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ASX Trading Wrap: Travel shares mount a comeback, WiseTech soars, Appen crumbles

vitamin and health supplements manufacturer Blackmores (ASX: BKL) leapt nearly 30%
vitamin and health supplements manufacturer Blackmores (ASX: BKL) leapt nearly 30%
vitamin and health supplements manufacturer Blackmores (ASX: BKL) leapt nearly 30%

Rene Anthony

Thursday, August 26, 2021

Thursday, August 26, 2021

As the reports kept pouring through, the local stock market managed to eke out a gain, led by a resurgence in interest towards travel stocks

As the reports kept pouring through, the local stock market managed to eke out a gain, led by a resurgence in interest towards travel stocks

Reporting season played a major role in separating the best-performing and worst-performing shares this week, with no shortage of companies in the spotlight. Travel stocks defied the odds to leap higher, while mixed fortunes greeted tech names. The ASX 200 gained 0.4% this week, closing on 7,488.30 points.

Which shares excelled?

WiseTech Global (ASX: WTC) was the week biggest mover among large-cap shares, with the stock at one point skyrocketing nearly 60%. The company FY21 results were the catalyst for the action, with revenue growing 18% to $507 million and net profit doubling to $105.8 million as software user metrics soared, assisting market penetration. 

The logistics software company smashed its EBITDA guidance of between $165 million to $190 million, delivering $206 million, largely aided by recurring revenue. On the strength of its free cash flow, up 149% year-on-year, the company lifted its final dividend by a comparable amount, and also took the opportunity to upgrade its guidance for FY22. Moving forward, management expects revenue growth of 18-25% in the current financial year, and EBITDA to surge 26-38% to between $260 million and $285 million.

Elsewhere, vitamin and health supplements manufacturer Blackmores (ASX: BKL) leapt nearly 30% throughout the week on the back of its full-year results. For the most-recent financial year, the company saw its revenue grow by 1.3% to $575.9 million, while underlying NPAT increased by more than 50% to $25.4 million. Much of the growth came from a better performance out of China, which reversed course from recent results where the market had been a point of concern.

Hopes have been building among investors in travel stocks, despite resounding losses being announced among the popular companies in this sector. However, investors appear to be looking forward, gaining some confidence from the accelerating vaccine roll-out and optimism about the prospects of potential international travel by the year end, at least according to Qantas' (ASX: QAN) best estimates. Other names flying higher this week were Flight Centre (ASX: FLT), Webjet (ASX: WEB) and Corporate Travel Management (ASX: CTD).Wealth management platform Hub24 (ASX: HUB) hit an all-time high after reporting a 34.4% increase in revenue to $110 million, as well as net profit after tax of $9.8 million. Perhaps the standout number, however, was the 141% surge in platform Funds Under Administration (FUA), which hit $41.4 billion. In addition, the company announced a strong outlook, with platform FUA already surpassing its prior FY22 guidance, enabling management to already lift its guidance for FY23.A host of other names were on the winners list this week including health care trio Clinuvel Pharmaceuticals (ASX: CUV), Nanosonics (ASX: NAN) and Imugene (ASX: IMU), enterprise software provider Fineos (ASX: FCL), retailers such as City Chic (ASX: CCX), Lovisa (ASX: LOV) and Cettire (ASX: CTT), plus the likes of Australian Strategic Materials (ASX: ASM), Paladin Energy (ASX: PDN), and Z Energy (ASX: ZEL).

Which shares dragged on the market?

Shares in Bravura Solutions (ASX: BVS) were sharply lower this week, down around 19% and leading the losses among the worst-performing shares in the top-end of the market. With revenue down 11% in FY21, and NPAT also sinking 14% to $34.6 million, the company just squeezed in to meet guidance. More importantly, the software firm long-term CEO, Tony Klim, signalled he will exit the company after 13 years in a blow to its outlook.

Health insurer NIB Holdings (ASX: NHF) also plummeted in the wake of its earnings report, despite posting solid numbers. The company recorded a 2.9% lift in revenue, while NPAT soared 84.5% year-on-year to $160.5 million. Its Return On Invested Capital (ROIC) returned to pre-pandemic levels. However, it was the company outlook weighing on investors' minds, with management citing lockdowns as a headwind for health insurance growth, and travel policies to remain subject to the impact of travel restrictions and COVID-19.

Former market darling Appen (ASX: APX) has seen its fall from grace go from bad to worse, with the share price sinking like a stone this week. Despite growth in new markets, the machine-learning and AI firm saw Group revenue drop 2% in the half as projects are expected to skew towards the second half of the year, and global services revenue was impacted by customer resource movements. Underlying profits fell by more than a third due to amortisation expenses and forward EBITDA guidance was reduced by US$2 million following its acquisition of data firm Quadrant.Another name that was a favourite amid last year lockdowns, however, has now seen momentum turn against it, is Kogan (ASX: KGN). The ecommerce retailer shocked the market this week when it unveiled an 87% drop in net profits for the year. Mounting inventory issues have hit the company hard, with expenses rising at the same time that sales growth has been moderating. The online retailer also scrapped its dividend in a sign of the company uncertain outlook.After a strong run, Ansell (ASX: ANN) share price hit the skids. While the medical and health care equipment manufacturer delivered a 58% rise in full-year profits, it was news of issues affecting the company supply chain in Asia that rattled shareholders. That has clouded the company outlook in the current financial year, with the stock falling more than 11%.Most of the other names weighing on the major indices this week were companies that reported throughout the week, including plumbing retailer Reece (ASX: REH), shoe retailer Accent Group (ASX: AX1), IT management firm Link Administration (ASX: LNK), lottery company Jumbo Interactive (ASX: JIN), as well as building material suppliers Adbri (ASX: ABC) and Boral (ASX: BLD).

We'll be back next week with another Weekly ASX Trading Wrap Up - until then, have a great week!

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