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ASX 200 drifts 0.1% lower, CBA reports solid FY20 result

The S&P/ASX 200 Index (ASX: XJO) fell by 0.1% today to 6,132 points.

Some of Australia’s biggest businesses reported their results today.

Commonwealth Bank of Australia (ASX: CBA)

The CBA share price fell 0.5% today in response to its FY20 result.

The major ASX bank announced that its cash net profit after tax (NPAT) fell by 11.3% to $7.3 billion. Profit was hurt by a higher loan impairment expense due to COVID-19 – there was a $1.5 billion COVID-19 provision.

Statutory NPAT rose by 12.4% to $9.6 billion due to gains on the sale of divestments.

CBA’s board declared a final dividend of 98 cents per share. The total FY20 dividend of $2.98 was down 31% compared to FY19.

The ASX 200 bank’s net interest margin (NIM) declined by 2 basis points to 2.07%. This decline was due to the impact of lower interest rates, partly offset by lower short term funding costs.

CBA said that at 31 July 2020, 135,000 of home loans and 59,000 of business loans were still being deferred – that’s 8% and 15% of the respective totals.

The bank’s CET1 ratio increased to 11.6%, up 90 basis points from a year ago. The deposit funding ratio was 74%, up from 69% in FY19.

CBA said that the next few months will be critical and some sectors will take longer to recover from COVID-19 impacts than others.

Transurban Group (ASX: TCL)

Transurban announced its FY20 result today which showed how much COVID-19 hurt its performance.

For the whole year, average daily traffic (ADT) was down 8.6% across its toll road networks. Proportional toll revenue decreased by 3.4% to $2.49 billion. Proportional earnings before interest, tax, depreciation and amortisation (EBITDA) and before significant items decreased by 6.4% to $1.89 billion.

The ASX 200 business reported a statutory loss of $153 million.

Transurban announced a final distribution of 16 cents per share for the six months to 30 June 2020. This takes the total FY20 distribution to 47 cents.

Management said that the FY21 distribution will be in line with the free cashflow it generates, excluding capital releases.

The Transurban share price dropped 1% today.

SEEK Limited (ASX: SEK)

SEEK also reported its FY20 result today. It saw revenue growth of 3% to $1.58 billion with reported EBITDA declining by 9% to $414.9 million.

Net profit after tax, excluding significant items, fell by over 50% to $90.3 million whilst the reported net loss was $111.7 million after including impairment charges of $198 million.

The ASX 200 business said that its Australia and New Zealand business was resilient and the launch of a new pricing model. SEEK Asia saw ongoing integration and investment to unlock long-term revenue potential.

SEEK decided not to pay a final FY20 dividend.

The CEO of SEEK, Andrew Basset, said: “The current macro outlook is highly uncertain. Our near-term profits will be impacted by COVID-19 but our focus is on executing and investing for the long-term. We are confident our investment and long-term focus is the right approach as SEEK’s revenue opportunity remains large and under-penetrated. If we invest and execute well, we can take advantage on improving conditions in the near-term but also a much larger longer-term revenue opportunity.”

The SEEK share price dropped 8.6% after suggesting that net profit may only be $20 million in FY21. 

Magellan Financial Group Ltd (ASX: MFG)

Fund manager Magellan reported its FY20 result today. It said that its net profit rose 5% to $396.2 million and adjusted net profit increased by 20% to $438.3 million.

Magellan’s average funds under management (FUM) increased by 26% to $95.5 billion. This strong result led to Magellan’s total dividends for FY20 rising by 16% to 214.9 cents.

The ASX 200 fund manager also announced a new series of investment strategies that will utilise Magellan’s investment philosophy and research at a lower cost with diversified portfolios of companies. Within the launch will be a new sustainable/ethical strategy.

The business is continuing to make progress towards the launch of a retirement income product. It obtained a private binding tax ruling for the ATO and it’s working with other regulators for the rest of the necessary approvals.

The Magellan share price rose 2.8%. 

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool Australia has recommended SEEK 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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