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The Nine Entertainment Co Holdings Ltd (ASX: NEC) share price has responded poorly to the release of the company’s full-year earnings report for the 2020 financial year (FY20) this morning. At the time of writing, the Nine share price is down 3.4% to $1.70 after closing at $1.76 yesterday.

What does Nine Entertainment do?

Nine is a diversified media conglomerate which owns the Channel 9 television channels and assets, as well as the 9Now online streaming service. The company also owns the old Fairfax Media Group, publisher of several newspapers such as The Sydney Morning Herald, The Age and The Australian Financial Review. Additionally, the company owns the Stan streaming service as well as a 60% chunk of Domain Holdings Australia Ltd (ASX: DHG).

What did Nine report this morning?

It was a mixed bag of results for Nine in FY20. Revenues were up 17% from FY19’s $1.848 billion to $2.171 billion for FY20.

Group earnings before interest, tax, depreciation and amortisation (EBITDA) growth were also positive, coming in at $396.7 million, up 13% from $349.9 million in FY19. However, the earnings before tax and depreciation (EBIT) metric was down 11% to $246.8 million. Basic earnings per share (EPS) were also down, falling 37% from 13.1 cents in FY19 to 8.3 cents for FY20.

That saw group net profits after tax fall 17% from $187.1 million in FY19 to $155.9 million for FY20.

Of Nine’s different groups, Broadcasting, Digital & Publishing and Corporate, all fell in terms of the percentage of contributing revenue. In their place, the Stan and Intersegment divisions rose in their revenue contributions. Revenue from Stan, in particular, was impressive, growing 54% from $157.1 million in FY19 to $242.1 million for FY20. In FY20, the company reported that the combined contribution from Stan and 9Now, as well as the digital components of Domain and Publishing, grew by 40% to roughly 48% of the company’s total EBITDA.

The company noted that “advertising markets across all mediums were significantly impacted by COVID-19 from March 2020 onwards”. In response, Nine implemented a “$266 million cash cost out program” over the 2020 calendar year.

Turning to dividends, Nine has announced that a final, fully franked dividend of 2 cents per share will be paid on 20 October (down from 5 cents per share in FY19), which takes the total dividends for FY20 to 7 cents per share. That represents a payout ratio of approximately 80% of net profits after tax, at the top of Nine’s 60-80% payout ratio target band.

FY21 outlook

Nine hasn’t provided any concrete guidance for the 2021 financial year but does note the following: “Whilst advertising market conditions remain challenging through the start of FY21, the market is performing ahead of earlier expectations and appears poised to recover when the COVID conditions stabilize.”

Nine also informed investors that it expects free to air (FTA) revenues to “be down ~15%” in the September quarter, accompanying a ~5% decrease in costs.

However, Nine does expect the Broadcast Video on Demand (BVOD) market to “continue to grow in FY21” after the company experienced 13% and 30% growth in June and July respectively.

More reading

• If an ASX share announces a demerger, here’s why you should listen
• Meet the ASX stocks that are about to get a boost from Facebook and Google
• A top ‘coronavirus share’ to buy this August

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Nine Entertainment Co. Holdings 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 bounced back from yesterday’s decline and is pushing higher. At the time of writing the benchmark index is up a sizeable 0.7% to 6,154.9 points.

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

The Bega Cheese Ltd (ASX: BGA) share price is up 5% to $5.10. This follows the release of its full year results this morning. The dairy company reported a 5% increase in revenue to $1,493 million and an 11% lift in statutory EBITDA to $87.8 million. Things were even better on the bottom line, with Bega’s profit after tax rebounding 284% to $21.3 million.

The De Grey Mining Limited (ASX: DEG) share price has jumped 15% to $1.02 after revealing positive drilling results. According to the release, the mineral exploration company has intercepted exceptional high grade gold at the Crow zone of the Hemi Gold Discovery. Management notes that these results demonstrate the potential for Crow to significantly add to the overall gold endowment at Hemi.

The Northern Star Resources Ltd (ASX: NST) share price has risen 3.5% to $13.82. Investors have been buying Northern Star and other gold miners on Thursday after a rebound in the gold price overnight. This has led to the S&P/ASX All Ordinaries Gold index rising by a solid 3.3% at the time of writing.

The Reece Ltd (ASX: REH) share price has jumped 12% to $12.44. Investors have been buying the plumbing parts company’s shares following the release of its full year results. For the 12 months ended 30 June, Reece delivered a 10% increase in sales revenue to $6,010 million. And on the bottom line, the company’s net profit after tax (Pre AASB 16) grew 19% to $202 million. This was driven largely by strong growth in its US business during the year.

More reading

• Reece share price on watch after delivering solid FY 2020 result
• Is it still the time to be greedy for ASX gold shares?
• Meet the group reaping the biggest profit from the gold bull run
• 5 things to watch on the ASX 200 on Monday
• Retail investors are flocking to buy ASX gold stocks Saracen Mineral and Northern Star Resources, and they look to have made a killing

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 COVID-19 pandemic has been disastrous for the retail sector. ASX retail shares have taken a hit, the global economic outlook is gloomy, and consumer sentiment is down.

And although restrictions have eased across most of Australia, metropolitan Melbourne is still under a harsh lockdown of unknown duration. Consumers hate uncertainty, and in times of crisis are much more likely to save their money than spend it.

This is reflected in the price of many traditional ASX retail shares. Department store operator Myer Holdings Ltd‘s (ASX: MYR) share price effectively flatlined at around $0.20 after starting the year closer to $0.50. And the share price of outdoor clothing retailer Kathmandu Holdings Ltd (ASX: KMD) is down close to 50% for the year to $1.165.

But some companies have excelled in these conditions.

The retail shift towards e-commerce is a major trend to emerge from COVID-19. This will potentially bring about permanent structural shifts in the way consumers choose to shop.

Here are 3 ASX retail shares that have pivoted online and are seeing their profits – and share prices – surge as a result.

Temple & Webster Group Ltd (ASX: TPW)

Furniture and homewares retailer Temple & Webster operates an online drop-shipping business without any physical furniture showrooms. This business model means the company was able to transition to remote working arrangements more easily than many rivals. At the same time, Temple & Webster has seen demand for homewares, furniture and office equipment spike as people spend more time at home.

In its FY20 results, released to the market in late July, Temple & Webster reported full year revenues of $176.3 million, an increase of 74% over the previous year. These revenues were heavily weighted towards the second half of the financial year, with fourth quarter revenues rising 130% over the prior comparative period. The ASX retail share (and its shareholders) will hope this positive momentum carries over into FY21.

Kogan.com Ltd (ASX: KGN)

Australia’s answer to Amazon, Kogan has become a bona fide COVID-19 market darling. Since falling to a 52-week low of $3.45 back in March, Kogan shares have skyrocketed more than 500% to $21.08 at the time of writing.

This impressive ASX retail share delivered strong results across the board in FY20. Active customers grew by over 35% to 2.2 million, revenues surged 13.5% to $497.9 million and NPAT was up almost 56% to $26.8 million.

As with Temple & Webster, revenues were weighted heavily towards the second half of the year, a trend which has continued into July. Gross sales for the month were up 110% year-on-year and gross profit surged by 160%.

City Chic Collective Ltd (ASX: CCX)

A more surprising success story to emerge out of the pandemic has been plus-size women’s clothing retailer City Chic. The ASX retail share has seen its share price skyrocket more than 360% off its March lows and is trading at $3.32 in mid-morning trade.

City Chic released its FY20 annual report this morning, in which the company reported sales revenues for FY20 of $194.5 million, an increase of 31% year-on-year. Underlying earnings before interest, tax, depreciation and amortisation (EDITDA) expenses came in at a healthy $26.5 million.

The revenue increases came mostly via online channels. Sales in North America were bolstered after City Chic acquired the Avenue, a US-based brand with a strong online presence. This, combined with prudent cost-cutting, has put City Chic in a strong position as it emerges from the COVID-19 crisis.

More reading

• City Chic share price on watch after FY20 results
• 3 small cap ASX growth shares to buy right now
• New research sheds light on consumer spending outlook
• Is this ASX 200 market too greedy right now?
• Four companies that got crushed (and why you had to own them)

Rhys Brock owns shares of Kogan.com ltd and Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd and Temple & Webster Group Ltd. The Motley Fool Australia has recommended Kogan.com ltd and Temple & Webster Group Ltd. 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 Zip Co Ltd (ASX: Z1P) share price has had a rollercoaster start to the day after the company released its full year financial results for FY 2020. At the commencement of trade, the Zip share price rose sharply to over $10 before a rapid fall saw it drop well below yesterday’s closing price of $9.65.

A year of rapid growth for Zip

Investors are today selling down the Zip share price despite the company reporting a very strong financial result for the 12 months to June 2020. Total revenue for the buy now, pay later (BNPL) provider increased by a massive 91% on the prior year to $161.0 million. Adjusted total revenue grew by 79%.

Transaction volumes generated by consumers increased by 91% during the financial year to $2.1 billion. Loan-book (receivables) for Zip increased by 73% to $1,182.0 million.

Due to the fast rise in transaction volume and receivables, cost of sales for Zip increased from $52.1 million to $107.7 million. Reported gross profit came in at 32% of portfolio income during FY 2020. This compared with 37% in the prior year.

Zip highlighted the growing number of key merchants that were added to its network over the financial year. These included: Amazon (NASDAQ: AMZN), Cotton On, Petbarn, City Chic Collective Ltd (ASX: CCX) and Pizza Hut.

New customer milestone reached in June quarter

Zip reached the 2 million customer milestone during the fourth quarter. Active customer accounts are now up by 62% on the prior year. Across Australia and New Zealand, the number of partners reached over 24,500. New Zealand saw particularly strong growth of over 100%, year on year.

Zip ended the financial year with $32.7 million in cash on its balance sheet. The company raised $61.9 million during FY 2020.

Larry Diamond, Managing Director and CEO said:

2020 has been another monumental year for Zip as we delivered a record set of financial results, whilst navigating the unprecedented impacts of COVID and transforming the business with a number of game-changing products and business acquisitions. We began FY20 with a vision to become a global BNPL player and capitalise on the increasing trends fueling the industry’s growth. The successful acquisition of PartPay led us to QuadPay, all developed on the same code base, with proven portability into multiple global markets.

Outlook for FY 2021

During FY 2021, Zip will continue to grow its customer base in Australia and New Zealand, while investing for global growth. Services will be launched in the United Kingdom in the first half of FY 2021.

Key strategic priorities include finalising the Quadplay acquisition and ramping up growth in the giant United States market. Zip Business will also be launched, and Zip will continue to roll out a range of new products to its chain of retail partners.

About the Zip share price

The Zip share price rose more than 27% yesterday on news the company had struck a new partnership agreement with eBay. At the time of writing, the Zip share price has fallen 8.39% following this morning’s update and is trading at $8.84. 

More reading

• ASX 200 drops 0.7%, Zip rises 27.5%
• Hydrix and Zip were among the most traded shares on the ASX last week
• If you invested $10,000 into Zip shares in March, here’s how much you’d have today
• Flexigroup share price in trade halt ahead of capital raise
• Why Bigtincan, Cleanaway, Worley, & Zip Co shares are storming higher

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Phil Harpur has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Amazon. 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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Link Administration Holdings Ltd (ASX: LNK) share price is currently trading more than 6% lower after the release of the company’s financial results for the period ended 30 June 2020 (FY20). 

FY20 results

Link Group had a challenging FY20 and delivered a statutory net loss after tax of $114 million, driven by a $108 million impairment of its corporate markets business in Europe. 

Revenue of $1.23 billion was down 3% on the prior corresponding period (pcp). Recurring revenue of $1.02 billion represents 83% of total revenue.

Operating earnings before interest, taxation, depreciation and amortisation (EBITDA) was down 26% to $294 million. 

The board has declared a 50% franked final dividend of 3.5 cents per share.

Link’s Property Exchange Australia (PEXA) is a national property settlement platform. It delivered 264 enhancements over the course of FY20 from member feedback. Additionally, 75% of all property transactions nationally are processed through the PEXA platform. As a result, revenue in this business increased 43% on the pcp and operating net profit after tax adjusted (NPATA) was $53 million, up from $5 million in the pcp.

Management comments

Link Managing director John McMurtrie said:

Against the backdrop of this challenging year, we have successfully delivered continuity of service for our clients, while also keeping our people safe during COVID-19. We continued our growth agenda and executed on a number of efficiencies and opportunities across the group.

He added:

Our transformation strategy of realigning into five global business units is now complete. Whilst the COVID-19 pandemic has delayed the benefit realisation expected, Link Group delivered $14.7 million of savings this year and plans to deliver $50 million of annualised savings by the end of FY2022.

Outlook

The group has decided because of the uncertain economic environment, financial guidance is not appropriate at this time, but is confident that it’s well placed to take advantage of new opportunities as they arise.

Link Administration has advanced on a number of initiatives that will deliver benefits in the near term, including its global transformation program and recapitalisation of PEXA. Its global transformation program is on track to deliver $50 million in annualised savings by the end of FY2022.

At time of writing, the Link Administration share price is trading at $4.10, a 6.82% drop on Wednesday’s close. 

More reading

• Link share price buoyed by appointment of new CEO

Matthew Donald has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Link Administration Holdings Ltd. The Motley Fool Australia has recommended Link Administration Holdings Ltd. 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 LiveTiles Ltd (ASX: LVT) share price is dropping lower on Thursday following the release of its FY 2020 results.

At the time of writing the intranet and workplace technology software provider’s shares are down over 4% to 22 cents.

How did LiveTiles perform in FY 2020?

For the 12 months ended 30 June 2020, LiveTiles reported a 98% increase in revenue to $44.5 million. This includes a 58% increase in other income to $6.7 million, related largely to government grants.

And while the company made good progress on restricting its operating expense growth to 11% during the year, its expenses still vastly outweigh its revenue at $76.2 million.

As a result, LiveTiles posted a statutory net loss after tax of $31.6 million and an underlying net loss after tax of $21.3 million.

But thanks to a $55 million equity raising in September, the company finished the period with cash on hand of $37.8 million.

“Significant step-change”.

LiveTiles’ Co-Founder and Chief Executive Officer, Karl Redenbach, was very pleased with the company’s performance.

He said: “We are very pleased with our FY20 results, including the significant step-change we made during the year to reduce our operating expenditures and improve our cash flow. This hard work following our September 2019 capital raising has supported us to maintain a healthy balance sheet position with cash on hand more than doubling when compared with last year.”

“Our Board has reiterated the Company’s near-term financial objective to reach operating cash flow breakeven during 2020, subject to operating conditions. Further, our confidence in the medium term outlook remains as strong as ever. Our team is hugely energised with the opportunity to help customers supporting their employees to communicate and collaborate in the new world of remote working,” he added.

Outlook.

In light of uncertainty created by the global pandemic, LiveTiles will not be providing guidance for FY 2021.

Though, it has advised that it will continue to focus on reducing its cash burn and is reviewing additional options including short-term revenue and cost initiatives to support this objective.

Outside this, its directors “continue to expect strong long-term growth potential for the Group, driven by increased remote working and demand for digital workplace software to support organisations.”

More reading

• 4 ASX shares to buy now for a post-coronavirus world
• Which 3 ASX tech shares are investing in long-term growth?
• LiveTiles share price sinks on Q4 update

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of LIVETILES FPO. The Motley Fool Australia has recommended LIVETILES 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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There are so many options in terms of where you choose to park your money in this day and age. In uncertain times like these, many people would say it’s safest to leave your savings in a bank account accumulating interest. But if you dig a little deeper, you’ll find that by doing so, you will actually be losing money rather than getting ahead.

How so? Well, let’s say you put $10,000 in Australia’s biggest bank, Commonwealth Bank of Australia (ASX: CBA). The interest that will be paid to you is around 1% per annum. Therefore, if you simply left your $10,000 in a savings account, each month you would be credited with $8.33 or $100 for the entire year.

One could argue yes, it is a paltry amount, but at least it’s safe. However, inflation rises every year by around 3%. So, what would cost you $10,000 today will cost you $10,300 the following year. In essence, you’ll be losing a net value of -$200 per year.

Enter, the share market. I’m sure every person dreams of a life that allows you to retire early and pursue your passions. It could be travel, studying and learning new skills, or even spending time with family and friends. Investing in the share market is one way to grow your nest egg to fund that early retirement.

So, if I had a spare $10,000, rather than leaving it in my savings, I would put it to work straight away in the share market.

There’s no doubt that choosing a company to invest in can be fraught with risks and short-term losses. However, investing is about long-term growth and not day-to-day market swings.

A lot of people may look at growth companies with a market capitalisation of $50 million–$500 million to quickly turn their portfolio from $10,000 to $100,000. However, these micro-cap and small-cap shares are considered extremely risky so I personally would not recommend them for a first-time investor.

Depending on your risk profile, I would consider investing in companies with a market capitalisation of somewhere between $500 million–$5 billion. In my view, these mid-cap companies provide the greatest opportunity for an investor to considerably increase their portfolio value with relative safety.

Well-run businesses with potential to grow materially in the future like Nearmap Ltd (ASX: NEA) and Electro Optic Systems Holdings Ltd (ASX: EOS) are 2 great examples. For the past 12 months, their share prices are both up 12% and 29%, respectively. A much better return than the 1% offered by Commonwealth Bank.

There are many more opportunities like these companies on the ASX. All that is required is some capital, some in-depth research and sound patience. Utilising those 3 attributes will help you reach the $100,000 mark much faster than simply having savings sitting in your account.

More reading

• Why the CBA share price could surge this morning
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Aaron Teboneras owns shares of Electro Optic Systems Holdings Limited and Nearmap Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Electro Optic Systems Holdings Limited and Nearmap Ltd. The Motley Fool Australia has recommended Electro Optic Systems Holdings Limited and Nearmap Ltd. 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 share price of ASX junior biotechnology company Mesoblast Limited (ASX:MSB) is on the move after the company released its FY20 results to the market Thursday morning. At the time of writing, the Mesoblast share price had risen 3.69% to $5.34.

What’s moving the Mesoblast share price?

The Mesoblast share price has been boosted after the company reported a 92% increase in revenues to US$32.2 million, while its loss after tax decreased by 13% year on year to US$77.9 million. Despite posting a loss for the year, the company has a strong balance sheet, with US$129.3 million in cash on hand as at 30 June 2020. Most of this came courtesy of a successful US$90 million institutional capital raise in May.

However, most investors will be focused on the company’s FY20 operational highlights and how it is setting itself up to deliver in FY21. Mesoblast has a number of its stem cell treatments in final trial and approval phases, the most exciting of which is its flagship product, Ryoncil.

Ryoncil can be used to treat graft versus host disease (GvHD). GvHD is a potentially life-threatening complication which can occur in cancer patients who have received bone marrow transplants. In some of these cases, the donated ‘graft’ cells can attack the patient’s own body cells. 

Earlier this month, the Oncological Drugs Advisory Committee (ODAC), which advises the United States Food and Drug Administration (FDA), voted in favour of the efficacy and safety of Ryoncil for use in children under 12, sending the Mesoblast share price higher. There are currently no FDA-approved treatments for GvHD patients in this age group.

The license application for Ryoncil is now under priority review with the FDA, with the potential for it to be approved by 30 September 2020. Mesoblast is hopeful that it can launch Ryoncil in the US during the December quarter. The company sees this as a significant commercial opportunity.

Another exciting application that could drive the Mesoblast share price is its product’s possible treatment of COVID-19 induced acute respiratory distress syndrome (ARDS). A recent pilot study delivered promising results, and a phase 3 clinical trial involving up to 30 leading medical centres across the US could go ahead next quarter, pending a review of safety and efficacy data by the US Data Safety Monitoring Board.

Should you invest?

There are always significant risks involved with investing in a junior healthcare company like Mesoblast. There is still the real possibility Ryoncil won’t get the requisite approvals from the FDA, or that the ARDS phase 3 trials won’t go head. While early promising results make these outcomes unlikely, they are still possible.

And investors can see the potentially volatile effects of either of these outcomes on the Mesoblast share price. In early August, Mesoblast shares plummeted 37% to just $3.07 in the space of two days, before shooting back up again by almost 70%. These big swings occurred either side of the positive ODAC announcement and show just how heavily the company’s valuation rests on these approvals.

Mesoblast is an exciting company which is setting itself up to deliver a potential banner year in FY21. However, given its recent share price performance it might not all be smooth sailing. So, be prepared for some short-term bumps along the way if you do choose to invest in today’s Mesoblast share price.

More reading

• Hydrix and Zip were among the most traded shares on the ASX last week
• How to boost your share market gains
• Cynata Therapeutics share price jumps 14% on COVID-19 trial
• Is this ASX biotech share the next CSL?
• Afterpay and Mesoblast were among the most traded shares on the ASX last week

Motley Fool contributor Rhys Brock 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 Ramsay Health Care Limited (ASX: RHC) share price is pushing higher on Thursday following its full year results release.

At the time of writing the private hospital operator’s shares are up 1.5% to $66.45.

How did Ramsay perform in FY 2020?

It was a tough year for Ramsay because of the negative impact of the pandemic on elective surgeries and costs.

During the 12 months ended 30 June 2020, Ramsay posted a solid 7.3% increase in revenue up 7.3% to $12.4 billion.

However, this revenue increase didn’t flow through to its earnings. Ramsay recorded a 7% decline in earnings before interest, taxes, depreciation, amortisation, and restructuring or rent costs (EBITDAR) to $2 billion.

Things were even worse on the bottom line, with the company posting a 43% decline in core net profit after tax to $336.9 million. This was down 34.4% on a like for like basis.

In light of this sizeable profit decline and the tough operating environment, as previously announced, Ramsay has decided against paying a final dividend.

How did its segments perform?

Ramsay’s core Australia/Asia business reported a 2.2% decline in revenue to $5.1 billion and a 23.2% reduction in EBITDAR to $781.3 million.

Over in the UK, Ramsay recorded a 4.9% decline in revenue to 494.8 million pounds and a 10.6% fall in EBITDAR to 89.2 million pounds.

Things were better in Continental Europe due to its recent acquisitions. It recorded a 14.3% lift in revenue to 3.9 billion euros and an 8.5% increase in EBITDAR to 641.1 million euros.

A tale of two halves.

Ramsay Health Care’s Managing Director, Craig McNally, notes that the company was on track for growth until the end of February.

He commented: “At our interim results we reaffirmed our FY’20 guidance of core EPS growth on a like for like basis of 2% to 4%. However, the extraordinary circumstances posed by the COVID-19 pandemic on the Company’s operations around the world resulted in us withdrawing guidance in March 2020 and had a significant impact on the full year result.”

Mr McNally notes that elective surgery restrictions were imposed in most regions from March 2020 creating a significant level of uncertainty. Combined with increasing costs, this weighed heavily on its results.

Speaking about the costs, the managing director commented: “We are also experiencing additional costs associated with increased PPE usage, more costly PPE on a per unit basis, social distancing requirements, staff costs involved in screening patients, staff and visitors, and increased cleaning regimes.”

Outlook.

Given that many uncertainties remain with respect to the ongoing impact of the pandemic, Ramsay was unable to provide financial guidance for FY 2021.

Nevertheless, the company remains positive on its long term outlook.

Mr McNally commented: “Notwithstanding the significant near-term uncertainties, over the longer term, strong industry fundamentals remain. In addition to the increased demand for healthcare generally created by ageing populations with increased incidence of chronic disease, there are also now longer public waiting lists in each of our markets. We expect to play an enhanced role in relieving pressure on public waiting lists into the future.”

The managing director also revealed that the company continues to look at expanding its network at home and abroad.

“Following our recent $1.5 billion equity raising, Ramsay is also committed to expanding our business both in Australia and overseas, in and out of hospital where there is a strategic fit and it meets our strict investment criteria. We have a strong balance sheet to support this growth strategy,” he concluded.

More reading

• Sonic share price surges to record high as its profit results defy sceptics
• Why I would buy and hold these ASX healthcare shares until 2040
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• 3 quality ASX shares to buy in August
• Has the CSL share price lost its ASX 200 market darling status?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 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 Air New Zealand Limited (ASX: AIZ) share price is on watch this morning after the airline revealed its full year results. The coronavirus pandemic has wreaked havoc on airlines, and Air New Zealand is no exception. The result affirms the unprecedented impact the pandemic has made on the global aviation industry following the implementation of travel restrictions in March. 

What did Air New Zealand report? 

Air New Zealand reported a loss before tax and significant items of $87 million for FY20, its first loss in 18 years. This compares to earnings of $387 million in FY19. Despite reporting a strong interim profit of $198 million, COVID-19-related travel restrictions resulted in a 74% drop in passenger revenue from April to the end of June. This drove full year operating losses. Statutory losses before tax, which included $541 million of significant items, were $628 million. Non cash items reflected most of the significant items, including a $338 million aircraft impairment charge related to the grounding of the Boeing 777-200ER fleet for the foreseeable future. 

How has Air New Zealand responded to COVID-19? 

Air New Zealand has responded to the coronavirus crisis with a sense of urgency. The airline secured additional liquidity, structurally reduced its cost base, and deferred significant capex spend. The business pivoted quickly to ramp up domestic and cargo services to help keep the New Zealand economy moving.

Chair Dame Therese Walsh said: “Faced with such a swift decline in revenue as lockdown restrictions were implemented and borders were closed, we took immediate steps to secure $900 million in additional funding, and drastically reduced our cash burn in the knowledge that, for a time, we would be a much smaller business than we had been pre-COVID-19.”

Positioning for recovery 

Air New Zealand is preparing for an eventual recovery in demand via a strategy refresh focused on sustaining competitive strengths. The airline had short term liquidity of $1.1 billion as at 25 August. This was made up of cash and a $900 million loan facility from the New Zealand Government. Cash burn averaged $175 million per month from April to June due to higher refunds and redundancy payments. This reduced, however, to $85 million for July. 

The company is focused on preserving liquidity across a range of potential demand recovery scenarios. Given current financial pressures, no final dividend was declared for FY20. Due to uncertainty around travel restrictions and the level of demand in FY21, Air New Zealand is unable to provide specific earnings guidance. Nonetheless, it noted that each of the scenarios it is currently modelling suggest it will make a loss in 2021. 

The Air New Zealand share price was trading at $1.28 at close of trade yesterday.

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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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