The S&P/ASX 200 (ASX: XJO) started the week on a negative note, falling 0.6% as COVID-19 cases surge in Australia, lockdowns expand to four states and Victoria was plunged into another curfew.
Around half the sectors were lower with the popular cyclical ‘value’ stocks like energy and financials hardest hit, down 3.4% and 1.3%, respectively. Quality remains in focus with Wesfarmers Ltd (ASX: WES) jumping 0.3%.
a2 Milk Company Ltd (ASX: A2M) was a surprise winner, jumping 12.1% amid rumours that global giant Nestle may be considering acquiring the group.
Sydney Airport Holdings Pty Ltd (ASX: SYD) was 0.7% lower after rejecting the unsolicited bid by a group of industry super funds.
BHP Group Ltd (ASX: BHP) also fell 1.4% amid rumours that Woodside Petroleum Limited (ASX: WPL) may be interested in the mining giant’s $20 billion oil and gas operations.
Bendigo Bank reports
Bendigo and Adelaide Bank Ltd (ASX: BEN) was a major detractor, the second tier bank falling 9.9% despite reporting a 50% increase in profit to $457 million.
Investors were clearly concerned about a 3% increase in costs rather than the group’s banking business, which is lending at a rate of close to three times that of the broader market.
Management declared a 26.5 cent dividend, down on 2020’s 31 cents per share.
To see how lead analyst Owen Raszkiewicz analyses an ASX bank, check out the video below or read his analysis article of CBA.
Lendlease’s profit collapse
Popular recovery play Lendlease Group (ASX: LLC) continues to disappoint investors with the stock falling 7.6% on a profit downgrade.
New management flagged a ‘challenging year to come’ announcing that this year’s $377 million profit will fall to between $230 and $290 million in 2022 despite the sale of its troubled engineering unit.
Despite expectations of the opposite, its One Sydney Harbour and Elephant Park developments will take a $100 million hit as weaker sales combine with lower prices.
Construction revenue fell 14% and management no longer expect to sell 4,000 properties per year, but likely half that meaning the properties will be held longer on its balance sheet; a difficult one to watch.
JB Hi-Fi sales slow
Pandemic winner JB Hi-Fi Limited (ASX: JBH) delivered its eighth consecutive year of record profit growth, up 67% to $506 million. However, many are expecting this run to end in 2022.
Sales were up 12% during the year as people upgraded their home office but same-store sales growth was falling 15% in July and August with 55% of stores closed and not considered essential.
The dividend was 19% higher with JB Hi-Fi shares adding 2.5% on the news.
BlueScope hikes dividend
Sticking with dividends, BlueScope Steel Limited (ASX: BSL) has been riding the wave of iron ore prices, announcing a 25 cent ordinary dividend and a special dividend of 19 cents after reporting a $1.19 billion profit. BlueScope Steel shares finished just 0.6% higher.
ASX 200 today
The ASX 200 is expected to edge higher when the market opens on Tuesday, following a mixed lead from US markets overnight.
According to Rask Media’s ASX reporting season calendar, Westpac Banking Corp (ASX: WBC), Magellan Financial Group Ltd (ASX: MFG) and BHP Group Ltd (ASX: BHP) are set to report.
