The S&P/ASX 200 (ASX: XJO) was trading down 0.83% at lunchtime today.
Making today’s sharemarket headlines was Pushpay Holdings Ltd (ASX:PPH) and JB Hi-Fi Ltd (ASX:JBH). Below, we also take a brief look at what’s helping to drive the market’s recent strong returns: capital raisings.
ASX 200 – top performers at lunchtime
Pushpay Holdings Ltd – Up 17%
Pushpay just reported its 2020 financial year result.
Pushpay reported that its operating revenue increased by 33% to US$127.5 million. Total revenue rose by 32% to US$129.8 million. Excluding the Church Community Builder acquisition, operating revenue rose by 28% to US$123.1 million. The company said it expects further revenue growth.
Total processing volume rose by 39% to $5 billion.
Improving the gross profit margin is important for a business to generate more efficient profit as it gets bigger. Pushpay’s gross margin increased to 65% from 60%. Without Church Community Builder it would have been 64%.
Whilst revenue grew by 33%, expenses only grew by 5%. That meant that total expenses were only 52% of operating revenue, down from 65%.
So far, Pushpay shares have risen 17% so the question now is: Is the Pushpay share price a buy?
JB Hi-Fi Limited – up 3%
The retailer saw an acceleration of sales in late March as customers prepared for a potential increase in government restrictions.
In the third quarter of FY20, JB Hi-Fi Australia saw total sales growth of 11.6% with comparable growth of 11.3%. The Good Guys saw 13.9% total sales growth with comparable growth of 13.9%. FY20 to 31 March sales were up 6.9% and 5.4%, respectively.
However, JB Hi-Fi New Zealand saw total sales slide 3.3% due to the closure of all ‘non-essential businesses’ which included JB Hi-Fi New Zealand’s stores and online operations. FY20 to 31 March sales were down 0.4%. Click here to continue reading.
Capital Raisings drive returns
For the most part, it seems ASX investors have welcomed the latest patch of capital raisings.
Indeed, investing in the most recent ASX capital raisings seems to have produced good returns despite the continuing COVID-19 market turmoil.
From March 18 to April 27 there were 35 raisings announced, seeking a total of $15.4 billion.
In all, 74% of the deals trading are trading above their offer price, with an average return of 17% to date.
Companies that have raised capital include Cochlear Limited (ASX: COH), Flight Centre Travel Ltd (ASX: FLT), Webjet Limited (ASX: WEB) and more recently, National Australia Bank Ltd. (ASX: NAB) and Lendlease Group (ASX: LLC).
There should still be an opportunity to participate in capital raisings. Macquarie analysts expect more ASX equity raisings after one-third of the ASX 300 withdrew their earnings guidance.