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. 🚔Trump's Surrender

2. 👟Accent Group Steps Up

3. 🔋Pilbara's Billion-Dollar Bash

4. 👕Budget Conscious Shoppers Benefits Kmart

5. 📡Aussie Broadband Revels in Impressive Growth

The Recap

Kmart Elevates Wesfarmers Result As Markets Await Jackson Hole

The ASX200 closed 66.9 pts. lower on Friday, making it the second week of declines. All eyes will be on U.S. Federal Reserve chairman Jerome Powell’s address at the Jackson Hole annual meeting later tonight.

Wesfarmers, the largest company to report today, grew underlying revenue by 7.4% and net profit after tax by 4.8%. This was due to stronger sales from the Kmart Group as shoppers hunted for bargains. More on Wesfarmers' performance later.

Only the Staples (+0.68%) and Discretionary (+0.30%) sectors ended the day higher. Coles (+0.25%) rebounded after a two-day sell-off, while Wesfarmer’s result dragged the Discretionary sector higher.

The Tech sector fell by the most today after the NASDAQ finished lower in the U.S. WiseTech (-4.7%) and Xero (-3.3%) finished in the red. The Iron Ore price pulled back after consecutive days of gains, sending our Materials sector lower by 1.55%

Overseas, Donald Trump handed himself into authorities for processing over his fourth indictment charge. The former president posted a mugshot on X, marking his return to the platform since being banned in 2021.

ASX200 Stock Snapshot

Wall Street

Wall Street retreated as investors hung tight ahead of Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium tonight as markets eagerly await any clues or hints on the Fed’s next rate move.

The sell-off in growth stocks resumed, particularly in tech, despite Nvidia’s stellar earnings. Nvidia traded as high as 6% higher throughout the day but ended Thursday’s session up only 0.1%. Other chip makers, AMD and Intel, fell by 7% and 4%, respectively.

The S&P500 finished 1.4% lower, and the NASDAQ was down 1.9% as all 11 sectors ended lower.

U.S. Bond yields rebounded overnight, with the 2-year treasury yield finishing above 5%

Walt Disney stock hit a nearly nine-year low as investors dumped shares due to a gloomy outlook. The company reported disappointing earnings as its streaming service, Disney+, lost users in Q2 despite a brief rally following price hikes earlier in the month.

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Earnings

Company Earnings Summary

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

• Ardent Leisure shares rose 6.6% after reporting a $17m loss, excluding the impact of the sale of its United States-based Main Event business. The loss was a 71% improvement from last year, impacted by lower visitor numbers due to lockdowns.

• Bravura Solutions jumped 44% despite a $280.7 million statutory loss and a 6.4% decline in revenue as the company committed to achieving a positive cash EBITDA run rate by the end of FY24.

• Jumbo Interactive reported an increase in revenue of 13.9% to $118.7m despite saying the decline in lottery ticket sales was one of the worst of the last decade. Underlying EBITDA climbed 6.9% to $58.9 million.

• Michael Hill’s profit fell to $35.2 million in FY23 from $46.7 million a year ago. The company declared total dividends for the year of 7.5¢, flat to a year ago.

• Pilbara Mineral shares fell despite increasing Ore Reserve by 35% to 214Mt. The Lithium miner reported full-year revenue of $4.1 billion, up from $1.2 billion vs. LY. EBITDA rose by 307% to $3.38 billion.

• Workforce provider Ventia Services forecasted “robust demand across all sectors” when it reported half-year earnings today, guiding NPATA growth of 7-10% for the entire year against FY22.

Markets

Index & Commodity Prices

Bond Prices

ASX By Sector

ETF Watch

Quick Singles

🪃 Local News

• Two of IAG’s subsidiaries are being sued by ASIC for misleading customers about the loyalty discounts available for certain types of home insurance.

• Kroll Australia has been appointed as the independent expert to review SkyCity Adelaide’s anti-money laundering and counter-terrorism financing.

🌏 Around The Globe

• Donald Trump has handed himself in to authorities at the Fulton County Jail in Atlanta, Georgia, for processing over his fourth indictment.

• Peloton continues to fall, reporting a $37m drop in sales with 20k paused subscriptions and 750k requests for seat replacements. A loss of $242m came in larger than expected.

• A new report from The Information claims that TikTok plans to ban links to outside e-commerce sites. You’ll need to use TikTok Shop to purchase an item you see on the app.

• SpaceX is working with Cloudflare to boost the performance of its satellite internet service Starlink, The Information reported on Wednesday.

• Nike shares fell for an 11th straight day after it reported a drop in net income of 28% to $1.0bn in Q4 due to higher operating costs and a 140 bps drop in Gross Margin.

• Roark Capital Group has emerged as the winner in the bidding war to acquire Subway, beating out TDR Capital and Sycamore Partners.

₿ Crypto Corner

• Roman Semenov and Roman Storm, developers of the cryptocurrency platform Tornado Cash, have been indicted with three counts of conspiracy. Storm has been arrested, while Semenov is still at large, according to a Southern District of New York statement.

• Solana Pay, a decentralised payment app created by Solana Labs, can now be utilised by Shopify merchants. This enables millions of businesses on the Shopify platform to offer Solana Pay as a payment option, with USDC as the initial integration.

Post Of The Day

Speaks for itself

Movers and Shakers

✅ Biggest Gainers

Aussie Broadband (ABB) shares rose 11% after announcing a set of impressive results for FY23, with growth across all segments, including a record revenue result:

• Revenue - $788.0m, +23.1%

• EBITDA - $86.6m, +52.1%

• Gross Margin - 35.4%, +2.1bps

• Operating Cash Flow - $116.7m, +147.2%

The rise in revenue was helped by total broadband connections increasing by 18.2%, finishing the year at 691,172. Aussie said it increased its market share in the NBN broadband sector (excluding satellite) by 7.6%, up from 6.5%.

Aussie Broadband acquired Over The Wire in March last year, reporting it achieved $6 million in run-rate synergies for the year while investing $19.1 million in its core fibre network to enhance capacity and margins.

The start of the new financial year has begun positively, with the company saying broadband services have increased to over 715,000 in the last seven weeks of trading. It expects EBITDA to be in the range of $100 million to $ 110 million, an increase of 12%-23% in FY23.

Accent Group (AX1) shares lifted 17% today to close at $2.16 after reporting a record profit this past financial year.

• Revenue - $1.57bn +, 24%

• EBIT - $138.8m, +122.9%

• EBITDA - $298.2m, +39.6%

• NPAT - $88.7m, up from $31.5m LY

• Total Dividend - 17.5c p/s, up from 6.5c p/s

The company’s Like-for-Like (LFL) retail sales were up 10.2% for the year but slowed in H2, which was up 8.0%. Strong sales were achieved across all major brands, including Platypus, Skechers, TAF, Hype DC, Vans and Dr Martens. Accent called out Skechers, TAF and Hype DC of note, who continued to achieve positive sales growth during slowing sales in May and June. Accent opened 80 new stores throughout the year, growing its customer base by 500,000, reaching 9.8 million customers.

Accent said inventory remains “below the previous year's levels, and aged stock levels are clean.” Accent Group's CEO, Daniel Agostinelli, expressed satisfaction with the FY23 results, highlighting the company's consistent focus on customers, new products, and return on investment.

Total retail sales in the first seven weeks of trading in FY24 are up 5%. However, LFL sales are down 1.8% as the company cycles a bumper start to FY22. Accent did say that the August trade had been approved to be 1% higher. Digital Sales were up 20% so far in the new financial year.

🔻Biggest Fallers

IPD Group (IPG) shares fell 4.8% to $4.38 today despite releasing record revenues and profits:

• Revenue - $226.9m, +28%

• EBIT - $23.1m, +41%

• NPAT - $16.1m, +45%

• EPS - 18.6c p/s, +30.1%

• Fully Franked Dividend - 4.7c p/s, +27%

The company reported cash reserves of $20.8 million and no borrowings.

IPD said, “It is too early in the new financial year to provide a full-year earnings outlook given domestic and global economic volatility and the recent acquisition of Ex Engineering”. This may have been a catalyst for the share price fall today.

The company highlighted its strategic investment throughout the year, including expanding Gemtek as it looks to service the emerging Electric Vehicle market and securing a long-term lease for a new 4,000spm warehouse in Eastern Creek, NSW.

PEXA Group (PXA) shares fell 6% after releasing full-year results for FY23. While the company reported a slight increase in revenue, EBITDA and Free Cash Flow fell from FY22.

• Revenue - $283.4m, +1%

• Operating EBITDA - $98.7m, -26%

• NPAT - ($21.8 million), down from $21.9m last year

• Free Cash Flow - $14m, -52%

This decline was attributed to the challenging property market conditions, with house prices and transaction volumes receding from the highs of FY22. The company also highlighted increased investments in technology and acquisitions.

The PEXA Exchange Business Revenue also decreased by 6% to $263.1 million but did grow volume in QLD and ACT.

Regarding the outlook, PEXA expects to continue its resilient performance, delivering strong cash flow and operating EBITDA margins in a consistent 50-55% range. Going on further to say, “The Group Margin currently sits at 35%, and we expect this will be a floor for our performance next year.”

PEXA also has cut its estimate of the total addressable market in the U.K. from $719 million to $500 million. The company said the original figure, published during the prospectus, was at a time when the U.K. property market was at “all-time highs”.

Deep Dive

Kmart Group Leads the Way for Wesfarmers

The retail conglomerate's FY23 Statutory NPAT increased by 4.8% to $2,465 million, beating expectations of a 4.1% rise. Total revenue rose by 18.4% to $43.6bn, including the acquisition of Australian Pharmaceuticals Industries under Wesfarmers Health. Excluding the acquisition, revenue rose by 7.4%. The company declared a fully franked final dividend of $1.03 per share, resulting in a total dividend of $1.91 per share, up 6.1% from the previous year.

Wesfarmers Financial Highlights

• Revenue (excl. WES Health) - $38,328m, +7.4%

• EBIT - $3,863m, +6.3%

• NPAT - $2,465, +4.8%

• EPS - $2.17, +4.8%

• Operating Cash Flows - $4,179m, +81.6%

• Full-Year Dividend - 191c p/s, +6.1%

Wesfarmers reported strong earnings from its two key retail banners, Bunnings and Kmart Group, and also boosted by its Chemicals, Energy unit, WesCEF.

Revenue & Earnings vs. FY22 - By Business Segment

Whilst Bunnings remains far and away the most prominent business segment in the Wesfarmers family, Kmart's revenue and earnings grew the most in dollar and percentage terms.

Kmart Group (including Target) grew across all its categories, increasing units sold and transaction volumes compared to the prior year. The company attributed this to the strong execution of pricing strategies as customers responded positively to Kmart’s lowest price positioning and good product availability.

Bunnings reported a minor sales increase, recording an uplift in sales from both consumer and commercial customers across all regions, despite the impact of prolonged wet weather on spring trade on the East Coast. Sales in the year's second half slowed, with a 2.1% growth, with solid demand and activity from commercial customers partially offset by lower consumer sales.

Officeworks attributed its revenue growth to an improved Back to School trading period while also continuing to achieve above-market growth in its technology categories.

Outlook

Wesfarmers said that elevated inflation and higher interest rates are expected to continue to impact demand in parts of the economy, with many customers becoming more value-conscious and trading down to lower-priced.

Trade in the seven weeks for FY24 has continued to excel for Kmart, although it has moderated from the second half of the FY23 result. Bunning’s sales growth was also in line with H2FY23, which Officeworks has traded flat so far in FY24.

A Little Extra

📉 Going Down?

Top 10 shorted stocks on the ASX - as of August 21

Core Lithium shorts fell on August 21, dropping from 11.40% to 8.37%. CXO shares fell over 20% the day prior after finalising a capital raise.

1. Flight Centre (FLT) - 10.38%

2. Syrah Resources (SYR) - 9.09%

3. IDP Education (IEL) - 9.06%

4. Lake Resources (LKE) - 8.64%

5. Pilbara Resources (PLS) - 8.58%

6. Elders Limited (ELD) - 8.55%

7. JB Hi-Fi (JBH) - 8.47%

8. Core Lithium (CXO) - 8.37%

9. Imugene (IMU) - 8.10%

10. Brainchip (BRN) - 7.95%

📊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. Morphic Ethical Equities Fund (MEC) - $0.035

2. Estia Health (EHE) - $0.12

3. Ingenia Communities Group (INA) - $0.058

4. Argo Investments (ARG) - $0.18

5. Fiducian Group (FID) - $0.18

6. G.U.D. Holdings (GUD) - $0.22

📅 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.