ASX 200 rises 0.7%, ResMed result disappoints

The S&P/ASX 200 Index (ASX:XJO) rose by 0.7% today, though the FY20 report from ResMed Inc (ASX:RMD) disappointed investors.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The S&P/ASX 200 Index (ASX: XJO) rose by 0.7% today to 6,042 points.

There was a slight reprieve in Melbourne for some meat production. Poultry processors can operate at 80% capacity whilst abattoirs with less than 25 employees and seafood processors with fewer than 40 staff will not be required to reduce their operations.

ResMed Inc (ASX: RMD) share price drops 7.4%

ResMed's FY20 result didn't do enough to impress investors today. 

For FY20 the healthcare business grew revenue by 13% to US$3 billion, with revenue growth of 9% to US$770.3 million in the final quarter.

ResMed reported that its non-GAAP gross margin improved by 80 basis points to 59.8% for FY20. The fourth quarter gross margin was 59.9%.

The ASX 200 share's FY20 net operating profit rose by 40% to US$809.7 million with non-GAAP operating profit growing by 24% to US$890.9 million. Fourth quarter non-GAAP operating profit rose by 24%.

ResMed's CEO Mick Farrell said: "Our fourth quarter results reflect the strength and resiliency of our business in today's uncertain environment. We finished fiscal year 2020 with double-digit revenue growth to $3 billion and operating profit up 24% on a non-GAAP basis.

"Throughout our fiscal fourth quarter, we continued to support the COVID-19 pandemic response through increased manufacturing of our ventilators, including bilevels, and ventilation mask systems while also supporting our customers with digital health solutions and other innovative tools to enable remote care for patients.

"Looking ahead, we are confident in our ability to navigate through the ongoing challenging clinical and economic environment to deliver for all our stakeholders. Sleep laps and physician practices are reopening across many geographies, and we're seeing accelerated adoption of digital health solutions which supports our long-term strategy. We remain vigilant and thoughtful about the outlook for our business as we continue to serve our customers, and we believe our strong foundation will accelerate our growth over the longer term."

Nick Scali Limited (ASX: NCK) share price jumps 14.6%

The furniture retail announced a good FY20 result and an impressive outlook.

Sales revenue only dropped by 2.1% despite COVID-19. Operating profit margins improved, leading to net profit after tax (NPAT) being flat at $42.1 million.

The board of Nick Scali decided to increase the final dividend by 12.5% to 22.5 cents per share.

Nick Scali revealed that trading during the month of July continued to be strong with written sales orders rising by more than 70%, following on from May and June where sales orders were also up more than 70%.

The retailer said that the orders will be delivered in the first quarter of FY21 and contribute to revenue in FY21. Revenue will be much higher in the first half of FY21 than last year and management are expecting profit to be up by at least 50% compared to the prior corresponding period.

Myer Holdings Ltd (ASX: MYR) update

The department store business announced an update today after the market had closed.

The ex-ASX 200 business said that it has amended and extended its debt facility to August 2022. The amended facility is $20 million lower at $340 million. No covenant testing will be required at the end of FY20 due to COVID-19. But covenants will be tested quarterly in future periods.

Myer's sales were severely impacted during the lockdown period and there was lower footfall after the stores had reopened. However, strong online sales growth has mitigated some of that impact.

Management said that the combination of disciplined cost control, government support via jobkeeper and other payment deferrals, rent relief and deferrals has meant the company expects to report a small positive net cash position at the end of FY20 despite the loss of revenue and earnings. This compares to $39 million of net debt at the end of FY19.

Melbourne Myer stores have closed due to the new restrictions, however click and collect will be available at a limited number of stores.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ResMed Inc. 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.

More on Share Market News

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »