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ASX 200 (XJO) jumps another 1.4%, Afterpay (APT) rises 4%

The ASX 200 (ASX: XJO) has risen another 1.4% today to above the 6,000 level.

Active COVID-19 numbers continue to grow in Victoria and New South Wales. The cluster in NSW relating to the Crossroads Hotel has grown by another 4 people.

Afterpay (ASX: APT) goes higher on US update

The Afterpay share price is up by more than 4% after the buy now, pay later company gave an update about its US business.

Afterpay announced today that its customers can now use Apple Pay to make purchases through Afterpay in physical stores and online.

From this month, some retail stores in the US will now offer Afterpay. Some of the first stores to offer this will be Forever21, Fresh, Skechers and Solstice Sunglasses. By using Apple Pay with existing payment terminals, there are no merchant integration costs associated with accepting Afterpay.

Customers in Australia will be able to use Apple Pay to make retail store purchases via the Afterpay app in the coming months.

Afterpay also announced that shoppers can also utilise ‘buy now, pay later’ with Google Pay as well.

Afterpay co-founder Nick Molnar said: “As we enter the second half of the year and retail re-emerges across the world, it’s critical we help our partners drive business growth, both online and offline. As a proven business solution for driving incremental sales and new customer growth, we are thrilled to introduce our new omni-channel solution to US retailers as they begin to open their doors and bring shoppers back to their physical stores.”

Objective Corporation (ASX: OCL) FY20 update

The company announced its unaudited management accounts for FY20. So it has essentially released its expected FY20 result.

Objective Corporation’s revenue rose by 13% to $70 million with annual recurring revenue growing by 21% to $56.6 million. Recurring revenue now represents 75% of total revenue.

Looking at the some of the key subscription product lines, ECMaaS revenue jumped by 101%, Connect revenue rose 34%, Trapeze revenue increased by 51% and Alpha One revenue went up 49%.

Objective’s EBITDA (click here to learn what EBITDA means) rose by 22% to $17.2 million. Net profit after tax (NPAT) also grew by 22%, to $11 million. Operating cash flow increased by 22% to $28.5 million.

In terms of its research and development spending, that grew by 18% to $15.7 million. These expenses are fully expensed when incurred, they are no capitalised.

Objective Corporation said it finished FY20 with a cash balance of $51 million. However, 1 July 2020 Objective acquired government regulation technology specialist iTree for a net cash cost of $18.5 million with no deferred consideration payments.

Big writedowns for the energy sector

Both Origin (ASX: ORG) and Woodside (ASX: WPL) announced painful writedowns for its FY20 accounts.

Woodside said that its financial statements for the half year to 30 June 2020 are expected to recognise after-tax impairment losses of US$3.92 billion after reviewing its carrying value of its assets.

It’s expecting to recognise $2.76 billion for oil and gas properties and $1.16 billion for exploration and evaluation assets. Additionally, it’s expected to include an after-tax onerous contract provision for the Corpus Christi LNG sale and purchase agreement of US$447 million.

Woodside explained that approximately 80% of the oil and gas properties impairment losses are due to the significant and immediate reduction in oil and natural gas prices assumed up to 2025, impacting Woodside’s products in the prevailing economic climate. Additional contributors are increased longer term demand uncertainty impacted by the COVID-19 pandemic and macroeconomic dynamics and the increased risk of higher carbon pricing.

COVID-19 has caused Origin to announce it expects to recognise post-tax charges in the range of $1.16 billion to $1.24 billion in its FY20 accounts.

These charges have come about due to the updated year-end valuation estimates primarily driven by revised assumptions about commodity prices, the associated impacts of the COVID-19 pandemic and the progressive transition to a lower carbon energy supply. Origin also said it expects revise its provisions for restoration and rehabilitation of generation assets.

There are two main elements for the writedowns. The first is an impairment in the range of $720 million to $770 million after tax for ‘Integrated Gas – Australia Pacific LNG’. The other main amount is $440 million to $460 million for an onerous contract provision for ‘Integrated Gas – Cameron LNG’.

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At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.

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