The Metcash Limited (ASX: MTS) share price could be on the move today after the release of its full year results this morning.

How did Metcash perform in FY 2020?

For the 12 months ended 30 April 2020, Metcash delivered a 2.9% increase in revenue to $13 billion and a 2% lift in revenue including charge through sales to $14.9 billion.

This was driven by a 3.5% increase in Food sales to $8.8 billion and a 0.3% lift in Liquor sales to $3.68 billion, but partially offset by a 1.3% decline in Hardware sales to $2.08 billion.

Due largely to weaker earnings in its Food segment, group underlying earnings before interest and tax (EBIT) fell 1.8% to $324.2 million. The Food segment was impacted by onerous lease obligations and the ceasing of supply to Drakes Supermarkets in South Australia.

After adjusting for these items, group underlying EBIT increased by ~$12 million.

On the bottom line, Metcash posted a reported loss after tax of $45.9 million. This compares to a profit after tax of $192.8 million in FY 2019 and was the result of material impairments to goodwill and other assets.

A total post tax impairment of $237.4 million was made in the first half following advice from 7-Eleven that it will not be renewing its current supply agreement with Metcash.

On an underlying basis, profit after tax was roughly flat at $209.7 million or 23 cents per share.

The Metcash board has determined to pay a fully franked final dividend of 6.5 cents per share. This brings its total dividends for FY 2020 to 12.5 cents per share.

A year of unprecedented challenges.

The company’s CEO, Jeff Adams, was pleased with Metcash’s performance over a very eventful and difficult 12 months.

He said: “I am pleased to report very admirable results in a year of unprecedented challenges that included the impact of devasting bushfires and the COVID-19 pandemic.”

“Our businesses went to extraordinary lengths to support our employees, our retailer network and local communities in their time of need. This included investing in their safety and wellbeing, in operations to ensure the continuity of supply of essential products, as well as in supporting retailers impacted by COVID-19 restrictions,” he added.

Trading update.

Metcash has started FY 2021 in a very positive fashion. For the first seven weeks of the new financial year, Food sales are up 9.3%, Liquor sales are up 5.5%, and Hardware sales are up 9.4%.

However, management warned: “There is uncertainty over the timing of further lifting of COVID-19 restrictions in Australia and the extent that our businesses will continue to benefit from the favourable change in consumer behaviour.”

Total Tools acquisition.

Metcash also revealed that its proposed acquisition of 70% of Total Tools Holdings for ~$57 million is in the final stages of negotiations.

Total Tools is the franchisor to the largest tool retail network in Australia, with its 81 stores nationwide generating sales of ~$555 million.

Management notes that this aligns with its strategy of being the leading supplier to independents in each of its three segments. It also expects it to enhance its position in the Australian hardware market and increase its exposure to trade customers.

More reading

• 5 things to watch on the ASX 200 on Monday
• Australian retail sales up 16.3% in May
• 3 defensive ASX shares to buy if the sell-off continues
• Woolworths facing fresh threat from Amazon.com
• Meet the ASX stocks to benefit from the new $688m home stimulus

Motley Fool contributor James Mickleboro 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.

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Last week the Australian share market was back on form and recorded a solid weekly gain.

While the majority of shares on the market pushed higher, some climbed more than most.

In fact, the three ASX shares listed below climbed so much they hit new record highs. Here’s why they are on fire right now:

The Kogan.com Ltd (ASX: KGN) share price continued its positive run and hit a record high of $14.75 on Friday. The ecommerce company’s shares have been on fire over the last few months thanks to its stellar sales and profit growth during the pandemic. The company recently took advantage of this strong share price performance to raise funds via a capital raising. It intends to use the proceeds for value accretive acquisitions.

The Sezzle Inc (ASX: SZL) share price climbed to a record high of $4.16 at the end of last week. Investors have been piling into the buy now pay later industry over the past few weeks on the belief that the pandemic has accelerated the adoption of the payment method and the shift to online shopping. In addition to this, earlier this month it was announced that Sezzle would be one of a number of shares added to the All Ordinaries index. This is likely to have led to increased demand for its shares from fund managers with strict mandates and index-tracking ETFs.

The Splitit Ltd (ASX: SPT) share price zoomed to a record high of $1.92 last week. As well as benefiting from increased interest in the buy now pay later space, investors were buying Splitit’s shares after a positive announcement. That announced revealed that the company has signed a partnership with payments giant Mastercard. This follows a similar partnership with Visa in March. Time will tell whether these partnerships have a material impact on its performance, but I’m not overly confident it will be enough to justify its current +$500 million valuation.

More reading

• Which shares to buy if the ASX tumbles
• ASX 200 up again, ASX retailers make big gains
• Grow your wealth with these 3 ASX fintech shares
• Why the Splitit share price has shot up 135% in 2 days
• Why Adairs, Nick Scali, SEEK, & Splitit shares are storming higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia has recommended Sezzle Inc. 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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My ASX share for the week is A2 Milk Company Ltd (ASX: A2M).

I think the infant formula business still has plenty more growth potential for the years ahead.

The company was recently added into the S&P/ASX 50 Index at the expense of AMP Limited (ASX: AMP).

I have been continually impressed by A2 Milk’s growth over the past five years. You may not have thought that A2 Milk is the kind of business to grow even faster during a global pandemic, but it is so far.

How is FY20 going?

A couple of months ago the ASX share gave an update that said that revenue for the three months to 31 March 2020 was above expectations. Customers were buying more product to stock the pantry. A2 Milk is also benefiting from the fact that its Chinese segment revenue is transacted in US dollars which was helped by foreign currency movements.

A2 Milk said it’s expecting FY20 revenue to be in the range of $1.7 billion to $1.75 billion. This would be growth of 30% to 34% on FY19’s revenue. I think that would be a really strong result considering it’s after years of good growth already.

The ASX share also said that the full year earnings before interest, tax, depreciation and amortisation (EBITDA) margin is expected to be higher than what was advised at the half-year result and in the range of 31% to 32%. That estimate includes spending the full $200 million marketing budget, weighted to the second half of FY20, will be fully spent before the end of the financial year.

I think this shows how profitable A2 Milk can be if/when its marketing cost growth can rise at a slower pace when it has reached sufficient scale in a region. 

There were three main reasons for the higher EBITDA margin. I’ve already mentioned the first two – higher revenue (and therefore higher margins) and the favourable exchange rate. There were also lower than expected costs for travel and other costs relating to delayed recruitment.

The A2 Milk board is still aiming for an EBTIDA margin of 30% in the medium-term to maintain a balance between growth and investment.

Why A2 Milk is my ASX share of the week at this price

In this type of uncertain environment I think it’s a good idea to go for businesses that can keep growing whether there’s more global lockdowns ahead or not.

In the short-term there could be another spike in demand. Particularly from Chinese customers because there are more COVID-19 Chinese restrictions again.

Over the longer-term I believe that this ASX share still has a long growth runway ahead. A2 Milk is expanding into the Canadian market with Agrifoods for the production, distribution, sale and marketing of A2 Milk branded liquid milk. Canada is a sizeable potential market for A2 Milk.

What’s most attractive about A2 Milk’s growth plans is the US and Asia. In the FY20 half-year result the company said USA revenue increased by 115.7% and Asian revenue rose by 76.7%. These markets could continue to generate great results because they have such big populations and A2 Milk’s market penetration isn’t that big, particularly in the US. It has been rapidly increasing its US store distribution over the past three years but it takes time to win over new customers.

A2 Milk is only just getting started in Canada too and there are plenty of other countries for A2 Milk to expand into.

Is A2 Milk a buy?

The ASX share is generating excellent revenue and profit growth each year. The growth is on par with some of the highly-valued ASX tech shares. Yet A2 Milk’s price/earnings ratio seems much more reasonable for its growth rate. It’s currently trading at 28x FY22’s estimated earnings. I’d be happy to buy some shares today for the long-term.

More reading

• Top brokers name 3 ASX 200 shares to buy next week
• How to become a millionaire in 25 years with $20 a day
• Why a2 Milk, Afterpay, and Pushpay shares just hit record highs
• The a2 Milk share price just hit a record high: Is it too late to invest?
• ASX 200 down 1.3%: Big four banks tumble, Afterpay tipped to go higher

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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The S&P/ASX 200 Index (ASX: XJO) decisively shook off the wobbles and was well and truly back in the green last week.

After smashing the previous 6-week winning streak with a week of volatility and heavy selling activity over the prior week, last week was a healthy return to form for the ASX 200 – making it 7 out of 8 weeks of gains as we start another week anew.

The week began with news that the United States Federal Reserve has initiated an unprecedented purchasing program for corporate bonds on the secondary market. This new wave of central bank intervention saw a massive shift in sentiment for both US and ASX shares that carried through the week.

But it wasn’t the blue chips that were in the ASX 200 driving seat. Instead, it was retail and tech shares that were making waves.

ASX 200 retail and tech shares shine

Some surprisingly positive retail sales figures were released to the market on Friday, which showed that retail sales during the month of May surged 16.3% to $4.03 billion – the largest increase in 36 years. This is obviously fantastic news for both the struggling retail sector and the broader economy.

As a result (and as you would expect), most ASX retail shares had an impressive day on Friday. Some noteworthy performers included Wesfarmers Ltd (ASX: WES), JB Hi-Fi Limited (ASX: JBH), Harvey Norman Holdings Limited (ASX: HVN) and, in particular, Adairs Ltd (ASX: ADH) and Nick Scali Limited (ASX: NCK), which were up 10.53% and 19.65% respectively over Friday’s trading.

For less obvious reasons, ASX tech shares also had a top week. Appen Ltd (ASX: APX) was a standout performer, despite no major news of significance coming out of the dataset provider. In fact, Appen shares were up close to 14% last week alone and hit a new, all-time high of $34.03 on Friday. Appen shares are now up 115% since March. Also in the ASX tech space, Xero Limited (ASX: XRO), WiseTech Global Ltd (ASX: WTC) and (of course) Afterpay Ltd (ASX: APT) also had strong weeks.

How did the markets end the week?

It was a tale of two markets on the ASX last week. On the surface, the ASX 200 started the week off at 5,847.8 points and finished at 5,942.6 points – a 1.6% bump for the week.

Monday was all about the bears. The ASX 200 lost a hefty 2.2% that day and looked in danger of breaching the 5,700 point threshold. But then we heard from the US Fed overnight and everything changed. Tuesday saw one of the best days in recent months with a 3.9% surge. This was followed up on Wednesday by another 0.8% rally tempered with Thursday’s cool-off that gave us a 0.9% drop. Friday was a dramatic day which saw ASX 200 shares spike early above a 1% gain, which was then whittled away until we were left with a mere 0.1% gain for the day. All in all, it was a very unpredictable week!

Meanwhile, the All Ordinaries (INDEXASX: XAO) also had a topsy-turvy week, but managed to eke out a 1.7% gain.

Which ASX 200 shares were the biggest winners and losers?

Let’s now brew a pot of tea and have a look at which ASX 200 shares were the week’s biggest winners and losers on the Foolish gossip pages. As always, let’s start with the losers:

Worst ASX 200 losers	% loss for the week
Pilbara Minerals Ltd (ASX: PLS)	(16.13%)
Mayne Pharma Group Ltd (ASX: MYX)	(14.63%)
Orora Ltd (ASX: ORA)	(12.17%)
Fortescue Metals Group Limited (ASX: FMG)	(6.89%)

Taking out the wooden spoon last week was lithium miner Pilbara Minerals – a company that hasn’t delivered too much joy to its investors for a few years now. Pilbara shares slumped over 16% last week after the miner was kicked out of the ASX 200 Index. Pilbara shares remain more than 50% below where they were trading at this time last year.

The same fate as Pilbara awaited Mayne Pharma last week, whilst Orora’s slump can be attributed to the company’s shares going ex-dividend last week.

Lastly, Fortescue is a rare sight in the losers column these days. It’s possible that some investors were looking to take some profits off the table. This mining giant has made several new, all-time highs in recent weeks and is still up nearly 28% year to date.

With the losers out of sight and mind, let’s take a look at which ASX shares were making investors happiest last week:

Best ASX 200 gainers	% gain for the week
Clinuvel Pharmaceuticals Limited (ASX: CUV)	21.3%
Healius Ltd (ASX: HLS)	19.76%
Appen Ltd (ASX: APX)	14.68%
Viva Energy Group Ltd (ASX: VEA)	13.92%

Clinuvel Pharma continued its massive run of recent months, taking out top spot with a 21.3% gain. This doesn’t appear to have been catalysed by anything of substance, although the shares have been strongly in favour since March, more than doubling in value since then.

Helius was in the spotlight after announcing the sale of its medical centres arm. Clearly investors approved of the company using the proceeds to pay down debt.

We’ve already discussed the positivity surrounding ASX tech shares like Appen, but Viva Energy surprised investors with upbeat guidance for the first half of the year. Investors always love to be pleasantly surprised, after all.

What is this week looking like for the ASX 200?

Last week demonstrated (yet again) how much of an impact the monetary policy of the United States can have on our markets. We were seemingly heading for a nasty week before the Fed (literally) intervened.

This week, I’m keeping my eye on the worrying possibility of another outbreak of coronavirus infections in Victoria and elsewhere across the country. This could have a significant impact on investors’ confidence this week, so I think it’s a situation well worth keeping an eye on. It’s also an unfortunate reminder that we’re not out of the woods with this pandemic just yet.

Before we begin it though, here’s a snapshot of how the major ASX blue chips are looking:

And finally, here is the lay of the land for some leading market indicators:

•     S&P/ASX 200 (XJO) at 5,942.60 points
•     All Ordinaries (XAO) at 6,061.6 points
•     Dow Jones Industrial Average at 25,871.46 points after falling 0.8% on Friday night (our time)
•     Gold (Spot) swapping hands for US$1,743.95 per troy ounce
•     Iron ore asking US$103.04 per tonne
•     Crude oil (Brent) trading at US$41.92 per barrel
•     Crude oil (WTI) going for US$39.43 per barrel
•     Australian dollar buying 68.16 US cents
•    10-year Australian Government bonds yielding 0.85% per annum

Foolish takeaway

As we start yet another week, we’re all keeping our fingers crossed that the success Australia has had in fighting the coronavirus continues on its current trajectory. We all knew from the start that this fight wasn’t to be quick or easy and last week we got another uninvited reminder of this. That’s why I think investing with a long-term mindset is more important than ever. So as always, stay safe, stay rational and stay Foolish!

More reading

• Beat low interest rates with Telstra and these ASX dividend shares
• These are the 10 most shorted ASX shares
• 5 things to watch on the ASX 200 on Monday
• These fantastic healthcare ASX shares could make you wealthy
• Are these small cap ASX tech shares the next Afterpay or Appen?

Sebastian Bowen owns shares of National Australia Bank Limited, Newcrest Mining Limited, and Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd., WiseTech Global, and Xero. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Telstra Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO, Appen Ltd, COLESGROUP DEF SET, Transurban Group, Wesfarmers Limited, 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.

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The most recent weekly economic report from Westpac Banking Corp (ASX: WBC) reveals that its team continues to forecast the cash rate staying at the record low of 0.25% until at least the start of 2022.

Given the state of the economy, unemployment, and inflation, I suspect that this forecast will prove accurate. Which means the interest rates on offer with savings accounts and term deposits are likely to remain lower for longer.

But don’t worry, because these three ASX dividend shares could help you beat low rates:

BWP Trust (ASX: BWP)

BWP is a real estate investment trust which leases the majority of its warehouses to Bunnings. I think the hardware giant is arguably the highest quality retailer in the country and a fantastic tenant to have. Especially right now when Bunnings is delivering very strong sales growth despite the pandemic, which should make rental increases easier. At present, I estimate that BWP’s units offer investors a forward 4.9% yield.

Dicker Data Ltd (ASX: DDR)

Another dividend share to consider buying is Dicker Data. It is a wholesale distributor of computer hardware and software which has consistently grown its earnings and dividends at a solid rate over the last few years. This has been driven by new vendor agreements and solid demand. Things are going particularly well in FY 2020. As a result, the company intends to increase its dividend by 31% to 35.5 cents per share. This represents a 5% fully franked dividend yield.

Telstra Corporation Ltd (ASX: TLS)

A final dividend share to consider buying this week is Telstra. I believe the telco giant’s outlook is the best it has been in a long time due to the easing NBN headwind and its T22 strategy. This strategy is simplifying its business and cutting costs materially. While a return to growth may still be a couple of years away, I’m confident its dividend cuts are over now and 16 cents per share is sustainable. This represents a very attractive fully franked 5% dividend yield.

More reading

• ASX 200 Weekly Wrap: ASX back in the green
• What is the price/earnings (p/e) ratio?
• Consider these blue chip ASX shares for strong dividend yields
• The ASX big bank stock with the best forecast dividend yield for the new year
• ASX 200 up 0.9%: Big four banks rebound, Appen hits record high

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited and 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.

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