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. 👖 Premiers Pivot

2. 🍼 A2 Milks China Chill

3. 📉 Iress Stock in Freefall

4. ☕ Brevilles American Brew

5. 🌾 Short Sellers Sniff Elders Out

The Recap

Premier's Pivot: CEO's Exit and Asset Disvestment Ahead?

Markets teetered around where they opened but fell away as the afternoon wore on, with the ASX200 finishing -0.46% lower to 7,115.5pts as the biggest day of earnings today saw mixed results.

Premier Investments were in the news today with a triple whammy, a positive trading update, departing CEO and a potential divestment of parts of its business. Investors liked what they heard, with the stock climbing 13%. More on that later.

Economic news from China continues to capture headlines. Chinese banks made a smaller-than-expected cut to their benchmark lending rate today, avoiding trimming the reference rate for mortgages, despite the central bank putting pressure on lenders to boost loans.' China’s central bank set the one-year loan prime rate at 3.45 per cent, falling short of expectations. The five-year loan prime rate was unchanged at 4.2 per cent.

Consumer Discretionary (+0.83%) was the best-performing sector as Premier Investments, and Breville rose on earnings updates. Wesfarmers, Aristocrat and The Lottery Corp. all finished higher. Staples (-1.34%) and Tech (-1.32%) fell the most of the sectors in the red.

The AFR reported on Sunday that Unions would take Industrial actuals by as early as September 2 if the ongoing Woodside’s North West Shelf gas platforms pay dispute can’t be resolved by this Wednesday. The ongoing dispute centres around job pay, security and working conditions. The unions are asking for a pay rise of at least 5%, while Woodside is offering 3%.

ASX200 Stock Snapshot

Economic News

The annual Jackson Hole Economic Symposium conference, held by the Federal Reserve Bank of Kansas City in Jackson Hole, is this weekend. This year’s topic is "The Structural Shifts in the Global Economy." The symposium will bring together central bankers, policymakers, academics, and economists worldwide. Some of the topics this year include:

• The impact of automation on employment

• The implications of an ageing population

• The role of climate change in economic policy

• The future of the international monetary system

• The challenges of monetary policy in a low-interest-rate environment

Sponsor

Get Productive With
ProductivityGlide

A Bite-Sized Email For Your Most Productive Day Yet

Success stories and productivity gems.

Read it in just 30 seconds.

Subscribe Here

Earnings

Company Earnings Summary

A quick snapshot of the other companies who reported earnings

• Adairs reported a 16.4% drop in underlying EBIT Y/Y to $63.9m with lower margins and higher operating costs. Sales in the first seven weeks of FY24 are down 8.9% Y/Y.

• AV Jennings reported a 72% rise in PBT of $31 million for FY23, thanks to a 20% rise in settlements and a 32% rise in gross margins.

• Ampol saw earnings drop due to an unplanned breakdown at its oil refinery, reporting a decline in operating profit of $329.6 million from $444.7 million a year earlier.

• Audinate reported a 40% growth in revenue and positive operating cashflows of $12.4 million for FY23 compared to $1.0 million in FY22.

• Bluescope Steel reported a drop in EBIT of 59% to $537 million due to weaker steel export prices and higher steelmaking raw material costs. The company gave the green light for a $1.15 billion reline of the blast furnaces at its Port Kembla steelworks.

• Charter Hall shares rose after reporting a 6% lift in its dividend. Statutory profit of $196.1 million was down 78.5% due to property value write-downs.

• Chorus fell after reporting a 61% drop in net profit to $NZ25 million, primarily due to higher costs, including natural disasters which occurred earlier in the year.

• IAG reported a 10.6% rise in Gross Written Premium, mainly due to rate increases which the company says are due to inflationary pressures and more natural disasters.

• McGrath reported a statutory profit of $6.2m, which almost halved from last year as the company navigated a challenging property market driven by historically low listing levels and rising interest rates.

• Reliance Worldwide shares fell after reporting a sales drop of 4% for FY23, with a fall-off in new housing starts in Australia to blame.

• Ooh Media reported a 4% rise in revenue despite the challenging advertising market, with growth from road advertising assets (12%) & airports (73%)

• Westpac has reported a drop in its core net interest margin to 1.86 per cent, down four basis points in the first half. It posted an unaudited net profit of $1.8 billion in the third quarter.

Markets

Index & Commodity Prices

This one came from our friends at Chartr for you hot sauce lovers.

The price of Sriracha sauce has soared due to heat waves causing droughts in the main growing areas of Mexico, California, and New Mexico. Prices are up a whopping 47% since 2017.

Resale markets have seen prices as high as $70 on eBay and $124 on Amazon for the iconic spicy brand.

Sign-up to Chartr for free to get other interesting charts daily.

Index & Commodity Prices

Bond Prices

ASX By Sector

ETF Watch

Quick Singles

🪃 Local News

• Elders shares sunk 10.8% after downgrading profit forecasts due to weaker-than-expected sales in its rural products division and pressure on margins from crop protection and farm chemicals.

• Azure Healthcare secured a A$2.6M contract to supply its Tacera Nurse Call platform to Mount Elizabeth Hospital in Singapore.

• AGL Energy negotiated with the Victorian government to keep Loy Yang, a coal power station running until 2035, despite pressure to shut down from its largest shareholder in line with the Paris climate agreement.

• AMP will settle a shareholder class action filed by Komlotex in 2018 for $110 million, pending approval by NSW's Supreme Court. AMP denies any liability.

🌏 Around The Globe

• Mortgage buyer Freddie Mac said the average rate on the benchmark U.S. 30-year home loan rose to 7.09% from 6.96% last week. The rate averaged 5.13% a year ago.

• Trucking firm Estes Express Lines will acquire bankrupt rival Yellow Corp’s terminals in a $1.3 billion deal.

• Smartphone shipments are expected to decrease by 6% globally in 2023 due to weak U.S. demand and economic challenges in China. Consumers are holding onto their phones for more extended periods.

₿ Crypto Corner

• On Friday, the Wall Street Journal reported that Space X had sold all its Bitcoin. Space X has not officially confirmed if it has sold its Bitcoin holdings.

• Securitize acquires Onramp Invest, a digital asset wealth platform for financial professionals. The acquisition aims to increase liquidity and transparency by moving private investments to public blockchains like Ethereum, Avalanche, Polygon, and Algorand.

• Bankrupt crypto lending platform BlockFi has finally opened crypto withdrawals for eligible U.S. users.

Movers and Shakers

✅ Biggest Gainers

• Breville Group (BRG) - reported a 4.2% increase in revenue despite a backdrop of lower consumer spending. The Americas region drove most of the growth, increasing by 15.9% (7.0% cc), with Brevilles premium products proving more resilient. It wasn’t all smooth sailing, with the company’s largest retailer, Bed, Bath and Beyond, filing for bankruptcy, offsetting its gains from its recent acquisition Lelit. No guidance was provided, with the company saying it foresees macroeconomic headwinds going into FY24. While new product launches, maturing new geographies, solution plays, and cost improvements will be the company-specific tailwinds. Breville finished 9% higher to $25.23.

• Nib Holdings (NHF) reported an 11% rise in underlying operating profit to $263.2 million for FY23. NIB announced a final dividend of 15¢ per share, a 40% jump from 2022's 11¢—the total yearly dividend hit 28¢. MD Mark Fitzgibbon emphasised NIB's shift towards a health management focus, aiming to centralise healthcare needs. Aussie health insurance premium revenue increased by 6.1%, while international premiums surged 22.4% due to returning international workers and students. Fitzgibbon acknowledged the ongoing business boost from COVID-19 but highlighted uncertainties for private health insurers. NHF closed the day up 4.5% to $8.36

🔻Biggest Fallers

• Iress (IRE) stock sank to a 10-year low, dropping 36% to $6.44 after the company suspended its interim dividend. Iress completed the sale of its managed funds administration business for $52 million to U.S. software giant SS&C Technology. Iress plans to use the sale's proceeds to pay its debt and divest its platform’s business to focus on its core operations. For H1FY23, Iress reported an EBITDA of $29.4 million, down 55% Y/Y, while revenue increased 2% to $315.3 million. The company reported a net loss of $139.8 million. For the second half of calendar 2023, Iress expects revenue growth to be weaker and underlying EBITDA to be broadly flat due to cost headwinds, reduced market trading volumes, and broader macro uncertainties.

• A2 Milk (A2M) - reported at the lower end of its guidance range but warned that the outlook in China isn’t rosy. NPAT for FY23 was $155.2 million, up 26.2% Y/Y. Revenue in the period was up 10.1%, driven by solid growth in the China & Other Asia segment, up 37.9%. Growth did slow to 3.0% in the second half of FY23, mainly due to a decline in the English label IMF Daigou market value. The weaker outlook no doubt affected the share price today, as A2M expect the Chinese IMF market to decline by further double-digits in FY24 due to fewer newborns. A2M shares finished 13.5% lower to $4.27.

Deep Dive

Premier Investments Tailors New Strategy as CEO Hangs Up His Hat

A Strategic Review, CEO Departs and a Trading Update.

A lot was happening today for Premier Investments, owner of brands such as Peter Alexender, Smiggle, Just Jeans and Portmans.

Here's a summary:

FY23 Trading Update

Premier expects to report record global sales for FY23, amounting to $1.64 billion. This represents a 9.7% increase from FY22 sales.

The company’s EBIT for FY23 is expected to be between $355.0 million and $357.0 million, marking a 6.0% - 6.6% growth.

Full-year FY23 results will be released at the end of September 2023.

Strategic Review

Premier Investments has initiated a formal review to assess its corporate, operating, and capital structure. The review will focus on the Peter Alexander, Smiggle, and Apparel Brands. The decision for this review stems from recognising the growth and opportunities presented by Premier Retail's various businesses. The review will explore multiple options, including potential demergers, and will be advised by UBS and Arnold Bloch Leibler.

CEO Resignation

Richard Murray, the Chief Executive Officer of Premier Retail, has resigned from his role, effective September 15 2023. He has also stepped down as Premier's Executive Director as of August 21 2023. John Bryce, the CFO of Premier Retail, will serve as the interim CEO. Richard Murray joined from J.B. Hi-Fi, where he was from 2014 to 2021. He oversaw the company’s rise from a small regional retailer to a national powerhouse, opening over 100 stores and expanding product ranges.

A Little Extra

📉 Going Down?

Top 10 shorted stocks on the ASX - as of August 15

We reported on Friday that Elders shot up the short ranks from June to August. Today they announced an earnings downgrade finishing 10% lower.
Follow the money as they say!

1. Core Lithium (CXO) - 10.77%

2. Flight Centre (FLT) - 10.22%

3. IDP Education (IEL) - 9.25%

4. Syrah Resources (SYR) - 8.68%

5. JB Hi-Fi (JBH) - 8.28%

6. Pilbara Resources (PLS) - 8.10%

7. Lake Resources (LKE) - 7.70%

8. Elders Limited (ELD) - 7.61%

9. Select Harvests (SHV) - 7.47%

10. Brainchip (BRN) - 7.43%

📊Broker Ratings

What do the brokers have to say?

1. Domain Holdings Australia (DHG) - Downgraded to Underperform from Neutral (Macquarie)

2. PWR Holdings (PWH) - Downgraded to Hold from Buy (Bell Potter)

💲Dividends

Companies trading ex-dividend today

1. U.S. Student Housing REIT (USQ) - $0.0116

2. Bailador Technology Investments (BTI) - $0.032

3. Vicinity Centres (VCX) - $0.0625

4. Ryder Capital (RYD) - $0.0425

5. Steadfast Group (SDF) - $0.09

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.