The S&P/ASX 200 (ASX: XJO) is poised to rise when the market opens this morning. Here’s what’s making headlines across local and global share markets.
ASX heads higher, JB Hi-Fi announces dividend bonanza
The ASX 200 started the week on a strong footing, jumping 0.9% on Monday with all but the interest rate sensitive sectors of property and utilities heading higher.
Whilst ASX reporting season is in focus, Zip Co Ltd (ASX: Z1P) was by far the biggest highlight, adding 16.9%, sending the market cap over $6 billion as investors seemingly move away from Afterpay Ltd (ASX: APT) into one of its main competitors in the US.
In terms of reporting season, JB Hi-Fi Limited (ASX: JBH) delivered a significant dividend increase, up 81.8% to $1.80 per share, after a bumper six months of retail sales. According to the report, total sales increased 23.7% in the first half to $4.9 billion, driven by a 161.7% increase in online sales which now represent 13.7% of total sales. A unique click-and-collect system is allowing JB Hi-Fi to benefit from efficiencies of scale with net profit improving 86.2% to $317.7 million, with sales growth broad-based across both consumer electronics and white goods via the Good Guys business, which saw a 26.4% increase in sales growth, now $1.45 billion or 30% of total sales.
JB Hi-Fi management refused to offer guidance given the Melbourne lockdown, but highlighted a slight ‘slowdown’ in sales in January, printing at 17.4% above 2020 levels. A solid result on all levels, with the JB Hi-Fi share price up 3.0% on the news, but questions remain about how long elevated sales can remain post a vaccine rollout.
Featured video: How to analyse an annual report (quickly)
Nearmap share price takes flight, Altium shares sink
Coca-Cola Amatil Ltd (ASX: CCL) finally received an increased takeover offer from Coca-Cola European Partners (CCEP), taking the deal from $12.75 to $13.50. Not insignificant but likely not what investors had been expecting. CCEP is clearly seeking to keep the price low in the hope of extracting efficiencies from this mature, slow-growing sector.
The Altium Limited (ASX: ALU) share price fell 4.8% after reporting a 12% fall in profit and rare contraction in revenue by 4%. The design company highlighted its ‘pivot to the cloud’ and difficult pandemic conditions for the rare revenue miss, but with profit of just US$16.6 million, there isn’t much room for missteps.
Aerial imaging company Nearmap Ltd (ASX: NEA) slapped down the short-selling report released by JCapital last week, the share price jumping 19.0% after management disproved each of the ‘researchers’ assertions. The company reported record annualised contract revenue in the US region, being the annual amount of the most recent monthly recurring sales, which hit US$35.1 million, while the group net loss was halved from $18.6 million to $9.4 million. Nearmap’s key customer groups showed significant strength with insurance contracts up 43%, government, 53%, and roofing companies 198%.
Nikkei hits 30,000, US markets closed for President’s day
With US markets closed for President’s Day, all eyes were on Japan, where the Nikkei 225 index finally touched 30,000 points again. The last time the market was at this level was in 1990, thirty short years ago.
Japan offers an interesting insight into the potential implications of near-zero interest rates and an environment of deflation, which many suggest the rest of the world may be facing in the coming years. Have markets moved ahead of themselves? Is there a risk that we are currently seeing a 10, 20 or 30-year high in US or Australian markets?
On the positive side, many Japanese companies have delivered strong returns in the same period that the Nikkei took to recover previous highs, suggesting active management, rather than index investment may be the best course of action.