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3 ASX reports out today: BlueScope, Argo Investments & GWA

Here’s your two-minute take on the latest financial results from BlueScope Steel Limited (ASX: BSL), Argo Investments Ltd (ASX: ARG) and GWA Group Ltd (ASX: GWA).

BlueScope Steel

FY20 Change (year over year)
Underlying EBIT $564 million down 58%
Final dividend (per share) 8 cents per share No change

Excluding the write-down of its New Zealand and Pacific Islands segment, BlueScope Steel reported a 58% decline in underlying operating profit (EBIT) with a 10% fall in revenue year-over-year.

BlueScope maintained its dividend payment to shareholders and said it retained its credit ratings from S&P Global and Moody’s. The company had $79 million of net cash at the end of the financial year — but excluding capitalised operating leases, it would have been $509 million.

The company made this statement about the start of its new financial year (FY21):

“At the beginning of 1H FY2021, lagged steel spreads in North America and Asia are lower than 2H FY2020 averages; orders and despatches in Australia remain stable and North Star is despatching near full capacity.”

GWA Group

Expected Actual
Profit $48 million $43.9 million
Dividends (per share) 6.6 cents 11.5 cents (final dividend: 3.5 cents)

GWA, a supplier of household and commercial fittings like taps and sinks, reported a profit of $43.9 million, down 53%, on revenue of $398.7 million — up 4% year over year.

The company said its strong financial position, which includes $32 million of cash in the bank and $175 million of debt, enabled it to pay a final dividend of 3.5 cents per share fully franked.

“Our top line was significantly impacted by lower construction activity, merchant destocking in the first half, and the impact of the COVID-19 pandemic and lower than expected merchant restocking in the last quarter of the year,” GWA CEO Tim Salt said.

GWA said economic indicators are pointing to a reduction in its addressable market in FY21, including new residential building.

Argo Investments

FY20 Change (year over year)
Profit $199.45 million Down 32%
Final dividend (per share) 14 cents Down from 17 cents

Argo, one of the leading listed investment companies (LIC) on the ASX, reported a robust dividend result despite a fall in yearly profit.

The company said its profit was significantly impacted by reduced dividends at the major banks like National Australia Bank Ltd (ASX: NAB), ANZ Banking Group (ASX: ANZ) and Westpac Banking Corp (ASX: WBC), hurting the company’s cash flow.

Given the weakness in the banking sector and the economy, Argo’s allocation to bank stocks has fallen from 17.4% to 13.8% of the portfolio. During the year, the company added Freedom Foods Group (ASX: FNP), Downer EDI (ASX: DOW), Oil Search Limited (ASX: OSH) and Ramsay Health Care (ASX: RHC) to its holdings.

Argo’s portfolio underperformed the S&P/ASX 200 Accumulation index. Argo’s portfolio fell 10.1% whereas the market returned negative 7.7%.

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Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Owen does not have a financial or commercial interest in any of the companies mentioned.
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