A busy start to the week for the ASX saw plenty of news doing the rounds on Monday. Here are updates from ARB Corporation, Bubs Australia and the Commonwealth Bank.
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4 x 4 parts maker ARB Corporation (ASX: ARB) continues to surprise on the upside, judging by the strong market reaction to Monday’s encouraging trading and earnings update for the six months to December.
The company has been a consistent surprise during the pandemic as consumers turned to upgrading their four by fours and tradie type utes and other vehicles.
The company revealed a 26.5% jump n unaudited first half sales, to $359 million.
“Based on preliminary, unaudited management accounts, the company’s profit before tax for first half of 2021-22 is within the range of $90 million to $92 million,” the company revealed in the statement to the ASX.
Analysts were expecting first half profits of about $57.6 million.
That saw the shares up more than 18% to a day’s high of $49.50 in a wider market weaker to flat for the session.
The shares later closed up nearly 8% at $46.15.
“The company maintains a positive outlook based on its strong customer order book and improved inventory levels, notwithstanding continuing COVID-19 challenges, ongoing delays in new vehicle availability and global economic uncertainty,” ARB said in a short statement to the ASX.
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Meanwhile, it’s a different story on sales into China for goat milk formula group Bubs Australia (ASX: BUB) when compared to other companies that have ridden the so-called daigou’ or informal distribution channel.
A2 Milk and Blackmores (the vitamins company) are just two company whose use of the ‘daigou’ channel have collapsed with border lockdowns in the wake of the Covid pandemic in its various waves.
On Monday Bubs Australia founder and CEO Kristy Carr singled out the ‘daigou’ channel in commentary on what has been a very strong December quarter
She said in a trading update the company had strengthened all channels, with its infants formula a “hero product line” and that doubling down on its daigou strategy – a casual sales channel into China – had paid off.
She said gross revenue from its Infant Formula had risen by 83% across all markets compared to the year on year, and up 13% quarter on quarter.
Growth in the corporate ‘daigou’ channel tripled compared to the previous corresponding quarter, and rose 17% quarter on quarter as well.
In the quarterly update Bubs revealed quarterly gross revenue rose to $19.9 million, up 56% compared to a previous corresponding period and up 8% quarter-on-quarter.
The company said it had increased its cash reserve from $28.3 million the previous quarter to $30.6 million for the December quarter.
The shares were up more than 15% at one stage to a day’s high but eased to close up 5.6% at 47 cents.
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The Commonwealth Bank (ASX: CBA) says its general insurance business will report a loss for the six months to December because of last October’s huge hail stores across parts of Eastern Australia, South Australia and Tasmania.
The storms have already hit larger rivals like IAG, QBE and Suncorp hard with an estimated cost of more than $1 billion.
In an ASX update that also included various technical points, CBA said on Monday that the insurance arm had recognised the loss as a result of claims and other costs caused by hail storms that hit the East Coast, South Australia and Tasmania in October last year.
CBA said the insurance arm will report a $85 million loss when the bank reports its half-year profits next Wednesday.
With the market expecting CBA will post cash profits of more than $4 billion for the half, the insurance loss is not “material” but a head up for its larger rivals.
CBA shares lost 2% on Monday to close at $93.74. The insurance loss had nothing to do with it – much of the loss was due to rebalancing of portfolios by index tracking investors to accommodate BHP’s higher weighting in the ASX 200 of more than 10%.
