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Summary
- Super Retail Group witnessed growth of 4.2% in total sales in the 52 weeks to 27 June 2020 with successive increase in sales in June from April and May.
- Australian business loan provider, Prospa Group, considering economic impacts of the pandemic, has set aside a further provision worth $20 million, and expects EBITDA between $18 million and $22 million for FY20.
- iSignthis registered positive quarterly operating cash flow for five quarters in a row, and its unaudited NPAT for the first half of 2020 stood at $660k.
Economic reopening following the long drought-spell of stringent lockdown restrictions emerged as a silver lining for business activities. However, repercussions of the pandemic weigh heavy on businesses, which seem to balance out the pernicious effects on the back of strategically aligned measures. Signifying similar economic turmoil evident across its economy, US GDP contracted at record 32.9% in the second quarter of 2020, which coupled with surmounting unemployment claims seem to affect the investor’s sentiments across the globe.
Echoing the similar vibrations in Australian stock market, S&P/ASX 200 fell by over 123 or 2.04% to 5,927.8 on 31 July 2020, as apprehensions clouded the capital market scenario. Meanwhile, the Victorian crisis seems to have further augmented concerns regarding the Australian economic recovery. Amidst such scenario, though few businesses showed a growth trajectory, there yet remained many businesses that await the optimistic signs.
Amidst all this, Super Retail, Prospa and iSignthis released their performance updates, which have caught the attention of many. Let us have a look at the three ASX-listed stocks that remained under the radar.
Super Retail Group Limited (ASX: SUL)
Australia’s one of the top 10 retailers selling automotive parts, boating, camping and adventure related equipment in conjugation with sporting and leisure goods, Super Retail Group Limited (ASX:SUL) is all charged up on ASX, piggybacking outstanding sales, resulting in a stronger-than-expected sales performance for 2019-20. SUL stock on the last day of July edged up around 9.5% to close the day’s trade at $8.88.
The Group in the 52 weeks to 27 June 2020 witnessed its three of the core businesses, which include Supercheap Auto, Rebel and BCF recording sales growth, while only Macpac suffered the loss. Notably, Supercheap Auto, which specialises in automotive parts and accessories and also sells travel, touring and outdoors-related products, remained most profitable, realising its total sales growth by 7.6% and LFL sales growth of 6.3%.
The Group’s total sales increased by 4.2% compared to the previous corresponding period.
During the fourth quarter post easing of COVID-19 restrictions, strong rebound in sales boosted personal fitness and outdoor leisure activities along with domestic travel and tourism. Although the monthly like-for-like sales performance of the Group dipped by 26.2% in April during peak COVID-19 restrictions (over pcp), sales performance picked up in May. Monthly like-for-like sales surged by 26.5% in May and continuing the upbeat momentum; the Group recorded an increase of 27.7% in monthly like-for-like sales in June.
Full-year results are scheduled to be released on 24 August 2020.
Prospa Group Limited (ASX: PGL)
Stock price of business loan provider Prospa Group Limited dipped by 7% post the announcement of FY20 unaudited results, which were materially impacted by COVID-19 induced severe economic downturns. The preliminary unaudited results for the full year to 30 June 2020 witnessed early impacts on loan originations as well as increased provisioning for credit losses.
Notably, pressures generated by COVID-19 on small businesses impacted loan originations during April ($2.9 million) and May ($6.2 million). However, loan originations in June ($12.8 million) increased over the past two months.
The Company indicated that customers who were provided pandemic relief packages have now returned to full contractual or partial repayment schedules, boosting the momentum of business activities. However, small businesses have been bracing pandemic impacts because of which, the Company has set aside a further provision worth $20 million considering economic impacts of the pandemic. The allowance for expected credit losses has been lifted as a percentage of receivables to 11.7% for FY20 (H1FY20 5.9%).
Prospa Group expects EBITDA between $18 million and $22 million following the provisioning coupled with additional $5.5 million in write-offs after a comprehensive review of loan book receivables. EBITDA earlier before the adjustments for FY20 was anticipated to be $4-8 million.
The Company expects revenue to grow by 4% over FY20 while the annualised growth rate of revenue was 10% in the nine months to March 2020.
Meanwhile, SME Loan Guarantee Scheme has been extended to 30 June 2021, earlier slated to end on 30 September 2020, which would provide continued support. Further flexibility in the loan amounts and terms, along with the addition of a broader product range would attract a more extensive range of small business customers.
Balance sheet of the Company remains strong with $55 million in unrestricted cash and $114 million in unused facility limits at 30 June 2020.
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iSignthis Ltd (ASX:ISX)
Reverberating a vibrant momentum despite setbacks brought by COVID-19 pandemic, iSignthis Ltd continues to deliver effective results. The Company witnessed the fifth consecutive positive quarterly operating cash flow with $1.6 million in 2Q20.
Cash balance stood at $16.1 million at the end of quarter in consolidated Group Cash, with a reduction of $1.3 million in the quarter, primarily because of investment in NSX Limited during the period worth $1.5 million. Receipts from customers for 2Q20 were down around 20% to $8.4 million from 1Q20, owing to the impact of COVID-19 and suspension from the ASX during the quarter.
The Company expects to take a non-cash impairment of $1.6 million during the quarter in its NSX investment. iSignthis indicated that unaudited operating NPAT for first half 2020 (excluding the impairment for NSX and costs related to the ASX legal proceedings) would have been around $3.3 million. However, unaudited operating NPAT stood at $660k for the first half of 2020.
Unaudited revenue for the period was around $7.7 million for 2Q20.
READ: What investors need to know about the suspended groups ANO and ISX
