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The A2 Milk Company Ltd (ASX: A2M) share price will be on watch on Wednesday after the release of its highly anticipated full year results this morning.

How did a2 Milk Company perform in FY 2020?

The fresh milk and infant formula company was on form again in FY 2020 and delivered further strong top and bottom line growth.

For the 12 months ended 30 June 2020, a2 Milk Company delivered a 32.8% increase in revenue to NZ$1,730 million. This compares to its revenue guidance range of NZ$1,700 million to NZ$1,750 million.

Also coming in on target was its earnings before interest, tax, depreciation, and amortisation (EBITDA) margin. The company finished the period with an EBITDA margin of 31.7%, compared to its guidance range of 31% to 32%.

This was despite the company investing NZ$194.3 million in marketing in FY 2020 targeting opportunities in China and the USA, which was an increase of 45.1%.

It led to a2 Milk Company reporting a 32.9% increase in EBITDA to NZ$549.7 million in FY 2020.

On the bottom line, the company posted net profit after tax of NZ$385.8 million and earnings per share of 52.39 NZ cents. This represents an increase of 34.1% and 33.5%, respectively, year on year. The former is roughly in line with consensus estimate of NZ$389 million.

A2 Milk Company’s free cash flow was strong once again. It generated operating cash flow of NZ$427.4 million, which led to the company ending the period with a closing cash balance of NZ$854.2 million.

The company also had inventory worth NZ$147.3 million on hand at the end of the period. Management notes that this was higher than prior years. This reflects its growing business and its decision to carry a higher level of inventory as a safety buffer given the uncertainties of COVID-19.

What were the drivers of its growth?

The biggest generator of revenue for the company was of course its infant nutrition business. It reported a 33.8% increase in infant nutrition revenue to NZ$1,420 million in FY 2020.

This was driven by strong growth in China label infant nutrition, with sales more than doubling to NZ$337.7 million. During the year the company’s distribution network expanded to ~19.1k stores in the key market. Despite this strong growth, a2 Milk Company ended the period with just a 2% mother and baby value share in China. This was up from 1.7% at the end of the first half and 1.3% at the end of FY 2019.

Management commented: “It was pleasing to see our expanded market share in this strategically important sales channel given heightened competitive activity across 2H20 and we continued to invest in driving demand across e-commerce platforms. There has been a concerted effort throughout the year to better track and understand the effectiveness of our digital marketing tools with an increased focus on data analytics to further refine and optimise our approach. This will continue in FY21.”

Also supporting its top line growth was its USA milk business, which reported revenue growth of 91.2% after its distribution expanded to ~20.3k stores.

Outlook.

Management notes that there continues to be uncertainty resulting from COVID-19 and the potential for moderation of economic activity. It warned that this could impact consumer behaviour in its core markets.

Nevertheless, it continues to anticipate strong revenue growth in FY 2021, supported by its sustained investment in marketing and organisational capability.

However, due partly to higher raw material costs, increased marketing investment, and non-repeating foreign exchange and COVID-19 benefits, the company expects its EBITDA margin to soften slightly to between 30% and 31% in FY 2021.

Looking further ahead, the board believes this level of EBITDA margin is appropriate for the medium term.

It commented: “the Board considers it appropriate that the Company target an EBITDA margin in the order of 30% in the medium-term. This assumes the market performance and mix of our products remains broadly consistent and the competitive environment evolves as anticipated. We will keep the balance between growth and investment under constant review.”

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Where to invest $20,000 into ASX shares immediately
• Top brokers name 3 ASX shares to buy next week
• 5 things to watch on the ASX 200 next week
• How to turn $20,000 into $900,000 in 5 years with ASX shares

Motley Fool contributor James Mickleboro 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.

The post a2 Milk Company share price on watch after delivering more strong growth in FY 2020 appeared first on Motley Fool Australia.

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On Tuesday the S&P/ASX 200 Index (ASX: XJO) was back on form and stormed notably higher. The benchmark index rose 0.8% to 6,123.4 points.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 to edge lower.

The benchmark ASX 200 is expected to edge lower on Wednesday morning. According to the latest SPI futures, the benchmark index is poised to open the day 6 points of 0.1% lower. This follows a mixed night of trade on Wall Street which saw the Dow Jones fall 0.25%, but the S&P 500 rise 0.2% and the Nasdaq storm 0.7% higher.

A2 Milk Company FY 2020 results.

The A2 Milk Company Ltd (ASX: A2M) share price will be on watch today when it releases its full year results for FY 2020. The infant formula company has provided revenue guidance of NZ$1,700 million to NZ$1,750 million. According to CommSec, the market is expecting the company to report a net profit after tax of NZ$389 million. This will be a 35% increase on FY 2019’s net profit after tax of NZ$287.7 million.

CSL to hand in its results.

Another big result release on Wednesday comes from CSL Limited (ASX: CSL). According to CommSec, the market is expecting the biotherapeutics giant to post a net profit after tax of US$2.11 billion. However, the main focus is arguably going to be on management’s outlook for FY 2021. This is because there are concerns that COVID-related disruptions to plasma collections could weigh heavily on its performance this year.

Oil prices soften.

Energy producers such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could come under pressure today after oil prices softened overnight. According to Bloomberg, the WTI crude oil price is down 0.7% to US$42.58 a barrel and the Brent crude oil price is down 0.6% to US$45.10 a barrel. This appears to have been driven by a spot of profit taking after solid gains the day before.

Gold price breaks through US$2,000 mark again.

It could be a positive day for gold miners Evolution Mining Ltd (ASX: EVN) and Resolute Mining Limited (ASX: RSG) after the gold price broke through the US$2,000 an ounce mark again. According to CNBC, the spot gold price is up 0.7% to US$2,012.30 an ounce. Weakness in the U.S. dollar and Warren Buffett’s investment in the space are supporting the precious metal.

More reading

• Where I would invest $10,000 in ASX shares right now
• These 2 exciting ASX 200 shares soared higher today
• ASX 200 rises 0.8%, Treasury Wine Estate shares turn sour
• 3 fantastic ASX 200 shares for retirees to buy
• The latest 3 ASX stocks to be hit by a broker downgrade today

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 CSL Ltd. 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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If you’re looking for some generous dividends next year, then I think you ought to consider buying the two ASX dividend shares listed below.

Here’s why I think they are well-positioned to pay generous dividends in FY 2021:

Aventus Group (ASX: AVN)

Aventus is a retail property company which owns a portfolio of 20 large format retail parks across Australia. Although the retail industry is a difficult place to be right now, I’m optimistic that Aventus will be less impacted by the pandemic than many of its peers due to its high weighting towards everyday needs. This includes leases to The Good Guys, Officeworks, Bunnings, and Aldi.

Furthermore, I believe its portfolio is well positioned for the longer term because of low vacancy rates, sustainable rents, low expenditures, and its ability to re-mix tenants. I’m expecting a distribution of at least 16 cents per unit in FY 2021. Based on the current Aventus share price, this represents a forward ~7.8% distribution yield

Dicker Data Ltd (ASX: DDR)

A second ASX dividend share I would buy for income in 2021 is Dicker Data. It is Australia’s leading locally owned and operated distributor of IT hardware, software, cloud, and Internet of Things solutions for reseller partners. It has been growing its sales, profits, and dividends at a consistently solid rate over the last few years.

Pleasingly, this positive form is continuing in FY 2020 despite the pandemic. Dicker Data recently released a first half update which revealed exceptionally strong profit growth. In light of this, management advised that it plans to lift its full year dividend by 31% to 35.5 cents per share. This represents a very attractive 4.6% fully franked dividend yield. Given its positive outlook, I expect further growth in its dividend in FY 2021. This could make it one of the best dividend shares to buy right now.

More reading

• 2 top ASX tech shares to buy and hold beyond 2026
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• Rates on hold until 2023? Buy these ASX dividend shares
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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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If your risk profile allows you to invest in small cap ASX shares, then you might want to take a look at the ones listed below.

I believe all three of these small cap ASX shares have strong growth potential and could be well worth adding to your watchlist. Here’s why I like them:

Clover Corporation Limited (ASX: CLV)

Clover is a producer of specialist ingredients that are designed to deliver science-based benefits to the global infant children and medical food markets. It has been growing its sales at a strong rate over the last few years thanks largely to increasing demand for omega-3 oils from infant formula manufacturers. Given favourable changes to ingredient requirements in a number of key markets, I expect this positive form to continue over the coming years.

Nitro Software Ltd (ASX: NTO)

Nitro Software is a software company aiming to drive digital transformation in organisations around the world across multiple industries. Its core product offering is the Nitro Productivity Suite. It provides integrated PDF productivity and electronic signature tools to customers through a horizontal, software-as-a-service, and desktop-based software solution.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara Health Technologies is a provider of software that leverages artificial intelligence imaging algorithms to assist with the early detection of breast and lung cancer. Demand for its software continues to grow at a rapid rate, leading to stellar market share gains and recurring revenue growth. Given the quality and stickiness of its software and management’s aim of generating higher and higher revenues per user, I believe it is well-positioned for growth over the next decade.

More reading

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• 3 exciting small cap ASX shares to put on your watchlist immediately

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 Clover Limited and VOLPARA FPO NZ. The Motley Fool Australia has recommended Nitro Software Limited and VOLPARA FPO NZ. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why you should add these small cap ASX shares to your watchlists appeared first on Motley Fool Australia.

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I think that ASX shares are a great way for beginner investors to build their wealth.

Don’t go thinking that you’re going to double your money in a few weeks. That’s not how normal investing works. The long-term average returns of shares has been around 10% per annum. If you manage to beat that then I think you’re doing well.

One of the main things I’d suggest for beginner investors is that you could look for diversified investment options away from the ASX. Sadly, many of the businesses that feature heavily on the ASX, like the big banks, don’t have much long-term growth potential in my opinion.

So that’s why I’d suggest buying these ASX shares for a beginner’s portfolio:

BetaShares Global Quality Leaders ETF (ASX: QLTY)

Here’s an explainer about exchange-traded funds (ETFs). You can buy a fund on the ASX, giving you exposure to lots of businesses in a single investment.

There are lots of different types of ETFs. But I only think it’s worth investing in an ETF which has good underlying holdings. An ETF will only perform as well as its investments.

The ETF I’ve named doesn’t invest in ASX shares, it invests in quality global businesses that rank well on four key attributes: return on equity (ROE), debt to capital, cash flow generation ability and earnings stability.

What that means is that the ETF is aiming for specific types of businesses that are highly profitable for how much money the shareholders have had to contribute, those businesses have healthy levels of debt, that they’re generating real cash profit (not just from accounting tricks) and that the earnings are generally reliable year to year.

So what shares count as quality? Nvidia, Apple, Accenture, Adobe, Facebook, Intuitive Surgical, Nike and Intuit are some of the biggest names featured.

The ETF has performed strongly in its short life – since inception in November 2018 it has returned an average of 18.8% per annum.

Clearly the stocks in this ASX share’s portfolio can produce strong returns. It’s invested heavily in the technology sector – around a third of the ETF is made up of IT businesses. Another 26.5% is allocated to healthcare shares. Healthcare shares are very defensive.

The ETF has an annual management fee of just 0.35%, which is cheap compared to active managers. The lower the fees the higher the net returns for investors.

Future Generation Global Invstmnt Co Ltd (ASX: FGG)

Future Generation Global is an ASX share that operates as a listed investment company (LIC). The job of a LIC is to invest in other shares on your behalf.

This LIC is quite different to most other LICs. It actually invests into the funds of Australian fund managers who invest in global shares. The special thing is that there are no management fees or performance fees involved with the LIC. All of the fund managers work for free so that the ASX share can donate 1% of its net assets per annum to youth mental health. Mental health support is particularly important during these difficult times.

Future Generation Global’s portfolio has produced impressive returns. The gross portfolio return has outperformed the MSCI AC World Index (AUD) over the past month, six months, twelve months, three years and since inception in September 2015.

Over the past six months, Future Generation Global’s return has outperformed by 5% and over the past year it has outperformed by 4.8%.

Some of the largest fund management allocations include 12.4% to Magellan Financial Group Ltd (ASX: MFG), 11% to Cooper Investors and 9.9% to Caledonia.

I think it’s a particularly good time to invest today because Future Generation Global’s pre-tax net tangible assets (NTA) was $1.505 at 31 July 2020. That means at the current Future Generation Global share price it’s trading at a 15% discount to the NTA. You can buy $1 of assets of the ASX share for $0.85. Not bad at all, considering Future Generation Global has shown long-term outperformance.

Foolish takeaway

I think both of these ASX shares would be great options for beginner investors. I think they can outperform the ASX’s overall return. At the current prices I would probably go for the Future Generation Global LIC because of the large NTA discount, but the quality ETF is likely to keep doing well too.

More reading

• Future Generation LICs grow dividends in June result
• 3 ASX shares I’d buy to quickly add diversification

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If you have cash sitting idle in a bank account, you will likely be disappointed at the low interest rates that appear to be sticking around for some time to come. A better strategy could be to invest in ASX shares.

The ASX share market has consistently moved higher since the lows we saw in March when COVID-19 shut down economies all over the world. In spite of the setbacks, many companies are evolving with new ways of working and pushing forward with growth strategies.

Investor confidence appears to be returning amidst a range of government stimulus measures and hopes of a vaccine. I believe there is no time like the present to invest. So, how should you invest your money? If we take a hypothetical $10,000, here is how I would invest it right now:

How I’d invest $10,000 in ASX shares

$2,000 | Xero Limited (ASX: XRO)

Xero is a leading provider of cloud-based, business software. It essentially helps organisations to run their businesses. In an ever-changing world, more and more companies are relying on Xero to manage their operations. The Xero share price has a history of strong performance, rising a staggering 2,000% since listing on the ASX. In my view, investors thinking they have missed out on all the growth don’t need to worry. The Xero share price is still currently growing strongly, increasing by more than 70% since the March bear market.

With more than 2 million subscribers, Xero maintains a substantial customer base by any measure. At its recent AGM, Xero announced an additional 96,000 subscribers were added to the platform from April to July. One thing I love about Xero is its mission to make life easier for business owners. In my experience, a business owner needs to focus on ‘keeping the main thing, the main thing’. As such, relying on software that simplifies management and operations is essential to business growth.

Xero software integrates with many common business expenses, such as those generated by fuel providers Caltex and BP, and even transport providers such as Uber for Business. For banking integration, Xero accesses bank feeds daily to save time with cash flow and reconciliation. All major Australian banks are supported by the platform including National Australia Bank Ltd (ASX: NAB), Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group Limited (ASX: ANZ), Westpac Banking Corp (ASX: WBC) and also Bendigo and Adelaide Bank Ltd (ASX: BEN).

The business landscape is changing rapidly and often the only way to survive is to adapt. Xero enables businesses to do just that. 

$5,000 | BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)

This ASX ETF aims to track the performance of the S&P/ASX All Technology Index (ASX: XTX) (before fees and expenses). By investing your money here, you are effectively getting exposure to many leading Australian companies in the technology space. Sectors covered include information technology, consumer electronics, online retail, and medical technology. 

The top ten holdings inside this ETF consists of 

• Afterpay Ltd (ASX: APT) at 18.1% 
• Xero Limited (ASX: XRO) at 10.8%
• Computershare Limited (ASX: CPU) at 7.4%
• Seek Limited (ASX: SEK) at 7.2%
• REA Group Limited (ASX: REA) at 6.0%
• Nextdc Ltd (ASX: NXT) at 5.8%
• Carsales.com Ltd (ASX: CAR) at 5.0%
• Altium Limited (ASX: ALU) at 4.5%
• Appen Ltd (ASX: APX) at 4.3%
• WiseTech Global Ltd (ASX: WTC) at 3.1%

Technology companies are thriving amidst the COVID-19 pandemic as the world goes through a digital evolution. Buying this ASX tech ETF can help to give your portfolio broad exposure, while maintaining your investment in Australian companies.

$3,000 | CSL Limited (ASX: CSL)

Who better to tackle the COVID-19 pandemic than a company with a 100 year history of successfully delivering biotherapies and vaccines? CSL is at the forefront of healthcare development. I feel it is one of the highest quality companies available on the ASX. If you’re looking to invest in ASX shares, I definitely think it should feature in your portfolio. 

The federal government is backing this biotech superstar to help produce COVID-19 vaccines for all of Australia. On top if this, CLS recently announced it had entered into a strategic partnership with the Coalition for Epidemic Preparedness Innovations (CEPI) and the University of Queensland to help with fast tracking of a vaccine. 

The CSL share price is up more than 800% over the last decade, or around 80% per year. Currently it’s trading at a 14% discount to its pre-COVID highs, representing a good buying opportunity.

Foolish takeaway

If I’m employing a common sense approach to investing, I’m looking for companies and funds that stand to gain the most from real world events. The economy is still suffering through the pandemic which can make you feel uneasy as an investor.

Despite this, I believe one thing is for sure; technology and healthcare are both going to be prominent growth industries moving forward. If we continue to struggle with this pandemic longer term, tech and health will continue to thrive. If we recover more quickly, these industries are still critical aspects of everyday life. Personally, if I was to invest $10,000 into ASX shares right now, it would definitely be in the tech and healthcare sectors.

More reading

• These 2 exciting ASX 200 shares soared higher today
• Tech shares race to record highs as Bank of America tips BHP and Rio shares
• Nextdc and 2 other thriving ASX tech shares to buy
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• The Starpharma share price jumps on new partnership deal

glennleese 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 Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO, Appen Ltd, and WiseTech Global. The Motley Fool Australia has recommended carsales.com Limited, REA Group Limited, and SEEK 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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Overall, it was a positive day for the S&P/ASX 200 Index (ASX: XJO). The index recouped nearly all of yesterday’s losses, closing out the day 0.77% higher at 6,123.40 points. But as always, there were some ASX 200 shares that significantly outperformed the index. Let’s take a look at what drove these two high-profile shares higher today. 

2 ASX 200 shares that climbed higher today

CSL Limited (ASX: CSL)

The second largest company on the ASX by market capitalisation, this blue-chip biotech is involved with the research and development of blood medicines as well as vaccinations.

CSL’s major strength is its plasma products – made from human blood. In Australia, the company relies on blood donated through the Red Cross. However, a majority of the company’s source material comes from donors in the United States. US donors are paid each time they donate blood which represents a strong monetary incentive for people, particularly in the current climate.

CSL holds around 20% share of the global plasma market.

Financial Outlook

Over the past few months, there have been concerns regarding the impact coronavirus will have on plasma collections for CSL as these are considered the lifeline of the company. However, CSL has actually stockpiled enough blood plasma to see it through until next year.

CSL will be releasing its FY 2020 results tomorrow. The ASX share market is expecting the biotech giant to post a net profit after tax of US$2.11 – $2.17 billion and a capital position of around US$1.1 billion in liquidity. All eyes will be on management’s outlook statements for FY2021. If today’s CSL share price is anything to go by, clearly investors are expecting good news. 

By the close of trade today, the CSL share price was up 4.5% to $293.29. It will be interesting to see whether the Aussie biotech can keep up this momentum following Wednesday’s update. 

Nearmap Ltd (ASX: NEA)

A leading specialist in high-resolution aerial imagery technology and location data, Nearmap provides geospatial map technology for business customers across Australia, New Zealand, the US, and Canada.

The company’s subscription-based service is used by a diverse range of customers in industries such as government, architecture, construction, engineering, insurance, real estate, and a host of others.

Financial Outlook

Nearmap has been growing its sizeable recurring revenue at a strong rate due to increasing demand for its services. Management expects the global imagery market to be worth US$10.1 billion this year. This is extremely positive given Nearmap operates in a highly fragmented market.

In April, the company released a business update to the market advising it had not seen any material impact from the current trading conditions. However, a number of cost-saving measures were implemented to preserve cash and maintain a healthy balance sheet without the need for capital raising.

Last week, a positive note out of broker, Citi, raised Nearmap’s shares to a target price of $2.75.

Like CSL, Nearmap will be releasing its FY 2020 results to the market on Wednesday this week. And, once again, it would appear that investors are expecting good things. By the end of the day, the Nearmap share price was up 6.3% to finish Tuesday’s session at $2.68. The Nearmap share price has risen a staggering 212% from its March low and is 6.8% up in year-to-date trade.

Foolish takeaway

The share market is clearly anticipating good things to come from both these ASX 200 shares. Both the CSL and Nearmap share prices have finished the day in positive territory – outperforming the ASX 200 less than 24 hours before the release of their FY20 results.

Although tomorrow will be an active day for investors as they digest the hotly anticipated results, regardless of this, I think that both CSL and Nearmap shares are great, long-term hold options.

More reading

• Why I would buy Nearmap and this ASX mid cap share right now
• Buy and hold these fantastic ASX blue chip shares
• The Starpharma share price jumps on new partnership deal
• 5 things to watch on the ASX 200 next week
• Get rich buying and holding these fantastic ASX shares

Aaron Teboneras owns shares of CSL Ltd. and Nearmap Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and Nearmap Ltd. The Motley Fool Australia has recommended 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 Service Stream Limited (ASX: SSM) share price will be on watch on Wednesday following the release of its full year results after the market close.

How did Service Stream perform in FY 2020?

For the 12 months ended 30 June 2020, the essential network services provider delivered a 9% increase in revenue to $929.1 million.

This was driven by a strong performance from its Utilities segment, which recorded a 45.3% or $119.8 million increase in revenue to $384.1 million. This was largely the result of the inclusion of a full year of revenue from Comdain Infrastructure. Revenue from Metering Services and New Energy activities was largely flat. This was due to a suspension across gas and electricity disconnections and delays in contract awards due to COVID-19.

The strong growth in Utilities revenue offset a weak year from the Telecommunications segment. It recorded a 7.7% or $45.2 million decline in revenue to $544.2 million. This was due to the successful conclusion of its NBN D&C operations in addition to clients delaying the start of a number of wireless projects due to the pandemic. This offset revenue associated with fixed-line activation and maintenance services, which increased during the year despite reductions across some O&M activities.

Improved margins led to Service Stream’s earnings before interest, tax, depreciation, and amortisation (EBITDA) from operations growing 15.9% to $108.1 million.

And on the bottom line, the company’s statutory net profit after tax came in at $49.3 million, down 1.1% year on year. This statutory result includes the impact of one-off non-operational costs and charges totalling $11 million.

Dividend.

Service Stream’s operating cash flows before interest and tax (OCFBIT) came in at $86.4 million, with profit to cash conversion exceeding 80% for the year.

This allowed the company to declare a final fully franked dividend of 5 cents per share despite the pandemic. This brought its full year dividend to 9 cents per share, which was flat on the prior corresponding period.

Chairman, Brett Gallagher, commented: “The Board is delighted to report a further year in which Service Stream has delivered another strong result. It’s especially pleasing that the fundamentals of our business have provided a position of strength, enabling dividend payments to be maintained, particularly at a time when many organisations have come under considerable pressure due to COVID-19.”

“The Board remains confident of continued demand for our essential services through these uncertain times, and that the business is uniquely positioned with a strong base of contracted revenues across a stable and dependable client base of utility and telecommunications asset owners and operators,” he added.

Nevertheless, given the current environment, no guidance has been provided for the year ahead. However, management stated that its “earnings are expected to remain resilient” in FY 2021, supported by long term contracts.

More reading

• These 2 exciting ASX 200 shares soared higher today
• ASX 200 rises 0.8%, Treasury Wine Estate shares turn sour
• Should you buy the beaten down shares of Bubs and Webjet?
• Kogan share price rockets 12% to a record high: Is it too late to invest?
• Estia Health share price jumps 4% following annual results

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Service Stream 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 S&P/ASX 200 Index (ASX:XJO) went up by 0.8% today to 6,123 points.

There were a number of important announcements today. I’ll start with the biggest movers:

Treasury Wine Estates Ltd (ASX: TWE)

The Treasury Wine Estates share price fell 14.3% after news from China.

According to the company’s announcement, the Chinese Ministry of Commerce has initiated an anti-dumping investigation into Australian wine exports into China.

The ASX 200 business said that it will co-operate with any requests for information received from Chinese or Australian authorities.

China is one of Treasury Wine Estates biggest export markets and the company thinks of China as a priority market.

Monadelphous Group Limited (ASX: MND)

At the other end of the performance table the Monadelphous share price rose by 19%.

It released its FY20 result showing that revenue increased by 2.6% to $1.65 billion.

The ASX 200 company achieved earnings before interest, tax, depreciation and amortisation (EBITDA) of $92.1 million with net profit after tax (NPAT) of $36.5 million.

The engineering businesses finished with a cash balance of $208.3 million. Management said this balance sheet will allow the company to invest in suitable business opportunities aligned to its new markets and growth strategy as they arise.

Management believe that the resources sector is expected to provide a steady flow of opportunities over the coming years.

Cochlear Limited (ASX: COH)

The Cochlear share price went up by almost 10% today after reporting its FY20 result.

Cochlear announced that its FY20 sales revenue was down 6% to $1.35 billion. Underlying earnings before interest and tax (EBIT) dropped 42% to $206.9 million due to the rapid fall in sales in the second half which was a consequence of COVID-19-related surgery deferrals.

The underlying net profit also fell by 42%, to $153.8 million.

However, Cochlear announced a statutory net loss of $238.3 million for the year due to $416.3 million of patent litigation expenses and $24.2 million in innovation fund gains after tax.

The ASX 200 company’s management couldn’t provide a forecast for FY21 revenue due to COVID-19 uncertainty.

Netwealth Group Ltd (ASX: NWL)

The Netwealth share price went up by 8.5% today after reporting its FY20 result.

Netwealth reported that its total income rose by 25.5% to $123.9 million. Netwealth’s EBITDA grew by 24.8% over the year to $64.8 million. Underlying net profit after tax grew by 21.7% to $43.8 million. Statutory profit came in at $43.7 million.

The board of Netwealth decided to declare a final dividend of 7.8 cents per share.

A major part of the growth this year came from the increase of funds under administration (FUA). The FUA rose 35% to $31.5 billion. There was record FUA net inflows of $9.1 billion over the year.

In FY21 the ASX200 company expects to continue to benefit from the significant changes currently reshaping the industry and it remains positive about the future and market share growth.

Netwealth is estimating that FY21 FUA net inflows will be $8 billion.

Westpac Banking Corp (ASX: WBC)

The big ASX bank released its FY20 third quarter update today.

It said that it generated unaudited statutory net profit of $1.12 billion for the quarter to 30 June 2020. That was up from the quarterly average profit of $595 million from the FY20 first half.

Unaudited cash profit was $1.32 billion. Again, this was up from the FY20 first half quarterly average of $497 million.

During the quarter Westpac recognised an impairment charge of $826 million, further increasing its provisions and provisioning cover. The net interest margin fell to 2.05% for the third quarter because of lower interest rates and the common equity tier 1 (CET1) capital ratio was 10.8% at 30 June 2020.

In a blow to income-focused investors, the Westpac board decided not to pay a dividend for the first half of FY20. The bank wants to retain a strong balance sheet amid the ongoing uncertainty.

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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool Australia owns shares of Netwealth. The Motley Fool Australia has recommended Cochlear 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.

The post ASX 200 rises 0.8%, Treasury Wine Estate shares turn sour appeared first on Motley Fool Australia.

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Although the likes of JB Hi-Fi Limited (ASX: JBH) and Kogan.com Ltd (ASX: KGN) have just seen their shares hit record highs, not all ASX shares are faring as well.

Two ASX shares that are still trading materially lower than their 52-week highs are listed below. Are they in the buy zone?

Bubs Australia Ltd (ASX: BUB) 

I became bullish on Bubs earlier this year when it finally became cash flow positive. This appeared to indicate that the infant formula and baby food company had reached an inflection point and the days of dilutive capital raisings were finally over. However, this positive financial performance was only very brief and Bubs was burning through its cash again in the fourth quarter. Bubs reported an operating cash outflow of $6.9 million for the quarter which, combined with other costs, led to the company burning through $10.3 million of cash. This left it with a cash balance of $26 million.

If it continues to burn through cash at this rate then it will not be long at all until it needs to tap the market with yet another dilutive capital raising. And given how the company has just announced its entry into the children’s vitamins market, I suspect that its cash burn could remain high because of the increased investment. In light of this, although the Bubs share price is down 31% from its high, I wouldn’t be in a rush to invest just yet. I would suggest investors wait for clear signs that the cash burn is over before stepping in.

Webjet Limited (ASX: WEB) 

The Webjet share price is down a massive 77% from its 52-week high. Investors have been selling the online travel agent’s shares this year after the pandemic brought travel markets to a standstill. In addition to this, a highly dilutive equity raising has also weighed heavily on the Webjet share price.

While I am a big fan of Webjet as a company, I’m still not ready to make an investment. With a market capitalisation of $1.15 billion, I don’t believe it offers a lot of value for money even after its heavy decline. I would suggest investors wait for travel markets to return to relatively normal before parting with your hard-earned cash.

More reading

• Why Tyro, Virtus Health, Webjet, & Westpac shares are dropping lower
• 2 five-star ASX growth shares to buy in August
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• 5 things to watch on the ASX 200 next week
• 2 ASX shares you could invest $500 into

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 Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO and Webjet Ltd. The Motley Fool Australia has recommended Kogan.com 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.

The post Should you buy the beaten down shares of Bubs and Webjet? appeared first on Motley Fool Australia.

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