Monday, August 10, 2020

ASX 200 drops 1.5% on elevated COVID-19 fears

ASX 200

The S&P/ASX 200 Index (ASX: XJO) fell 1.5% today as investors fears increased about the continuing growing COVID-19 cases.

In Victoria there was an additional 75 new positive COVID-19 cases. The state is now considering local lockdowns and it’s undertaking a testing blitz in several suburbs.

Here are some of the highlights from the ASX 200 today:

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) reports solid growth

The healthcare business released its FY20 report today. It’s one of the ASX businesses involved in helping patients who are suffering due to COVID-19.

The ASX 200 business reported operating revenue of NZ$1.26 billion, up 18% compared to FY19. This represented growth of 14% in constant currency terms.

Management said that the increase of revenue was largely driven by growth in the use of Optiflow (nasal high flow therapy), demand for products to treat COVID-19 patients and strong hospital hardware sales throughout the course of the year.

Net profit after tax was NZ$287.3 million, up 37% on the previous year, or 30% in constant currency. However, excluding the impact from tax changes, being the R&D tax credit and building tax depreciation, net profit after tax grew by 23% in constant currency terms.

Whilst revenue growth was strong, there was one downside. The gross margin decreased by 73 basis points to 66.1%, primarily driven by additional air freight costs required to acquire the increased supply of raw materials and expedite finished goods to customers. There was also additional start-up costs of the company’s second Mexico manufacturing facility.

The board declared a final dividend of 15.5 cents per share, an increase 15% compared to last year. This brings the total dividend to 27.5 cents per share, an increase of 18% on last year.

In FY21 the ASX 200 company is guiding revenue to be approximately NZ$1.48 billion and net profit of between NZ$325 million to NZ$340 million.

The Fisher & Paykel Healthcare share price rose almost 7% today.

Jumbo Interactive Ltd (ASX: JIN) share price drops 13%

Lottery reseller business Jumbo suffered a selloff today as the new agreement with Tabcorp Holdings Limited (ASX: TAH) was announced.

The new deal is a 10-year term which extends the current expiry by approximately seven years.

A fixed extension fee of $15 million is payable by Jumbo to Tabcorp upon commencement.

But there is also a service fee payable on the ticket subscription price. It starts at 1.5% in FY21, then it increases to 2.5% in FY22, rises again to 3.5% in FY23 and is scheduled to reach 4.65% after that. For FY21 to FY23, where the value of subscriptions is in excess of $400 million for each applicable financial year, Jumbo will pay a service fee of 4.65% on the value in excess of $400 million.

The share price of ASX 200 business Tabcorp went up 0.9% today.

More bids for renewable energy business Infigen Energy Ltd (ASX: IFN)

There were more bids announced for wind farm business Infigen today.

UAC Energy increased its bid to $0.86 per share and also declared its offer wholly unconditional. However, Iberdrola Australia then outbid UAC Energy again, increasing its offer to $0.89 per share.

The share price rose 3.4% to $0.92, which may suggest investors are expecting further bids.

Other large ASX 200 share price movements from today

At the red end of the ASX there were several large declines. The NRW Holdings Limited (ASX: NWH) fell just over 10%, the WiseTech Global Ltd (ASX: WTC) share price dropped 8.6%, the Mesoblast Limited (ASX: MSB) share price dropped almost 7% and the Virgin Money UK PLC (ASX: VUK) share price fell 6.6%.

At the positive end of the ASX, some of the other positive movements aside from Fisher & Paykel Healthcare were: the Evolution Mining Ltd (ASX: EVN) share price went up 4.1%, the Silver Lake Resources Limited. (ASX: SLR) share price increased almost 3% and the Nearmap Ltd (ASX: NEA) share price climbed 2.8%.

More reading

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 Nearmap Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited. The Motley Fool Australia owns shares of WiseTech Global. 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.

The post ASX 200 drops 1.5% on elevated COVID-19 fears appeared first on Motley Fool Australia.

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