Christmas has come early for the bank’s shareholders with the decision to slightly increase the 2024 dividend – despite a single-digit decline in the net profit and cash earnings.
Beating the market benchmark is never easy, with 72 per cent of Australian actively managed global equity general funds trailing the S&P World Index in the six months to June 30, 2024. Domestic equity funds performed slightly better, albeit against a significantly lower bar set by the S&P/ASX 200 Index.
ASX falls as Russia enters Ukraine, Cochlear, Hub 24 jump on upgrades
The unexpected run of earnings and profit surprises in 2021 wasn’t enough to offset geopolitical concerns from Russia, sending the S&P/ASX200 down 1 per cent on Tuesday.
The losses remain focused around the higher valued IT and discretionary sectors, which were down 3.2 and 2.7 per cent respectively.
Energy has been the biggest beneficiary given Russia’s key role in global oil and gas supply, with the sector gaining 1.9 per cent.
The highlight, however, was Cochlear (ASX: COH) with the hearing aid producer gaining 9 per cent and supporting the entire healthcare sector.
The company surprised analysts by delivering 190 per cent revenue growth on a 7 per cent increase in volumes but converting this into another 25 per cent jump in profit to $158 million.
Higher margins were attributed to strong cost control with the management guiding to profit growth in 2022 of between 13 and 22 per cent.
Shares in Costa Group (ASX: CGC) also gained 8.7 per cent after the company announced record international revenue in China and Morocco, that supported a 4.8 per cent lift in full year sales.
Profit fell 22 per cent due to weakness within avocado sales, but the company continues to show strong signs of recovery.
Coles overcomes comparables, Nanosonics tanks, Hub 24, Seven gain
Coles Group (ASX: COL) appears to be navigating the difficult ‘comparables’ that come with the bumper 24-month period for grocery retailers, reporting a 1 per cent increase in revenue on 2021’s inflated levels.
Profit fell 2 per cent to $549 million but was well ahead of estimates with COVID-related and staffing costs continuing to bite.
Liquor sales gained 2.7 per cent, but convenience stores continued to struggle, down 8.5 in what analysts described as a ‘solid’ result; the dividend remained at 2021 levels.
Nanosonic (ASX: NAN) shares tanked another 13 per cent despite the infection protection company reporting a 41 per cent increase in first half revenue.
Shares in Hub 24 (ASX: HUB) recovered some lost ground, gaining 4.8 per cent with the fast-growing investment and super platform provider delivering a doubling of profit to $14.2 million.
This once again evidenced the earnings potential of this tech-driven sector once they reach critical mass; funds under administration climbed to $68.3 billion.
Seven Group (ASX: SVW) shares fell 3.1 per cent after the company reporting a doubling of profit primarily due to the booking of a $757 million gain on their strategic acquisition of a controlling stake in Boral (ASX: BLD).
US markets sell on Ukraine ‘invasion’, sanctions, but Home Depot the real detractor
US markets all traded more than 1 per cent lower on Tuesday, reopened after President’s Day.
Most reversed losses of as much as 2 per cent after the entry of Russian troops into ‘separatist’ parts of Ukraine scared investors.
As much as this is likely to be a localised issue, the threat of sanctions could harm the economy given Russia produces around 20 per cent of the world’s oil.
At this stage, no financial sanctions have been imposed by Germany has paused their massive Nord Stream 2 gas pipeline with Russia.
The Dow Jones was down 1.4 per cent, the S&P500 1 and the Nasdaq 1.2 per cent but interestingly it was Home Depot’s (NYSE: HD) driving the latter.
The share price fell by close to 9 per cent contributing to more than 30 per cent of the Dow’s fall, despite beating earnings estimates and hiking their dividend by 15 per cent.
Investors are clearly concerned about the weakening margins and higher costs.
