3 ASX share reports I loved this week

It was a busy week for ASX share reporting. There were a number of interesting reports and there were a few that really caught my eye:

A2 Milk Company Ltd (ASX: A2M)

I really like see a business performing well. I think it’s kind of inspiring to see an ASX share do very well, particularly when it involves growing well on the global stage.

A2 Milk is one of those businesses that has performed exceptionally well for an extended period of time. It reported another excellent set of numbers in FY20.

If you didn’t read the full result, I’ll give you some of my highlights from it.

Total revenue increased by 32.8% to NZ$1.73 billion. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 32.9% to NZ$549.7 million.

Net profit after tax (NPAT) rose by 34.1% to NZ$385.8 million with operating cash flow of NZ$427.4 million.

The business finished with a closing cash balance of NZ$854.2 million. Quite a bit of that cash is seemingly going to be used to acquire a controlling stake of Mataura Valley Milk. It’s looking to acquire 75.1% of it for NZ$270 million.

Infant nutrition revenue rose by 33.8% to NZ$1.42 billion. Chinese label infant nutrition sales more than doubled to NZ$337.7 million. A2 Milk is growing strongly in the US with revenue growth of 91.2% to NZ$66.1 million. Distribution has now reached 20,300 stores, up from 17,500 stores at the end of December 2019.

I think A2 Milk could be one of the best ASX share mid-caps to own over the next five years.

JB Hi-Fi Limited (ASX: JBH)

When I think about which ASX blue chip is nailing it right now, it has to be JB Hi-Fi. The business has continually surprised and impressed me over the past five years. The FY20 result was no different. In the middle of a global pandemic and a recession, you wouldn’t think JB Hi-Fi would be one of the ASX shares that would do really well.

But it has done very well.

Total sales grew by 11.6% to $7.9 billion. Underlying earnings before interest and tax (EBIT) rose by 30.5% to $486.5 million. Underlying net profit after tax (NPAT) rose by 33.2% to $332.7 million and underlying earnings per share (EPS) increased by 33.2% to 289.6 cents. Statutory net profit rose 21% to $302.3 million.

JB Hi-Fi’s board decided to increase the final dividend by 76.5% to 90 cents per share. That brought the total FY20 dividend up to 189 cents, an increase of 33.1%.

I like that the ASX share rewarded its employees with $1,000 given to full-time employees (and pro-rated for part-timers and casuals).

The July 2020 sales update was also really strong. For the month, total sales growth was 42.1% for JB Hi-Fi Australia, 9.1% for JB Hi-Fi New Zealand and 40.4% for The Good Guys. At the time of the result, August sales were also “strong”.

Redbubble Ltd (ASX: RBL)

Independent artist marketplace business Redbubble also really impressed with its result this week.

Marketplace revenue increased by 36% to $349 million. Gross profit increased by 42% to $134 million.

Operating EBITDA, which excludes non-cash share-based payments, currency, lease accounting changes, depreciation and amortisation, went up 141% to $15.3 million. EBITDA went up 358% to $5.1 million.

The ASX share reported that it generated free cash flow of $38 million in FY20.

In the fourth quarter of FY20 Redbubble reported revenue growth of 73% to $103 million. Gross profit rose by 88%. In the last quarter of FY20 it made $8.4 million of operating EBITDA and $7.4 million of EBITDA.

In FY21, July marketplace revenue grew by 132% and a similar sales level in the first two weeks of August.

Foolish takeaway

All three of these ASX shares reported strong growth despite the difficult conditions. I’m not sure I’d buy JB Hi-Fi shares because I’m not sure how long this type of performance can last – but I’ve been wrong before! However, A2 Milk and Redbubble both still look like buys to me for the long-term.

More reading

• Is the A2 Milk share price still a good buy after strong full year results?
• The ASX 200 fell 0.1% today, Suncorp shines
• ASX 200 flat: Suncorp surges higher, A2 Milk acquisition plans, TPG’s half year update
• Why a2 Milk, Coca-Cola Amatil, Star, & Suncorp shares are charging higher
• Meet the latest ASX stock that’s more than doubled its full year COVID-19 earnings

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. 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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