The S&P/ASX 200 Index (ASX:XJO) went up by 0.3% today with reporting season continuing.
Afterpay Ltd (ASX: APT)
It was acquisition news that sent the Afterpay share price higher by 4.4% today.
The buy now, pay later business announced plans to expand into Europe by acquiring European business Pagantis.
Afterpay thinks that Europe is the next logical step for growth because of its "large millennial population, vast fashion and beauty retail markets, and significant debt card usage." Afterpay has said that the ecommerce market in the EU is worth more than €300 billion.
Pagantis is a buy now, pay later provider operating in Spain, France and Italy. It also has regulatory approval to operate in Portugal.
Afterpay's Clearpay plans to rollout across the EU market in the third quarter of FY21, however this acquisition will accelerate and de-risk the roll-out for the ASX 200 share, according to Afterpay's leadership.
The acquisition price is at least €50 million with €5 million of cash on completion and at least €45 million in cash payable on completion.
Pagantis has around 1,400 active merchants and 150,000 active customers.
Fortescue Metals Group Limited (ASX: FMG) reports large dividend
Fortescue reported that its FY20 underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 38% to US$8.4 billion with the EBITDA margin rising to 65%.
Underlying net profit after tax (NPAT) went up by 49% to US$1.75 billion. This earnings strength allowed Fortescue to increase its final dividend by 19% to $1 per share. That took the annual FY20 payout to $1.76 per share, 54% higher than last year.
Net debt at the end of FY20 was US$258 million, which was US$1.8 billion lower than the net debt of US$2.1 billion at 30 June 2019. Net cash from operating activities rose by 47% to US$6.4 billion.
In FY21 the ASX 200 company is aiming for iron ore shipments of 175mt to 180 mt. C1 costs are expected to be between US$13.00 to US$13.50 based on an assumed exchange rate of AU$1 to US$0.70. Capital expenditure is expected to be between US$3 billion to US$3.4 billion.
Reliance Worldwide Corporation Ltd (ASX: RWC)
The top performer in the ASX 200 today was Reliance Worldwide after reporting its FY20 result.
Net sales were up 5% for the year to $1.16 billion. Americas revenue grew by 6% for the year. Asia Pacific external sales rose by 2% in FY20 despite the slowdown in Australian new residential construction. However, UK and European sales were adversely impacted by COVID-19 but there was a gradual recovery evident towards the year end.
Adjusted EBITDA, which excludes $33.4 million of restructuring and impairment charges, fell almost 10% to $251.3 million. EBITDA was $$217.9 million.
Adjusted NPAT fell 18% to $130.3 million with reported NPAT falling 33% to $89.4 million.
The ASX 200 company said that during the year it undertook cost reduction initiatives to ensure the company was appropriately placed to pursue future profit growth. In the US it closed its Tennessee manufacturing facility with production transferred to the company's main US plant in Alabama. John Guest synergies delivered during the year was $13.8 million.
Net debt was reduced by $124.4 million to $302.2 million. Operating cash flow rose 56% to $278.3 million. Despite the improving balance sheet, the final dividend payment was 2.5 cents per share, causing the annual dividend payment to be 7 cents per share – down 22.3% from the 9 cents per share annual dividend.
The outlook for FY21 is uncertain due to COVID-19, so it didn't provide formal guidance. However, sales growth in the US has been 22% higher in July than for the same month in the prior year. Other regions have displayed solid sales too.
The first three weeks in August have continued to show positive momentum.
