The S&P/ASX 200 Index (ASX: XJO) went up 0.25% this week. In normal times this would have been a fairly volatile week, but it was quiet compared to March.
Australia (and other countries) are announcing the lifting of restrictions as officials are getting more confident with the coronavirus. But there is trouble brewing between China and Australia.
Xero Limited (ASX: XRO) was a poor performer within the ASX 200
The cloud accounting software business reported its FY20 result this week. But the Xero share price fell 10% on Thursday and Friday after reporting.
The ASX 200 company reported Xero that free cash flow increased by 320% to NZ$27.1 million. Net profit after tax (NPAT) came in at $3.3 million, an improvement from the NZ$27.1 million loss in FY19.
Whilst Xero reported solid growth numbers in FY20, the early trading in FY21 has showed that Xero is being affected like most other companies. The uncertainty is why Xero was unable to provide guidance for FY21.
Commonwealth Bank of Australia (ASX: CBA)
Australia’s biggest ASX 200 bank revealed its third quarter update this week.
Its March 2020 quarter showed cash profit was down 44% compared to the first half of FY20’s quarterly average. It announced an additional credit provision of $1.5 billion relating to the coronavirus.
Both the statutory net profit after tax and cash profit came in at $1.3 billion. The CBA share price rose by almost 2% on Wednesday.
The major ASX 200 bank also announced that it had agreed to sell a 55% stake in Colonial First State (CFS) for $1.7 billion. CBA will retain the other 45%. The sale price represents a multiple of 15.5x CFS’ pro forma net profit after tax (NPAT) of approximately $200 million.
Altium Limited (ASX: ALU)
The ASX 200 technology company announced another coronavirus update this week.
since the last market update in early April, it’s anticipating some headwinds due to coronavirus impacts in the US and Western Europe.
May and June are typically the strongest months of the year for closing sales. So it’s going to cause problems for Altium’s FY20 result with the cash preservation priorities of small and medium size businesses affecting Altium’s sales. But Altium did say that engineers are still working on prototype designs. The electronics industry is still holding up relatively well.
In response to the problem, Altium has launched ‘attractive pricing’ and extended payment terms to drive volume.
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Tristan Harrison owns shares of Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of Altium. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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