It’s earnings season again as the ASX market announcements page becomes increasingly flooded with earnings lodgements.

To save you the trouble of trudging through it all, we’ve wrapped up the highlights from some of the reports that caught our eye.

 

Zip Co (ASX:ZIP)

Highlights:

  • Record group revenue of $693.2m, up 16.1% YoY
  • Record transaction numbers of 72.7m, up 8.3% YoY
  • Cash EBTDA of -$48.2m, reflecting a 54.8% improvement in 2H23 vs 1H23, and above guidance

BNPL company Zip Co jumped 6% this morning after its full year results delivered strongly against its updated strategy.

In FY23, Zip generated record transaction volumes and revenue, improved credit losses and margins, and completed cost reductions and capital management initiatives.

Revenue growth was solid at 16.1% year on year, and revenue margins expanded by 60 basis points to 7.8%.

During the year, Zip completed a strategic review of its non-core businesses and took actions to close or wind-down those businesses, delivering cash inflows back and neutralising cash burn.

“We also proactively undertook two liability management exercises that reduced corporate liabilities by $312.2 million at a significant discount to face value, providing Zip with a materially strengthened balance sheet,” said Zip Group CEO, Cynthia Scott.

The company achieved an important milestone, exiting FY23 with the US and NZ businesses cash EBTDA positive, along with the Australian business which has been cash EBTDA positive for five years.

“Looking ahead, we are focusing on maintaining the momentum, driving sustainable growth and product innovation in our core markets of ANZ and the US as we deliver on our mission to be the first payment choice, everywhere and every day,” said Scott.

 

Tyro Payments (ASX:TYR)

Highlights:

  • Gross profit grew 30% year-on-year to $193.2m
  • Transaction value increased 25% year-on-year to $42.6bn
  • Record EBITDA of $42.3 million (vs FY22: $10.7m), and an EBITDA margin of 22%

The payments company says the strong results were driven by a disciplined focus on cost and accelerated product delivery.

Tyro reported record transaction value, gross profit, and EBITDA, as well as its first full-year positive free cash flow (of $5.7m) result since listing on the ASX.

Earlier this year, Tyro introduced a new operating model to create a leaner and more disciplined organisation.

This included a smaller and refreshed executive management team, with key executive appointments including Dominic White as chief product officer, Deanne Bannatyne as chief growth officer, and Adrian Perillo as CEO of Tyro Health.

“The year also marked the beginning of our flagship partnership with Telstra and Australia Post, bolstering our distribution to small businesses through 800 retail stores across the country,” said CEO, Jon Davey, who will join Tyro’s board effective 1 September.

For FY23, Tyro is targeting EBITDA of $52m to $58m, from a transaction value range of $45 billion to $47.5 billion.

 

The Star Entertainment Group (ASX:SGR)

Highlights:

  • For the full year, normalised EBITDA was $317m, slightly above announced guidance range
  • Statutory net loss of $2.44bn, including significant items of $2.48bn net of tax
  • Proposed NSW casino duty rate uncertainty now resolved

Star said its trading and financial performance at the Star Sydney Casino has been adversely impacted by several factors, including increased competition from Crown and less regulated NSW clubs.

The Star Gold Coast meanwhile started the year strongly, benefiting from a surge in domestic tourism and consumer spending post-Covid.

There were significant non-cash impairments during the year totalling $2.82bn, which primarily include the impairment of The Star Sydney, The Star Gold Coast and Treasury, as well as ongoing regulatory and legal costs.

The highlight for the year includes the in-principle agreement reached with the NSW Government to amend the casino duty rates which will result in lower duty payable by Star in FY24.

 

Lark Distilling (ASX:LRK)

Highlights:

  • FY23 net sales (revenue after excise) of $17m, down $3.3m or 16% vs FY22
  • Gross Profit margins continue to perform strongly, improving to 68.9%, up 240 bps
  • EBITDA loss of $5.1m

Lark rose 7% this morning despite reporting a challenging year in terms of headline financial results.

However, the soft year-on-year performance was significantly impacted by one-off sales in FY22 and Q4 in particular.

Adjusting for these one-off transactions, underlying net sales growth was 15%, underpinned by the organic performance of its core Signature and Symphony product ranges, with combined net sales growth of 53% and 49% respectively.

During the year, the Lark brand received 11 awards at the International Wine & Spirits Awards in London, and Lark Classic Cask was recognised as the Best Australian Whisky by Dan Murphy’s.

In late FY23, Lark undertook a restructure to right size the organisation and allow redeployment of resources in support of future growth areas.

The company’s balance sheet and capital position remain sound, providing Lark with important financial flexibility, with cash at bank at 30 June 2023 of $7.2 million.

 

Gale Pacific (ASX:GAP)

Highlights:

  • Full year revenue of $187.6m, down 9% on pcp
  • Net profit was $3.7m, down 51% on last year
  • No dividend declared, which was down from 1c paid in FY22

The fabric manufacturer plunged 26% this morning after reporting a 51% plunge in its bottom line NPAT.

Gale said trading conditions have been challenging throughout the year in all selling regions.

Historically aggressive interest rate hikes by global central banks, particularly in the US and Australia, coupled with an accelerated shift in post-pandemic consumer spending on household goods, led to demand headwinds across all products.

“As an outdoor products company, weather conditions also greatly influence the company’s performance,” said Gale CEO, John Paul Marcantonio.

“Unseasonably cool and historically wet weather across the eastern half of Australia negatively impacted the overall result for consumer and commercial categories.”

Gale expects trading conditions to remain challenging in the first half of the 2024 financial year, with continued demand headwinds.

 

Share prices today:

 

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