The S&P/ASX 200 Index (ASX:XJO) was mixed today, it finished lower by 0.18% to 6,156 points.
Here are some of the highlights from the ASX:
Westpac Banking Corp (ASX: WBC)
The major ASX 200 bank reported that its cash and statutory earnings are going to be reduced by $1.22 billion.
The notable items include new items of $816 million (after tax), combined with a previously announced AUSTRAC provision of $404 million.
In total, these notable items will reduce the group’s CET1 capital ratio of 24 basis points.
Westpac announced the write-down of goodwill and intangibles associated with Westpac’s life insurance services business and the auto finance business as well as the writedown of capitalised software. These amounted to $568 million after tax.
There is going to be an increase in the provision and costs associated with the AUSTRAC proceedings of $415 million after tax. This includes the previously announced $404 million in provisions associated with the court approval civil penalty and AUSTRAC’s legal costs.
Westpac said that there is an increase in provisions for customer refunds, repayments, associated costs and litigation provisions of $182 million after tax.
The final section of notable items relates to asset sales and revaluations. The net impact of this will reduce cash earnings by $55 million after tax. That includes the revaluation of life insurance liabilities and a loss on the agreed sale of its vendor finance business. Those items totalling $267 million after tax will be partly offset by an after-tax benefit of $212 million from the revaluation of its Zip Co Ltd (ASX: Z1P) shares.
The Westpac share price finished lower by 0.4%.
Coca-Cola Amatil Ltd (ASX: CCL) fizzes higher
The Coca Cola Amatil share price went 16% higher today after announcing a takeover offer by Coca Cola European Partners (CCEP).
CCEP has made a non-binding, indicative proposal of $12.75 cash per share, less any dividends paid, for shares held by independent shareholders.
CCEP will also acquire shares of Coca Cola Amatil owned by The Coca-Cola Company, on less favourable terms compared to what independent shareholders will get.
Assuming the proposal passes a number of conditions, Coca Cola Amatil’s independent directors intend to recommend the takeover.
Adairs Ltd (ASX: ADH)
The Adairs share price dropped 6% today in response to a trading update.
Despite 43 stores being closed in Melbourne, its first 17 weeks of FY21 have been strong.
Total Adairs sales grew by 22% compared to the prior corresponding period. Open store like for like sales went up 17%. Adairs online sales went up 134%. Mocka sales went up 48%. Online sales represented 41% of total sales, up from 17% last year, comprising 32% from Adairs online and 9% from Mocka.
Adairs’ gross margins have been well above last year and remain an area of focus for management. The underlying trading gross margin for Adairs for the first 17 weeks was 600 basis points higher. However, management think the margin will moderate over the rest of FY21.
Nick Scali Limited (ASX: NCK)
Nick Scali also gave an update today.
For the first quarter of FY21, written sales orders continue to be materially up on last year, despite the closure of stores since August in Melbourne and for four weeks in Auckland.
Total sales orders for the first three months of FY21 are up 45% on the previous year. This trend has continued through October. Excluding store closures in Melbourne and Auckland, comparable store sale orders grew by 59% in the first quarter.
Nick Scali online orders have increased by 47% in the first quarter. Management think the earnings before interest and tax (EBIT) contribution from online will be higher than previously anticipated.
The company had previously provided guidance that net profit for the first half would be 50% to 60% higher than last year. Even allowing for delays in the supply chain caused by the current reduction of inbound shipping and the reduced availability of containers, the company is now expecting first half profit will be 70% to 80% higher. Any delays in delivering orders will flow into the second half as revenue.
The Nick Scali share price dropped 6% in response to this news.