We collected data on 309 companies during the February reporting season and the overall picture is mildly encouraging. There are signs of a nascent turnaround on most metrics but the divergence between the coronavirus winners and losers was striking.
| For period to: 31 December 2020 | Current | 10 Year Average |
|---|---|---|
| Companies in sample | 309 | 220 |
| Median sales (%) | 4.6 | 6.4 |
| Median Pre-Tax Profit (%) | 10.7 | 5.1 |
| Median Net Profit (%) | 14.0 | 4.8 |
| Median EPS growth (%) | 3.8 | 2.9 |
| Median Net Margin (%) | 11.3 | 10.8 |
| Median Dividend Yield (%) | 4.9 | 4.8 |
Sales revenue for our sample companies was up 4.6% on a year ago although the downtrend since 2016 appears to be intact. Net profits rebounded solidly after falling steeply in the year to 30 June.
However these numbers can be influenced by acquisitions, mergers and divestments so earnings per share figures probably provide a better window into the company’s operations. Earnings on this basis were up 3.8% in the year to 31 December which is relatively feeble given that they dropped 21.6% in the year to 30 June. The median net profit margin was 11.3% which is just above the long-term average of 10.8%.
Perhaps the most noticeable findings were (i) the large percentage of companies reporting a loss, despite the economic bailout measures, and (ii) the relentless rise in the proportion of stocks not paying any dividend. Indeed the percentage of companies in the ‘no dividend’ category was the highest since we started collecting this data back in 2007.
