The S&P/ASX 200 (INDEXASX: XJO) fell 0.5% on Wednesday on what was one of the busiest days of ASX reporting season, with 20 companies releasing either half year or quarterly updates.
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.
