Chris Stott

With reporting season in full swing the flow of company results is picking up and keeping the investment team busy. In this week’s report we provide a brief summary on the key takeaways from Capitol Health and NAB.

Market overview

The S&P/ASX All Ordinaries Accumulation Index closed down 0.5% for the week.

On Monday, National Australia Bank's Monthly Business Survey reported that business conditions had risen to their highest levels since early 2008. In contrast, consumer sentiment figures released on Wednesday showed a 1.5% decline in August, highlighting the patchy nature of the economy.

Capitol’s healthy announcement

On Thursday, Capitol Health (ASX: CAJ) announced its preliminary results for FY2017 reporting core radiology earnings before interest, tax, depreciation and amortisation (EBITDA) of $22.2 million, ahead of its previous guidance of $19.5-$21.5 million.

The company also announced the potential for a share buyback of $52.3 million shares, upon receipt of the recently sold NSW assets.

Shares in Capitol Health closed up 5% for the week. We own Capitol Health as a research-driven investment in WAM Capital, WAM Research and WAM Microcap.

NAB banks on results

On Friday, National Australia Bank (ASX:NAB) announced its third quarter results, reporting cash earnings of $1.7 billion, a 5% rise on the prior corresponding period and up 2% on the March quarter.

The result showed a positive net interest margin (NIM) trajectory while NAB's debts fell below previous periods and historical averages.

We believe NAB will continue to improve its NIM and capital position, and we see potential for cost reductions to improve earnings.

Shares in NAB closed up 1% for the week. We own NAB as a market-driven investment in WAM Leaders and Century Australia.


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