ASX Earnings Wrap: Qantas chalks up first full year profit in 4 years; Early Pay, Step One jump over 15pc

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.

Qantas (ASX:QAN)

Highlights:

Full year underlying profit before tax of $2.47 billion
Statutory earnings per share: 96 cents
On-market share buy-back of up to $500 million announced

Qantas has just posted its first full year statutory profit since FY19, of $2.47 billion. This compares with $7 billion in accumulated statutory losses over those three years.

Underpinning the profit this year was completion of its $1 billion recovery program, which was launched in the first year of those losses.

Qantas says it has benefitted from 132% increase in flying compared with FY22, with strong travel demand driving significantly higher revenue.

The airline announced today that it will share the benefits by rewarding employees, reinvesting for customers, and returning capital to shareholders.

The airline has set aside ~$340 million to reward more than 21,000 staff, including granting of up to 1,000 Qantas shares each. An on-market share buy-back of up to $500 million was also announced for shareholders.

Separately, Qantas has also just ordered 12 Boeing 787s and 12 Airbus A350s.

Looking ahead, the airline expects international capacity to continue to recover, and says international flights are on track to return to 100% of pre-Covid levels in the second half of 2024.

Step One Clothing (ASX:STP)

Highlights:

Full year revenue of $65.2 million, a 9.7% decrease vs pcp
Proforma EBITDA of $12 million, up 33% vs pcp
Strong financial position with closing cash of $38.3 million and no debt

The online direct to consumer company selling innerwear rose 17% after reporting a strong bottom line in a period where sales decreased.

Step One’s 33% growth in EBITDA reflects the success of its strategic pivot from growth to profitability, during a period of challenging trading conditions.

The company said it continued to experience challenging trading conditions across all of its markets in the near future, driven by weak consumer sentiment resulting from inflationary pressure and rising interest rates.

While abstaining from providing guidance for FY24, Step One says its strategy will be to focus on expanding the customer funnel and partnerships with retailers, amongst other goals.

Earlypay (ASX:EPY)

Highlights:

For the full year, net revenue of $41.8m, down 5% on pcp
Reported loss after tax of -$7.7m, vs a profit of $13.2m in the pcp
FY24 result expected to exceed FY23’s underlying proforma NPAT

Earlypay surged 16% despite reporting a softer financial year compared to the previous.

The company, which pays people’s wages in advance, said FY23 was a difficult year in which it suffered a material credit loss relating to a single client exposure.

Following a comprehensive review, numerous underwriting, risk, operational and organisational changes were made to mitigate against outsized credit losses in the future.

As a result of these steps, the company expects its FY24 result to exceed FY23’s underlying proforma NPAT, driven by lower credit loss provisioning, margin expansion and funds in use growth.

“Based on our expectations for FY24, it is expected that the company will rebuild retained earnings and be in a position to resume paying ordinary dividends in FY24,” noted Earlypay.

Humm Group (ASX:HUM)

Highlights:

FY23 Cash NPAT of $24.1m, down 53% on pcp
Strong balance sheet with $112m in unrestricted cash
Fully franked final dividend proposed of 1 cps, bringing the year’s total to 2 cps

The diversified lender said it has made great progress this year in executing the strategy to rationalise its products and reduce costs, while maintaining profitability.

In all, the company has removed $18.6m in costs this year, and is on track to deliver $20m-$25m in annualised cost savings.

The last 12 months have also seen Humm successfully reposition its Consumer Finance business to focus on profitable growth, with the majority of costs associated with exiting non-core businesses removed.

Looking ahead to FY24, Humm says it will continue to review and remove unnecessary cost and complexity from the business, and execute on its strategic capital initiatives.