Profit reporting season is a goldmine for entrepreneurs of all shapes and sizes.
The requirement for listed companies to report their results to the market every six months means business owners can get free, detailed information about how the big boys of their industry are tracking, from profit margins to gearing levels to cost pressures.
Today is a big day of results, with a host of companies reporting, including Super Cheap Auto, Seek, Boral, Pacific Brands, Suncorp and Seven West Media amongst the big names reporting.
There’s hundreds of pages of investor presentations to wade through, but I’ve spotted a few key insights I wanted to share with you.
Pacific Brands posted a $450 million loss and lost its CEO Sue Morphett, but another little gem from the company was the poor performance of its workwear division, where earnings dropped more than 20%. Pacific Brands said it was an “economy-driven downturn, particularly in SME segment”.
If you want a good insight into how the consumer is travelling then Coca-Cola Amatil’s results are worth studying – the nervous buyer doesn’t drink as much Coke. Coke seems worried, citing “continued poor consumer spending” for its sluggish Australian sales.
Super Retail Group, which owns the Super Cheap Auto chain, the BCF chain and Rebel Sports, reported another good result. But its outlook was also positive, with like-for-like sales in its auto and leisure divisions running at 5% in the first seven weeks of 2012-13, and Rebel sales up 7% over the same period.
Online job ads giant Seek posted another great result, with net profit up 35%. Its outlook is also encouraging, tipping an “improved result” over the next 12 months. I’m taking that to mean the company isn’t expecting deterioration in the domestic labour market.
Boral might have reported a slight rise in net profit, but its Australian business saw earnings tumble 29% and commentary from CEO Ross Batstone was sobering: “Earnings from our Australian business in the six months to June were hit by very weak housing and non-residential building activity, combined with delays and disruption from sustained rainfall across the east coast.”
Seven West Media, the conglomerate that includes the Seven Network, Pacific Magazines and West Australian Newspapers, left investors in no doubt that ad markets remain very, very tough, with overall growth likely to be minimal in the “near term”. However, it said online advertising growth was running at 23.6% in the first six months of 2012, which underlines where marketers are putting their dollars.
Suncorp reported loans from the SME and agribusiness that are more than 90 days past due have fallen slightly from $65 million to $57 million in the three months to June 30 – a small improvement, but an improvement all the same.
Blood products and biotech group CSL delivered a 4.5% rise in net profit, which would have been 16% had it not been for the strong Australian dollar. But what caught my eye was its commitment to innovation – R&D spending increased 13% in constant currency terms (adjusting for the Australian dollar) to $355 million.
The Reject Shop reported comparable sales growth of just 0.5% across the 2011-12 year, but the second half saw growth running at 3.6%. The company reported a net profit rise of 35.6% to $22 million and the company expects to open 20 new stores.
Labour hire company Skilled Group reported a full-year profit of $49.3 million, compared to $3.1 million last financial year. The company says it is continuing to benefit from strong mining activity in Western Australia, NSW and Queensland and underlined that this work isn’t drying up soon – 38% of Skilled’s revenue comes from contacts that are longer than five years.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
