The Ecofibre Ltd (ASX: EOF) share price briefly leapt 7.6% this morning after the hemp products producer announced a strategically important acquisition. The company will acquire a portfolio of businesses and assets of a key manufacturing partner. The portfolio includes five businesses with deep technical expertise across a range of textile disciplines. This will help accelerate the transition of the company’s Hemp Black products from R&D to commercialisation. At the time of writing, the Ecofibre share price had been sold down to currently trade at $2.50. This is level with the company’s share price at Friday’s close. Ecofibre shares were placed in a trading halt on Monday pending today’s announcement. 

What does Ecofibre do? 

Ecofibre is a producer of hemp products in Australia and the United States. Its Hemp Black business is focused on developing naturally anti-microbial, hemp-based textiles and composite materials. Its Ananda Hemp Food brand produces Australian grown hemp food products. The Ananda Health and Professional brands produce nutraceutical products for humans and pets.

Why has Ecofibre made the acquisition? 

Ecofibre is acquiring the business and assets of TexInnovate which comprises a portfolio of five businesses that work as an integrated manufacturing platform. This will drive innovation and delivery for a range of products envisaged for Hemp Black. The acquisition creates an integrated value chain for Hemp Black’s key intellectual property and technology processes. 

Ecofibre will pay US$42 million for the business. This is comprised of US$10.5 million cash, US$10.5 million in Ecofibre shares and an earnout with a value of up to US$21 million. Completion is scheduled to occur on 1 September 2020 with the acquisition funded via a $29.5 million share placement at an issue price of $2.50. 

How has the Ecofibre share price been performing? 

The Ecofibre share price fell throughout June but has been on an upward trajectory in July. As mentioned, the share price leapt more than 7% on opening this morning but has since pulled back with shares now trading at $2.50. In FY20, Ecofibre grew revenues by 42% to over $50.7 million with growth in sales across all businesses. Net profit after tax grew 119% to $13.2 million, above the $12.5 million previously forecast. 

Ecofibre says it is in a strong financial position with cash and equivalents of $18.3 million and no debt. The company is developing the industrial hemp market through the Hemp Black business, which recently tapped into demand for personal protective equipment (PPE). Hemp Black sold around 135,000 face masks in May and June contributing $2.4 million to revenue. Mask manufacturing capacity is expected to double this quarter. 

What’s the outlook for Ecofibre?

Ecofibre’s businesses are performing strongly. Ananda Health is the number one hemp brand for US pharmacies, and is on track to launch in CVS in 2Q21. CVS is the largest retail pharmacy chain in the US with some 10,000 outlets. Ananda Food has seen steady growth and is building a quality customer base for the long term. This latest acquisition will speed the commercialisation of Hemp Black products. 

More reading

• ASX cannabis shares adjust to coronavirus environment
• Why Afterpay, Ecofibre, Mesoblast, & Zip Co shares are racing higher
• Stock of the day: Ecofibre share price jumps on profit guidance

Motley Fool contributor Kate O’Brien 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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Could ASX growth shares outperform in 2020? I think some strong tailwinds make for an exciting earnings season ahead.

Why ASX growth shares could outperform this year

The dividends versus growth argument is as old as the share market itself.

However, I think 2020 has a compelling argument for ASX growth shares.

The preference for ASX dividend shares is often centered around the ‘bird in the hand’ argument. That basically suggests investors prefer a certain cash flow today compared to an uncertain, potential payoff in the future.

However, many companies have slashed dividends this year. That means 2020 could be the year that ASX growth shares outperform within the S&P/ASX 200 Index (ASX: XJO).

I’m excited about the upcoming August earnings season and I think there’s good reason why.

Why I like Xero and 1 more strong performer to watch in August

Shares in top ASX tech shares like Afterpay Ltd (ASX: APT) have been rocketing higher this year.

However, there have been a number of top ASX growth shares quietly outperforming the benchmark index.

The first company on my watchlist is Xero Limited (ASX: XRO). The Xero share price is up 14.7% and continuing to climb.

Xero provides an accounting software platform targeted at small and medium enterprises. 

That may not seem like a great business at the moment. However, Xero has some big customers locked in and that could help recurring revenue figures. 

I also think that added complexity in business accounting over the short to medium term could be a serious tailwind. Government stimulus programs are good for cash flow but also create some accounting headaches.

Add in the simplicity and low-cost Xero model and I think Xero’s FY20 earnings could receive a serious boost. Notably, Xero does not release its earnings alongside many of its ASX peers.

The Kiwi accounting group is set to announce its results in November at a similar time to the ASX banks. That means the Xero share price could have further to run compared to some of its ‘WAAAX’ tech peers.

It’s not just tech shares like Xero that I’ll be watching in August. Another New Zealand company that has caught my attention, and I’ll be keeping an eye on the A2 Milk Company Ltd (ASX: A2M) earnings result next month.

A2 Milk shares have rocketed 35.6% this year and are also part of the 2020 share price outperformers’ group.

Strong supermarket sales and steady international growth have underpinned the ASX growth share gains this year. 

I think the technical environment remains strong for the Kiwi dairy group. Farmgate milk prices remain low and the A2 Milk brand’s expansion into other product lines has proven to be a hit.

While a lot of future growth may already be priced in, I think A2 Milk’s earnings may be surprisingly strong next month.

That means the ASX growth share is worth watching to see if it can propel the Kiwi dairy company’s shares to a new record high.

More reading

• ASX 200 flat: Big four banks higher, St Barbara and IGO sinks on Q4 updates
• Why the IGO share price is the worst performer on the ASX 200 today
• How to turn $20,000 into $100,000 with ASX ETF shares
• Earnings season: What’s ahead for the Afterpay share price?
• Is the AFIC share price a buy after a 41% drop in profit?

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of A2 Milk and AFTERPAY T FPO. 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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In a media release today, the Australian Prudential Regulation Authority (APRA) updated its capital management guidance for banks and insurers.

Updated guidance

The guidance eases restrictions around paying dividends. As a result, this replaces its April recommendation, in which it advised that banks and insurers should be “seriously consider deferring decisions on the appropriate level of dividends until the outlook is clearer.”

However, in today’s release, APRA has indicated boards should seek to retain at least half of their earnings when making decisions on capital distributions, conduct regular stress tests, and make use of capital buffers to absorb impact of stress.

APRA Chair Wayne Bryes said, “today’s announcement strikes a balance in recognising the strength of the financial system, while at the same time acknowledging the difficult path ahead.”

“APRA has therefore set an expectation that dividend payout ratios for authorised deposit-taking institutions (ADIs) will be maintained below 50% for this year,” he added.

APRA believes that, despite the environment being risky, it is now more confident in terms of how Australia’s economy and financial institutions are being impacted by the coronavirus pandemic.

Banks rally

Bank share prices have rallied on the back of the news (at time of writing):

• Australia and New Zealand Banking Group Ltd (ASX: ANZ) up 1.88%
• National Australia Bank Ltd (ASX: NAB) up 1.56%
• Westpac Banking Corp (ASX: WBC) up 1.43%
• Commonwealth Bank of Australia (ASX: CBA) up 1.47%

In other bank news

Westpac Bank announced today it will be bringing 1,000 jobs back to Australia from overseas. The decision follows a surge in demand for customer assistance. This action is expected to initially increase the bank’s costs by around $45 million per annum by the end of FY 2021.

Commonwealth Bank released a technology update yesterday. It announced 2 strategic partnerships with Square Peg and Zetta Venture Partners to support new banking ventures in artificial intelligence, data and analytics. In addition, the bank’s technology venture building entity X15 has launched an app called Backr to help small business owners launch new digital-enabled businesses. 

In addition, Commsec (an online broker offered by Commonwealth Bank) has seen a surge in retail investor activity in FY20 with 400,000 new accounts, which is 2.5 times that of its typical average. The increase in trading accounts could point to strong trading revenues for brokers.

Last month, ANZ announced the sale of UDC Finance to Japan’s Shinsei Bank for NZ$762 million. This transaction is subject to regulatory approval and is expected to be completed in the second half of 2020 calendar year.

National Australia Bank will release its Q3 trading update on Friday 14 August 2020.

More reading

• ASX 200 flat: Big four banks higher, St Barbara and IGO sinks on Q4 updates
• Why AP Eagers, CIMIC, NAB, & Virgin Money shares are charging higher
• Why the Westpac share price is storming higher today
• CBA and 2 more ASX shares to buy and hold forever
• Are ASX tech shares the only way to protect your portfolio against the coronavirus?

Motley Fool contributor Matthew Donald owns shares of National Australia Bank Limited. 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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At lunch on Wednesday the S&P/ASX 200 Index (ASX: XJO) has given back its strong morning gains. The benchmark index is currently flat at 6,020.6 points.

Here’s what is happening on the market today:

Bank shares pushing higher.

The big four banks are all pushing higher on Wednesday and doing their part to support the ASX 200 index. Investors have been buying Westpac Banking Corp (ASX: WBC) and the rest of the big four after APRA provided guidance on dividends. While APRA still wants the banks to retain at least half of their earnings when making decisions on capital distributions, this is not as bad as some feared.

St Barbara Q4 update.

The St Barbara Ltd (ASX: SBM) share price is dropping lower on Wednesday after the release of its fourth quarter update. During the quarter, St Barbara delivered an 18.6% quarter on quarter increase in gold production to 108,612 ounces. This was achieved at an all-in sustaining cost (AISC) of A$1,301 per ounce. This meant that St Barbara achieved its full year guidance for both production and costs. I suspect its guidance for FY 2021 could be the reason for the selling. It has guided to similar production and costs next year.

IGO update disappoints.

The IGO Ltd (ASX: IGO) share price has crashed lower today after the release of its quarterly update. During the fourth quarter, the nickel producer delivered revenue and other income of $231 million and underlying EBITDA of $113 million. This result would have been stronger had its Nova and Tropicana operations not reported a material rise in costs quarter on quarter. This appears to have led to its full year earnings falling short of expectations.

Best and worst ASX 200 shares.

The best performer on the ASX 200 on Wednesday has been the AP Eagers Ltd (ASX: APE) share price with an 8% gain. This follows the release of the auto retailer’s annual general meeting update. The worst performer on the index by some distance is the IGO share price. Its shares are down 14% after the release of its quarterly update.

More reading

• Xero and 1 other ASX growth share to watch in August
• APRA eases dividend restrictions, ASX bank shares rally
• Why the IGO share price is the worst performer on the ASX 200 today
• Why AP Eagers, CIMIC, NAB, & Virgin Money shares are charging higher
• Why the Westpac share price is storming higher today

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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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It is a challenging time for investors looking for ASX 200 dividend shares that are still paying reasonable dividends. Earnings tailwinds and economic uncertainty has forced many companies to cut dividends or opt to pay none at all. Here are three blue-chip ASX 200 dividend shares with solid cash flows and a history of reliable dividend payments that you could buy for the medium to long term. 

1. WAM Capital Limited (ASX: WAM) 

WAM Capital is a listed investment company (LIC) that provides investors with exposure to an actively managed diversified portfolio of undervalued growth companies listed on the ASX. The company has more than a decade of stable or increasing dividend payments and currently has a dividend yield of 8.07%. 

In the company’s June portfolio update, it cited that its portfolio continued to increase as coronavirus restrictions began easing and the Australian economy showed signs of recovery. Significant contributors to its positive investment portfolio performance included leading Australian healthcare and diagnostics services company Healius Ltd (ASX: HLS), service station operator Viva Energy Group Ltd (ASX: VEA) and Afterpay Ltd (ASX: APT). In my opinion, WAM is not only one of the most reliable and consistent ASX 200 dividend shares, but also does the hard yards for investors with active portfolio management. 

2. BHP Group Ltd (ASX: BHP) 

Despite getting hit with a broker downgrade, I believe the recent surge in iron ore prices will continue to position BHP as a leading ASX 200 dividend share. The iron ore spot price is currently around its 12-month highs at US$105.59 per tonne which will convert to high margins for Australia’s low cost producers. BHP currently pays fully franked dividends with a yield of 5.70%. 

3. Tassal Group Limited (ASX: TGR) 

Tassal Group is a diversified seafood producer engaged in the provision of Atlantic salmon and prawns. The company trades at a relatively cheap price-to-earnings (P/E) ratio of just 10.55 and currently pays a dividend yield of 4.89%. I believe Tassal could be a steady, future ASX 200 dividend share, having delivered a compound annual growth rate of 16.7% for revenue and 12.8% for net profit after tax over the past five years. The company sees early positive trends in customer behaviour in a COVID-19 world whereby consumers are more health conscious, want to trust what they are eating and also opt for easy to prepare meal solutions. Salmon and prawns meet such needs as healthy and sustainable proteins and Tassal has the opportunity to help increase seafood’s percentage share of plate. 

More reading

• Downer share price lower despite contract wins
• Will Rio Tinto pay a special dividend tomorrow?
• Top broker warns earnings expectations for the ASX reporting season are too high
• Are ASX iron ore shares doomed?
• These shares were the ASX 200’s biggest losers last week

Motley Fool contributor Lina Lim 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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With the word ‘COVID‘ on the tip of almost everyone’s tongue, hospitals under pressure to keep up with demand and companies racing to find a vaccine, is it time to think about investing in health?

The ASX healthcare sector contains more than 100 companies. When I talk about healthcare, I am including healthcare equipment, services, pharmaceuticals, biotechnology and even life-science companies. Given the breadth of the sector, it can certainly be daunting to try and choose a healthcare company to invest in. Here are 3 of my favourite ASX healthcare shares to consider adding to your portfolio.

CSL Limited (ASX: CSL)

CSL (formerly known as Commonwealth Serum Laboratories) was founded over 100 years ago in Melbourne. Among the many achievements CSL has celebrated, the most recent is the development of the world’s first human papillomavirus vaccine, known as Gardasil.

Earlier this month, CSL announced it is working to fight COVID-19 as well, by joining an industry partnership known as the CoVIg-19 Plasma Alliance. Needless to say, with the history of success CSL has, I’m interested to see what happens next. With its strong background in vaccines, I’m glad CSL is looking for solutions to our current pandemic.

The CSL share price is selling at around $271.73 (at the time of writing) and although this is a littler lower that its previous high of $343 before the March crash, its returns for investors over time have been spectacular. CSL shares are up more than 700% over the last decade. Current prices represent a 20% discount on the previous high, which is another reason I feel CSL shares are worthy of portfolio consideration.

Ramsay Health Care Limited (ASX: RHC)

Ramsay Health is another Aussie success story. Founded in 1964 in Sydney, Ramsay is a private healthcare provider. It has operations across multiple countries and specialises in surgery, rehabilitation and psychiatric care. Ramsay is the largest operator of private hospitals in the country, boasting 70 hospitals and day surgery units.

Trading at around $63 (at the time of writing), Ramsay’s current share price represents a 20% discount on previous highs. Ramsay shares have grown in value approximately 370% over the last decade.

One of the issues Ramsay has faced during the COVID-19 crisis is the suspension of elective surgeries. The company has announced that it is gradually reintroducing elective surgery now, implementing new safety measures for patients. With its strong portfolio and the recent resumption of elective surgeries, it could be a good time to consider adding Ramsay Health shares to your portfolio.

Nanosonics Ltd. (ASX: NAN)

Founded in 2001 and based in Sydney, Nanosonics is an innovator in infection prevention. Recognising a problem with healthcare-associated infections, Nanosonics has developed many solutions, including its signature product, the ‘trophon EPR’. This product provides a safe, simple solution to prevent ultrasound probe cross-contamination. For patients, this ensures high level disinfection and kills human papillomavirus (HPV), which is known to cause cancer. Nanosonics technology is used around the world, including countries such as America, Canada, France, Germany, Singapore and many others.

Trading around $6.20 (at the time of writing), the Nanosonics share price represents a 19% discount to previous highs. More importantly, over the last decade, Nanosonics shares have delivered a more than 1,000% return to investors. I feel that Nanosonics is a strong contender for portfolio inclusion.

Foolish takeaway

I’ve selected these 3 ASX healthcare shares as I feel that they are well positioned in the market and relevant to the COVID-19 crisis. Healthcare is an industry that is here forever, in some form or another. With CSL developing vaccines, Ramsay operating hospitals and Nanosonics preventing infections, they all offer a high value proposition to the healthcare space. The current pandemic only adds to that value.

More reading

• Are ASX tech shares the only way to protect your portfolio against the coronavirus?
• What would deflation mean for your ASX shares?
• Afterpay and Immuron were among the most traded shares on the ASX last week
• Why PolyNovo and these ASX healthcare shares could be long term market beaters
• Leading brokers name 3 ASX shares to sell today

Motley Fool contributor Glenn Leese has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and Nanosonics Limited. The Motley Fool Australia has recommended Nanosonics Limited and Ramsay Health Care 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 IGO Ltd (ASX: IGO) share price crashed this morning even as the miner forecasted a big uplift in revenue and earnings.

The nickel miner’s (formerly known as Independence Group) share price tumbled 9% to $5.03. This makes it the worst performer on the S&P/ASX 200 Index (Index:^AXJO) at the time of writing.

The slump is nearly twice that of the second worst performer, the GUD Holdings Limited (ASX: GUD) share price which tanked 4.9% to $11.16.

In case you are wondering, in third spot is the NRW Holdings Limited (ASX: NWH) share price with its 3.6% loss to $1.72.

Big uplift in revenue

But it’s IGO that’s worse for wear as its full year forecasts fell short of market expectations. Management said that FY20 revenue would hit $892.4 million after fourth quarter sales jumped 23% quarter on quarter (QoQ) to $230.6 million.

The full year figure is nearly $100 million ahead of what it posted last year and is the pleasing part of the update, in my view.

The problem is that IGO is forecasting full year underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $459.6 million.

High earnings bar

While that’s around 35% ahead of the previous year’s result, it falls short of analysts’ expectations.

For instance, Macquarie Group Ltd (ASX: MQG) was expecting management to post an operational EBIDTA of $530 million.

Investors may have also been put off by IGO’s FY21 production guidance as the miner is expecting to produce less of its key commodities.

Falling production in FY21

IGO is guiding to produce between 27,000 to 29,000 tonnes of nickel in concentrate at its flagship Nova mine this financial year. This compares to the 30,436 tonnes it produced in FY20.

The amount of copper it’s hoping to mine is also lower for FY21 at 11,000 to 12,500 tonnes when it recorded 13,772 tonnes last financial year.

Its Nova project was a real star performer in the June quarter as it delivered ahead of expectations. This perhaps created an expectation that it will keep surprising on the upside. Shareholders will be hoping management is just being conservative.

Is IGO share price a buy?

Forecasted gold production at IGO’s Tropicana JV mine will also fall short of FY20. The mine produced 463,100 ounces of the precious metal in total but this is expected to fall to 380,000 to 430,000 ounces in FY21. So much for capitalising on the record high gold price.

But I suspect IGO will soon draw in bargain hunters if its shares fall much further. The outlook for nickel is bright thanks to the growth in electrified vehicles and the miner holds a strong balance sheet.

More reading

• Xero and 1 other ASX growth share to watch in August
• ASX 200 flat: Big four banks higher, St Barbara and IGO sinks on Q4 updates
• Is the AFIC share price a buy after a 41% drop in profit?
• 5 things to watch on the ASX 200 on Wednesday
• GUD Holdings share price storms higher on FY 2020 result

Motley Fool contributor Brendon Lau owns shares of Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group 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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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 0.2% to 6,007.6 points.

Four shares that are climbing more than most today are listed below. Here’s why they are charging higher:

The AP Eagers Ltd (ASX: APE) share price has jumped 7% to $7.56 on the day of its annual general meeting. In its presentation, management confirmed that trading conditions are difficult. However, it remains confident it will report an underlying profit from continuing operations of $40.3 million during the first half. This represents a 23.6% decline from the prior corresponding period.

The CIMIC Group Ltd (ASX: CIM) share price is up 3% to $23.03. This morning the engineering company signed an exclusivity agreement with funds advised by Elliott Advisors UK. This is in relation to the potential investment by Elliott into 50% of the share capital of CIMIC’s Thiess business. Management notes that introduction of an equity partner into Thiess would capitalise on the robust outlook for the mining sector and provide capital for Thiess’ continued growth.

The National Australia Bank Ltd (ASX: NAB) share price is up 1.5% to $18.12. This follows news that APRA has eased restrictions around paying dividends. APRA notes that it has had the opportunity to review banks’ and insurers’ financial projections and stress testing results. Although it still wants the banks to retain at least half of their earnings when making decisions on capital distributions, this is not as bad as some feared.

The Virgin Money UK (ASX: VUK) share price is up 2% to $1.82. Investors have been buying the UK-based bank’s shares following the release of its third quarter update after the market close on Tuesday. Virgin Money UK reported a 4.8% increase in customer deposits to £67.7 billion and a 5.7% increase in Business lending growth to £8.8 billion. It also revealed no material provisions related to the pandemic.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Virgin Money UK share price on watch after Q3 update
• Top broker warns earnings expectations for the ASX reporting season are too high
• These were the ASX 200’s biggest share gainers last week
• ASX 200 Weekly Wrap: ASX has week of high volatility

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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The Downer EDI Limited (ASX: DOW) share price has edged lower this morning despite the infrastructure company announcing $324 million in contract wins. Downer EDI’s asset services business has been awarded a number of contracts in the power generation, oil and gas, and industrial sectors with a combined value of approximately $324 million.

What does Downer EDI do? 

Downer EDI designs, builds, and maintains assets, infrastructure, and facilities. The leading provider of integrated services in Australia and New Zealand, Downer EDI also owns 88% of Spotless Group Holdings. The company has a solid track record of delivering installation, maintenance, and shutdown services to customers across Australia. 

What did Downer EDI announce? 

Downer EDI announced the award of contracts across a number of markets. In the power generation market, Downer has been awarded contracts to deliver outages and supplementary labour to a power plant in NSW, install a stator at a plant in Victoria, and inspect and rewind generator rotors in Queensland. 

In the oil and gas market, Downer was awarded a contract with Santos Ltd (ASX: STO) for multi-disciplinary works across a number of sites and an extension to a maintenance contract for a natural gas facility in Darwin. In the industrial market, the company has been awarded a contract with BHP Group Ltd (ASX: BHP) for capital projects at iron ore sites and a contract with Wesfarmers Ltd (ASX: WES) for electrical maintenance and shutdowns.  

CEO Grant Fenn said “the contract wins demonstrate Downer’s position as an industry leader in the delivery of major maintenance and specialist services to customers in the resources, energy, and industrial sectors”. He also commented that “…Downer has an excellent track record of delivering installation, maintenance and shutdown services to our customers across Australia”. 

How has the Downer share price been performing? 

The Downer share price fell a massive 69% between its January high and March low. By comparison the S&P/ASX 200 (ASX: XJO) fell 36.5% from its high in February to its low on 23 March. Although the Downer EDI share price has gained 55.6% from its low, it remains 52.2% below its high for the year. The ASX 200 is currently 16.1% below its high for the year. Despite the impacts of COVID-19, Downer EDI reports cash performance improved materially in the second half of the financial year. Underlying EBITDA of $410 – $420 million is forecast for FY20, with NPATA of $210 – $220 million.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Will Rio Tinto pay a special dividend tomorrow?
• Top broker warns earnings expectations for the ASX reporting season are too high
• Are ASX iron ore shares doomed?
• 3 Warren Buffett quotes to start the week off right

Motley Fool contributor Kate O’Brien owns shares of BHP Billiton Limited. The Motley Fool Australia owns shares of Wesfarmers 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 Westpac Banking Corp (ASX: WBC) share price is storming higher today and helping to drive the S&P/ASX 200 Index (ASX: XJO) higher.

At the time of writing the banking giant’s shares are up 3% to $17.98.

Why is the Westpac share price storming higher?

Westpac, Commonwealth Bank of Australia (ASX: CBA), and the rest of the big four banks have been pushing higher today after APRA eased restrictions around paying dividends.

APRA notes that it has had the opportunity to review banks’ and insurers’ financial projections and stress testing results.

And while it still wants the banks to retain at least half of their earnings when making decisions on capital distributions, this is not as bad as some feared.

APRA Chair Wayne Byres said the updated guidance balanced the need for banks and insurers to keep supporting households and businesses, while also maintaining a prudent approach in the face of a very sharp and severe economic contraction.

Westpac brings jobs back to Australia.

In other news, this morning Westpac announced that it will be boosting the economy by bringing back 1,000 jobs to Australia.

It is making the move as it seeks to bolster the strength and resilience of its operations and improve support for customers.

The decision follows a surge in demand for customer assistance at the start of the COVID-19 pandemic, which has created challenging conditions for home lending processing and call centres.

Westpac Chief Executive Officer, Peter King, commented: “While we have added additional resourcing to support unprecedented demand following COVID-19, and I thank our teams who have worked tirelessly helping customers, at times our response rates have been too slow.”

“We will also be returning all dedicated voice roles to Australia to enhance the capacity of our existing call centres. This will mean when a customer calls us, it will be answered by someone in Australia.”

“Bringing jobs back to Australia has been made possible with the changing work patterns in response to the COVID-19 pandemic, as well as the upgrade to our technology infrastructure over recent years. Together these have enabled our teams to operate effectively at home or in other locations when needed,” Mr King said.

This will come at a cost, though. While Westpac expects the change to help to improve productivity, the creation of 1,000 roles is expected to initially increase costs by around $45 million per annum by the end of FY 2021.

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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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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