RECAP: ASX companies reveal impact of COVID-19, inflation on their bottom line

Page after page of facts and figures, spreadsheets and graphs and glowing quotes in supersized font from the CEO saying what a fantasic year it’s been.

And if you believe that ....

Reading through company reports can confuse and bore in equal measure, and often leave investors scratching their heads, wondering if they’ve got a complete picture of the financial health of a business they’ve entrusted with their hard-earned cash.

When it comes to understanding exactly what the heck those bean counter boffins are on about, there’s no one better than The West’s Neale Prior - who’s read more company reports than he’s had free long lunches - to cut through the bull.

From EDITDA to net profit, here’s what you should really be looking for while wading through those reports ...

Building fixtures and fittings company GWA Group says strong commercial refurbishment activity in Australia and continued sales momentumin the UK has been partially offset by the decline in sales in New Zealand and Asia as a result of COVID-related disruptions, including staff shortages.

The group reported full-year sales of $418.7m, up 3 per cent on the previous year, helped to lift reported net profit 0.4 per cent to $35.2m for the 2021-22 financial year.

Managing director and CEO Urs Meyerhans said approvals in the residential and commercial renovation and replacement segments remained at historically elevated levels.

“We maintain strong operational leverage to the market, underpinned by ongoing operational discipline including managing higher input cost through proactive pricing and managing inventory levels to meet customer demand,” he said.

The company declared a final dividend of 8 cents a share, fully franked, bringing the full-year dividend to 15 cents, fully franked, which is up 20 per cent on a year earlier.

GWA shares were unchanged at $2.16 at 12.05pm.

First and foremost, we’re a value driven retailer – if, assuming sales do slow, then consumers will gravitate to value and we’re absolutely known for that.

That’s what JB Hi-Fi chief executive Terry Smart told investors on a call after delivering full-year results earlier on Monday.

He expects technology’s ubiquitous place in Australian life will allow the company to focus on and refine its value offerings as consumers face higher cost of living pressures.

Read more from the call here ....

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Shares in Beach Energy are still losing ground following the release of full-year results, which many analysts said failed to live up to expectations.

Macquarie was among those left wanting more.

“Disappointing update from BPT. NPAT 13 per cent below MacQ & Consensus. No dividend increase (we expected one) despite growth campaign derisking. Guidance for FY23 also weaker & capex guide higher than expectations,” it said in a note.

Beach shares were down 13 per cent to $1.607 at 11.30am.

A buoyant Australian vehicle market has keep wheels turning at carsales.com, with the company on Monday reporting adjusted revenue of $510 million, up 16 per cent on the previous financial year.

It said the result was a reflection of strong domestic results in the private and media segments.

Adjusted net profit of $195m was up 27 per cent on 2020/21.

Group chief executive Cameron McIntyre said carsales.com was continuing to invest in future growth opportunities, including progressing the acquisition of the remaining 51 per cent of Trader Interactive in the US.

“The acquisition is a natural evolutionof our international growth strategy into large, attractive markets and brings further growth opportunities as well as increasing the diversification of our business across geography and customer segment,” he said.

“We continue to see robust levels of demand in all our key markets, reflecting the strength of our market position and the resilience of marketplace businesses through economic cycles. This gives us confidence we can continue to deliver great results for our shareholders in FY23.”

The company’s shares were up almost 5 per cent to $22.615 at 11am.

The local share market has edged higher in early trade as investors digest a spate of earnings reports and a $1 billion takeover offer.

At 10am on Monday, the S&P/ASX200 index was up 30.9 points, or 0.44 per cent, to 7063.4, while the all ordinaries was up 35.3 points, or 0.48 per cent, to 7324.1.

See what’s moving the market ...

JB Hi-Fi chief Terry Smart expects rising inflation to have little impact on the retailer’s sales, saying technology and home appliances are so entrenched in peoples’ lives that they are not discretionary purchases.

In a call with investors, Mr Smart talked up the resilience of the group’s sales. Younger customers at JB Hi-Fi would continue to upgrade phones and other technology, while at The Good Guys, where 60 per cent of sales are home appliances, fridges and washing machines would continue to be bought as needed because there are no workarounds.

“What we’ve got to do, especially now, is just stay focused ... on the customer service aspect,” he said in response to a question about reconciliing strong sales with weaker consumer sentiment.

“We’ve just got to keep monitoring that in-store (performance) and looking for ways we can improve that.”

Mr Smart said customers were less frequently using stores to browse and research. Instead, research was done online and customers went in-store with high purchase intent.

Perth-founded aerial imaging and geospatial intelligence company Nearmap doesn’t report results to the market until Wednesday but surprised many on Monday when it reported it was in advanced talks for a $1 billion takeover.

It reported earlier this year that it was plotting a potential push into Europe just as growth of its North American business overtakes its Australian operations.

Read the full story here ...