Reporting Season Round Up — July 31 Edition: Brickworks, Premier Investments and Fonterra thrived in FY21
Although most ASX companies use July 1 to June 30 or the calendar as their financial year, the ASX allows for different FY ends so long as they stick to 12 month periods (and the deadline of releasing results two months after the end of the year).
Today’s trio utilise August 1 to July 31, and in that 12 month period Brickworks grew its underlying net profit by 95% while Premier Investments grew its statutory profit by 97.3%.
Brickworks is a building products maker but it also has property investments and is a major shareholder of fund manager Washington H. Soul Pattinson (WHSP).
The company reported strong demand for its building products and development activities in its property trust.
Although its stake in WHSP was diluted from 39.4% to 26.1% due to a merger with Milton Corporation, the deal will reap it a $375-$425 million.
Managing director Lindsay Partridge said FY22 is still on track to be a good year. Although current lockdowns in Sydney and Melbourne have had some impacts, he’s confident things will rebound.
“With vaccination rates across the country now approaching government targets, we are hopeful that by the second half of the 2022 financial year, the prospect of any further restrictions will be behind us and all states will simultaneously experience an elevated period of activity,” Partridge said.
While the Solomon Lew-led retail group Premier Investments has made waves thanks to its shareholding in Myer (ASX:MYR), it also owns brands including Just Jeans, Smiggle and Peter Alexander.
It reported sales of $1.4 billion, up 18.7% from FY20 of which $300.7 million were online.
Lew hailed the result, noting it occurred despite a combined 50,581 lost retail store trading days during the year.
“To have delivered these record result in a very difficult and volatile environment is a truly outstanding achievement,” he said.
Just as Brickworks’ boss did, Lew said he was optimistic of a forthcoming boom of pent up demand once restrictions were eased.
“Premier remains optimistic about the all-important second quarter of FY22, as the vaccine rollout progresses and the economy re-opens,” he declared.
One industry that hasn’t been so lucky amidst COVID-19 has been the dairy industry, or at least the exporters thanks to trade tensions and demand in the daigou trade drying up due to border closures.
Fonterra (ASX:FSF) is one such stock. But rather than being a company it is a farmers co-operative owned by 10,000 Kiwi farmers and it has assets on both sides of the Tasman.
The co-op reported a profit nearly of nearly $600 million down $60 million on a reported basis although FY20 was inflated by multiple divestments.
It cut its debt by $872 million and paid out $7.74 per kilo to its members – representing an $11.6 billion payout.
Fonterra reported solid demand locally and abroad noting COVID-19 forcing people to cook at home was a good thing.
“That’s really benefited out consumer brands and supported upward momentum in our consumer channel performance,” CEO Miles Hurrell.
The company also unveiled plans to spin out its Australian assets into a separate IPO including the Western Star and Perfect Italiano brands.