Reporting season 2022: Bubs breaks records while Domino’s slumps on same-store falls

Posted: 23 February 2022 10:06 am
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Reporting season is underway with investors gaining a snapshot of how businesses are performing.

On another jam-packed day of reporting season, investors gained a snapshot into everything from a logistics tech company to a supermarket giant and an ethically based fund manager.

Following on from yesterday's announcements, which was headlined by Coles and Cochlear, investors gained a glimpse into how COVID is continuing to impact Australia's largest businesses.

Here's what you need to know.

Woolworths

Following on from rival Coles's announcement yesterday, supermarket giant Woolworths is also reporting that this is one of the most challenging periods the company has faced.

In the 6 months until 31 December, sales were up 8% to $31.9 billion. Its earnings before interest and taxes slumped 11% while its net profits fell 6.5% to $795 million.

Lower profits have seen Woolworths slash its dividends to 39 cents per share.

The company notes its sales rising but earnings falling is due to higher direct and indirect costs related to COVID-19.

It also points out that closures to stores, including its Big W brands, had an impact on its bottom line.

Woolworths group CEO Brad Banducci said: "While the far-reaching impacts of COVID resulted in one of the most challenging halves we have experienced, we ended H1 strongly with positive trading momentum and helped our customers enjoy a much-needed Christmas celebration and festive holiday season," he said.

Shares in Woolworths are up 3.85% to $36.55.

WiseTech

Meanwhile software for logistics company WiseTech has lifted its guidance after a 77% rise in profits.

The company highlights to the ASX that the challenges facing the logistics sector have not impacted WiseTech, which has seen its total revenue increase 22% to $281 million in the 6 months until 31 December. It is now reporting net profits after tax increases of 77% to $77.3 million.

As such, it is lifting its interim dividend by 76%, with shareholders receiving 4.75 cents per share.

It notes that global supply chain issues that still exist are easing among factories in the US and Europe at the same time ecommerce remains strong.

Moving forward, the company is now increasing earnings before interest, taxes, depreciation and amortisation (EBITDA) guidance by $10–$15 million in FY22, with its revenue likely to increase between 18–25%.

WiseTech founder and CEO Richard White said, "We are seeing ongoing momentum in our market penetration with 3 new CargoWise large global rollouts secured since 1 July 2021 and continued strong CargoWise revenue growth demonstrating the appeal of our customer value proposition."

Investors agreed with the positive outlook with shares increasing by 3.52% to $44.30.

Domino's

Also noting the challenges of COVID, Domino's Pizza Enterprises has seen its sales grow but its profits fall.

In its latest results, it shows network sales increased by 11.1% to $2.05 billion while online sales were up 11.5% to $1.6 billion. However, net profits after taxes fell 5.3% to $91.3 million.

The company has added stores into its 10th market being Taiwan as it continues to grow across Asia, adding 500 stores across Asia, Europe and Australia over the last 6 months.

Despite growing in numerous locations, the company warns same-store sales are set to fall below its long-term goal of 3–6%.

Group CEO and managing director Don Meij said it remains the company's intention to deliver growth through long-term investments, even through COVID.

"While there may be uncertainty about what it means for society to be 'living with COVID', we are certain we have the essential ingredients for long-term future success, and plan to deliver significant continued growth."

"COVID-19 has brought unanticipated challenges, including the closure of a market, temporary store closures and staff shortages as they self-isolate as patients or close contacts," Meij told the ASX.

"It is a testament to our team to have delivered a strong performance in the face of these challenges."

Shares in Domino's fell 11.61% to $88.55 following today's announcement.

Bubs

Australian baby formula and food maker Bubs has reported record revenues.

On its latest statement to the ASX, its first underlying EBITDA profit is 1.2 million in the first half, off a record gross revenue of $38.5 million, which is up 73% on the prior corresponding period.

Bubs' forward guidance sees gross quarterly revenue reach 19.9 million by Q2 FY22 back to where it was pre COVID pandemic. The company said its financial turnaround is due to strong revenue performance across its key business sectors.

Bubs founder and CEO Kristy Carr notes she is pleased with the first-half performance.

"This was a product of management's uncompromising focus and ability to execute on strategic initiatives with precision, notwithstanding challenging macroeconomic conditions," Carr said.

Shares in Bubs are up nearly 7% to $0.46 following today's announcement.

Australian Ethical

Ethically based superannuation and managed fund Australian Ethical has announced the company is continuing to benefit from people looking to align their money with their values.

The company is reporting strong revenue increases to the 6 months to 31 December 2021, off the back of operating revenue being up 38% driven by strong growth in customers and net flows.

As it currently stands, the business has $6.9 billion in funds under management with its total net flows of $0.6 billion, which is up 42%.

Overall, the company's net profits after tax is $5.4 million. Shareholders in the business will receive a dividend of 3 cents per share.

Australian Ethical CEO John McMurdo points to strong momentum away from mainstream investing towards a more responsible way of making money.

"In a year where Australia's responsible investment markets reach new highs, it's clear that a 'check the box' approach is no longer enough", he said.

"As Australia's original and leading ethical investor, this puts us in an enviable position to capture our natural and achievable share of a rapidly growing addressable market."

Shares in Australian Ethical are slightly down at $8.02 per share.

Cameron Micallef owns shares in Australian Ethical at the time of writing.

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