price. With ~7.2 million shares of the company in rotation, its market cap currently stands at AUD 1.58 billion. The stock has delivered substantial returns in the past with 30.96 per cent return on a YTD basis, and 77.70 per cent during the last six months.
Lovisa Holdings Limited
Australian-headquartered Lovisa Holdings Limited (ASX: LOV) offers on-trend fashion jewellery to customers at ready-to-wear prices. The company delivers around 150 new styles to its stores each week. Lovisaâs first store was launched in April 2010, and since then, it has expanded to 15 countries globally.
FY19 Full Year Results
Lovisa has recently released its FY19 full year results for the year ended 30 June 2019 on the ASX. The company delivered strong growth in store numbers despite softer trading conditions in Australia.
On an operational front, the company continued to focus on investment in processes and people to ensure that it remains efficient as it grows and can execute on its strategic plans. The company made investment into several senior roles in the 1st half of the financial year to lead its leasing team, as well as key markets and regional store management in growth regions.
On a financial front, the company reported a rise in its revenue by 15.3 per cent to AUD 250.3 million during the period, with growth delivered over most of the markets. The offshore expansion continued in FY19 with a net increase of 64 stores across the company, that included 70 new stores opened offset by 6 closures as well as 12 relocations.
The Gross profit of Lovisa improved by 16 per cent to AUD 201.4 million, reflecting enhanced margins from currency tailwinds along with continued disciplined promotional and inventory management. The Cost of Doing Business of the company also increased by 240bps to 55.6 per cent in FY19, impacted by continued investment in both global and local support structures, higher operating costs of new territories and new territory expansion. EBIT of the company rose 2.8 per cent to AUD 52.5 million for the year.
Dividend Announcement
The company declared the payment of a final fully franked dividend amounting to 15.0 cents per fully paid share (AUD 15,835,000) for the period of six months, likely to be paid on 24 October 2019. The announced dividend reflected a lift of 1.0 cent on the pcp, taking the full year dividend to 33.0 cents, representing a 6.0 cent increase on the prior year. The Cash dividends of the company in the period were at AUD 33.8 million, AUD 12.1 million higher than the prior year.
Stock Performance
LOV is currently trading higher at AUD 12.450 on the ASX with a rise of 3.06 per cent relative to the last closed price (as at 2:07 PM AEST on 22nd August 2019). At the time of writing the report, the 52-week high and low value of LOV was recorded at AUD 12.920 and AUD 5.620, respectively. The stock has delivered a massive return of 94.21 per cent on a YTD basis.
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