From Woolworths to A2 Milk: What’s hurting these 5 ASX stocks today?

Highlights 

  • Woolworths shares fell despite a rise in the company’s quarterly sales.
  • Humm Group shares declined on plan to commence dividend payment.
  • Codan shares slumped despite bagging a new contract.
  • Gold Road Resources dropped after it released its September quarter business report.
  • A2 Milk shares nosedived on plan to expand business in China.

The Australian share market edged lower in see-saw trade on Wednesday as investor sentiment was dented by higher-than-expected inflation. The top gainer on the ASX was plumbing parts business Reliance Worldwide (ASX: RWC), while dairy business The A2 Milk Company (ASX:A2M) topped the losers’ chart.

Let’s zero in on these five shares dominated trade on the ASX today:

Codan

Shares of technology solutions company Codan (ASX: CDA) plunged as much as 18.2% to touch a low of AU$11.40 despite bagging a new contract.

The company’s subsidiary, DTC Communications Inc (DTC), has won a multi-year contract to supply software defined mesh radios to a publicly listed global technology corporation as part of a sensitive military program.

The initial purchase order worth AU$37.6 million is to be delivered in the upcoming 12-month period, 60% of which is likely to be delivered in FY22.

Woolworths Group

Shares of supermarket giant Woolworths Group (ASX: WOL) declined as much as 4.7% to hit an intraday low of AU$38.66 following its first quarter sales report.

For the quarter ended 3 October 2021, sales climbed 7.8% year-on-year to AU$16 billion, driven by a surge in online sales. The boost in sales was majorly powered by the company’s e-commerce division, whose sales spiked over 50% to AU$1.87 billion for the period. The retailer’s recently acquired food services division PFD also made its maiden contribution to the company, more than tripling Woolworths’ B2B food segment sales to AU$656 million.

The company’s sales soared despite chief executive Brad Banducci calling the period as the “most challenging COVID quarter”. The company cited how trading in October so far has slowed down as New South Wales and Victoria have begun re-emerging from their lockdowns, though this had benefited Big W’s sales.

Humm Group

Aussie fintech company Humm Group’s (ASX: HUM) shares have dropped 2.2% to AU$0.90 during the day’s trade so far.

The buy now, pay later (BNPL) company has informed its shareholders that it will commence dividend payment in the first half of financial year 2022, with a payout ratio of 30-40%.

The company also unveiled a plan to divest its New Zealand commercial business. The move is being seen as part of the company’s strategy to transform itself into a BNPL operator.

Gold Road Resources

Shares of Gold Road Resources (ASX: GOR) rose 2.2% to AU$1.39 after it released its September quarter business report.

The company produced 59,371 ounces of gold at its Gruyere joint venture operations, up from 53,132 ounces in the June quarter. Production was delivered at an all-in-sustaining cost (AISC) of AU$1,697 per ounce, compared to AU$1,659 per ounce in the June quarter.

The company said quarterly production was impacted by low plant utilisation including the unscheduled ball mill maintenance announced in late September.

A2 Milk Company

Shares of dairy nutritional company A2 Milk Company (ASX:A2M) tumbled as much as 12.5% to AU$5.99 following a business update.

The company’s chief executive, David Bortolussi, said A2 Milk will double down on its China aspirations despite major uncertainties over future growth amid changing consumer preferences and economic instability. He told investors on Wednesday that the company aims AU$1.9 billion in sales over the medium term and says margins will likely be in the “teens” under his revised growth strategy.

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