The Match Out: ASX bounces back, Big profit for Woodside (WDS), Musk tweets about Uranium

• The ASX 200 finished up +32pts/ +0.47% at 6998
• The IT sector was best on ground (+1.84%) while Energy (+1.43%) & Staples (+0.81%) were also strong.
• Materials (-0.04%) the only sector to fall while Communications (+0.20%) & Utilities (+0.20%) underperformed.
• Oil rallied overnight giving the sector a boost today and a positive backdrop for Woodside (ASX: WDS) +1.47% to report a good 1H result – a big profit!
• Uranium stocks were good following comments from Elon Musk saying that countries shouldn’t shut down existing nuclear power plants as Europe grapples with an energy crisis.
• Aussie Broadband (ASX: ABB) +0.38% had director buying today – didn’t really help a lot!
• First Sentier has just gone substantial in Whitehaven Coal (ASX: WHC) with a 5% holding.
• IGO limited (ASX: IGO) +3.79% had largely pre-released their FY22 result, however, they enjoyed the tailwind that swept through the lithium stocks today – the sector remains very hot.
• Sandfire (ASX: SFR) -3.6% fell after saying no dividend for FY22, the rest of their FY22 result had been pre-released.
• Dubber (ASX: DUB) +7.48% has had a very tough year, however, revenue growth impressed today.
• Bubs Australia (ASX: BUB) -4.96% fell despite delivering earnings that came in ahead of guidance provided in July following their US win.
• Helius (ASX: HLS) +3.51% was solid although FY23 going to be a tougher year without the big bump from Covid testing.
• Iron Ore was ~4% lower in Asia today.
• Gold was flat overnight and down -0.20% in Asia at ~US$1733.
• Asian stocks were mixed Hong Kong down -0.45%, Japan +1.07% while China was off -0.40%
• US Futures are all up, around +0.30%

ASX 200 Chart 

Stocks that reported today

Woodside (ASX: WDS) $35.87

WDS +1.47%: 1H results for the now much larger energy company today and they solid/inline with expectations. The Underlying 1H22 NPAT of $1.82bn compares to consensus of $1.77bn while the interim dividend of $1.09 was inline with expectations of $1.08. That dividend is a, 80% payout of bet profit plus 80% of the net cash payment received from BHP following the merger. They reiterated FY22 guidance for production 145-153mmboe and capex $4,700-5,300m. Gearing now in focus sitting at just 7%, they are now targeting 10-20% gearing (down from 15-35%) however there is still clearly room to move here. 

Independence Group (ASX: IGO) $13.15

IGO +3.79%: the results were largely pre-released at the quarterly update from nickel & lithium miner last month, so today’s focus was on the balance sheet and growth options from here. Revenue was a small beat at $903m while earnings were a small miss at $331m vs $341m expected. They completed the acquisition of Western Areas in the period, increasing their exposure to nickel & copper. Independence Group produced their first battery-grade lithium out of Kiwana in May, and the qualification process is underway to secure offtakes. Ramp-up of production as well as progress final investment decision expansion is already underway, the company guiding to 1350-1450kt of spodumene in FY23.

Aussie Broadband (ASX: ABB) $2.67

ABB +0.38%: A stock that we like & own but are down on in our Emerging Companies Portfolio is ABB with yesterday’s results leading to another ~20% sell-off in the share price. We covered the result yesterday however worth pointing out that Founder and Managing Director Phil Britt has just filed up for $500k of stock (purchased today). The issue in the result yesterday was all about guidance, however from what we understand, they have taken a conservative stance here given a few moving parts at the moment. The other interesting aspect that we gleaned yesterday was that ABB won’t be paying any tax for the next 2 years minimum. Hopefully the last of the consensus downgrades and ABB remains a core holding in our Emerging Companies portfolio. 

Sandfire Resources (ASX: SFR) $4.55

SFR -3.6%: the copper miner struggled today after deciding against paying a dividend at the full-year results. Other numbers were largely pre-announced with revenue of $US 922.7m and EBITDA of $447.3m known to the market. The recent purchase of Spanish copper asset MATSA contributed positively and production is running ahead of expectations, though the EU energy crisis remains a concern here. Performance of WA asset De Grussa was also solid, though they are in the wind-down phase here while the development of Motheo in Botswana remains on track. Given the substantial investment required across their assets, management decided to pause dividends for the time being which weighed on the stock today.

Dubber (ASX: DUB) 57.5c

DUB +7.48%: the call recording and AI software company saw a strong ramp-up in recurring revenue despite a disappointing flow through to revenue, though this was previously flagged. Annualized Recurring Revenue increased by 50% to $59m, assisted by continued penetration within their service provider partners. Turning revenue into receipts continues to be a problem with the company recognizing $25.6m in operating revenue but only seeing $29.9m paid. They did flag that new processes had been put in place to improve collections in future periods.

Bubs Australia (ASX: BUB) 57.5c

BUB -4.96%: a record year for Bubs after receiving a boost in sales on gaining US FDA approval late in the year. Revenue came in at $104m and underlying EBITDA of$4.8m were both ahead of guidance provided in July when the company raised $63m to scale up operations. Revenue from China bounced back, more than doubling vs FY21, as export restrictions to the country eased. The US made up 9% of revenue despite having received FDA approval in late May. The company is now working toward achieving permanent approval, already managing to send 800,000 tins of infant formula to the country. Plenty of positives out of FY22, however the company provided little in the way of detailed guidance which weighed on shares today.

Healius (ASX: HLS) $3.83

HLS +$3.51: An inline FY22 result for the healthcare company today following a more challenging past 6 months, and the meet (rather than beat) was enough to see the share price higher. Revenue of $2.34bn compared to consensus of $2.36bn with Net Profit After Tax (NPAT) of $309.30m a whisker ahead of the $305.87 tipped. The FY22 dividend of 16cps was a touch light but okay. No guidance was provided, however, the market is positioned for a large decline in revenue (to $1.98bn) and earnings (to $132m) in FY23 given the Covid testing bump that supported in FY22. 

Broker Moves

• 29Metals Rated New Buy at Barclay Pearce Capital; PT A$3.13
• Lovisa Rated New Underperform at Barclay Pearce Capital
• Bendigo & Adelaide Rated New Buy at UBS; PT A$11
• Bank of Queensland Rated New Buy at UBS; PT A$8
• 29Metals Cut to Hold at Canaccord; PT A$1.90
• 29Metals Cut to Underperform at Jefferies; PT A$1.75
• Johns Lyng Cut to Neutral at Evans & Partners Pty Ltd; PT A$5.98
• Adore Beauty Cut to Equal-Weight at Morgan Stanley; PT A$1.70
• Dalrymple Bay Raised to Sector Perform at RBC; PT A$2.40
• InvoCare Raised to Add at Morgans Financial Limited; PT A$12.80
• Lynas Cut to Sell at Ord Minnett; PT A$4.85
• Cluey Cut to Speculative Buy at Canaccord; PT A$1

Make informed investment decisions

At Market Matters, we write a straight-talking, concise, twice-daily note about our experiences, the stocks we like, the stocks we don’t, the themes that you should be across and the risks as we see them. Click here for your free trial.

The Match Out will be available each day after the market close. Follow my profile to be notified when the latest report is live.