Good Evening,

Welcome to the ASX News Daily Recap.

Lost track of what happened on the market today?

Don’t stress. We’re here to catch you up.

Here’s a sample of what you may have missed:

1. 👨‍🎓 IDP Climbs as Student Placements Skyrocket

2. 🍕 Domino’s Commits To No-Price Hikes

3. 🚢 WiseTech Wavers on Lower Forecast

4. 🛒 Woolies outdoes Coles

5. 📱 Threads New Desktop Launch

The Recap

ASX Rises As
IDP Education & Domino’s Soar

Another positive day for markets as investors tried to stay abreast of company earnings on another busy day of profit results. The ASX200 index finished 0.4% higher at 7,148.40.

Woolworths, IDP Education and Dominos rose today after posting earnings results. WiseTech came crashing back down to earth, falling 19% to $69.60 after trading at all-time highs the last couple of weeks. We cover these companies and more later in the recap.

Oil prices increased on Wednesday as weak demand indicators from China and the possibility of further U.S. rate hikes were weighed against potential supply tightness. Brent crude rose to $US84.16 per barrel, and U.S. West Texas Intermediate crude gained 0.2% to $US79.82.

Tech stocks continue to be volatile; after rising more than 5% yesterday, the sector sunk 5.26% today as WiseTech fell on a weaker FY24 outlook than expected. Xero (-0.25%) and Altium (-1.06%) also traded lower. However, NextDC rose 3.75% after announcing it has increased its contracted utilisation as its M2 data centre.

The staples sector rose 1.77% thanks to Woolworths and its positive earnings report; however, Coles (-0.38%) fell again after reporting yesterday. Materials (+1.34%) were another winner as the Iron Ore price climbed.

ASX200 Stock Snapshot

Wall Street

The banking sector finished 2.41% lower after S&P Global Ratings followed Moody’s Investors Service in cutting the rating of several U.S. lenders amid a "tough" climate. This drove the S&P500 lower by -0.28%, while the NASDAQ finished +0.06% higher.

Nvidia will report earnings after Wednesday's market close. Options markets suggest a potential 10% share price move with more call options than puts. Will all the A.I. hype be justified?

Moderna shares lifted 4.7% after it signed an agreement with Chinese biotech CARsgen Therapeutics to study a cancer vaccine using mRNA technology.

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Earnings

Company Earnings Summary

Here is your quick recap of some of the companies that reported earnings today

• APA Group, Australia's largest gas pipeline transporter, announced a 10.4% increase in net profit for the year as it plans to fund its $1.8 billion acquisition of remote power assets from Alinta Energy.

• HMC Capital shares rose as the company said it’s on track to hit $10 billion in assets under management by the end of the calendar year.

• Iluka Resources paused production at one of its rustle kilns due to subdued demand for mineral sand. Iluka reported a 45% drop in net profit to $204 million.

• Reece Group says the housing construction and renovation markets are “clearly softening”, and it is working on the assumption that volumes will decline in 2023-24. Profits fell 1.2% to $387.6 million for FY23.

• SiteMinder reported a net loss of $49.3 million for FY23 due to costs related to the acquisition of GuestJoy, restructuring costs, and pre-IPO commitments. Revenue increased by 30.5% to $151.4 million.

• SkyCity reported a net profit of $NZ8 million ($7.4 million) as its core casino operations returned to a full year of operation. Sky City reported a 44 per cent rise in revenue to $926.2 million.

• Santos reported a 32% slump to $US790 million ($1.23 billion) in the first half of FY23 due to softer production and lower oil and LNG prices.

• The Lottery Corp reported a 23.6% fall in profit with lower turnover from jackpot games Oz Lotto and Powerball. Revenue did increase by 7.2% due to higher turnover from Keno turnover.

• Worley reported a drop in net profit of 78% to $37 million as it took a loss on selling a North American business it acquired.

• Woolworths Group reported a 5.7% increase in sales to $64.29 billion, driven by a 5% rise in revenue from its Australian food business, with same-store sales up 4.2% over the 52 weeks to June 25. Group EBIT before significant items rose 15.8% to $3.116 billion, supported by an 18.3% gain in Australian food EBIT to $2.838 billion. WOW shares finished the day 3.5% higher.

Markets

Index & Commodity Prices

Bond Prices

ASX By Sector

ETF Watch

Quick Singles

🪃 Local News

• NextDC has increased its contracted utilisation by 25MW to 145MW since the last update on April 12 2023. NEXTDC’s M2 data centre has benefited the most from the recent customer contract wins and is now at 38% of the planned capacity.

• 4DS Memory shares rose 89% after it achieved “significantly better than expected” analysis results from testing its latest memory system offering, the Fourth Platform Lot wafer.

🌏 Around The Globe

• Domino’s Pizza is shutting down all 142 stores in Russia as the franchise owner in the region plans to declare bankruptcy. According to Yale researchers, over 1,000 Western companies have reportedly left Russia since the country invaded Ukraine.

• Meta will launch its web version of its X rival Threads this week, though Instagram head Adam Mosseri said it was “a little bit buggy” as of Friday.

• Schwab Corp. plans to cut jobs and downsize offices in response to investor pressure, aiming to save $500 million annually.

• Microsoft will acquire non-European streaming rights for Activision's console games over the next 15 years as a part of a restructured transaction to gain approval from British regulators for Microsoft's $69B acquisition.

₿ Crypto Corner

• Maple Finance, a crypto lending platform, raised $5 million to expand services in Asia, allowing borrowers to create their credit facility on the blockchain for multiple lenders to access.

• Shibarium, Shiba Inu's Layer-2 network, is set to relaunch with new features and a monitoring system to handle high traffic levels after a bumpy start last week. According to a recent blog post by pseudonymous developer Shytoshi Kusama, Shibarium is now enhanced and optimised after two days of testing and tweaking parameters.

Movers and Shakers

✅ Biggest Gainers

IDP Education (IEL) shares finished the day 9.5% higher after announcing record revenue of $982 million, a 24% increase compared to FY22. This growth was propelled by a 63% surge in student placement revenue. CEO Tennealle O’Shannessy emphasised IDP's strong market position and commitment to enhancing customer experience.

• Adjusted NPAT was $154 million, a 45% rise from FY22.

• 53% growth in student placement volumes, with the Australian market growing by 77%.

• IDP administered 1.93 million IELTS tests during FY23 and saw a 35% increase in English language teaching course enrolments.

• A final dividend was declared at 20 cents per share, resulting in a full-year dividend of 41 cents per share, up 52% from FY22.

McMillan Shakespeare (MMS) reported an increase in normalised UNPATA of 3% to $86.2 million. The salary packing provider said in its update that it would simplify its Asset Management Services portfolio, with the sales of Aggregation and divestment of its U.K. business netting $20 million. Shares closed 13% higher.

• Normalised revenue of $625.6 million, marking a 5.3% increase

• Normalised EPS was $119.6 cps, reflecting a 10.5% rise from FY22.

• Statutory NPAT decreased by 54.1% to $32.3 million.

• It declared a final fully franked dividend of $0.66c per share, bringing the total FY23 dividend to $1.24 per share, a 14.8% increase from FY22.

• Novated lease orders for E.V.s rose by 12.3%, with E.V.s accounting for 21.4% of orders in June 2023.

🔻Biggest Fallers

The WiseTech (WTC) share price fell 19% today as the company’s FY24 outlook fell short of analysts’ expectations. Before today, WTC shares had increased by over 61%. Wisetech reported a 29% increase in revenue, with CargoWise recurring revenue seeing a significant rise of 48%, reaching $650.1 million, driven by existing and new customer growth.

• Total revenue increase of 29% increase, amounting to $816.8 million.

• EBITDA, excluding M&A costs, was up by 28% at $412.1 million.

• The company's underlying net profit after tax (NPAT) increased by 30% to $247.6 million.

• It declared a final dividend of 8.40 cents per share, a 31% increase from FY22.

WiseTech also made strategic acquisitions, including Envase Technologies and Blume Global, to strengthen its foothold in North American landside logistics. The company signed a global customs rollout with the world's largest freight forwarder, Kuehne+Nagel, and expanded its collaboration with FedEx.

Corporate Travel Management (CTD) finished the day 7% lower to $18.00 despite announcing a 70% increase in revenue to $660.1 million for FY23, surpassing its earlier guidance of $648 million.

Underlying EBITDA for FY23 also rose by 179% to $167.1 million. The latter half of FY23 saw strong earnings momentum with over $115 million in EBITDA and $2.95 billion in new client acquisitions.

Managing Director Jamie Pherous highlighted the company's successful pandemic strategy and optimistic outlook for FY24. The Board declared a final, unfranked dividend of 22 cents per share.

Deep Dive

Domino’s Rebounds After
Rising Costs

Dominos said today that menu items wouldn’t be lifted as they navigated a tricky FY23. CEO Don Meij said the company lost market share and grappled with unprecedented inflation rates affecting food, labour, and energy costs.

Dominos were among the market winners during the pandemic, with the share price reaching highs of $160 in September 2021. Inflation has pressured the company’s net profit, which fell 74% to $40.6 million.

Markets received today’s report positively, with the share price risings 11.8% to close at a 3-month high of $53.70.

FY23 Financial Highlights

• Global Food sales for FY23 reached $4.0 billion, a 2.2% increase from the previous year.

• The company's revenue increased by 3.4% to $2.37 billion, but underlying EBIT decreased by 23.3% to $201.7 million.

• Full Year EBIT was reported at $201.7 million, a decline of 23.3%.

Strategy and Challenges

• Domino’s aims to enhance franchisee and group profitability by introducing innovative products and services and ensuring consistent value.

• The company faced challenges raising menu prices in response to inflation, which impacted sales volumes and margins.

• New product launches, like the "My Domino’s Box" in Japan and the "Doner Kebab pizza" in Germany, have been well-received

• In June, Domino’s announced restructuring initiatives to bolster future growth. This includes exiting the Danish market, closing underperforming stores, and streamlining operations.

Don Meij acknowledged the missteps in pricing decisions and emphasised the company's commitment to rebalancing the value equation for customers and franchisees.

Outlook

• FY24 year-to-date trading update shows a network sales growth of 12.6%, with same-store sales increasing by 2.8%. Regionally, Europe and Australia/New Zealand recorded a 6.6% growth, while Asia faced a decline of 7.8%.

Domino’s is optimistic about FY24, expecting significant sales and earnings improvements. Caution remains, however, on the Asian market's performance and is focusing on strategies to boost customer frequency.

A Little Extra

📉 Going Down?

Top 10 shorted stocks on the ASX - as of August 16

1. Core Lithium (CXO) - 10.77%

2. Flight Centre (FLT) - 10.29%

3. IDP Education (IEL) - 9.04%

4. Syrah Resources (SYR) - 8.93%

5. JB Hi-Fi (JBH) - 8.31%

6. Pilbara Resources (PLS) - 8.30%

7. Lake Resources (LKE) - 8.25%

8. Brainchip (BRN) - 7.67%

9. Elders Limited (ELD) - 7.62%

10. 29Metals (29M) - 7.36%

📊Broker Ratings

What do the brokers have to say?

There were several companies with broker rating changes today; see the complete list here

💲Dividends

Companies trading ex-dividend today

1. My state (MYS) - $0.115

2. Magellan Financial Group (MFG) - $0.698

3. VGI Partners Global Investments (VG1) - $0.05

4. Domain Holdings Australia (DHG) - $0.04

5. FSA Group (FSA) - $0.035

6. AGL Energy (AGL) - $0.23

7. AMP (AMP) - $0.025

8. Downer EDI (DOW) - $0.08

📅 Economic Calendar

Data to keep an eye on this week

DISCLAIMER: None of the information provided in this newsletter should be constituted as financial advice. This newsletter is strictly for educational purposes only. It should not be taken as investment advice or a solicitation to buy or sell assets or make financial decisions. Please do your research.