Key points
- The market expects BHP to post its weakest profit in five years when it reports on Tuesday but it still needs to honour a promise to lift its dividend. Under the company’s US$6.5 billion ($8.7 billion) progressive dividend policy, it says it will increase, or at least maintain, its dividend in US dollar terms every year.
- Building products supplier Boral is also expected to produce good numbers on Thursday, with a lift of 38% expected in EPS and a boost to the dividend of about 28%.
- In the industrial stocks, the market is expecting to be impressed by results this week from health products group Blackmores, travel firm Corporate Travel Management, property company Sunland Group, and healthcare and pathology operator Healthscope.
The FY15 reporting season is almost two-thirds complete. Checking back in with Shane Oliver, head of investment strategy and chief economist at AMP Capital, overall the results have been a little disappointing, in his view. Oliver says 43% of results have beaten expectations and 60% have lifted profits from a year ago – while that is an “OK” result, it is well down on what we have seen in the last few reporting seasons.
Resources focus
As expected, resources companies have remained under pressure, but industrial profit margins have been weaker than expected and the banks have been mixed and guidance for the current financial year has been a bit downbeat. Oliver says profits now look to have fallen by about 2% over the last financial year and expectations of a profit boost for the 2015-16 financial year have been downgraded to about 2%.
However, it is not all doom and gloom: outside the resources sector, says Oliver, profits are growing by about 7%, with companies exposed to housing and NSW and Victoria generally doing well, and dividends are continuing to rise solidly.
Resources will be the focus early in the week, with giant BHP reporting tomorrow. The market expects BHP to post its weakest profit in five years. The mining giant simply can do nothing else, given that the prices of its key commodities, iron ore, steel-making coal, copper, oil and gas have been crunched. Analyst consensus is for BHP’s underlying earnings to fall from US$13.4 billion to about US$6.6 billion, excluding South32. On earnings per share (EPS) basis that means a fall of at least 50%, and possibly more.
But BHP is expected to lift its dividend: under the company’s US$6.5 billion ($8.7 billion) progressive dividend policy, it says it will increase or at least maintain its dividend in US dollar terms every year. Given that expectation, the market is also resigned to big cuts in capital spending and will look for further evidence of BHP slashing its costs to the bone.
Iron ore player BC Iron will also report a dire set of numbers on Wednesday. The market expects a loss and no dividend. However, mining is not all bad news: gold miner Evolution Mining reports on Thursday, and a strong production result – the June quarter and the year to June both saw record gold production numbers – should feed into a healthy result.
Industrial strength
On the industrial front, global packaging giant Amcor reports on Tuesday and should show solid earnings growth in FY15, driven by increased exposure to higher-growing emerging markets and further improvement in operating efficiencies.
Building products supplier Boral is also expected to produce good numbers on Thursday, with a lift of 38% expected in EPS and a boost to the dividend of about 28%.
However, retail heavyweight Woolworths reports on Friday, and the market is expecting slippage in both EPS and DPS. The company’s guidance points to flat profit at best: reported net profit is expected to be about $2.15 billion.
In the industrial stocks, the market is expecting to be impressed by results this week from health products group Blackmores (Tuesday), travel firm Corporate Travel Management, property company Sunland Group, healthcare and pathology operator Healthscope and packaging company Orora (Wednesday), media and entertainment group Nine Entertainment, reproductive services firm Monash IVF, financial services group Perpetual, healthcare star Ramsay Health Care (a big tip to beat its guidance) and a return to profitability for global apparel player Billabong (Thursday), and on Friday, food exporter Bellamy’s Australia, retail giant Harvey Norman, financial services group IOOF, Regis Healthcare and legal group Shine Corporate.
Here is the schedule for major companies reporting full-year June 30 results this week. Consensus analysts’ earnings per share (EPS) and dividend per share (DPS) estimates come from FN Arena, unless otherwise stated.
Tuesday 25 August
Acrux (ACR)
Full-year
Consensus earnings per share (EPS): 8 cents, +19.4%
Consensus dividend per share (DPS): 6 cents, unchanged
Amcor (AMC)
Full-year
Consensus earnings per share (EPS): 61.2 cents, +11.2%
Consensus dividend per share (DPS): 47.3 cents, +21.3%
BHP Billiton (BHP)
Full-year
Consensus earnings per share (EPS): 123.2 US cents, –52.6%
Consensus dividend per share (DPS): 124.6 cents, +3%
Blackmores (BKL)
Full-year
Consensus earnings per share (EPS): 246 cents, +64.9%
Consensus dividend per share (DPS): 189.5 cents, +49.2%
Nearmap (NEA)
Full-year
Consensus earnings per share (EPS): 0.5 cents, –75.3%
Consensus dividend per share (DPS): nil, unchanged
(Thomson Reuters estimates)
Oil Search (OSH)
Full-year
Consensus earnings per share (EPS): 26.7 US cents, –18%
Consensus dividend per share (DPS): 11.1 US cents, –20.8%
Pacific Brands (PBG)
Full-year
Consensus earnings per share (EPS): 1.9 cents, versus –24.6 cents FY14
Consensus dividend per share (DPS): 0.6 cents, –86.1%
South 32 (S32)
Full-year
Consensus earnings per share (EPS): 12.5 cents
Consensus dividend per share (DPS): 1.4 cents
Scentre Group (SCG)
Full-year
Consensus earnings per share (EPS): 22.4 cents, –86.5%
Consensus dividend per share (DPS): 21.1 cents, +107%
Senex Energy (SXY)
Full-year
Consensus earnings per share (EPS): –0.7 cents, versus 3.3 cents FY14
Consensus dividend per share (DPS): nil, unchanged
Virtus Health (VRT)
Full-year
Consensus earnings per share (EPS): 40.3 cents, +3.8%
Consensus dividend per share (DPS): 26.2 cents, +0.6%
Wednesday 26 August
APA Group (APA)
Full-year
Consensus earnings per share (EPS): 27.8 cents, –32.4%
Consensus dividend per share (DPS): 37.6 cents, +3.8%
BC Iron (BCI)
Full-year
Consensus earnings per share (EPS): –10.2 cents, versus 59.5 cents FY14
Consensus dividend per share (DPS): nil, versus 32 cents FY14
Corporate Travel Management (CTD)
Full-year
Consensus earnings per share (EPS): 31.9 cents, +67.8%
Consensus dividend per share (DPS): 18.3 cents, +52.5%
Helloworld (HLO)
Full-year
Consensus earnings per share (EPS): –22.5 cents, versus –14.4 cents FY14
Consensus dividend per share (DPS): nil, versus 0.5 cents FY14
Healthscope (HSO)
Full-year
Consensus earnings per share (EPS): 9.9 cents, +12%
Consensus dividend per share (DPS): 6.9 cents, versus nil FY14
Next DC (NXT)
Full-year
Consensus earnings per share (EPS): –4 cents, versus –11.8 cents FY14
Consensus dividend per share (DPS): nil, unchanged
Orora (ORA)
Full-year
Consensus earnings per share (EPS): 10.9 cents, +27%
Consensus dividend per share (DPS): 7.3 cents, +21%
Pact Group (PGH)
Full-year
Consensus earnings per share (EPS): 29 cents, –17.1%
Consensus dividend per share (DPS): 19.3 cents, +103.1%
Seymour Whyte (SWL)
Full-year
Consensus earnings per share (EPS): 10.2 cents, –22.3%
Consensus dividend per share (DPS): 5.1 cents, –32.4%
Sunland Group (SDG)
Full-year
Consensus earnings per share (EPS): 16 cents, +97.5%
Consensus dividend per share (DPS): 10 cents, +400%
Worley Parsons (WOR)
Full-year
Consensus earnings per share (EPS): 88.4 cents, –12.5%
Consensus dividend per share (DPS): 74.6 cents, –12.2%
Thursday 27 August
Billabong (BBG)
Full-year
Consensus earnings per share (EPS): 0.5 cents, versus –28.6 cents FY14
Consensus dividend per share (DPS): nil, unchanged
Boral (BLD)
Full-year
Consensus earnings per share (EPS): 30.7 cents, +38.4%
Consensus dividend per share (DPS): 19.2 cents, +28%
Cromwell Property Group (CMW)
Full-year
Consensus earnings per share (EPS): 8.4 cents, –21.4%
Consensus dividend per share (DPS): 7.9 cents, +4.1%
Evolution Mining (EVN)
Full-year
Consensus earnings per share (EPS): 12.2 cents, +73.2%
Consensus dividend per share (DPS): 1.6 cents, –21.8%
Flight Centre (FLT)
Full-year
Consensus earnings per share (EPS): 251.7 cents, +22.3%
Consensus dividend per share (DPS): 152.6 cents, +0.4%
Freedom Foods (FNP)
Full-year
Consensus earnings per share (EPS): 8.1 cents, –1.3%
Consensus dividend per share (DPS): 4 cents, +33.3%
(Thomson Reuters estimates)
Mantra Group (MTR)
Full-year
Consensus earnings per share (EPS): 14.6 cents, +16.6%
Consensus dividend per share (DPS): 10 cents, versus nil FY14
Monash IVF (MVF)
Full-year
Consensus earnings per share (EPS): 9.9 cents, +106.2%
Consensus dividend per share (DPS): 6.6 cents, +100%
National Storage REIT (NSR)
Full-year
Consensus earnings per share (EPS): 8.1 cents, –26.4%
Consensus dividend per share (DPS): 8.1 cents, +113.1%
(Thomson Reuters estimates)
Nine Entertainment (NEC)
Full-year
Consensus earnings per share (EPS): 15.5 cents, +135%
Consensus dividend per share (DPS): 8.9 cents, +111.9%
Paladin Energy (PDN)
Full-year
Consensus earnings per share (EPS): –6.1 cents, versus –34.3 cents FY14
Consensus dividend per share (DPS): nil, unchanged
Perpetual (PPT)
Full-year
Consensus earnings per share (EPS): 277.9 cents, +41.6%
Consensus dividend per share (DPS): 237 cents, +35.4%
Ramsay Health Care (RHC)
Full-year
Consensus earnings per share (EPS): 202.9 cents, +40.8%
Consensus dividend per share (DPS): 106.3 cents, +25%
Retail Food Group (RFG)
Full-year
Consensus earnings per share (EPS): 30.6 cents, +15.6%
Consensus dividend per share (DPS): 25.5 cents, +15.9%
Sedgman (SDM)
Full-year
Consensus earnings per share (EPS): 6.3 cents, versus –3.4 cents FY14
Consensus dividend per share (DPS): 7 cents, +75%
Southern Cross Media (SXL)
Full-year
Consensus earnings per share (EPS): 9.1 cents, versus –42 cents FY14
Consensus dividend per share (DPS): 6 cents, –19.7%
Transfield Services (TSE)
Full-year
Consensus earnings per share (EPS): 16.9 cents, +58%
Consensus dividend per share (DPS): 1 cent, versus nil FY14
Friday 28 August
Bellamy’s Australia (BAL)
Full-year
Consensus earnings per share (EPS): 9 cents, +364%
Consensus dividend per share (DPS): 2.6 cents, versus nil FY14
Bega Cheese (BGA)
Full-year
Consensus earnings per share (EPS): 16 cents, +25%
Consensus dividend per share (DPS): 7.5 cents, +15.4%
Harvey Norman (HVN)
Full-year
Consensus earnings per share (EPS): 24.6 cents, +23.6%
Consensus dividend per share (DPS): 26.4 cents, +88.6%
IOOF (IFL)
Full-year
Consensus earnings per share (EPS): 57.1 cents, +30.7%
Consensus dividend per share (DPS): 52.8 cents, +11.2%
Regis Healthcare (REG)
Full-year
Consensus earnings per share (EPS): 17.3 cents, +179%
Consensus dividend per share (DPS): 9.3 cents, versus nil FY14
Silver Lake Resources (SLR)
Full-year
Consensus earnings per share (EPS): 1.4 cents, versus –38 cents FY14
Consensus dividend per share (DPS): nil, unchanged
Woolworths (WOW)
Full-year
Consensus earnings per share (EPS): 188.7 cents, –4%
Consensus dividend per share (DPS): 136.3 cents, –0.5%
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