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ASX 200 drops 2%, IOOF and Afterpay shares sink, Bubs jumps

ASX 200
Credit: Cimexus

The S&P/ASX 200 Index (ASX: XJO) declined by more than 1.9% today, it dropped to 6,650 points.

Here are some of the highlights from the ASX:

IOOF Holdings Limited (ASX: IFL)

The IOOF share price fell by 10.6% today after delivering its quarterly update for the three months to 31 December 2020.

IOOF announced that its funds under management, advice and administration (FUMA) fell by $0.4 billion to $202.4 billion. Management said this reflected an uplift of $12.7 billion due to market movements, largely offset by one-off negative movements of $10 billion including $8.1 billion from the termination of the BT relationship, $1.5 billion from the liquidation of IOOF’s cash management fund and a $0.4 billion one-off transfer from the cash management trust.

The ASX 200 company said that ‘financial advice’ suffered $1.3 billion of net outflows, ‘portfolio and estate administration’ received $40 million of net inflows, ‘pensions and investments’ saw $625 million of net outflows and ‘investment management’ experienced $2.2 billion of net inflows – though that included $1.9 billion of net outflows due to reinvestment simplification into external interest-bearing cash accounts delivering improved client outcomes, but the revenue differential for IOOF was negligible.

Talking about IOOF’s plan with financial advice, IOOF CEO Renato Mota said: “Advice 2.0 has resulted in changes to the way that advisers choose to utilise IOOF’s services. We have seen practices with $363 million in funds under advice choose to become self-licensed and continue to utilise services under the IOOF Group. We have also seen 22 advisers with $869 million in funds under advice transition from IOOF licences due to various reasons including some practices that we don’t view as economically sustainable under our future advice model. The financial impact of the total $1.3 billion advice outflows is not material.”

Evolution Mining Ltd (ASX: EVN)

ASX 200 gold miner Evolution Mining gave its quarterly update to 31 December 2020 today as well.

In terms of cash generation, Evolution Mining said that it made $258.9 million of mine operating cash flow. Net mine cash flow generation was $170.5 million. Group cash flow was $99.3 million.

The cashflow allowed Evolution Mining to reduce its net bank debt by $93.4 million to $86.9 million.

Its gold production increased 6% quarter on quarter to 180,305 ounces, whilst the all-in cost (AIC) declined by 5% to A$1,582 per announce, for an AIC margin of A$834 per ounce.

Bubs Australia Ltd (ASX: BUB)

The Bubs share price went up 23% today after announcing its performance for the three months to 31 December 2020.

Bubs’ group quarterly gross revenue was $12.8 million, an increase of 36% over the first quarter of FY21, though it was down 12% on the prior year.

China cross border e-commerce (CBEC) sales were up 27% quarter on quarter and up 34% compared to the prior corresponding period.

Adult goat dairy gross revenue was up 45% quarter on quarter and up 25% against the prior corresponding period.

The Bubs infant nutrition portfolio, which represented 57% of the second quarter’s revenue, grew 27% compared to the FY21 first quarter.

The company said that Bubs Australia is the fastest growing infant formula manufacturer across Woolworths Group Ltd (ASX: WOW), Coles Group Ltd (ASX: COL) and Chemist Warehouse, with combined retail scan sales at the checkout up 41% quarter on quarter and up 67% compared to the prior corresponding period.

Bubs also said that export sales to markets outside of China continue to strengthen, with sales rising 194% quarter on quarter and up 138% against the prior corresponding period.

Other movements

With the ASX 200 being down by almost 2%, there were some big sell downs.

Some of the WAAAX shares were among the biggest fallers. The Xero Limited (ASX: XRO) share price dropped 6.3%, the Afterpay Ltd (ASX: APT) share price declined 6.2% and the WiseTech Global Ltd (ASX: WTC) share price fell 6.1%.

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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO, COLESGROUP DEF SET, and WiseTech Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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