Earnings Wrap: Ramsay and Lovisa miss expectations, Qantas declares $500m buyback

Ramsay Health Care (ASX: RHC): Dividend miss, higher-than-expected Capex

One liner: Revenue in-line but wide net profit and dividend miss, stronger performance from Australia, Asia and UK acute hospitals solid growth, plans to accelerates digital and operation transformation.

• Revenue $15.3bn vs. $1.52bn expected

• Net profit of $298.1m vs. $341m expected

• Final dividend 25 cps, fully franked

• Full year dividend of 75 cps, well-below Morgan Stanley expectations of 99 cps

CEO and MD Craig McNally, ‘We remain confident that we are well placed to take advantage of the long term trends driving the healthcare industry, and will continue to evolve our portfolio of activities and business to ensure we leverage our scale in the sector to capture share and drive improved results for shareholders.’

FY24 guidance and outlook:

• Group growth in earnings to be driven by mid single digit top line growth, margin recovery, and digital and data opex investment

• Growth capex $0.89-1.1bn (above Morgan Stanley expectations of approximately $850m)

• Modifying investment strategy in light of higher development costs and disruption in the building industry

• Australian earnings in expected to mid single digit volume growth, with shift towards investment in digital and data platforms

• UK forecasting mid to high single digits volume growth

Lovisa (ASX: LOV): FY23 miss, FY24 sales start to ease

One liner: Double miss, trading for the first seven weeks of FY24 flag a decline in sales.

• Revenue up 33.1% to $596.6m vs. $613m expected by analysts

• Net profit up 20.1% to $68.2m vs. $72.4m expected

• Final dividend of 31 cents per share (70% franked)

“We are very pleased that we were able to maintain the momentum of our store rollout through the financial year after a strong start in the first half, which has again delivered us excellent top line sales growth, and combined with strong comparable store sales has resulted in an excellent financial result for the year," said CEO Victor Herrero.

Outlook

• Trading for the first 7 weeks of FY24 saw comparable store sales for this period down 5.8% on FY23

• Total sales for this period are 13.1% up on the same period in FY23.

Qantas (ASX: QAN): Unsurprising result, international capacity trending higher

One liner: FY23 results mostly in-line with expectations, approved buyback of up to $500m, Group domestic capacity expected to remain above pre-COVID levels while International capacity set to top pre-Covid levels in second half of 2024.

• Revenue of $19.2bn vs. $19.6bn expected by analysts

• Statutory net profit of $1.74bn vs. $1.73bn expected

• Approved a buyback of up to $500m, set to commence in September (following a return of $1bn in FY23 at an average price of $6.19 per share)

Outlook

• Group Domestic capacity is expected to remain above pre-COVID levels throughout FY24

• Group International capacity will continue to recover, on track to return to 100% of pre-COVID levels in 2H24

• Approximately A$400M in transitionary costs incurred in FY23 will unwind in FY24

Whitehaven Coal (ASX: WHC): Results in-line, dividend beat

One liner: Results largely in-line with analyst expectations, full-year dividend comes in stronger than expected but FY24 ROM guidance miss.

• Revenue up 23.3% to $6.06bn vs. $6.09bn expected by analysts

• Net profit up 36.7% to $2.67bn vs. $2.64bn expected

• Final dividend of 42 cents per share

• Full-year dividend of 74 cents per share, above Goldman Sachs expectations of 61 cents per share

“Record coal prices and our portfolio of high quality thermal and metallurgical products allowed Whitehaven to optimise the sales mix for FY23 and maximise our exposure to the strong gC NEWC thermal index. With 94% of our sales going into the higher priced thermal market, we delivered an average realised price of A$445 per tonne," said CEO Paul Flynn.

FY24 Outlook:

• “With strong underlying market demand for high-CV, high quality thermal coal and metallurgical coal, coupled with forecast supply tightness, we recognise the opportunity and importance to improve operational performance," said Flynn

• FY24 ROM coal production between 18.7-20.7Mt vs. Goldman Sachs expectations of 22.4Mt

• Unit cost of coal between $103-113 a tonne (FY23: $103)

• Capex between $460-570m

Nine Entertainment (ASX: NEC): Losses across the board in FY23

One liner: The television and radio broadcaster comprehensively missed analyst expectations in FY23, with its losses across NPAT, revenue and EBITDA steeper than anticipated.

• $262.1 in NPAT versus consensus of $267.2 million

• Revenue of $2.69 billion versus analysts’ estimate of $2.72 billion

• Adjusted EBITDA of $591.2 million versus $597.1 million

• Earnings per share of 15.7 cents a share, down 23% from 20.5 cents in FY22

• Final dividend of 5 cents a share, bringing the total for FY23 to 11 cents, down 20% on FY22

“Whilst we faced tougher economic conditions which have impacted the broader industry, Nine has risen to the challenge, continuing to drive audience and revenue share, and investing in the future of the business while focussing on the efficiency of our cost base,” said NEC chairman Peter Costello.Outlook “FY24 has begun much as FY23 ended. The advertising market remains subdued, particularly in FTA, digital display and print publishing,” management said.

Medibank (ASX: MPL): Profit jumps 30% and beats expectations, despite expensive cyber hit

One liner: Medibank Private has delivered full year net profit ahead of expectations, despite a miss in revenue, and declared a final dividend of 8.3 cents per share.

The cost of last October cyber attack climbed to more than $46m, but it wasn’t enough to stop the company from posting a 30% uplift in profit. Chief executive David Koczkar said “policyholder growth is back on track following the cybercrime event”.

Key numbers:

• Underlying NPAT $499.6m vs expectations of $481.7m

• Revenue $7.36B vs expectations of $7.46B

• Segment operating profit A$694.6M vs expectations of $644.9m

• Final DPS 8.30c - Record 14-Sep, payable 5-Oct

Outlook:

• Medibank Anticipates further moderation in resident industry growth in FY24 relative to FY23 and is aiming to achieve 1.5-2.0% resident policyholder growth in FY24.

• Targeting A$20m of productivity savings across FY24 and FY25.

• Expect costs of between A$30-35m in FY24 for further IT security uplift and legal and other costs related to regulatory investigations and litigation.

• “Our unique dual brand strategy, our products and services and our health innovation set us apart from others and gives us confidence we will continue to grow”, the company said.

Stockland Group (ASX: SGP)

One liner: Stockland FY23 results comes in at higher end of guidance with FFO $0.371.

• Statutory NPAT cont ops A$438M compared with $1,381m in FY22, reflecting $(250)m of net valuation movements over FY23

• NTA/security A$4.24

• Final DPS A$0.144

CEO and MD Tarun Gupta: ‘Our FY23 result reflects a strong operational performance and the continued implementation of our strategy in an uncertain macroeconomic environment.’

FY24 guidance and outlook:

• Pre-tax FFO per security A$0.345-0.355

• tax expense expected to be a high single-digit percentage of pre-tax FFO

• Distribution per security expected to be within Stockland's targeted payout ratio range of 75 to 85% of post tax FFO

South32 (ASX: S32): Reports US$173m NPAT loss in FY23

One liner: Declining financials across the board for FY23, attributed to several factors including US$1.3 billion in impairments and commodity prices falling from record levels since last year.

Management also cited “higher inflation and uncontrollable costs,” all of which more than offset the group’s higher production volumes.

• US$173 million NPAT loss was down $2.8 billion from US$2.67 billion a year earlier, primarily due to the non-cash impairments from its Hermosa Project in Arizona, US.

• Revenue of US$9.05 billion missed analyst forecasts of $8.34 billion.

• Adjusted EBITDA of US$2.53 billion, which was down by US$2.2 billion on last year, was a slight beat versus consensus of US$2.42 billion

• Final dividend of US 3.2 cents a share (fully-franked) for the year ended 30 June 2023, payment date is 12 October 2023.

Graham Kerr, South32 CEO, highlighted production records at the miner’s Hillside Aluminium, Australian Manganese, and South Africa Manganese operations.“During the year, we delivered strong production growth in commodities that are critical for a low-carbon future.”

Outlook

Management is guiding toward production growth in aluminium and copper of 4% in FY24 and 3% in FY25.“FY24 Group capital expenditure guidance, excluding EAIs, is set at US$860 million as it prioritise safe and reliable operations and invests to improve productivity and grow future volumes,” management said.

Tabcorp (ASX: TAH)

One liner: One beat, two misses from gaming company Tabcorp in FY23 as NPAT and revenue undercut analyst expectations.

• Group EBITDA of $391 million in FY23 was up 8% on last year, ahead of consensus forecast of $382 million

• NPAT of $67 million NPAT missed analyst guidance of $72.6 million.

• Revenue of $2.43 billion was up 2% on FY22’s figure, but below consensus forecasts of $2.47 billion

• Final dividend of 1 cent a share, fully franked, bringing the total FY23 dividend to 2.3 cents and a payout ratio of 60% of NPAT.

“We are the only one of the large wagering operators in the Australian market to increase revenue and EBITDA in FY23,” said managing director and CEO Adam Rytenskild.

“Despite a distorted market which included the introduction of an aggressive new operator and increased generosity and marketing spend by competitors, our digital revenue share remained relatively stable.”

Outlook

“In FY24 we expect opex to increase to $630-$640m including investment to reposition the TAB brand in 1H24, along with continued investment in data and analytics capability,” management said.

“While expenditure will increase in FY24, targeted opex of $600m-$620m in FY25 remains unchanged.”