Investors like Growth Stocks; Praemium and Baby Bunting on FY20 Earnings Report Card

Summary

  • Despite the challenges caused by the pandemic, growth stocks such as Baby Bunting and Praemium are unstoppable, as they move forward to achieve their goals, outpacing their competitors.
  • Of late, Baby Bunting and Praemium are garnering the attention of the investors. Additionally, their robust business performances and business development strategies are boosting their confidence.
  • Praemium echoed that its resilient business model, comprising of varied revenue streams, a bolstered balance sheet and solid cash flows have furnished the Company with the financial strength to continue its focus on organic growth, as well as endeavoured strategic acquisition opportunities.
  • Owing to COVID-19 pandemic induced continuous uncertainty, Baby Bunting refrained from providing earnings guidance for FY20. However, the Company with its bolstered financial performance during FY20 plans to make future investments in digital channels for sales growth and supply chain for gross margin expansion.

On 14 August 2020, the benchmark index S&P/ASX 200 ended day’s session in the green zone. The Australian benchmark index closed the day’s session at 6126.2, up by 0.58% as compared to previous day close. Noteworthy, several businesses are not only functioning uninterruptedly during this economic turmoil, but they are thriving and moving forward to gain more success and achievements.

However, on 17 August, the benchmark index was trading at 6075.5, decreasing by 0.83 (at AEST 3:49 PM).

Numerous companies are beating the market and growing at a rabbit’s pace with their robust revenue growth, swift expansion, and business development strategy.

Yes, you guessed it right. We are referring to growth stocks.

Growth stocks usually inject money in the business by usually forgoing dividend payment and reinvesting their earnings to speed up growth in the short term. In the current times, numerous investors are eyeing growth stocks primarily due to their investment strategies and their ability to deliver robust returns in a short period of time, generating capital gains for investors.

In a nutshell, investing in ASX growth stocks seems to be a flavour of the season.

Did you read; 3 Growth Stocks to Build Recession-Proof Portfolio: ALU, NAN, PPH

Let's quickly discuss two ASX200 stocks that are witnessing growth during this unprecedented crisis.

Praemium Limited (ASX:PPS)

A global investment platform provider, Praemium unveiled its robust business performance with soared revenue and other income of 14% to AU$51.2 million for the year ended 30 June 2020 as compared to FY19.

The swelled revenue reflected an enlarged growth of 11% (y-o-y) to AU$38.8 million in the Australian segment, and an upsurge of 1% to AU$11.8 million in the international segment.

Additionally, the 11% revenue growth in the Australian business segment reflected growth in both platform as well as portfolio services.

Source: Company’s Presentation, dated 14 August 2020

Source: Company’s Presentation, dated 14 August 2020

Other highlights of the accelerated financial performance of PPS for FY20 are as follows:

  • PPS’ Global Funds Under Administration (FUA) noted an incremental growth of 26% (y-o-y) and reached AU$20.3 billion.
  • The Company witnessed an upsurge of 25% (y-o-y) in the underlying EBITDA and stood at AU$14.2 million.

Source: Company’s presentation, dated 14 August 2020

Source: Company’s presentation, dated 14 August 2020

  • Furthermore, net profit after tax (NPAT) experienced a bolstered y-o-y growth of 91% to stand at AU$4.9 million.
  • The Company’s noted a substantial increment of 95% (y-o-y) in the operating cashflow.
  • Cash was recorded at AU$15.9 million, as on 30 June 2020.

Notably, PPS’ financial performance echoed robust underlying growth for its global managed account platform and financial software solutions.

Did you read; How are ASX listed FXL, TYR, PPS, EML, APT and WAAX stocks faring amid Covid-19?

Furthermore, the Company released First Supplementary Bidder’s Statement concerning acquisition of all the shares of Powerwrap Limited (ASX:PWL) by Praemium at an offer price of 7.5 cents per share in cash, and 1 Praemium share for every 2 Powerwrap shares owned. The offer opened on 31 July and will end by 31 August.

The acquisition of Powerwrap would be a complementary addition to Praemium’s growth strategy and product portfolio. Moreover, the transaction, if concluded, is believed to deliver considerable synergies and would be Praemium’s significant acquisition in its 20-year history.

Related read; Praemium Makes A$55 Million Bid to Acquire Powerwrap, Stock up ~16%

On 17 August 2020, Praemium was trading at AU$0.462 (at AEST 3:14 PM), with an increase of 0.435%.

Did you read; How is the buying pattern changing during the COVID-19 pandemic?

Baby Bunting Group Limited (ASX:BBN)

Australia’s biggest nursery retailer and one-stop-baby shop, Baby Bunting released its boosted financial performance for the year ended 28 June 2020.

The Company noted a y-o-y increase of 11.8% in the total sales to AU$405.2 million, and y-o-y growth of 4.9% in the comparable store sales. Baby Bunting’s online sales grew by 39.1% (y-o-y) and represented 14.5% of total sales.

Additionally, Baby Bunting’s pro forma EBITDA noted an increase of 24.1% to AU$33.7 million, and statutory net profit after tax (NPAT) witnessed a fall of 14% to AU$10.0 million.

Furthermore, Baby Bunting’s pro forma gross profit witnessed a substantial growth of 15.9% pcp to AU$146.9 million, primarily due to increment in sales of higher margin private label and exclusive products, and enhancement in sourcing and attaining efficiency in their supply chain.

It is worth noting that the Company did not qualify for, or obtain, any JobKeeper support.

Did you read; The new JobKeeper might cause bankruptcies for businesses

Dividend

The Company unveiled a fully franked final dividend of 6.4 cents per share, representing 10.5 cents dividend for the full year.

Notably, the final dividend of 6.4 cents per share would be paid on 11 September 2020. The dividend would go ex on 27 August 2020, and has record date of 28, 2020

Did you read; Blue-chip stocks: Value versus Growth in Covid-19 Era

Outlook

Owing to the uncertainty caused by COVID-19 pandemic, the Company did not provide any earnings guidance for FY21.

However, Baby Bunting unveiled its plans to open 4 to 6 new stores in FY21, comprising the opening of three new stores in the first half of FY21. Furthermore, the Company seek to make future investments in digital channels for sales growth, as well as investments in supply chain to enlarge gross margin.

On 17 August 2020, Baby Bunting was trading at AU$4.390 (at AEST 3:40 PM), up by 5.783%.


Disclaimer
The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.

Ad

GET A FREE STOCK REPORT


Top Penny Picks under 20 Cents to Fit Your Pocket! Get Exclusive Report on Penny Stocks For FREE Now.


   

Kalkine

Rated 4.3/5 based on 904 Reviews at Google My Business
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK