The market liked the solid interim results and higher rewards for shareholders from two of the biggest Trans-Tasman companies listed on the ASX.
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Fletcher Building (ASX: FBU) boosted interim dividend by 50% after the company managed to ride out the impact of Covid Delta and Omicron on its activities on both sides of the Tasman.
Fletcher will pay an interim of 18 NZ cents a share, up from 12 NZ cents a year ago after lifting net earnings 41% – to $NZ171 million – in the six months to December.
Fletcher Building CEO Ross Taylor said in the release: “With improved operational performance and cost disciplines now embedded across the business, we were able to deliver a strong HY22 performance.
“This was despite the first quarter being heavily impacted by the up to five week-long COVID-19 stringent lockdown in New Zealand and local lockdowns in Australia which impacted EBIT by approximately $NZ105 million.
“Revenue was robust overall at $NZ4.064 billion, up 2% on the first half of FY21. Group earnings before interest and tax (EBIT) before significant items was $NZ332 million, up 3% from $NZ323 million in the prior period,” he said.
“Our strong second quarter performance was a particular highlight in this result where the Group generated EBIT of $NZ264 million, up 73% on the comparative quarter, delivering a strong Group EBIT margin of 11.8%, indicating strong momentum into the second half.
“Cash flows from operating activities for the half year were $NZ157 million, compared to $NZ424 million reported in HY21 and reflects flagged investments to rebuild stock in key areas and housing investment following a busy FY21.
Taylor said the second half of the year is expected to be “very solid” for the company with customers and forward indicators pointing to continuing volumes.
Fletcher expects second half EBIT margin to be approximately 9.5% and to deliver FY22 full year EBIT before significant items of approximately $NZ750 million.” which would be up nicely from the 2020-21 EBIT of $NZ669 million.
But Taylor did warn that based on the company’s experience in Australia with the Covid-19 Omicron variant, FBU “expects pre-tax earnings could be impacted by between $NZ25m and $NZ50m as productivity is impacted by people and supply absences.”
The shares were up more than 7% on the ASX when they closed at $6.26.
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For pet food and healthcare group EBOS (ASX: EBO), the six months to December 31 were also solid despite the vagaries caused by Covid and its variants on retail/consumer activity on both sides of the Tasman in the period.
Being in healthcare through its chemist chains and distribution operations, EBOS was one of the main players in managing the pandemic and servicing people in and out of lockdowns.
The December half saw record revenues of more than $NZ5.3 billion – up 12.8%, a record interim result of $NZ109.3 million, up 15.8% and a higher dividend of 47 NZ cents a share, up 10.6%.
EBOS CEO, John Cullity said in the stock exchange release that it was another “record result for EBOS on the back of particularly strong revenue growth across our key Healthcare and Animal Care segments.”
“Both segments continued their strong growth trajectory, reinforcing the value of our diverse portfolio of businesses and the successful execution of our strategy of pursuing both organic and inorganic growth.”
“The strong growth of our Healthcare segment was driven by our Community Pharmacy, Terry White Chemmart (“TWC”), Institutional Healthcare and Contract Logistics businesses.
“The Community Pharmacy division’s performance was particularly pleasing, resulting from customer growth, market share gains and the return of Pfizer’s retail pharmacy volumes to the wholesale channel.”
Looking to the rest of the year, EBOS said “We continue to be comfortable with current trading conditions however, it is uncertain what the ongoing disruptions caused by COVID-19 variants will have on EBOS’ trading performance.”
“Capital expenditure for the remainder of FY22 is expected to remain elevated as a result of continued investment in our operational infrastructure to support the Group’s growth,” the company said.
The shares closed up 3.5% at $A36.80.
