The first half profit reporting season has now drawn to a close and the news has generally been better than expected. Of the 204 companies in our database, nearly 56 per cent received a share price boost after releasing their results – well above the ten-year average of 49.4 per cent.
Although conditions remain tough in many sectors, especially retailing, most of the key metrics are encouraging with sales growth up 9.1 per cent on last year and net profits climbing 7.5 per cent. Earnings per share rose by 5.1 per cent which is down on last year’s figure of 6.2 per cent but similar to the five-year average of 5.8 per cent. Margins were tracking at record highs early in the survey but the average was dragged lower by some disappointing results late in the month.
Profits were up across most sectors with industrials up by 6.0 per cent on a year ago, resources up 17.5 per cent, financials up 12.2 per cent and property securities up 8.4 per cent. While there were some notably large asset writedowns, the overall proportion of loss makers was just 9.8 per cent, the lowest figure since before the Global Financial Crisis.
Likewise, the generous dividend payouts continued during the December half with 46.6 per cent of companies increasing their payments, the second highest percentage since 2008. Nearly 90 per cent of the stocks in our sample either maintained or lifted their dividend.
Investors were particularly impressed by The A2 Milk Company (A2M), Appen (APX), Service Stream (SSM), Kogan.com (KGN), Seven West Media (SWM), Webjet (WEB), The Reject Shop (TRS), Flight Centre (FLT), Seven Group Holdings (SVW), CSL, Computershare (CPU), Cimic Group (CIM), Rio Tinto (RIO), Mineral Resources (MIN), Aveo Group (AOG), Event Hospitality (EVT), GWA, Money3 Corporation (MNY), Infigen Energy (IFN), oOh!media (OML) and Altium (ALU).