Australians are under lockdown for around a month now, as part of the government’s various measures to stop the spread of COVID-19. Apart from banning social gathering, restricting travel, and urging social distancing and proper hygiene, the government is also spreading awareness concerning symptoms of the infectious disease to keep people alert about their health.
Given the lockdown, operations of several businesses have also been severely impacted. Let us skim through recent market updates from few ASX-listed players, highlighting their activities/measures amid COVID-19 scenario.
EBOS Group Limited (ASX: EBO)
EBO is engaged in the marketing, wholesale and distribution of medical, healthcare & pharma goods in Australasia, in addition to well-known consumer products & animal care brands.
On 21 April 2020, EBO provided a business update highlighting the continued strength of its liquidity as well as balance sheet, along with measures/developments/activities with respect to the COVID-19 situation. The Company updated that it continued to witness positive momentum across its businesses through to the closure of Q3 ended 31 March 2020, since results of the first half. EBO generated strong revenue growth from its healthcare and animal care segments, backed by the rising demand.
Operations/Measures Amid COVID-19: EBOS’ businesses covering wholesale, distribution and retail healthcare activities are playing a crucial role in ensuring sustained & stable supply of healthcare, medical and pharma goods, as they fall under the category of essential services.
The healthcare division is carrying out its operations in line with various measures announced by the ANZ governments in response to coronavirus. Other than this, the Company announced various health & safety actions to safeguard its employees & clients, and measures to make sure that its healthcare distribution sites stay functional during this crisis.
The Company has set up a Pandemic Response Team that meets regularly to look for & assess issues as well as take any measures needed.
Strong Business Momentum in Q3 FY2020: As mentioned earlier, EBOS experienced strong business momentum during the quarter ended 31 March 2020.
- Healthcare segment reported record levels of demand in response to coronavirus events;
- Animal Care segment made a strong contribution to the Group’s performance;
- EBOS remains in a strong financial position during these market conditions, with refinanced ~ $200 million of bank debt and working capital facilities. The robust bank demand boosted these facilities to $250 million with the addition of $50 million.
- Despite the prevailing market conditions, the Company received immense support from its banking partners.
AuMake International Limited (ASX: AU8)
AuMake International Limited is engaged in the sale of trusted Australian products, mainly to daigou & Chinese tourists, via its wholesale warehouses, retail stores as well as through online e-commerce platform.
On 21 April 2020, The Company announced its Q3 FY2020 results for the quarter ended 31 March 2020.
As per the above image, AuMake International experienced a significant drop in its revenue from Broadway offline.
Broadway offline: Before the halt in visits of Chinese tourists at the end of January 2020, the Company experienced a positive impact of the Broadway acquisition on total group revenue and gross margin. However, post the travel ban, it noted a significant drop in Broadway offline revenue for February and March 2020.
AuMake offline: Because of the restriction imposed by the Australian government on physical movement to prevent the virus spread, the Company suspended all its offline stores on 30 March 2020.
Online: Online revenue during the quarter performed well and increased as a percentage of total revenue with a temporary decline in revenue from offline channels.
Business response to Coronavirus:
- Obtaining & investing in the expansion of online revenue streams.
- Operating cost base reduction by 70%, which includes suspension of trading at all offline stores.
- Cash receipt for Q3 FY2020 was $13.3 million. It comprises of $2.1 million obtained from bigger clients where limited credit terms are offered.
- Cash at the bank by quarter ended 31 March 2020 stood at $10 million.
Telix Pharmaceuticals Limited (ASX: TLX)
On 21 April 2020, the clinical-stage biopharmaceutical company, TLX released its Q1 FY2020 results for the period ended 31 March 2020 as well as Q1 2020 sales update for its prostate cancer imaging product, the TLX591-CDx kit.
Telix, for the remaining part of 2020, expects a drop in the rate of R&D and clinical trial expenses, partly owing to COVID-19. The R&D activity during the March quarter was directed at the continued development of three programs -
- TLX591-CDx / TLX591 (diagnosis / treatment of prostate cancer)
- TLX250- CDx / TLX250 (diagnosis / treatment of kidney cancer)
- TLX101 (treatment of glioblastoma, a form of malignant brain cancer)
The Company received $500,000 in research grant from the Innovative Manufacturing Cooperative Research Centre coupled with GenesisCare, iPHASE Technologies, Cyclotek and the Bio21 Institute. During the period, its Phase III ‘ZIRCON’ Investigational New Drug application was approved by the US Food and Drug Administration. Additionally, the Company closed acquisition deal for a Seneffe-based licensed radiopharmaceutical production facility in Belgium.
Sales Update –
- Telix delivered ~2,600 individual patient doses prepared from 1,100 TLX591-CDx prostate cancer imaging kits
- Cash received from product sales went up by 15% quarter-on-quarter to $1.14 million
- Pricing of the TLX591-CDx kit remained stable
Cash Flow Highlights -
- Net cash outflow in Operating Activities: $14.119 million;
- Net cash outflow in Investing Activities: $0.471 million;
- Net cash outflow from in financing activities: $0.516 million;
- Cash & cash equivalent by the end of the March quarter stood at $34.491 million.
Premier Investments Limited (ASX: PMV)
On 21 April 2020, Premier Investments Limited announced that it had to temporarily close all the retail stores in Australia from 6 pm on 26 March 2020 to 9 am on 22 April 2020. The decision was important due to preventive measures imposed by the Federal and State governments to stop the spread of coronavirus and was in line with the similar decisions the Company had to take in New Zealand, UK and the Republic of Ireland.
The Australian government on 16 April 2020 announced that measures to address coronavirus like social distancing, public gathering & stay home directions would continue to remain in place and are less likely to change in the next 4 weeks till at least 11 May 2020.
On this front, the Company is supporting the Australian government with respect to the implementation of these directions to safeguard the health & safety of the Australian people.
The decision to temporarily close the retail stores is consistent with the clear message echoed by the Prime Minister that people should not leave their home unless there is an absolute need to move out.
PMV also assured that it would open its stores as soon as possible. Also, all the seven brands of Premier are trading online in the country and would continue to trade online until the stores are temporarily closed.
Stock Information of the above-discussed companies as on 22 April 2020 (AEST: 3:13 PM)
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