Investors are watching these ASX 200 share prices: Megaport, ARB, Netwealth

Summary

• Earnings season is the period where market participants are actively looking at companies that are about to release their financial results. A better-than-expected result almost always has a favourable impact on the share price.
• Megaport Limited released its FY20 results with revenue growth of 9% and a 24% increase in the customer base. The Company also announced the release of a new product - Megaport Virtual Edge.
• ARB share price hit a 52-week high on 19 August as the Company announced favourable results with ~5% sales growth.
• In FY2020, Netwealth’s underlying earnings before interest, tax, depreciation and amortisation rose 24.8% to A$64.8 million.

Because of COVID-19 pandemic share prices of many ASX 200 companies have performed poorly. Since the beginning of 2020, several ASX 200 companies have raised capital to save themselves from the brink of collapsing as the health crisis has created financial turmoil worldwide.

The market ended in the green zone for the second day in a row, moving 0.72% higher at 6,167.6 points. Let us look at three companies that helped the index move north following positive financial results announced recently.

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Megaport Limited (ASX:MP1)

Network-as-a-Service provider Megaport Limited announced its FY20 results on 19 August with a remarkable growth of 66% in revenue. The highlights of the results include:

• Revenue stood at A$ 58.04 million, up 9% compared to FY19.
• Monthly Recurring Revenue, or MRR, for June, was up 57% at A$5.7 million.
• Customers increased by 24%, reaching 1,842.
• Profit after direct network costs was A$29.5 million, up 147% or A$17.6 million increase.
• Net loss stood at A$47.7 million; Megaport raised ~A$134 million via two capital raisings.
• As on 30 June 2020, Megaport had cash worth A$166.87 million.

The impressive results were driven by expansion into multiple geographies across North America, Asia-Pacific, and Europe.

Megaport Limited share price is on the watch also because it announced the release of a new product, Megaport Virtual Edge. The product will allow customers to connect into Megaport’s platform without deploying hardware to tap into its extensive platform reach to implement and extend their network function in real-time. This product innovation will enable the hosting of Network Functions Virtualization (NFV), like SD-WAN capabilities, directly on Megaport’s global Software Defined Network (SDN). Megaport is collaborating with Cisco to enable Cisco SD-WAN as the first use case on MVE.

ALSO READ: Tale of Megaport Limited: Capital Raising, Latest Financials and COVID-19 Risk

Currently, Megaport has more than 1,800 customers like Facebook, Amazon, and Tesla, which uses its products to power their digital businesses. The Company provides bandwidth which allows the users to connect to cloud services and data centres.

Megaport released a statement on the launch saying, to support traffic localisation for low-latency networking, highly-distributed MVE footprint will align with global centres of commerce, and it will also provide interconnection gateway to manage multicloud and multi-location interconnection securely.

The Company was added to the ASX200 index in a reshuffle on 12 June 2020.

DO READ: Megaport Shares the Results of Share Purchase Plan

Stock Information: On 19 August 2020, the Megaport share price stood at A$15.540, an increase of 6.366%. MP1’s market capitalisation was A$2.24 billion. The Company has generated a notable return of 40.35% on a YTD basis.

ARB Corporation Limited (ASX:ARB)

Manufacturer and distributor of vehicle accessories, ARB Corporation Limited, has seen a recent spike in it’s the stock. ARB share price hit the 52-week high on 19 August following FY results announcement a day earlier. ARB Corporation, which started in a family garage by Anthony Ronald Brown, is the largest manufacturer and distributor of four-wheeler accessories today. The group released a statement saying even though the times are challenging, it has not only managed to lift FY20 sales and profit but also will maintain its full-year dividend payment.

Highlights from the FY20 results include:

• Sales grew 4.8% to reach A$465.379 million.
• Reported net profit after tax was broadly in line with FY19 at A$57.295 million (+0.3%).
• ARB highlighted that the results include the impact of COVID-19 and the wage subsidies received from the Australian and New Zealand government worth A$9.5 million.
• Earnings per share was consistent with FY2019 figure at 71.8 cents. ARP announced a total dividend of 39.5 cents per share (including 18.5 cps interim and 21.0 cps final dividend).

In April and May, sales were interrupted heavily due to the pandemic. Before April, ARB had generated an impressive 7.6% growth in sales till March 2020. Customers orders improved in May, leading to record monthly sales in June and July 2020. ARB did not provide any guidance citing COVID-19 uncertainty as the reason. The Company had earlier withdrawn its FY20 guidance due to the pandemic. However, record sales in July coupled with a robust balance sheet and improved margins put ARB is a decent position.

Market participants believe the recent acquisition of Beaut Utes and PRO-FORM Plastics could be an added driving factor for the growth. ARB’s strong balance sheet with A$41.6 million in cash and another accessible A$55.6 million in debt could be another factor.

Stock Information: On 19 August 2020, the ARB Corporation share price stood at A$23.990, an increase of 3.361%. ARB’s market capitalisation was A$1.85 billion. The Company has generated an impressive return of 52.10% in the last three months.

ALSO READ: Stocks touching Fresh Highs – ARB, MP1, TCL

Netwealth Group Limited (ASX:NWL)

Investment management services provider Netwealth Group Limited caught the attention of the investors after announcing robust FY20 results where profit surged 22%. For the period, Netwealth’s underlying earnings before interest, tax, depreciation and amortisation rose 24.8% to A$64.8 million. The groups EBITDA margin totalled 52.3% for the year, and the underlying net profit after tax climbed 21.7% to A$43.8 million.

Netwealth’s said it is well-positioned to meet with the challenges’ coronavirus pandemic has presented. Its total income increased by a whopping 25.5% to A$123.9 million. Another reason investors’ showed interest in NWL as it announced a fully franked final dividend of 7.8 cents per share.

Although its operating expenses increased by 26.2%, the group said it’s a part of strategic investments in IT infrastructure, people, and software to support further growth.

The group added 68 more employees to its team with a total of 339 employees as on 30 June 2020.

Netwealth announced the launching of its first of two new active funds on its wealth management platform which is the Magellan Global Specialist Series Infrastructure Fund and Magellan Global Specialist Series Global Fund.

Stock Information: On 19 August 2020, the Netwealth share price stood at A$14.220, an increase of 0.851%. NWL’s market capitalisation was A$3.35 billion. The Company has generated remarkable returns of 86.75% and 82.64% in the last three months and six months, respectively.