Wednesday’s ASX session saw ANZ Bank announce a deal to buy accounting software company MYOB, while retailer KMD Brands is still feeling the pinch from Covid-related lockdowns.
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ANZ Bank (ASX: ANZ) is expected to reveal its first big non-banking acquisition with an $4.5 billion plus purchase of accounting software company MYOB from US private equity giant KKR.
The deal is expected to be announced Thursday., according to market reports, despite the ANZ playing a straight bat on Wednesday’s short statement
ANZ told the market on Wednesday it was yet to reach an agreement and there was no certainty there would be a deal.
It said any transaction to be subject to regulatory approvals from the Australian Competition and Consumer Commission and the NZ Overseas Investment Office.
Oddly ANZ didn’t mention if the deal would have to be examined by key banking regulators, APRA in Australia and the RBNZ across the Tasman., as well as APRA.
In the short statement to the ASX, ANZ said it was responding to media speculation about talks with KKR.
Market analysts say move is aimed at boosting the ANZ’s its small and medium-sized banking operations.
MYOB is one of Australia’s leading providers of business management, financial and accounting solutions for SMEs, Enterprise and Accounting Practice customers,” ANZ said in the statement.
ANZ shares eased 1.1% to $22.43 yesterday as investors wondered if the mooted purchase would see the bank ask shareholders for money to buy MYOB.
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The string of Covid-related lockdowns in NZ, Australia and parts of the US in late 2021 and early this year will see outdoor wear retailer KMD Brands (ASX: KMD) report a sharply lower profit for the financial year to July 31.
In a trading update issued on Wednesday, the former Kathmandu Holdings revealed that while trading had improved as the lockdowns eased and then disappeared and supply chain problems faded, the damage done earlier in the year to customer traffic will take a toll on earnings.
Underlying Earnings Before Interest and Tax – a key retailing profitability measure – is forecast to end up down more than 40% in the range of $NZ53 million to $59 million – from the 2020-21 EBIT of $NZ92.18 million.
And Underlying EBITDA is forecast to be down by around 20% to a range of $NZ88 million to $NZ94 million from the previous financial year’s $NZ113.3 million.
The retailer said it expects total sales for the year to come in around $NZ955 million to $NZ965 million – up slightly from the $NZ924 million for 2020-21, a very solid result given the disruptions caused by the Covid lockdowns in Kathmandu and Rip Curl stores and to other parts of its business.
“As previously communicated, the year-on-year impact of COVID on first half EBITDA was approximately $35 million,” KMD said on Wednesday.
“Trading conditions have improved in the second half, however COVID continued to impact footfall, particularly in the third quarter, and caused sporadic store closures due to staff availability, the company told the ASX and NZX in an update on Wednesday.
“Same store sales year-to-date remain positive for both Rip Curl (up 2.1%) and Kathmandu (up 7.3%), despite the significant COVID impacts on retail.
“Rip Curl’s wholesale and direct-to-consumer retail channels continue to perform well. Wholesale order books are above prior year levels as we look forward to next year.”
“Pleasingly, Kathmandu has experienced a record winter promotional period in Australia. Second half gross margins are well above last year due to a combination of currency benefit and updated promotional execution.
“Trading in New Zealand was weaker than in Australia reflecting lower growth in consumer footfall and revenues, offset by improved gross margins reflecting the deliberate strategy to carefully moderate the historic “high-low” pricing model.
“While Q3 was impacted by the ongoing COVID outbreak in both counties, Q4 profitability is expected to be above pre-COVID levels absent of any new government restrictions.”
“Oboz is recovering from the three-month COVID closure of Vietnam factories in the first half, compounded by shipping congestion and international freight delays.
“Oboz has received approximately two hundred thousand pairs of footwear in the past two months, as suppliers resumed full production. Additional supply has been secured for future seasons to meet order book demand.”
“Inventory levels are forecast to be above last year, reflecting decisions taken in the light of ongoing supply chain disruption, to accelerate orders to meet forward wholesale orders and expected retail demand.
“Inventory quality remains high, with depth in carry forward styles, and lower clearance levels year on year,” CEO Michael Daly said in Wednesday’s statement.
KMD shares edged up half a per cent to $1.10 by the close on Wednesday.
