The Match Out: Staples rebound, Resources support the index

ASX 200 Chart - Intraday

ASX 200 Chart  - Daily 

National Storage REIT (ASX: NSR) $2.25

NSR +2.27%: The largest supplier of self-storage in Australasia and recent addition to our Growth Portfolio reported FY23 results today that were ahead of expectations. FY23 EBITDA of $191.5m was ~4% ahead of consensus while post-tax profit of $141.8m was up 12% and in line with expectations. While the business remains in good shape, group occupancy was down 3.5% in the period to 85%, which clearly leaves room for improvements, although full occupancy is not realistic in these sorts of assets. They have guided to underlying earnings of greater than $154m, 2.6% ahead of current market expectations and a distribution guidance of at least 11.3c, put them on a 5% yield. NTA increased by 6% to $2.48.

• A quality operator delivering another quality result and it’s still trading below NTA! 

Worley (ASX: WOR) $17.49

WOR +0.63%: The decarbonisation story was reinforced today with WOR delivering a solid set of FY23 results and importantly, reinforced their growing push into sustainability related work. Aggregated revenue $10,9b was up 21% on the year driving underlying EBITA of $635m, up 16% and ahead of expectations. They said sustainability-related work was $4.5 billion, 41% of aggregated revenue and up 41% from $3.2 billion last year. The declared a 25cps final dividend unfranked although income is not the play here. Guidance was opaque but positive, saying they expect revenue to grow and underlying margins to improve further (EBITA to 7.5-8%).

• Another incremental positive step for WOR as take advantage of being a first mover in decarbonization.   

WiseTech Global (ASX: WTC) $69.60

WTC-19.62%: Wisetech has been one of the market darlings through 2023 but today it plunged the most since 2020 after the software solutions company delivered weaker-than-expected guidance, saying FY24 EBITDA would ~$472m at the midpoint versus consensus at $543m i.e. over 12% lower. This year's numbers were largely in line with revenue of $816.8mn, up 29% year on year, actually a slight beat but for a stock like this, it’s all about what comes next and they didn’t deliver today. While profitability might be heading in the correct direction, the share price implied a lot of optimism through 2023 gaining ~75% at its best.

• A disappointing result for WTC compared to market expectations but still a solid business with 96% recurring revenue.

Domino’s Pizza (ASX: DMP) $53.70

DMP +11.81%: jumped the most since November as they talked up the prospects for a strong recovery in FY24 as recent company restructuring starts to pay off. Revenue of $2.35bn mirrored Bloomberg consensus of $2.36bn, total sales grew +2.2% while EBIT came in -23% lower as higher prices offset fewer meals being sold, an important balance for DMP moving forward. Cost savings announced in June were updated today and are expected to improve Ebit by $33-40mn, good news for shareholders but not the 200 people about to lose their jobs.

• An ok result but after falling -75% from its 2022 high it was taken as a breath of fresh air.

Corporate Travel Management (ASX: CTD) $18.09

CTD -6.9%: travel stocks have broadly been a great place to be over the last 12 months, however Corporate Travel’s update today shows some cracks in the story coming through. FY23 numbers were largely in line which is unsurprising given the consistent messaging around earnings in the last few months. Revenue was up 70% to $660m and profit before tax of $125m was a slight beat. Earnings were supported by contract wins, strong margins and higher travel costs where the company earns a clip in the total value. Guidance was the concern with PBT of $193-233m a small miss to consensus of $220m at the midpoint despite being more than 60% higher than FY23.

• A strong result but guidance a bit light, Corporate Travel is known for being conservative early in the year

Readytech (ASX: RDY) $3.23

RDY +4.19%: results for the people management software business today went off largely without issue. Revenue of $103m was up 32% and only a small miss to consensus, while EBITDA jumped 21.7% to $34.8m which was in line with expectations. The company talked up their sales pipeline, particularly in the enterprise business which has a near $1b opportunity. They also guided to EBITDA margins remaining around the 34-35% level which is a positive. Their aspirational $160m+ of revenue by FY26 seems achievable after today’s results.

Broker Moves

• Elanor Commercial Cut to Hold at Ord Minnett
• Estia Health Cut to Hold at Moelis & Company; PT A$3.20
• HUB24 Raised to Buy at Citi; PT A$35.60
• Kogan.com Raised to Buy at Canaccord; PT A$6.50
• Woodside Energy Cut to Sell at Citi; PT A$33
• Coles Group Cut to Neutral at Evans & Partners Pty Ltd
• Redbubble Raised to Buy at Canaccord; PT A$1.20
• Allkem Cut to Neutral at Jarden Securities; PT A$14.60
• Alumina Raised to Neutral at Citi; PT A$1.30
• Scentre Group Raised to Reduce at CLSA; PT A$2.70
• Estia Health Cut to Neutral at JPMorgan; PT A$3.20
• HUB24 Cut to Neutral at Macquarie; PT A$33.60
• Estia Health Cut to Neutral at Macquarie; PT A$3.08
• Monadelphous Raised to Outperform at Macquarie; PT A$14.50
• Megaport Raised to Outperform at Macquarie; PT A$18
• Ingenia Raised to Neutral at JPMorgan; PT A$4.30
• HUB24 Cut to Hold at Morgans Financial Limited; PT A$32.80
• Viva Energy Cut to Neutral at Evans & Partners Pty Ltd
• HUB24 Cut to Hold at Jefferies; PT A$31.08
• Megaport Cut to Hold at Morgans Financial Limited; PT A$13
• Allkem Raised to Buy at Jefferies; PT A$16.50
• Australian Clinical Labs Cut to Sector Perform at RBC; PT A$3
• Coles Group Cut to Hold at Jefferies; PT A$17.50
• Coles Group Cut to Hold at Morgans Financial Limited; PT A$16.90
• Nanosonics Raised to Hold at Bell Potter; PT A$4.85

Major Movers Today 

Have a great night

The Market Matters Team

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