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ASX 200 drops 0.2%, Costa soars, BOQ is buying ME Bank

ASX 200
Credit: Cimexus

The S&P/ASX 200 Index (ASX: XJO) fell by around 0.2% to 6,781 points.

Here are some of the highlights from the ASX today:

Costa Group Holdings Ltd (ASX: CGC)

The Costa share price was the star performer in the ASX 200 today, rising by around 12%.

It reported its result for the full year ending 27 December 2020.

Costa revealed that its revenue increased by 11.2% to $1.2 billion. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 47.2% to $144.8 million and underlying net profit grew 108.4% to $59.4 million.

The horticultural business said that it has recovered from drought challenges. The international segment performance was well up on the previous year. There was a sustained Australian category momentum through the second half of the 2020 calendar year, driving increased earnings.

Costa said that there was improvement across the board with successful execution of business fundamentals including yields, quality, costs and COVID-19 management.

Favourable market conditions were supported by positive demand and pricing, especially in the citrus, berry and avocado categories.

Costa said that it’s continuing to manage the business for the long-term.

The company’s balance sheet ended with net debt of $143.9 million. The Costa board decided to declare a dividend of 5 cents per share.

Costa CEO Harry Debney said:

The company is committed to investing in new crop growing methods to achieve improved yields, reduce production costs, and address climate related risks. This is why in CY21 we will commence a commercialisation program for the planting of 40 hectares of protected, trellised high density substrate avocado trees, across a number of regions aligned to our existing avocado plantings. A small trial undertaken over the past three years has already delivered global leading results, including faster tree maturity, higher yield, better fruit quality and greater efficiency of water use versus conventional plantings.

BlueScope Steel Limited (ASX: BSL)

The company reported it FY21 half-year result today. It said that its net profit after tax (NPAT) went up by 78% to $330.3 million. BlueScope revealed that its underlying net profit after tax was $332.8 million.

Underlying earnings before interest and tax (EBIT) for the half-year was $530.6 million, an increase of 75% compared to the prior corresponding period.

The Australian steel products division delivered underlying EBIT of $259.1 million, this was an increase of 103% compared to the prior corresponding period. There has been particularly strong demand for coated and painted products, leading to the strongest domestic volumes since 2010 for the company.

The ASX 200 company’s building products division for Asia and North America generated underlying EBIT of $150.3 million, up 87% compared to the prior corresponding period. The North America business improved significantly, due to improved manufacturing performance and cyclical margin expansion. Its building North America business saw 189% growth of underlying EBIT to $70.5 million.

The BlueScope share price ended the day higher by more than 2%.

Macquarie Group Ltd (ASX: MQG)

The Macquarie share price went up more than 3% today after updating its profit guidance for FY21.

The ASX 200 investment bank said that it’s expecting its FY21 profit to now be up 5% to 10% on FY20.

Extreme weather conditions in North America have significantly increased short-term client demand for Macquarie’s capabilities in maintaining critical physical supply across the commodity complex and particularly in relation to gas and power.

Macquarie’s commodities and global markets (CGM) business physically ships gas on the majority of major pipelines across the US and over time has built capacity to support clients by delivering power and physical commodities to help them meet the unexpected needs of their customers.

Bank of Queensland Limited (ASX: BOQ)

Today, BOQ announced that it’s going to acquire ME Bank for $1.325 billion to create a true challenger to the big four banks.

BOQ said that it’s expected to deliver material scale, broadly doubling the retail bank and providing geographic diversification with strong trusted brands and customer-focused values.

The regional bank said that this is financial compelling. It’s expected to be low double-digit to mid-teens accretive for cash earnings per share (EPS) including full run-rate synergies in FY22.

It’s expected that the pre-tax synergies will be somewhere in the realm of $70 million to $80 million.

BOQ also said that it expects to announce FY21 first half statutory profit growth of 60% to 65% and cash profit growth of 8% to 10%.

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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 and has recommended COSTA GRP FPO and Macquarie Group Limited. 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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