Why Freedom Foods and Vocus shares soared higher today

Here’s why Freedom Foods Group Ltd (ASX: FNP) shares and Vocus Group Ltd (ASX: VOC) shares soared higher today.

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The S&P/ASX 200 Index (INDEXASX: XJO) ended 1.10% higher today at 6,395.7 points, buoyed by gains in the US market overnight.

Here are two ASX shares that performed particularly well today. Let’s take a look at what was driving their share prices higher.

Freedom Foods Group Ltd (ASX: FNP)

The Freedom Foods share price ended a very healthy 6.07% higher today to close at $4.72. Today’s strong gain appears to be linked to an impressive set of financial results released last week despite high volatility in the company’s share price since that time.

For the six months ended 31 December 2019, Freedom Foods delivered net sales of $299.7 million, a 43% increase over the prior corresponding period (pcp). Meanwhile, earnings before interest, tax, depreciation and amortisation (EBITDA) also grew strongly to $32.7 million, representing an increase of 55.6%. These impressive results were driven by strong sales and earnings growth from Freedom Foods’ Dairy Beverage, Nutritionals and Plant Beverage business units.

At the time of the announcement, the company noted that it expects some short-term disruption to China demand over the next few months due to the coronavirus outbreak. However, the company further added that the underlying medium-term demand from key customers in this market remains unchanged. Freedom Foods remains scheduled to start supply to new China-based customers from June 2020.

Over the next few years, Freedom Foods is confident of continuing strong growth with regards to both earnings and revenue.

Vocus Group Ltd (ASX: VOC)

The Vocus share price lifted a strong 4.23% today to close at $3.45 per share. I believe that today’s rise was partially linked to the ACCC decision released earlier today not to appeal the TPG-Vodafone merger.

The merger will reduce competition in the fixed broadband sector and this has seen a positive overall uplift to a number of ASX telco shares today. Vodafone Hutchison Telecommunications (Aus) Ltd (ASX: HTA) closed 13.3% higher, TPG Telecom Ltd (ASX: TPM) ended the day up 9.6%, while Telstra Corporation Ltd (ASX: TLS) shares saw a 2.01% increase. These gains would have also been buoyed by the overall positive sentiment on the ASX today.

Vocus also released a reasonably strong set of financial results back on February 19, 2020, in what was a very challenging market. For the six months to December 31, Vocus reported a 2% increase in underlying EBITDA to $179.3 million. Meanwhile, net profit after tax was down slightly on the pcp to $54.4 million.

These results were driven by a reduction in both direct costs and overheads. Management reiterated its guidance for group underlying EBITDA in the range of $359 million to $379 million for FY20.

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Motley Fool contributor Phil Harpur owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended Freedom Foods Group 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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