Wesfarmers

Posted on | by Todd | Leave a Comment on Wesfarmers

Wesfarmers‘ officials have credited their conglomerate structure for a 13.2% increase in half-year net profits to $1.57 billion. This result was well above the street’s expectation of $1.47 billion.

The company announced it will increase its interim dividend to $1.03 from 91 cents, payable on March 28th. Wesfarmers’ revenue grew by 4.3% to $34.9 billion, and EBIT were up 15.1% to 2.42 billion.

The strongest results from the conglomerate came from the industrial division, where earnings rose from $22 million to $377 million, largely from the $256 million turnaround in resources as coal prices moved higher during the quarter.

On the other side of the ledger, Coles’ same store sales grew by 1.3%, but lower prices meant revenue from the supermarket remained steady and earnings fell 6.8% .

Chart – WES

Commonwealth Bank

Posted on | by Todd | Leave a Comment on Commonwealth Bank

Shares of Commonwealth bank have opened 2% higher to $84.50 after reporting a record first-half profit of $4.9 billion.

The result was 6% higher than the previous record reported in the first half of last year. An interim fully franked dividend of $1.99 was declared, which was 1 cent higher than expected.

Upside price momentum could be tempered as the bank announced net interest margin was lowered to 2.11% from 2.15% and their wealth management division saw a net profit drop of 34% compared to the same period last year.

Chart – CBA

Treasury Wine Estates – 1H17 Earnings

Posted on | by Leon Hinde | Leave a Comment on Treasury Wine Estates – 1H17 Earnings

TWE has reported its 1H17 EBITS of $227m, underlying NPAT was $136m  and an interim dividend of$0.13

Assuming 2H17 is in-line with the first half, we expect a full year result slightly above consensus, which currently sits at $440m

FY18 revenue $2.6b, EBIT $490m, EPS $0.42 and DPS of $0.28, places the stock on a  forward yield of 2.4%

Chart – Treasury Wines

 

 

General Trade Update

Posted on | by Leon Hinde | Leave a Comment on General Trade Update

SCG and WFD went ex-dividend yesterday at $0.105 and $0.125, respectively. With both names we’ve added tight covered calls to boost the cash flow to 10 – 12% on an annualised basis.

Ansell  is a relatively new addition to portfolios and yesterday’s earnings result was slightly disappointing. Again, we’ve been aggressive with the covered calls so we’re not looking for too much on the upside with ANN and we collected  between $0.80 to $1.20 for the covered calls. We will look to exit on a rally back towards $23 by April/May.

Amcor reported a terrific earnings result with underlying growth running ahead of market expectations at 5%. This could accelerate up to  8 – 10% in the second half. This supports our $15.50 price target.

CBA’s earnings result tomorrow will be key for the banks. Thus far NAB and BEN have failed to deliver growth on the revenue and profit lines. We shorted BEN from $13.00 and we’ve been aggressive with selling call options over the top 4 banking names.

AZJ reported earnings in-line with market expectations. We remain cautious of the group’s high payout ratio with almost 100% of earnings being paid in dividends. This looks unsustainable in the medium term.

Tomorrow we will be focused on the earnings  results for BLD, CBA,  CPU, CSL, SHL and WES.

Chart – Amcor
Chart – Bendigo Bank

 

 

 

 

 

 

JB Hi-Fi 1H17 Result

Posted on | by Leon Hinde | Leave a Comment on JB Hi-Fi 1H17 Result

JB Hi-Fi  1H17 earnings results  beat expectations driven by strong sales and  gross margin expansion.

1H17 underlying NPAT of $125 million represented growth of 32%. Assuming FY17 EPS of $1.87, it places the stock on a forward yield of 4.1%.

Our Algo Engine generated a buy signal in both retail names back in December.

Chart – JB Hi-Fi
Chart – Harvey Norman