Cleanaway, Tassal, Magellan shares charge: Aus shares 0.2% higher at noon on earnings

Market Reports

by Jessica Amir

The Australian share market opened higher, following Wall Street’s positive leads with the Dow Jones rising the most overnight, 0.5 per cent with investors being hopeful that the US trade and Chinese trade authorities will reach an agreement before the early March deadline.

The S&P/ASX 200 index is 0.2 per cent or 13 points higher at 6.077 at four-month highs. On the futures market the SPI is 11 points higher.

Broker upgrades/downgrades

Citi has dropped Telstra’s (ASX:TLS) 12-month expected share return to negative 22 per cent, with a price target of $2.50 (a stark difference to its close price of $3.21 yesterday), after the major telco cut its first-half dividend to 8 cents per share, and also posted what the analyst says was a solid result in ‘very difficult conditions’. Telstra’s first-half 2019 earning result came in line with its guidance and slightly ahead of Citi’s below consensus estimates. Telstra shares are trading 0.6 per cent lower at midday. Year-on-year its shares are trading 7 per cent lower.

Company news

Australia’s largest total waste management company, Cleanaway Waste Management (ASX:CWY) announced its profit after tax rose 35 per cent over the half year to 31 December 2018, compared to the same time last year, with its NPAT hitting $60.8 million. Its revenue (from ordinary activities) rose 46 per cent to $1.149 billion with all operating segments seeing a rise in revenue and earnings, while its integration with Toxfree is tracking as planned. It also rose its half-year dividend by 50 per cent, to 1.65 cents per share, 30 per cent franked. Shares in Cleanaway Waste Management (ASX:CWY) are trading 10 per cent higher at $2.14 at noon. Year-on-year its shares are trading 57 per cent higher.

Australian salmon farming company Tassal Group (ASX:TGR) reported its best-ever first-half results across all key operational and financial metrics, with NPAT up 22.3 per cent to $31.7 million (for the period ending 31 December 2018). Operating EBIT rose 23 per cent to $49.83 million. Its interim dividend rose 13 per cent over the period, while its franking amount reduced from 100 per cent to 25 per cent. Shares in Tassal Group (ASX:TGR) are trading 8.2 per cent higher at $5.03 at noon. Year-on-year its shares are trading 44 per cent higher.

Investment management company, Magellan Financial Group (ASX:MFG) reported a 225 per cent rise in its net profit after tax (NPAT) to $173.5 million in the first half of the 2019 financial year, compared to the same time last year. CEO Brett Cairns says the half-year results have been underpinned by strong investment performance amid volatile markets. Its interim dividend rose 66 per cent to 73.8 cents per share. Average funds under management rose 35 per cent over the period to $72.1 billion. Shares in Magellan Financial Group (ASX:MFG) are trading 8.4 per cent higher at $31.65 at noon. Year-on-year its shares are trading 26 per cent higher.

Best and worst performers

The best performing sector is S&P/ASX Energy adding 1.7 per cent, followed by Staples and Healthcare and Materials, while the worst performing sector is S&P/ASX Utilities, shedding 0.8 per cent, followed by Telcos and Financials.

The best performing stock in the S&P/ASX 200 is home appliance manufacturer, Breville Group (ASX:BRG), rising 17.6 per cent to $14.04, Following is Cleanaway Waste Management (ASX:CWY) and Magellan Financial Group (ASX:MFG).

The worst performing stock in the S&P/ASX 200 is Unibail-Rodamco-Westfield (ASX:URW), dropping 9 per cent to $11.17, followed by shares in Emeco Holdings (ASX:EHL) and Suncorp Group (ASX:SUN).

Commodities and the dollar

Gold is trading at $US1,308 an ounce.
Iron ore price fell 0.5 per cent to US$87.22
Iron ore futures are pointing to a fall of 0.7 per cent.
One Australian dollar is buying 70.95 US cents.