The ASX saw another week of wild swings last week as it grappled with a stream of coronavirus related news. The federal government announced its massive $130 billion wage subsidy package, which drove a market rally on Monday. The ASX recorded its biggest on-day gain in 40 years, with the S&P/ASX 200 Index (ASX: XJO) rising 7%.
On Friday, US jobless claims figures were cause for pessimism with 6.6 million filing for unemployment during the week, up from 3.3 million the previous week. This was countered by a surge in crude oil prices prompted by a Trump tweet saying an agreement between Russian and Saudi Arabia to cut production was imminent.
Amidst emergency capital raises, more ASX companies cut or deferred dividends. Kathmandu Holdings Ltd (ASX: KMD), Webjet Limited (ASX: WEB), and IDP Education Ltd (ASX: IEL) all tapped investors for fresh equity. Harvey Norman Holdings Limited (ASX: HVN) cancelled its interim dividend while Crown Resorts Ltd (ASX: CWN) deferred its dividend and scrapped the franking credits attached to it.
In the end the ASX 200 finished the week up 4.65% at 5,067.5. This is more than 11% up from a low of 4,546 on 23 March. Here we take a look at last week's biggest gainers.
G8 Education Limited (ASX: GEM)
G8 Education finished the week up 70.1% at $1.08. The child care provider was boosted throughout the week on rumours of a government bail out for child care centres, and surged 20% in half an hour on Thursday before going into a trading halt.
The federal government announced childcare will be free for parents that need it late last week, with the government to pay centres directly. G8 Education has more than 470 early learning centres attended by some 58,000 children.
At the end of March, G8 Education postponed its fully franked final dividend of 6 cents a share. It was due to be paid on 6 April but payment was postponed until 30 October. The decision was made by the board as part of its cash management planning to maintain liquidity and protect long term shareholder value.
Pilbara Minerals Limited (ASX: PLS)
Pilbara Minerals shares closed the week up 27.3% at 21 cents. The lithium producer's shares were boosted by a long-term offtake agreement announced the previous week.
The agreement provides for Pilbara Minerals to supply 60,000 tonnes per annum in 2020, and 75,000 tonnes per annum for the remainder of the 5 year term. CEO Ken Brinsden said the agreement will "further integrate Pilbara Minerals within the supply chain of the world's largest electric vehicle battery manufacturer. This will allow us to capture value from the future growth in the electric vehicle market."
Last week, Pilbara Minerals provided an operations update which said it was deploying a production moderation strategy matching site production and available stocks to customer demand. This allowed the company to strengthen its balance sheet, closing the March quarter with $108.2 million in cash.
Brinsden commented that "the solid operational and financial performance of the Pilgangoora Project during the March quarter shows that our moderated production strategy continues to defend the business despite the relatively weak backdrop of demand both before and during the COVID-19 impact in China."
Ansell Limited (ASX: ANN)
Ansell shares finished the week up 25.9% at $29.21. Ansell produces protective industrial and medical equipment which has been in high demand due to the coronavirus pandemic.
Ansell reiterated its guidance last week, predicting earnings per share in the range of US$1.12 to US$1.22. The company reported very strong demand for its hand and body protection products which provide protection from infective agents.
Demand is also high for single use examination and surgical gloves. The company does, however, expect the high level of demand to be somewhat offset by declining demand for some industrial products. This decline is caused by temporary lockdowns, export restrictions, and a lowered economic growth outlook.
Ansell is working closely with government authorities to maintain manufacture of protective products and distribute them to areas where they are most needed. Output is being maximised through selective investments in new capacity and by leveraging manufacturing locations that are not affected. The company expects to be able to continue to ship large quantities of products to key markets.
Beach Energy Ltd (ASX: BPT)
Shares in Beach Energy finished the week up 23.9% at $1.295. Shares in the oil and gas company were lifted by the spike in oil prices, although it is not clear if they will maintain their current levels.
The previous week, Beach Energy released an update saying it was taking decisive action in response to a lower oil price environment. This included the deferral or minimisation of capital investment. The company said it was well positioned to manage an extended period of low oil prices as well as the impacts of coronavirus.
The lower Australian dollar provides a buffer against lower US dollar oil prices, and the company has a strong balance sheet leaving it well placed for for market disruption. At the end of February Beach Energy had over $151 million net cash and access to over $600 million in liquidity.
AP Eagers Ltd (ASX: APE)
AP Eagers shares ended the week up 23.2% at $3.51. The previous week shares fell 22.6% when the company reduced its final dividend due to the ongoing uncertainty around the duration and impact of coronavirus.
The fully franked dividend was halved from 22.5 cents per share to 11.25 cents per share, however AP Eagers says it will consider payment of an additional dividend of an equivalent amount later in the year once the uncertainty has settled.
Last week the motor vehicle dealership owner asked landlords at its 200 outlets for 3 months free rent. AP Eagers fears car yards will see minimal sales during this period, and has moved to temporarily shut some sites as a cost saving measure.
The company is the largest car dealership group in Australia, with 11.2% of the total market. AP Eagers has told landlords it will stop paying rent from 1 April in an attempt to bring parties to the negotiating table. There are about 450 leases involved in total, with some of its 200 dealers running multiple sites.
