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ASX 200 jumps almost 4%, Webjet share price soars

ASX 200
Credit: Cimexus

The S&P/ASX 200 Index (ASX: XJO) jumped almost 4% today, it rose to 5,942 points.

The share market is rebounding again as the US Federal Reserve moved to start buying individual corporate bonds to add liquidity to the market.

The best ASX 200 performer

The strongest growth in the ASX 200 today came from Viva Energy Group Ltd (ASX: VEA). The share price went up by 15.5% after it announced profit guidance and gave a business update.

Viva Energy said that the group underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for the first half of FY20 is expected to be approximately $257.5 million to $287.5 million.

The underlying net profit after tax (NPAT) is expected to be approximately $20 million to $50 million.

The ASX 200 business said that the announced on-market share buyback will commence in June 2020.

The company is going to proceed with its major maintenance of the residual catalytlic cracking unit during 2020 at a reduced cost and over an extended timeframe, with total capital expenditure of the event expected to be between $85 million to $100 million, down from $110 million to $140 million previously.

Total sales volumes for the first half of FY20 are expected to be approximately 6,100 million to 6,200 million litres. However, this has been offset by cost reductions and improvements in retail fuel margins.

Volatile shares jump higher

A number of volatile ASX shares bounced back today.

The Webjet Limited (ASX: WEB) share price rose by 11.4%. EML Payments Ltd (ASX: EML) saw its share price grow by 11.4%. The Afterpay Ltd (ASX: APT) share price climbed 10.5%. Zip Co Ltd (ASX: Z1P) experienced a 9.5% share price rise of. The Challenger Ltd (ASX: CGF) share price jumped 10%. The Flight Centre Travel Group Ltd (ASX: FLT) share price grew 7.8%.

According to the ASX, there were only two shares that fell in the ASX 200. The Saracen Mineral Holdings Limited (ASX: SAR) share price dropped 0.9% and the Pro Medicus Limited (ASX: PME) share price dropped 0.4%.

Pharmaceutical supply agreement

The pharmaceutical industry announced some positive news today. The government and health department has reached an agreement about an additional $92 million of funding through the community service obligation (CSO) as well as an introduction of a floor price to continue to support medicine supply through the wholesaler network over the next five years.

This new funding is effective from 1 July 2020. Both Australian Pharmaceutical Industries Ltd (ASX: API) and Sigma Healthcare Ltd (ASX: SIG) are part of the National Pharmaceutical Services Association (NPSA) industry body which made the announcement. The API share price went up more than 5% today. The Sigma share price also climbed 5% today.

Special dividend and capital return announced by Orora Ltd (ASX: ORA)

ASX 200 packaging business Orora held an extraordinary general meeting (EGM) today to approve a capital return and share consolidation. Both of these items were approved in the meeting today.

The sale of Orora’s Australasian fibre business to Nippon Paper Industries for $1.72 billion resulted in net proceeds after tax and costs of approximately $1.55 billion.

The Orora board decided that best thing to do with $600 million of that capital is to return it to shareholders. A special dividend of $450 million is the main element of the plan, which equates to 37.3 cents per share, partially franked at a rate of 50%.

The other $150 million will be delivered to shareholders by way of a capital return. It will be a cash payment of 12.4 cents per share. This was payment approved today at the meeting. The special dividend and capital return will be paid to shareholders on 29 June 2020.

The company now has little to no debt. The directors said they’d prefer the remaining proceeds are used for potential growth investment opportunities. However, if no opportunity is found then directors will consider an additional return of excess capital to shareholders.

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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Emerchants Limited and ZIPCOLTD FPO. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Challenger Limited, Pro Medicus Ltd., and Webjet Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Emerchants Limited and Flight Centre Travel 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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