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Three ASX-listed Stocks Under Discussion - API, CAR, GMG

  • April 24, 2020 01:18 PM AEST
  • Team Kalkine
Three ASX-listed Stocks Under Discussion - API, CAR, GMG

COVID-19 pandemic has forced the need for lockdowns, self-isolation, and closures to stop the spread of this infectious disease. The crisis has wreaked havoc on the economy, while impacting the equity markets equally.

Given the situation, several businesses are updating the outbreak impact and measures undertaken. Also, there are few businesses that have been least impacted by the COVID-19, as they have been categorised under the essential services segment.

In this article, we are discussing three ASX-listed stocks from diversified sectors and their recent activities.

First Half of Australian Pharmaceutical Industries in Line with Expectations

Australian Pharmaceutical Industries Limited (ASX: API) is a wholesale distributor of pharmaceutical and allied products, in addition to being a retail support service provider to pharmacists.

Recently, the Company notified the market with its operational and financial performance for 1H FY20 ended 29 February 2020, which were in line with expectations provided at the January AGM.

  • Total revenue grew by 2.8% year-on-year to $2.0 billion.
  • Revenue from Pharmacy Distribution (excluding Hepatitis C medicines) went up by 7.1% to $1.43 billion.
  • Revenue amounted to $24.6 million for Clear Skincare, up by 12.8% on the pcp, with gross profit of $20.9 million, up 14.5%, highlighting strong margin management in addition to benefit of additional revenue from new clinics.
  • Underlying earnings before interest and tax for the period stood at $41.7 million, reflecting a decline of 6.1% over pcp and underlying NPAT (excluding AASB16 Leases) amounted to $26.3 million, down 1.9% against pcp.
  • These results indicate generally challenging retail conditions as well as consumer sentiment, which are allied to timing of orders relative to last year and supplier delays impacting upon Consumer Brands’ earnings.

Source: Company's report

Pharmacy Distribution and Priceline Pharmacy are anticipated to continue their operations amid the COVID-19 situation, as a vital part of the national health infrastructure. The Company is expecting long-term growth prospects of its assets with strong balance sheet providing flexibility in managing the business and investing for growth.

The stock of API was trading at $1.025 per share on 24th April 2020 (AEST 11:37 AM), indicating an increase of 1.99% against its previous closing price. The market capitalisation of Australian Pharmaceutical stood at $495.12 million with total outstanding shares noted at 492.66 million. The stock of API has provided shareholders with a return of -24.15% and -31.63% within the time span of three months and six months, respectively.

COVID-19 Measures Introduced by carsales.com

Engaged in online automotive advertising, carsales.com Limited (ASX: CAR) provides services related to selling and buying a car, bike, boat, caravan and much more throughout its network of sites. CAR recently updated the market with various steps undertaken in response to COVID-19.

  • The Company waived all its fixed and variable advertising charges for April 2020 and provided a 50% discount for May 2020, as support to trade customers and industries in which it operates. This would contribute significantly to lower short-term operating costs of dealers and reflects strong commitment of CAR to support the Australian industry.
  • In light of decreased market activity and lower revenue, the Company implemented cost saving initiatives in order to mitigate the near-term financial impact of COVID-19, which include a reduction of 20% in remuneration of Board and Executive from 1 April 2020 to 30 June 2020 and a reduction of other discretionary costs throughout the business like outdoor brand marketing.
  • The Company has a strong balance sheet and prudent gearing levels, which place the business in a decent position during the current operating environment. CAR had a net debt position of $355 million, a net debt to EBITDA leverage ratio of 1.6x and a strong liquidity position with around $190 million in cash at the end of March 2020.

The Company has already withdrawn outlook statement for FY2020 due to the unpredictability of the current operating environment. However, backed by market leading position, strong customer proposition, and diversification across product and geography, CAR is expecting to remain resilient and positioned well into the future.

Do Read: How these IT stock are helping investors to get a virus proof portfolio?

The stock of CAR was trading at $13.050 per share on 24th April 2020 (AEST 12:03 PM), indicating an increase of 1.953% against its previous closing price. The market capitalisation of carsales.com stood at $3.14 billion with total outstanding shares noted at 245.59 million. The stock of CAR provided shareholders with a return of –28.57% and –14.67% within the time span of three months and six months, respectively.

Solid Performance for Goodman Group in First Half

Goodman Group (ASX: GMG) operates in the international industrial and business property space. The Company is also in the business of fund management. GMG, at the end of February 2020, announced to have dispatched distribution of 15.00 cents per security for the six months ended 31 December 2019.

In the first half of FY20 ended 31 December 2020, the Company registered strong growth across all its business segments.

  • During 1H FY20, the Company reported operating profit amounting to $530.4 million, reflecting a rise of 14.1% as compared to pcp, and operating earnings per share for the period stood at 28.8 cents;
  • Statutory profit noted at $810.6 million;
  • Factors driving the results included focus on specific markets where e-commerce is growing, consumer expectations are increasing as well as the need for more efficient supply chains is becoming greater;
  • Total assets under management and external assets under management grew by 15% to $49.2 billion and $45.7 billion, respectively.

Outlook-

  • The real estate fundamentals are likely to deliver sustainable and competitive growth via high occupancy and sustained rental growth in the upcoming period;
  • Development work in progress growing to $4.3 billion at the half and expected to exceed $5 billion;
  • Total assets under management expected to surpass $50 billion by June 2020

The Company expects future growth in assets under management aided by increasing development volumes as well as revaluations in the upcoming years, as per the Company announcement in mid-February 2020.

The stock of GMG was trading at $12.660 per share on 24th April 2020 (AEST 12:06 PM), indicating a decline of 1.402% against its previous closing price. The market capitalisation of Goodman stood at $23.48 billion with total outstanding shares noted at 1.83 billion. The stock of GMG provided shareholders with a return of –14.29% and –9.70% within the time span of three months and six months, respectively.

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