Author: therawinformant

The tale of the 2 supermarket titans. Both large-cap businesses in the same industry, in a battle to win market share and be the dominant retailer.

Pricing wars and marketing tactics have been a common theme between the 2 multi-billion-dollar companies. Coles Group Ltd (ASX: COL) introduced the ‘Little Shop’ promotion and Woolworths Group Ltd (ASX: WOW) closely followed suit with the ‘Lion King Ooshie’ collectables. A clever strategy to strengthen brand loyalty, as customers were obsessed with these plastic toys.

Marketing feats aside, non-cyclical earnings have seen the Coles and Woolworths share prices run higher since the start of the year – up by 26% and 11%, respectively. While this could be attributed to the pantry stocking of late, both companies have been drivers of top-line growth in recent times.

Here’s a closer look at how Coles and Woolworths stack up.

Coles Group Ltd (ASX: COL)

Demerged from its parent company Wesfarmers Ltd (ASX: WES) back in November 2018, the Coles share price has been on tear, hitting a record high of $19.16 yesterday. Clearly, investors are wanting to snap up some shares before the company reports its results to the market next week on 18 August.

Goldman Sachs is expecting sales to be at $37.5 billion and its earnings before interest and tax (EBIT) at $1.39 billion – an increase on last year’s results of 7.7% and 5.1%, respectively. FY20 net profit after tax (NPAT) is estimated to be around $928.2 million. While its full-year results will only reveal Coles’ performance to the end of 30 June 2020, I believe the company has a good runway ahead due to its defensive qualities and strong balance sheet.

Despite Coles’ growth trajectory, I would class the company as a hold for any investor based on valuation grounds – its market cap (at the time of writing) is currently $25.37 billion. I believe there will be a slight pullback in the Coles share price, which could open up the opportunity to pick up some shares at a discounted rate.

Woolworths Group Ltd (ASX: WOW)

The conglomerate’s share price was trading relatively flat during the first half of the year, but has surged 14% higher across the past 2 months.

Mixed results are anticipated from the industry giant when it releases its FY20 scorecard on 27 August. According to Goldman Sachs, group sales are expected to increase to $63.52 billion – up 5.9% from the year before. Though most of the heavy lifting will be done by its supermarket business with sales totalling $41.88 billion (a rise of 7.2%), other areas such as its hotels chain are forecast to drag down overall growth. The hospitality business is said to fall to $1.31 billion in sales from the comparable year, a drop of 21.5%. Underlying NPAT is also expected to decline by 3.1%, down to $1.573 billion.

I think that the Woolworths share price is a fairly valued at the moment at its current price of $40.34. With stage 4 restrictions in Victoria and fears of a new coronavirus wave sweeping NSW, the group’s retail and hotel segments will be greatly impacted as a result. In light of this uncertainty, I will be keeping my powder dry for now until I am confident Australia has passed the pandemic.

Foolish takeaway

Coles and Woolworths have both benefitted from grocery hoarding and a shift from eating out to dining home. According the Australian Bureau of Statistics, these past few months have seen the biggest rise in retail sales, however the surge in demand will return back to normality once the pandemic subsides.

If I had to choose between the two, Coles shares would be my pick as I believe the company is positioned for greater earnings and more reliable growth in the long-term.

More reading

• Brokers have upgraded 3 ASX shares to the buy zone. Here’s why
• 2 safe and strong ASX dividend shares to buy during the COVID-19 crisis
• 2 ASX dividend shares to buy with $5,000 today
• Top ASX dividend shares to buy in August 2020
• Why the Coles share price just hit a new record high

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. 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.

The post Coles shares vs Woolworths shares. Which is a better buy? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3kBOkSC

Telstra Corporation Ltd (ASX: TLS) is the latest S&P/ASX 200 Index (ASX: XJO) company to announce its full-year earnings for FY2020, which were divulged this morning. Evidently, the market didn’t really like what it saw, given that the Telstra share price is down around 5.6% at the time of writing to $3.20.

I can see why investors are a little sceptical of our largest ASX telco today. Telstra reported earnings within its guidance range. But the $7.4 billion of earnings before interest, depreciation, tax and amortisation (EBITDA) was 9.7% lower than FY2019’s earnings. As a Telstra shareholder myself, I’m not too worried though. The coronavirus pandemic was always going to have something of an impact on Telstra’s numbers, which ended up impacting around $200 million in earnings. And the NBN is still draining money away from the telco.

But there was one bright spot for me as a shareholder. It was the announcement that Telstra will be continuing to pay a dividend worth 8 cents per share.

In a year where former dividend heavyweights like the ASX banks, Transurban Group (ASX: TCL) and Sydney Airport Holdings Pty Ltd (ASX: SYD) have been deferring, slashing or cancelling their dividend payments, Telstra is a pillar of strength in my view. With the Telstra share price of $3.20, the 8 cents per share dividend equates to an annualised dividend yield of 5%. Including Telstra’s full franking credits, this yield grosses-up to 7.14%.

You could do a lot worse in this era of record-low interest rates!

What about Telstra shares and 5G?

But dividend income alone isn’t all I see in the future of Telstra shares. The company is also heavily investing in the next generation of mobile technology: 5G.

5G promises to overhaul the way we use the internet. Its potential applications range from NBN-beating speeds with low latency to the Internet of Things (IoT). In its earnings report this morning, Telstra told investors that it expects its 5G coverage “will reach around 75% of the Australian population by June 2021”. I’m confident Telstra’s market dominance will be extended into the 5G realm due to the company’s first-mover advantage. It is already well ahead of its competition (including the newly merged TPG Telecom Ltd (ASX: TPG)) in its 5G investments and rollout. This could lead to a new and lucrative stream of revenue for Telstra very soon.

Foolish takeaway

All in all, I think Telstra shares represent a great investment today, despite the company’s patchy earnings report. In my eyes, you are getting a dividend heavyweight offering a sustainable 7.14% grossed-up yield, with a potentially lucrative 5G growth avenue right in front of it. Not a bad offering in these uncertain times, I reckon!

More reading

• Why AGL, Breville, CBA, & Telstra shares are dropping lower today
• ASX down 0.55%: Telstra maintains its dividend, Treasury Wine shoots higher, AMP’s special dividend
• Why the Telstra share price has tumbled 5% this morning
• Telstra hits guidance and declares 16 cents per share FY 2020 dividend
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of Transurban Group. 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.

The post Telstra just announced its dividend! Are Telstra shares now a buy? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3kPwvzI

In early afternoon trade the S&P/ASX 200 Index (ASX: XJO) has given back its morning gains and is dropping lower. At the time of writing the benchmark index is down 0.6% to 6,096.2 points.

Four shares that have fallen more than most today are listed below. Here’s why they are dropping lower:

The AGL Energy Limited (ASX: AGL) share price has crashed 9.5% lower to $15.35. This follows the release of the energy company’s full year results. AGL Energy reported an underlying profit after tax of $816 million. This was a 22% decline on the prior corresponding period but within its guidance range. It appears to be its guidance that has spooked investors. It expects underlying profit after tax of $560 million and $660 million in FY 2021.

The Breville Group Ltd (ASX: BRG) share price has dropped 5.5% to $25.77. This morning the appliance manufacturer released its full year results. Breville delivered a 25.3% increase in revenue and an 11.2% increase in normalised net profit after tax to $75 million. Investors may have been expecting an even stronger result.

The Commonwealth Bank of Australia (ASX: CBA) share price is down 2.5% to $72.35. This appears to have been driven by a broker note out of Morgan Stanley this morning. The broker still has concerns over the bank’s credit quality and suspects that dividend restrictions could remain in place in 2021. As a result, it has held firm with its underweight rating and cut its price target to $62.00.

The Telstra Corporation Ltd (ASX: TLS) share price has fallen almost 6% to $3.19 following the release of its full year results. Investors have been selling Telstra’s shares despite it achieving its guidance and maintaining its 16 cents per share dividend in FY 2020. This selling may be due to concerns over the pandemic’s impact on its performance in FY 2021. Management expects a negative COVID-19 impact of $400 million.

More reading

• Telstra just announced its dividend! Are Telstra shares now a buy?
• ASX down 0.55%: Telstra maintains its dividend, Treasury Wine shoots higher, AMP’s special dividend
• Why the Telstra share price has tumbled 5% this morning
• Breville share price on watch as dividends climb 10.8% higher
• Telstra hits guidance and declares 16 cents per share FY 2020 dividend

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. 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.

The post Why AGL, Breville, CBA, & Telstra shares are dropping lower today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3kMCO7d

Secos Group Ltd (ASX: SES) share price is up 6.9% today after a major new pet supply contract delivers material improvement in FY20 results.

Located in Melbourne, the group is a leading developer and manufacturer of sustainable packaging materials. It supplies biodegradable resins, packaging products and high-quality cash films to a global customer base and has sales offices around the world including Malaysia, China, Mexico and the United States.

Material improvement in FY20 results

The Secos share price rise reflects a significantly improved profit and loss position anticipated for the year ended 30 June 2020. Unaudited FY20 net loss is expected to improve 71.5% to $1.2 million.

Additionally, the group achieved positive earnings before interest, taxation, depreciation and amortisation (EBITDA) in the second half, with a net loss of less than $0.1 million. The financial improvement has been driven by growing demand for its biodegradable products, significantly increased plant utilisation, lower interest costs and operational and manufacturing efficiencies.

In FY20, unaudited financial headline numbers include:

• Revenue from ordinary activities up 0.9%. $21.039 million in FY20 vs $20.848 million in FY19
• Gross profit is up 129%. $3.383 million in FY20 vs $1.478 million in FY19
• Expenses are down 33.2%. $3.512 million in FY20 vs $5.257 million in FY19
• Net loss for the period has improved 71.5%. $1.186 million in FY20 vs $4.170 million in FY19

The group’s fully audited accounts will be released on 27 August 2020.

Pet supply contract secured

Secos announced a significant supply contract this week with leading US pet company, JC USA Inc, a wholly owned subsidary of the Jewett-Cameron Trading Company. The contract is for the supply of compostable pet waste bags made from Cardia proprietary biopolymer resins. This supports an estimated $3 million in sales annually with growth potential as Jewett-Cameron grows its market reach and compostable pet waste bags sales.

There are more than 89 million dogs in the USA and a similar number in Western Europe, according to Statista. And Secos says pet owners are more focused on finding environmentally-friendly ways to manage their pet’s waste and reduce the use of conventional plastic bags and eliminate micro plastic pollution.

About Secos share price

The Secos share price has surged 6.9% to 16 cents at time of writing. It has a market capitalisation of $66.2 million.

More reading

• Brokers have upgraded 3 ASX shares to the buy zone. Here’s why
• Coles shares vs Woolworths shares. Which is a better buy?
• Telstra just announced its dividend! Are Telstra shares now a buy?
• Why AGL, Breville, CBA, & Telstra shares are dropping lower today
• ASX down 0.55%: Telstra maintains its dividend, Treasury Wine shoots higher, AMP’s special dividend

Motley Fool contributor Matthew Donald has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

The post The Secos share price has climbed more than 6% today. Here’s why appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2DUMKdR

At lunch on Thursday the S&P/ASX 200 Index (ASX: XJO) is on course to end the day with a disappointing decline. The benchmark index is currently down 0.55% to 6,098.4 points.

Here’s what is happening on the market today:

Telstra maintains its dividend.

The Telstra Corporation Ltd (ASX: TLS) share price is tumbling lower on Thursday despite delivering a full year result in line with its guidance and maintaining its dividend. The telco giant reported a 5.9% decline in total income to $26.16 billion and underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $7.4 billion. This allowed the company to declare a final dividend of 8 cents per share, bringing its full year dividend to 16 cents per share. Investors may be concerned by its guidance for a negative COVID-19 impact of $400 million in FY 2021.

Treasury Wine Estates shares shoot higher.

The Treasury Wine Estates Ltd (ASX: TWE) share price has been on fire today following the release of its FY 2020 results. The wine company posted a 6% decline in net sales revenue to $2,649.5 million and a 22% decline in EBITS to $533.5 million. The decline in its earnings was largely due to challenging conditions in the US wine market and the COVID-19 pandemic. The latter impacted the sales of high margin luxury products. Positively, management revealed that its China business rebounded strongly in June.

AMP announces capital return.

The AMP Limited (ASX: AMP) share price is racing higher today after the financial services company released its half year results. AMP revealed an underlying profit of $149 million and plans to return $544 million to shareholders. This comprises $344 million via a fully franked special dividend of 10 cents per share and up to $200 million via an on-market share buy-back.

Best and worst ASX 200 shares.

The best performer on the ASX 200 on Thursday has been the Treasury Wine share price with a 12% gain. This follows the release of its aforementioned full year results. The worst performer has been the AGL Energy Limited (ASX: AGL) share price with a 9% decline. This morning the energy company reported a 22% decline in underlying profit after tax of $816 million. Things are expected to get worse in FY 2021, with AGL Energy expecting underlying profit after tax to drop to $560 million and $660 million.

More reading

• Telstra just announced its dividend! Are Telstra shares now a buy?
• Why AGL, Breville, CBA, & Telstra shares are dropping lower today
• Why the Telstra share price has tumbled 5% this morning
• Why AMP, Premier Investments, QBE, & Treasury Wine shares are storming higher
• Northern Star share price falls 1.6% on trading update

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited and Treasury Wine Estates Limited. 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.

The post ASX down 0.55%: Telstra maintains its dividend, Treasury Wine shoots higher, AMP’s special dividend appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/31OGkoG

The Brainchip Holdings Ltd (ASX: BRN) share price is pushing higher this morning following news that the company has entered into an Equity Draw Agreement with LDA Capital. At the time of writing, the Brainchip share price has jumped more than 9% to 18 cents.

What does Brainchip do?

Brainchip is involved in the development of software and hardware accelerated solutions for advanced artificial intelligence (AI) and machine learning applications. The company maintains a primary focus on the development of its processor unit hardware product, Akida.

Akida is both scalable and flexible to address the requirements in edge devices. An edge device is any piece of hardware that controls data flow at the boundary between two networks, such as a router or a smartphone. Akida is designed to provide ultra-low power and fast AI edge network for vision, audio, olfactory and smart transducer applications. The edge AI market is forecast to exceed US$50 billion by 2025 and is the central focus of the company.

Brainchip has revenue channels in Australia, North America, Europe, the Middle East and Asia.

What is pushing the Brainchip share price higher?

This morning, Brainchip announced is has entered into an agreement with LDA Capital in regards to a financing facility. The agreement provides financing in the form of a Put Option for up to $29 million.

LDA Capital is an American company that provides capital to companies seeking financing in traditionally underserved markets. The company has aggregate transaction values of over $10 billion and operates in 42 countries. LDA Capital Managing Partner, Anthony Romano, said of the deal, “We believe Brainchip’s Akida Neuromorphic Processor offers a unique solution to the current limited power budget and processing capabilities of today’s edge AI technology.”

The facility strengthens Brainchip’s balance sheet and is intended to support the commercialisation of its Akida technology. The deal provides the company with up to $29 million in committed equity capital over the next 12 months. This may be extended by the parties for a further 12 months if required. The company will control the timing and maximum amount of the draw down under this facility subject only to the minimum draw down commitment of $10 million within the first 12 months.  Brainchip CEO, Lou DiNardo, stated “We are pleased to have very high-quality U.S. based institutional investment group as part of our register.”

What now for Brainchip?

The Brainchip share price has been soaring higher this morning as it reached a high of 18 cents, up 9.09% from yesterday’s close. Furthermore, the company has seen remarkable growth this year, up 500% since its lows in March. Shareholders will be buoyed by the fact that this deal provides added protection for the company as the economy continues to face COVID-19 related uncertainty.

More reading

• 3 unloved ASX growth shares that could make you rich

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

The post Brainchip share price surges 9% on new financing facility appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/31OGpsu

At the time of writing, the Goodman Group (ASX: GMG) share price was up 3.57% to $18.27 after the company released its annual results for the financial year to 30 June 2020.

What was in the announcement?

Goodman Group had revenue of $2.63 billion in the 2020 financial year, this was down 13% on the 2019 financial year.

According to the company, net profit after tax was $1.50 billion in the 2020 financial year, this was compared to net profit after tax in the 2019 financial year of $1.63 billion.

Diluted earnings were 80 cents per share in the 2020 financial year.

The group’s operating profit, which was profit before certain non-cash items, was $1.06 billion in financial year 2020, a 12.5% increase on financial year 2019.

Goodman Group forecast that it would pay a full year distribution of 30 cents per share in financial year 2021. It also forecast operating profit in the 2021 financial year of $1.17 billion and operating earnings per share of 62.7 cents.

At 30 June, Goodman Group had total assets under management of $51.6 billion.

In their Directors’ report, the Goodman Group Board stated;

“The Board  acknowledges the unprecedented times the world is experiencing and the terrible impact COVID-19 is having on people’s lives and livelihoods. Goodman’s markets have been affected at various times and to varying degrees, but the Group has adapted to this new operating environment with limited disruption and has continued to  grow the business sustainably for the long term. Goodman plays an important role in providing both essential infrastructure and making a tangible difference for customers in the cities in which the group operates.”

“Over the past decade, the Group has established significant human capital, financial resources and a well located real estate portfolio, to sustain the business through market cycles. This is reflected in the results for the financial year with Goodman reporting operating profit of $1060.2 million, compared to $942.3 million for the prior year, an increase of 12.5%. This equates to an operating EPS of 57.5 cents, up 11.4% on FY19.”

About the Goodman Group share price

Goodman Group is a real estate company that develops, owns and manages commercial and industrial properties. Its properties include warehouses and logistics facilities along with business and office parks. Goodman Group has been listed on the ASX since 1995.

The Goodman Group share price is up 90.31% since its 52-week low of $9.60, it has returned 35.94% since the beginning of the year. The Goodman Group share price is up 21.80% since this time last year.

More reading

• How the Goodman Group share price gained 14% in July amid a difficult real estate market
• Why I would buy Goodman Group and these blue chip ASX shares
• 3 core holdings for a $100,000 ASX portfolio
• Buy these outstanding ASX 50 shares for strong potential returns
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

The post Goodman Group share price lifts on FY2020 results appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/31KBcC5

The Telstra Corporation Ltd (ASX: TLS) share price has slumped 5.3% lower today after releasing its full-year earnings.

What did Telstra announce today?

The Aussie telco reported 5.9% decline in total income to $26.16 billion in FY20. That is within the guidance range of $25.3 billion to $27.3 billion, albeit a little on the low side.

Telstra’s largest segment, Consumer and Small Business, struggled in FY20. The business unit reported a 6.7% slump in income to $13.33 billion while Telstra’s Enterprise revenue fell 3.3% to $7.97 billion.

The telco’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) totalled $7.4 billion and landed within guidance.

Telstra also delivered free cash flow of $3.4 billion which was within the guidance range of $3.3 billion to $3.8 billion. The telco also maintained its full year dividend at 16 cents per share, fully franked.

The outlook was a little unclear for Telstra as management acknowledged the difficulties presented by the coronavirus pandemic.

Why is the Telstra share price falling?

It looks like investors have been bearish on the result as the Telstra share price has fallen 5.3% lower to $3.21 per share.

That could be partially due to the estimated impact of COVID-19 with FY21 underlying EBITDA forecast to be $6.5 billion to $7.0 billion.

NBN impacts continue to drag on earnings with management forecasting a negative $700 million impact in FY21.

Despite hitting guidance on a number of key metrics, most of the figures are at the low end of the provided range. That means some investors may have been pricing in a higher-end result than was achieved in FY20.

That has been enough to spook investors and send the Telstra share price tumbling lower in early trade.

How has Telstra performed in 2020?

The Telstra share price has fallen 9.8% lower this year while the S&P/ASX 200 Index (ASX: XJO) is down 8.5%.

It looks like there are some headwinds looming for the Aussie telco but it could still be a solid dividend share based on this morning’s results.

More reading

• Northern Star share price falls 1.6% on trading update
• Qantas share price is facing this new challenge in FY21
• Breville share price on watch as dividends climb 10.8% higher
• Flight Centre share price on watch after achieving cash flow target
• Telstra hits guidance and declares 16 cents per share FY 2020 dividend

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. 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.

The post Why the Telstra share price has tumbled 5% this morning appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3aiJODX

In late morning trade the S&P/ASX 200 Index (ASX: XJO) has given back its early gains and is dropping lower. At the time of writing the benchmark index is down 0.25% to 6,116.4 points.

Four shares that are not letting that hold them back are listed below. Here’s why they are storming higher:

The AMP Limited (ASX: AMP) share price has jumped 11% to $1.53. This morning the financial services company released its half year results and revealed an underlying profit of $149 million. It also revealed plans to return $544 million to shareholders. This comprises $344 million via a fully franked special dividend of 10 cents per share and up to $200 million via an on-market share buy-back.

The Premier Investments Limited (ASX: PMV) share price is up almost 9% to $18.39. This follows the release of a second half trading update by the retail conglomerate. Although the company’s retail business will report a decline in overall sales, the business still expects to deliver profit growth in FY 2020. This is due to a big jump in higher margin online sales during the financial year.

The QBE Insurance Group Ltd (ASX: QBE) share price has stormed 5.5% higher to $10.61. This morning the insurance giant released its half year results and revealed a statutory net loss after tax of $712 million. This was actually better than its guidance for a loss of $750 million for the half. This reflects the impact of COVID-19, catastrophe experience and a pre-tax investment loss of $90 million. Despite this loss, QBE declared a 4 cents per share interim dividend.

The Treasury Wine Estates Ltd (ASX: TWE) share price has jumped 12% to $12.60 following the release of its FY 2020 results. For the 12 months, the wine company reported a 6% decline in net sales revenue to $2,649.5 million and a 22% decline in EBITS to $533.5 million. Treasury Wine Estates’ performance was impacted by challenging conditions in the US wine market and the COVID-19 pandemic. The latter impacted the sales of high margin luxury products.

More reading

• QBE share price surges 7% despite reporting first-half loss
• Premier Investments share price zooms 12% higher on strong trading update
• Treasury Wine Estates share price jumps higher on FY 2020 results
• 5 things to watch on the ASX 200 on Thursday
• Link share price buoyed by appointment of new CEO

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited and Treasury Wine Estates Limited. 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.

The post Why AMP, Premier Investments, QBE, & Treasury Wine shares are storming higher appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/31ODYpQ

The QBE Insurance Group Ltd (ASX: QBE) share price has surged more than 7% in early trade, despite the insurer reporting a loss for the first-half of 2020.

How did QBE perform for the first half of 2020?

Earlier today, QBE released its results for the half year ending 30 June 2020.

The company’s interim result for 2020 saw QBE report a half-year loss of US$712 million, compared to a US$463 million profit in the prior corresponding period. QBE noted that the result was slightly better than previous estimates.

QBE also reported a 10% increase in gross written premiums for the first half of US$8.04 billion. The company also noted a hardening in premium rates, especially in the company’s North American and international divisions.

The insurer recorded a US$335 million hit from the impacts of COVID-19 and other catastrophe claims. For the first-half, QBE recorded catastrophe claims of US$304 million, exceeding its allowance of US$252 million. The surge in claims was fuelled by widespread bushfires, hail and storm activity in Australia.

The increase in claims was reflected in QBE’s combined operating ratio (COR). For the first-half, QBE reported a COR of 103.4%, indicating that the insurer is paying out more in claims than it is receiving in premiums. The company noted that excluding the impacts of the COVID-19 pandemic would result in a COR of 97.4% for the first half.

Despite reporting a loss in the first-half, QBE’s management reiterated that the company remained well capitalised to endure the ongoing impacts of the COVID-19 pandemic. To reflect the board’s confidence, QBE declared an interim dividend to shareholders of 4 cents per share.

The outlook for QBE

QBE is the second-largest insurer in Australia and operates in 3 segments, with insurance operations in 27 countries.

In its half-year report, the insurer acknowledged the uncertainty surrounding the impact of the COVID-19 pandemic. Despite the uncertainty, QBE expects to capitalise on accelerating pricing momentum and organic growth opportunities given its strong capital base.

In late April QBE completed a US$750 million capital raising in order to help the company withstand a range of economic and investment downside scenarios.

QBE expects total COVID-19-related costs to climb to US$600 million, including US$265 million of potential further net claims that could emerge over the next 12–18 months.

QBE also noted that the company is supporting customers through the crisis by offering premium refunds, premium deferrals, extending credit and counselling services.

Foolish takeaway

At the time of writing the QBE share price has surged more than 7% higher for the day at an intra-day high of $10.83.

More reading

• Why AMP, Premier Investments, QBE, & Treasury Wine shares are storming higher
• Link share price buoyed by appointment of new CEO
• Leading brokers name 3 ASX shares to buy today
• These were the ASX 200’s biggest share gainers last week
• ASX 200 Weekly Wrap: ASX has week of high volatility

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

The post QBE share price surges 7% despite reporting first-half loss appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2PMWARt