Don Williams, CIO of Platypus on key thematics from reporting season
Don Williams, CIO of Platypus on key thematics from reporting season. Overall reporting season was better than the market expected, both in terms of the numbers delivered and the way the market traded through August. Key thematics we observed were an increased discipline on costs and a commitment to boost cash returns to shareholders. Corporate Australia seems to have finally acted on investor calls to focus on profitability and return more cash to their owners. Dividend growth exceeded earnings growth by a significant margin, supported by a much better cashflow performance. Companies are cutting costs in order to maintain profitability in a poor revenue growth environment. At the start of reporting season expectations for top line growth were 4-5%; the market delivered just 2.2%. Healthcare was the standout sector in our view, with sector leading revenue growth of 13.8%, and record profits for the majority of the established players.