Reporting season continued last week with investors rewarding companies that performed better than expected and punishing those that failed to meet expectations. Fears regarding the spread of coronavirus intensified with markets catching the contagion.
A market correction saw the S&P/ASX 200 Index (INDEXASX: XJO) fall more than 10% from recent highs and the Australian dollar hit an 11-year low.
So, with that being said, let’s take a look at last week’s best performing ASX 200 shares.
InvoCare Limited (ASX: IVC)
InvoCare shares climbed 9% last week to close at $14.50 on Friday, up from $13.30. The funeral services company was last week’s top performer following the release of its full-year results on Wednesday.
InvoCare reported a strong bounce back in growth in earnings before interest, tax, depreciation and amortisation (EBITDA), which was up 21.4%. The result was driven by an increase in the number of deaths which increased 2.9% in 2019 compared to a drop of 3.3% in 2018. Recent acquisitions added an additional $4.3 million to EBITDA during the year, while pre-paid funds under management increased 10% year on year.
In 2019, InvoCare completed the renovation of 106 locations and plans to renovate a further 74 locations in 2020. Renovated locations delivered an 8.5% improvement in EBITDA over unrenovated locations. Effective cost control also boosted the funeral provider’s results, with the cost increase in the underlying business limited to 2.8%.
InvoCare reported net profit after tax (NPAT) of $63.8 million, a 54.6% increase on the prior year. A final dividend of 23.5 cents per share, fully franked, was declared, up from 19.5 cents in 2018. Full-year dividends of 41 cents were declared which represents a 79% payout of operating earnings.
Chorus Ltd (ASX: CNU)
Chorus shares ended the week up 5.1% at $6.39. The telecommunications infrastructure provider increased its full-year guidance after a strong first half. Chorus updated its EBITDA guidance for the full year to NZ$640 million to NZ$655 million, up from NZ$625 million to NZ$645 million.
Chorus delivered half-year EBITDA of NZ$332 million, up from $318 million in 1H19. The growth in EBITDA was achieved through a combination of operating cost reductions and strong broadband connections growth. NPAT was NZ$31 million, up from NZ$30 million in the prior corresponding period (pcp).
Last year’s completion of the first phase of the Ultra-Fast Broadband rollout marks the beginning of the wind-down of Chorus’ communal fibre build program. The second phase is already 40% complete with just 150,000 premises remaining to be passed by December 2022.
The Board recognised that investors have had constrained returns through the decade-long fibre investment cycle and from FY22, Chorus expects to transition to a dividend policy based on a payout range of free cash flow.
Healius Ltd (ASX: HLS)
Healius shares rose 3.8% during the week to close at $3.04. Shares in the healthcare business jumped midweek on takeover speculation and increased guidance.
Private equity firm Partners Group is planning a takeover of Healius. The takeover bid, which Healius confirmed last week, valued Healius at $2.1 billion at the time of the announcement and includes an offer of $3.40 per share. Prior to this, Partners Group acquired an option over the shares of Healius’ largest shareholder, Chinese company Jangho, which holds a 15.88% stake in Healius.
Healius also confirmed it intends to explore a sale process of part or all of the Medical Centres business to instead focus on growth in the Diagnostics divisions and eventually the Day Hospital business.
Healius increased the bottom end of its guidance, forecasting underlying NPAT of $96 million to $102 million for FY20 following an 8% rise in first-half NPAT. Underlying NPAT increased to $42.1 million for the half, up from $39.2 million in the pcp. Results reflect efficiencies from Healius’ organisational redesign and cost savings initiatives.
Nextdc Ltd (ASX: NXT)
NEXTDC shares rose 0.6% last week to finish the week at $7.89. Shares in the data center operator rose significantly on Friday, up by 6.33%, following the release of the company’s half-year results.
NEXTDC reported a 21% increase in EBITDA which rose to $50.9 million from $42.2 million in 1H19. Operating cash flow increased 34% to $20.1 million from $15 million in 1H19.
Customer numbers were up 16% to 1,264 at 31 December 2019. The number of interconnections increased 20% to 12,012, representing 8.2% of recurring revenue, up from 7.7% in the pcp.
NEXTDC reported a statutory loss after tax of $4.9 million, reflecting higher depreciation and interest costs after a record period of investment. Cash and cash equivalents were $197 million at 31 December and NEXTDC also had an undrawn $300 million senior syndicated debt facility.
CEO Craig Scroggie said, “The company continues to see strong demand across the national portfolio, noting that we are in advanced negotiations in relation to some large customer opportunities that have the potential to significantly increase NEXTDC’s contracted utilisation base.”
Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)
Fisher & Paykel shares actually lost ground last week, ending 0.1% down at $24.59. The company was still the 5th biggest ASX 200 share gainer, however, as the majority of ASX shares fell by more in last week’s sea of red.
Fisher & Paykel was bolstered by updated revenue and earnings guidance issued earlier this month following stronger Hospital and Homecare sales. The company updated revenue guidance for the financial year ending 31 March to NZ$1.2 billion from NZ$1.19 billion. NPAT guidance was upgraded from a range of NZ$255 million – NZ$265 million to a range of NZ$260 million – NZ$270 million.
CEO Lewis Gradon said, “we’ve seen better than expected sales in our Homecare product group combined with continued strong growth in our Hospital product group. This includes an increase in demand from China related to the COVID-19 coronavirus outbreak.”
Fisher & Paykel advises that although some suppliers of raw materials are based in China, it does not anticipate any significant impact on supply to existing customers. Many of its suppliers have expedited the supply of raw material to the company as a manufacturer of essential medical devices.
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Motley Fool contributor Kate O'Brien has no position in any of the stocks mentioned. The Motley Fool Australia has recommended InvoCare Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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