The Motley Fool

ASX 200 drops 2%, ASX banks fall, Super Retail jumps

The S&P/ASX 200 Index (ASX: XJO) fell by just over 2% today to 5,928 points.

The number of COVID-19 case numbers continue to mount in Victoria and the NSW cases continue to edge higher.

Super Retail Group Ltd (ASX: SUL) was a bright spot

The Super Retail share price rose by 9.5% today, it was a shining light on a pretty negative day for the ASX 200.

The retailer announced updated expectations for the FY20 year with the full year result expected on 24 August 2020.

In the 52 weeks to 27 June 2020, three of the company’s four core businesses achieved solid sales growth. Supercheap Auto sales increased 7.6%. Rebel sales grew 3.3% and BCF sales increased by 4%. However, Macpac sales declined by 5%. Overall, total sales grew by 4.2% with like for like sales growth of 3.6%.

Super Retail revealed that sales rebounded strongly during the fourth quarter as the easing of COVID-19 restrictions led to a significant uplift in domestic tourism and travel, personal fitness and outdoor leisure activities. In April there was a 26.2% decline in like for like monthly sales during the peak of the COVID-19 lockdown. But then sales increased by 26.5% in May. In June the momentum continued with like for like sales growth of 27.7%.

The company also announced some preliminary unaudited financial results for FY20.

Total revenue was approximately $2.82 billion, up from $2.71 billion.

Pro forma segment earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to come between $327 million to $328 million – up from $315 million in FY19. Pro forma segment earnings before interest and tax (EBIT) is expected to be between $235 million to $236 million – up from $228 million.

Pro forma normalised net profit expected to come between $153 million and $154 million. The FY19 profit was $153 million. These pro forma numbers exclude $54 million of ‘abnormal items’.

ASX banks take a tumble

The big four ASX banks were among the largest hits on the ASX 200 today.

Australia and New Zealand Banking Group (ASX: ANZ) suffered a share price fall of around 2.2%.

The Commonwealth Bank of Australia (ASX: CBA) share price dropped by around 2.75%.

The National Australia Bank Ltd (ASX: NAB) share price fell by approximately 2.5%.

Finally, the Westpac Banking Corp (ASX: WBC) share price dropped 3.3%.

Most of the ASX 200 was actually in the red today. Whilst Super Retail was one of the best performers, it was another painful day for a business which has suffered a lot recently:

AMP Limited (ASX: AMP)

The AMP share price dropped close to 13% today after giving an update that showed its underlying profit is expected to halve in the upcoming FY20 half year result.

AMP said that the Australian wealth management division is expecting operating earnings of approximately $60 million.

AMP Capital is expecting operating earnings of approximately $70 million.

The AMP Bank division is expecting operating earnings of around $50 million. AMP Bank is expecting a credit loss provision of $25 million due to COVID-19 related economic conditions.

The CEO of the ASX 200 share, Francesco De Ferrari, said: “AMP has taken decisive action to support clients and employees and maintain a strong and resilient business, as COVID-19 continues to impact investment markets and the broader economy.

“Our strong capital position and liquidity have positioned us well to respond, though our first half results have been impacted by the market volatility.

“The pandemic has presented many challenges but has not distracted us from our mission to transform AMP into a simpler, client-led, growth orientated business.

“In the first half, we have made significance progress in delivering our strategy including completing the highly complex sale of AMP Life which simplifies our portfolio and sets us up well for the future.”

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail 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.

Related Articles...

Latest posts by Tristan Harrison (see all)