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Summary
- The level of COVID-19 impact on different businesses has provided direction to many companies to devise strategies and adopt measures to ride through the crisis.
- Seek Limited has provided its capital management update; It has decided not to pay the final dividend for FY2020.
- NWL expects its revenue in between A$116 million and A$120 million, and underlying EBITDA in the range A$58 million - A$62 million in FY2020.
- Infigen Energy reported a 26% decline in revenue to A$47.1 million on pcp.
H1 CY2020 has been a nightmare for organisations worldwide with the pandemic bringing the world economy to a standstill. While there is good news with a lot of nations resuming business activities and getting back on track, the threat of the virus is far from over.
Many companies were affected while many had marginal or no impact from the pandemic. The infectious disease created a scenario where businesses were compelled to look at alternate approaches and innovative strategies to make sure they do not succumb under the COVID-19 burden. With the earnings season on, businesses are coming up with their quarterly and full-year results as well as activities update. The performance reflects whether the approach they followed during the period bore any fruits.
DO READ: COVID Diary: Strategies that helped these 100 Companies create History
In this article, we would look at few ASX-listed companies from diverse sectors and see their recent announcement and the performance of these stocks.
SEEK Limited (ASX:SEK)
SEEK Limited, the operator of online employment classifieds and education and training has provided capital management update.
On 23 July 2020, the company had paid its interim dividend and has decided not to pay the final dividend for FY2020 to maintain capital in an ambiguous environment to fund SEK’s long-term growth strategy.
As highlighted by the company in its announcement dated 8 July 2020 related to the pricing of a A$75 million “tap” issuance of the June 2026 A$ Floating Rate Guaranteed Subordinated Notes, the proceeds have now been received. The proceeds would increase covenant headroom under SEEK’s existing senior syndicated debt facility.
Further, the company has redeemed all A$175 million of the Senior Notes, and thus the earliest debt maturity of the Borrower Group is now November 2022.
Covenants and Liquidity Position as on 30 June 2020:
- SEK is operating within its debt covenants.
- It has Borrower Group cash along with undrawn facilities which are ~A$593 million.
AMP Limited (ASX:AMP)
AMP Limited, the provider of life insurance, superannuation, pensions and other financial services in Australia and New Zealand has provided an update on 1H FY2020 Results, the economic disruption and impact from market volatility due to COVID-19 pandemic.
1HFY2020 Operating Earnings:
For 1HFY2020 ended 30 June 2020, AMP expects that its retained business unit operating earnings would be ~A$195 million.
- Australian wealth management- The company expects its 1HFY2020 operating earnings of ~A$60 million.
- AMP Capital: The operating earnings from this division would be ~A$70 million.
- AMP Bank: Operating earnings is projected to be A$50 million.
Netwealth Group Limited (ASX:NWL)
Netwealth Group Limited, the provider of superannuation and non-superannuation platform products to financial intermediaries and clients recently released its June 2020 quarter business update.
- FUA or Funds Under Management on 30 June 2020 was A$31.5 billion, a growth of 35% after a negative market movement of A$0.9 billion for the year.
- Cash transaction account balance reduced to less to 10% of FUA on 30 June.
- Fee paying FUA % went up to 63.1%, driven by the transitioning of the clients to the new pricing structure. It includes a A$2.5 million account balance administration fee cap.
Outlook:
- NWL expects its performance for FY2020 to surpass the earlier guidance marginally. The revenue would range from A$116 million to A$120 million, and underlying EBITDA would lie in between A$58 million to A$62 million.
- The existing pipeline of new businesses continues to stay positive despite market disruption.
- NWL will continue to invest to ensure market leadership in technology, service & functionality to capitalise on the considerable long-term growth prospect.
Challenger Limited (ASX:CGF)
Challenger Limited, a multi-faceted financial services company, has recently completed its share purchase plan on 24 July 2020 and raised A$35 million. On 23 June 2020, the company had completed its A$270 million institutional placement.
The company expects to issue around 8.1 million new fully paid ordinary shares where each share is issued at A$4.32 per New share, representing a discount of 2% discount the 5-day VWAP of CGF shares up to 21 July 2020. The proceeds from the Placement and the SPP will be used by the company to bolster the balance sheet further increasing CLC pro forma PCA ratio to 1.78x. This would give further strength to market volatility & flexibility to support ROE accretive investment opportunities.
Infigen Energy (ASX:IFN)
Infigen Energy, an active participant in the Australian energy market, has provided Q4FY2020 Activity Report for the three months ended 30 June 2020.
The net revenue of the company was A$47.1 million during Q4FY2020 and A$235.6 million for 12 months. Below is the breakdown.
The Q4FY2020 Activity Report outlines the impact of COVID-19 on IFN’s people, operations, supply chain and customers. It also reflects the company’s progress on active development projects, the updated outlook commentary related to FY2020 and FY2021.
Magellan Financial Group Limited (ASX:MFG)
Headquartered in Sydney, Magellan Financial Group Limited is a specialist funds management business has announced the restructure proposal to make easier Magellan’s Global Equities retail product offering. The restructuring would happen by the consolidation of the unlisted opened-ended Magellan Global Fund. The listed opened-ended Magellan Global Equities Fund and the listed closed-ended Magellan Global Trust would be merged into a single fund with two unit classes.
Post the restructuring, the enlarged Magellan Global Fund intends to commence a one-for-four entitlement offer to its unitholders to subscribe for new Closed Class Units with an attached bonus three-year option. Further, the unitholders would be able to subscribe for new Closed Class Units under the entitlement offer at the prevailing NAV per Unit. They would also receive a valuable partnership benefit in the form of extra Closed Class Units worth 7.5% of the value of their subscription.
Other than this, Magellan also offers to issue a bonus option to Closed Class unitholders in Magellan Global Fund based on 1 option for every 2 Closed Class Units held. Each option exercisable into one Closed Class Unit at an exercise price agreed at a 7.5% discount to the current NAV per Unit at the time of exercise.
Stock Information (as on 3 August 2020):
Source: ASX
