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Earning Releases and Upgrades on ASX This Week 

  • November 21, 2020 12:16 PM AEDT
  • Team Kalkine
Earning Releases and Upgrades on ASX This Week 

Summary

  • ALS Limited has reported half-year results. The performance has been mostly stable, albeit impact due to the pandemic. It has also announced an interim dividend. 
  • BlueScope Steel has highlighted stabilising business performance across segments. It is now expecting underlying EBIT of around $475 million for 1H FY21. 
  • Accent Group’s business is trading well ahead of expectations despite the impact of lockdowns in Victoria and Auckland. New stores have also been well received by the customers, and the company is on track to open 80 new stores in FY21. 
Gold MTF non-AMP

Markets are stabilising strongly in response to medical breakthrough in vaccine developments for COVID-19. Domestically, Australian corporates are convening annual general meetings. 

While the virus spread has been relatively well managed in the country, the recent outbreak in Adelaide underscores the fact that the pandemic is far from over. 

Many companies listed on the ASX are providing trading updates, while some are disclosing results. 

ALS Limited (ASX:ALQ)

ALS Limited has released half-year results for the period ended 30 September 2020. Revenue for the period stood at $838.8 million, down 8.7% from the same period last year. This decline in revenue has been attributed to the pandemic. 

In the second quarter, the intensity of decline was 7.8% against a fall of 9.7% in the first quarter. In H1 FY21, the company’s life sciences division witnessed a revenue decline of 3.5%, showing the resilience of the division. Likewise, commodities revenue declined by 13% and industrial revenue declined by 17.1%.

Statutory profit for the period stood at $70.3 million, down $65.3 million due to gain from the sale of the Chinese business in H1 FY20. Excluding Government subsidies and related direct costs, underlying net profit after tax from continuing operations declined by 17.9% to $80.6 million.

For the half-year period, the company’s EBITDA margin across divisions expanded as a result of cost initiatives. 

ALS has announced a fully franked interim dividend of 8.5 cents per share against 11.5 cents per share in H1 FY20. The announcement of dividend underscores capital management and a strong liquidity position of the company. 

While capex was lowered during the first half of FY21, it continued investing in targeted growth opportunities. These investments include the development of COVID-19 testing opportunities to meet demand over the medium term. 

ALS also invested in expanding Geochemistry Laboratory capacity because of strong demand from major miners, junior miners and intermediate miners. 

Outlook

While the first quarter was significantly impacted due to the pandemic, there was stabilisation in the second quarter. The trend has carried into the early third quarter.

In the life sciences division, the company expects an improvement in the second half, subject to economic shutdowns. For the commodities division, the company stated that the demand would flow from mining activities and revenue conversion is expected in the second half. 

ALS continues to look for accretive acquisition opportunities, especially for its life sciences division. Its balance sheet strength is enabling for acquisitions, which meet its strict criteria. 

On 20 November 2020, ALQ last traded at $10.250.

BlueScope Steel (ASX:BSL)

This week, BlueScope upgraded its guidance for the half-year FY2021. It now expects underlying EBIT of around $475 million, an increase of around 80% over 2H FY20. This guidance includes the recent property sale by BlueScope Properties Group. 

CEO Mark Vassella noted that the business is performing well, and momentum has carried into the end of H1 FY21. Demand in the Australian market has continued to exceed expectations. BlueScope now expects that construction and manufacturing activity in Australia would be strong. 

He also stated that benchmark steel spreads in East Asia and Midwest US are presently above long-term averages. But there remains uncertainty, given the impact of COVID 19 could halt macroeconomic activity. 

Segment Performance

Australian Steel Products is performing better with strong demand in domestic construction and distribution, especially painted and coated products. Meanwhile, export coke is expected to contribute better than 2HFY20. Moreover, BSL expects the segment to deliver a better result than 2H FY20. 

In the US, North Star is operating at full capacity as automotive volumes are stabilising, while expansion remains on track. Steel spreads are improving, but due to pricing lags in the sales mix, 1H FY21 underlying EBIT is expected to be lower than 2H FY20. 

Building Products Asia & North America would deliver better performance than 2H FY20. In ASEAN, the company expects underlying EBIT in 1H FY21 to at least double compared to 2H FY20. The North American segment is expected to deliver a similar performance to 2H FY20. BlueScope expects China to experience a similar performance to 1H FY20. 

BlueScope Properties is expected to deliver better results due to the recent property sale. Lastly, the performance of New Zealand and Pacific Islands is improving from 2H FY20. This is being driven by stabilising demand after COVID-19.  

On 20 November 2020, BSL last traded at $17.230, down by 2.766% from the previous close.

Accent Group Limited (ASX:AX1)

Accent has reported that sales are well ahead of expectation for the first 20 weeks for FY21 (29 June -15 November). Its like-for-like sales were up 15.7%, excluding Auckland and Victorian stores. 

During the period, the company’s online sales were up 129% over the previous year. As a result of store closures in Auckland and Victoria, it expects a sales impact of $39 million compared to the same period last year. Melbourne stores were closed between 29 June and 28 October, and Auckland stores were closed between 12 August and 30 August. 

CEO Daniel Agostinelli stated that sales are ahead of expectations after store re-openings in Victoria. Although online sales remain strong, customers are flooding Victorian stores after re-opening in late-October. 

Also Read: ASX Retail companies set to embrace softer restrictions in Victoria

The momentum in sales for New Zealand and other states continues, and the company does not anticipate a material impact on sales given the recent lockdown in Adelaide due to store footprint and digital channel sales. 

Accent remains on track to open approximately 80 new stores in FY21. In late-October, it opened the first Australian Stylerunner store in Armadale, Victoria. Customer response to the new store has exceeded expectation, and additional three stores were signed. 

New Pivot stores in Highpoint, Ballarat and Shellharbour are trading above expectations, and the company is planning to open 15 stores by the end of FY21. 

Mr Agostinelli stated that plans are in place to capitalise on the festive season. Accent’s integrated omni-channel model has allowed the business to perform strongly amid disruptions arising out of the pandemic. 

On 20 November 2020, AX1 last traded at $1.895, up by 6.460% from the previous close.

 

 


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