The consumer staples sector was the biggest detractor, falling 3.5%, on fears that recent trends will slow, with the property sector also falling 2.2%.
Here’s a round-up of six major ASX reports from Wednesday.
Coles benefits from pandemic surge
Coles Group Ltd (ASX: COL) reported an 8% increase in revenue for the first half, to $20.6 billion, with comparable-store sales of 7.2% well above the longer-term average of 3%. Growth in liquor sales, up 15.1%, was also a key driver of the 14.5% increase in net profit, which hit $560 million.
Management announced a 10% increase in the dividend to 33 cents but noted recent sales growth trends are unlikely to be sustainable in the longer term. This seemed a fairly obvious and innocuous statement, but the Coles share price fell 5.4% on the news.
The key for Coles and Woolworths Group Ltd (ASX: WOW), which fell 4.6%, will be improving profit margins via a higher portion of online sales and supply chain efficiencies.
Westpac dividend decision on hold
Westpac Banking Corp (ASX: WBC) reported a 54% increase in quarterly profit to $2.2 billion in the first quarter, excluding the impact of loan impairments and write-downs. Revenue improved by just 1%, but a 2% fall in expenses and an improvement in the net interest margin to 2.06% were highlights. The dividend decision won’t be made until April, but Westpac shares added 4.6% on the news.
Treasury Wine’s profits whacked
Treasury Wine Estates Ltd (ASX: TWE) announced it expects zero contribution from its Chinese business in the second half of 2021, but suggested it may have found alternative destinations for a significant portion of the wine allocated to Chinese markets.
It remains to be seen whether shareholders trust the company, but shares increased 2.4% despite reporting a 43% fall in profit to $120.9 million on the back of an 8.2% fall in revenue.
The dividend was also cut by 25% with the CEO citing disruptions to sales channels, shipments and, of course, the Chinese anti-dumping complaints.
Domino’s Pizza share price heats up
Yesterday’s zero is today’s hero, with Domino’s Pizza (ASX: DMP) delivering a record dividend after reporting a 20.9% increase in group revenue to $1.1 billion in the first half.
Net profit also improved by 37.9% and importantly, ‘network’ or franchise sales were the key driver, up 16.5% with management suggesting consumers had brought forward long-term demand for home-delivered food.
Growth across all countries, including Germany and Japan, was positive with the CEO now flagging further acquisitions and store openings. The Domino’s share price finished the day 7.6% higher.
Vicinity Centres coming back to life
Chadstone shopping centre owner Vicinity Centres (ASX: VCX) offered some positive news amid what was a difficult second half for the group. Management announced a $394.1 million loss for the year, driven primarily by the $572.4 million reduction in the value of its property portfolio.
Despite the devaluation, the company reported that cash collection has now reached 72% including Victoria, with visitation also nearing 80% across each of its key assets. Funds from operations, or more importantly distributable income, fell to $267.1 million but a distribution of 3.4 cents was announced, 50% of 2020’s payment but a payout ratio of 65% of income.
Despite the weak performance Vicinity’s net tangible asset value of $2.17 is well above the current share price, offering long-term investors a rare discount for a high-quality property portfolio.
Charter Hall share price slides
Charter Hall Group (ASX: CHC) experienced a similarly difficult year, albeit with a more diversified portfolio of properties. Occupancy across Charter Hall’s $46.4 billion portfolio is now around 97.1%, however, operating earnings fell 42.7% in the first half.
Looking beyond the headlines, the significant fall in profit was actually due to a large performance fee received in the previous year making comparisons difficult. The dividend was increased 6% but the Charter Hall share price fell 7.0% on the news.
What to expect
Looking ahead, you can expect reports from the likes of ANZ Banking Group Ltd (ASX: ANZ), CSL Limited (ASX: CSL), Wesfarmers Ltd (ASX: WES) and Fortescue Metals Group Limited (ASX: FMG) today, as per Rask Media’s ASX reporting season calendar.