The Advance NanoTek Ltd (ASX: ANO) share price could come under pressure on Thursday following the after-hours release of its FY 2020 results.
How did Advance NanoTek perform in FY 2020?
For the 12 months ended 30 June 2020, the sunscreen-focused advanced materials company delivered revenue from ordinary activities of $17.97 million. This was a 46% increase on the prior corresponding period and in line with its May guidance for revenue of $18 million.
One metric that did fall short of its guidance was its profit before tax. Advance NanoTek reported a 121% increase in profit before tax to $7.46 million. This compares to the guidance of $8.4 million for FY 2020 it gave on 11 May. No explanation was given in relation to why the company hit its sales target but fell short of its profit before tax guidance.
On the bottom line, the company reported a net profit after tax of $5.3 million, which was down 44.7% on the prior corresponding period. Though, it is worth noting that FY 2019’s profit after tax was positively impacted by its decision to write back a tax benefit of $6.25 million.
FY 2021 outlook.
The increasing demand for hand sanitiser globally during the pandemic looks set to impact its sales in FY 2021. Management notes that this increase is limiting the production capacity of manufacturers for products such as sunscreens.
The company is also anticipating a gap in sales over the next three months as distributors sell down inventory. While management expects the first half to be an improvement on the first half of FY 2019, it looks likely to be down on the corresponding period in FY 2020.
Despite this, Advance NanoTek has been ramping up production and building up its inventory. Management commented: “The Board is very satisfied with this new strategy because ANO has significantly shortened delivery times-frames to five days and reduced the cashflow burden on our distributors of having to hold significant inventory in their warehouses.”
These 3 stocks could be the next big movers in 2020
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.*
In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.
*Returns as of 6/8/2020
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Advance NanoTek Limited. The Motley Fool Australia has no position in any of the stocks mentioned. 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.
- Could these small cap ASX shares be the next Afterpay (ASX:APT) or Zip (ASX:Z1P)? – September 25, 2020 4:42pm
- Will the Reserve Bank cut the cash rate again in October? – September 25, 2020 4:28pm
- Here’s why the Plenti (ASX:PLT) share price zoomed 13% higher today – September 25, 2020 4:10pm