The S&P/ASX 200 Index (ASX: XJO) recorded another rise last week as Trump flagged plans to reopen the US economy. This was the 4th straight week of rises for the ASX 200, marking its longest winning streak since September last year. The index ended the week up 1.86% at 5,497.50.
Lockdowns continued in Australia and overseas but light seemed to appear at the end of the tunnel. Trump announced guidelines to allow for the gradual easing of restrictions. In China, industrial production data showed a 32.13% increase in March by comparison to February.
The IMF has predicted a V-shaped rebound for the economy. While Australia appears to be entering its first recession in 30 years, growth of 6.1% is predicted for next year following the coronavirus contraction. Share markets appear to be looking on the bright side based on recent rises.
We take a look at the 5 ASX 200 shares which gained the most last week.
Afterpay Ltd (ASX: APT)
Afterpay shares finished the week up 20.33% at $29, giving a total gain of 225% since their 23 March low of $8.90. Last week, Afterpay reported that March was its third largest underlying sales month on record. Underlying sales in the March quarter increased 97% compared to Q3 FY19.
Afterpay reported underlying sales of $7.3 billion for the year to date, growing at 105% compared to the prior corresponding period. Some moderation in sales was seen in the second half of March with global underlying sales 4% lower in the second half of the month than the first half.
Healthy growth in merchant and customer numbers was recorded during the March quarter – active customers grew to 8.4 million, up 122% on the prior corresponding period. Merchant numbers grew to 48,400 globally, up 78% on the prior corresponding period. In Australia, eBay went live on 3 April and new merchants continue to onboard in all markets at volumes in line with pre-coronavirus levels.
Afterpay has made adjustments to risk settings, which have had a positive impact on loss performance lead indicators in the second half of March and early April. The company reports it has a strong balance sheet and liquidity position meaning there should be no requirement to raise capital in the foreseeable future.
Mayne Pharma Group Ltd (ASX: MYX)
Mayne Pharma Group shares finished the week up 31.3% at 42 cents. Shares lifted on news that Mayne had submitted an application to the FDA seeking authorisation for an oral contraceptive.
The contraceptive, E4/DRSP, is a next generation oral contraceptive containing a naturally occurring oestrogen. This oestrogen can be produced by Mayne's manufacturing partner at scale through a plant-based production process.
US sales of hormonal contraceptives are worth more than US$4 billion per annum, with 10 million American women using some form of hormonal contraception each day. Mayne plans to bring its product to market in the first half of calendar 2021.
Healius Limited (ASX: HLS)
Shares in Healius closed the week at $2.47, recording a gain of 20.5% for the week. Healius provided a trading update last week highlighting increased COVID-19 testing and telehealth consultations.
Investors had previously sold off Healius' shares on fears the coronavirus crisis would result in less use of its service. Healius has experienced some declines in its business as a result of the deferral of non-COVID-19 testing and elective services.
In pathology, revenues are down around 30%. In imaging, revenues are down 40% in line with the mandated deferral of elective surgery. This has been partially offset, however, by increased COVID-19 testing and rapid take up of GP telehealth consultations.
Healius has over $200 million in cash and committed, undrawn debt facilities. The company is also being supported by state and federal governments to ensure its essential healthcare services continue to be readily available. Nonetheless, the FY20 interim dividend has been deferred for 6 months to October.
Southern Cross Media Group Ltd (ASX: SXL)
Southern Cross Media Group shares closed the week up 19.2% at 15.5 cents. Southern Cross Media shares have been sold off in recent weeks as the advertising market has taken a downturn. Shares reached a low of 11 cents on 8 April, immediately after Southern Cross completed a capital raise.
Southern Cross undertook a share placement raising $149 million at 9 cents per share. Retail shareholders will get their chance to participate in the capital raise through a 1.75 for 1 non-renounceable entitlement offer. The shares issued under the placement commence trading on Monday 20 April.
Southern Cross is facing a hit to near-term earnings as advertisers cut spending in light of COVID-19. The raising is aimed at shoring up its capital structure to enhance liquidity and provide a more appropriate operating model in the current climate. Funds from the capital raising will be used to pay down debt.
Collins Foods Ltd (ASX: CKF)
Shares in Collins Foods closed the week up 15.9% at $7.08. There was no news out of Collins Foods last week to prompt the price rise, but investors might be anticipating relaxed dining restrictions in future.
Collins Foods runs the KFC franchise in Australia and Europe, Taco Bell in Australia, and Sizzler in Australia and Asia. In its most recent update on operations the company advised restaurants had closed dine-in areas in line with regulations. The focus is now on takeaway, drive-thru, and delivery. For KFC Australia, takeaway, drive-thru, and delivery represent 80% of sales.
Same store performance between 14 October 2019 and 1 March 2020 was strong. KFC Australia saw same store sales growth of 3.5% Since the start of restrictions, however, overall sales have declined, down 8% for KFC Australia compared to the prior year.
Drive-thru restaurants have been performing better than food court restaurants, with the latter suffering from a lack of foot traffic. In Europe, drive-thru is not as prominent in the overall sales mix. Sales in the Netherlands have fallen 30% – 40% since restriction began, while in Germany sales have fallen by approximately 50%.
