Doug Goodwille from Kayne Anderson speaks to Drew Meredith from The Inside Network on market thinkers.
While a surging gold price is on hold as the world adjusts to a Trump presidency, all the factors that saw its price rise more than 50 per during his first term in office – trade disputes, fiscal deficits and geopolitical tensions – are almost certainly guaranteed the second time around.
Reporting Season wrap
What a week of ASX Reporting Season!
We had the three biggest companies in Australia report FY21 results, each surprising the market in its own way.
A pizza retailer was the best performer, a winemaker defied the odds, and everyone’s friendly neighbourhood fund manager disappointed.
If you’ve been hiding under a rock, here’s your 5-minute update on ASX reporting season week one. To see all coverage of ASX Reporting Season and stay up-to-date with the flurry of reports this month, bookmark our ASX reporting season calendar.
And the gold medal goes to…
Arguably the standout performer of week 1, Domino’s Pizza Enterprises Ltd (ASX: DMP) share price rocketed 11% post its FY21 result.
The company recorded sales growth of 14.6% across its network leading to a 27.2% jump in profits.
But it was management’s announcement that it would supercharge its store rollout expansion that really got the market excited.
At 54x free cash flow, it’s not cheap. But this is an A+ management team executing to perfection.
No China, no worries
Given the company lost its largest growth engine in China, Treasury Wine Estates Ltd (ASX: TWE) has done a cracking job eking out a full-year profit.
TWE experienced organic growth across its sales and profit line, in addition to increasing its revenue per case.
Treasury will benefit as international borders and customers splash out on dining-out and premium culinary experiences.
Definitely, one to watch in FY22.
Magellan or melon?
The king of Australian funds management Hamish Douglass and the band at Magellan Financial Group Ltd (ASX: MFG) disappointed shareholders for the first time in living memory.
Magellan’s performance fees dropped 63% as its flagship global fund underperformed its benchmark over the past year.
Is this the turning point after a decade of funds under management and profit growth? I doubt it.
The MFG team are savvy operators. I expect them to rebound in FY22.
Slow and steady wins the race
Perennial outperformer and super fund favourite CSL Limited (ASX: CSL) achieved another solid full-year result growing profits by 13%.
However, it was the guidance for FY22 which spooked the market.
Management expects only a modest increase in revenue and a profit range below FY21.
For the long-term CSL shareholders out there, I’d say don’t sweat it. CSL has a pipeline of treatments in clinical trials which will spur future earnings.
I expect CSL to return to historical growth in FY23 onwards.
Buybacks, dividends, profits – CBA says we’ve got it all!
Talking of superfund favourites, the Commonwealth Bank of Australia (ASX: CBA) delivered the holy trinity.
A $6 billion buyback. $2 per share dividend. 19% profit growth. It’s Christmas in July August!
In all seriousness, I’d say don’t get too used to these kinds of numbers.
A large part of CBA’s profit was the result of unwinding loan provisions made in the depths of the pandemic.
This may be as good as it gets for CBA shareholders. I expect CBA’s earnings to moderate in FY22.
BHP goes… green?
Never did I expect to mention BHP Group Ltd (ASX: BHP) and ethics in the same sentence.
However, BHP has pulled the plug and divested its oil business to Woodside Petroleum Limited (ASX: WPL).
BHP also announced a huge dividend of US$3.01 ($4.20 in AUD), pulled its double listing structure, and piled $5.7 billion into a Canadian potash mine.
That’s quite the mouthful.
BHP management is reshaping the business for the future of resources. It’s yet to be seen if this was the right move or not.
Final thoughts
It’s a fantastic time to be an investor with a tonne of companies providing updates to the market, many with bigger dividends.
Next week will be even bigger!
To keep up-to-date with all the latest news regarding ASX companies, be sure to bookmark the Rask Media home page.
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