Company Updates

Omni Bridgeway Limited (OBL) reported a net profit after tax of AUD17.6m for the year ended June 30, 2020. This compares with a net loss after tax of AUD(36.1m) in the prior corresponding period. The turnaround in profit was underpinned by the successful resolution of a number of cases in favour of OBL, generating revenue of AUD275.5m (compared with AUD35.0m in the prior corresponding period). This is OBL’s highest reported level of earnings from litigation cases in its history. Cash and net receivables increased by 44% to AUD325m.

On 21 August 2020, MyState Limited announced its results for the year-ended 30 June 2020 (FY20), reporting a statutory net profit after tax of AUD30.1m, down 3.0% on the prior corresponding period. MyState’s capitalisation remains sound and unchanged, with the company reporting a Common Equity Tier 1 (CET1) ratio of 11.07% (albeit, toward the lower-end of peers).

On 21 August 2020, Suncorp Group Limited (Suncorp), the non-operating holding company for AAI Limited (the main insurance operating subsidiary for Suncorp’s Australian insurance operations) and Suncorp-Metway Limited (its banking operations), announced its results for the year-ended 30 June 2020 (FY20), reporting a statutory net profit after tax AUD913m.

In mid-August 2020, Next Generation Clubs Australia (Next Gen, Company) provided a trading update. Since July, all clubs have transitioned to an ‘opt-out’ status, with all memberships being reinstated. Membership activation is now at 84% of pre-COVID levels across all its clubs. In addition, operating costs have also increased, correlated with the increase in activity.

On 17 August 2020, Bendigo and Adelaide Bank Ltd. announced its results for the financial year ended 30 June 2020, reporting a statutory net profit after tax of AUD192.8m, down ~49% on the prior corresponding period. The statutory result included a number of pre-announced impacts, including collective provisions for COVID-19 (AUD127.7m).

On 13 August 2020, AMP Limited (AMP) reported a soft (although pre-announced) statutory net profit after tax of AUD203m for the six months ending 30 June 2020 (AUD149m on an underlying [management-adjusted] basis, down 42% on the prior corresponding period). The drop in underlying earnings was primarily attributable to the impacts of COVID-19, which was felt across all business units.

On 13 August 2020, QBE Insurance Group Limited (QBE), announced its results for the six months ending 30 June 2020 (1H20), reporting a statutory net loss after tax of USD712m (compared with a net profit after tax of USD463m in prior corresponding period). The pre-tax result was materially impacted by underwriting impacts of COVID-19 (USD335m), adverse prior accident year claims development, higher than anticipated catastrophe claims, and a net investment loss of USD90m (compared with a net investment profit of USD755m in the prior period).

On 12 August 2020, Seek Limited (SEEK, Company) released its FY20 results. Marginal revenue growth was underpinned by strong performance from its Zhaopin (China) segment. However, SEEK ANZ, Asia and Latin America reported soft results driven by lower employment advertising amidst the COVID-19 pandemic.

On 12 August 2020, Centuria Capital Group (Centuria, Company) released its FY20 results. Results were mixed, with the Company reporting higher revenue and cash flow from operations but softer EBITDA and NPAT compared to prior comparative period.

On 11 August 2020, Challenger Ltd, the parent company of Challenger Life Company, announced its FY20 results, reporting a statutory net loss after tax of AUD416m and normalised net profit after tax (prior to adjustments for investment experience and other significant items) of AUD344m.

On 6 August 2020, The GEO Group Inc (GEO, Company) announced results for the six month period ended 30 June 2020. The mixed results reflect reduced border crossing activity and court sentencing stemming from the COVID-19 pandemic.

In early August, Ansett Aviation Training (AAT, Company) provided a trading and financial update. Encouragingly, AAT reported higher revenue, EBITDA and cash balances than forecasts for FY20.

On 7 August 2020, Insurance Australia Group reported a net profit after tax of AUD435m in FY20, down ~60% on the prior corresponding period. Underlying results were sound but headline numbers reflected the impacts of natural peril events during the year (including the bush fires) and lower investment returns.

On 30 July 2020, General Motors Financial Company (GMF, Company) announced 1H20 results for the six month period ended 30 June 2020. GMF recorded softer revenues, earnings before tax (EBT) and net profit after tax (NPAT).

On 30 July 2020, Genworth Mortgage Insurance Australia Limited, the non-operating holding company for Genworth Financial Mortgage Insurance Pty Ltd, reported a statutory net loss after tax of AUD90.0m for the six months ended 30 June 2020. Much of the headline result was impacted by provisions for expected future claims in response to COVID-19 that were announced in the first quarter, with the company reporting a net profit after tax of AUD35.6m in the second quarter.

On 20 July 2020, Privium Group (Privium, Company) provided a trading update for the 11 months ended 31 May 2020 and an update on progress of the refinancing of its notes. While full year results are still to be finalised, the Company reported a 5% increase in sales to 1,215 (FY19 1,154), with revenue to May of AUD235.3m and EBITDA of AUD12.0m.

In our latest Credit Outlook looking at what's in store for the next six months, we consider the various dynamics at stake that will influence the financial markets and the economy for the rest of 2020. Notwithstanding better than feared data more recently, significant uncertainty around the recovery in employment and demand is likely to weigh on the private sector (businesses and households) for some time.

Next Generation Clubs Australia (Next Gen, Company) recently provided a trading update. The update, which was in mid-June, coincided with the opening of some of its facilities. In Australia, all of its clubs have now reopened - Adelaide, Canberra, Perth and Sydney. However, Next Gen's clubs are currently operating in accordance with each state's social distancing guidelines (increased hygiene requirements in the near-term are expected to lead to higher operating costs). 

On 4 June 2020, Elanor Wildlife Park Fund (EWPF, Company) released its results for the period from 29 November 2019 (fund inception) to 31 March 2020. Results were considerably softer than forecasts as Featherdale Sydney Wildlife Park (Featherdale) and Mogo Wildlife Park (Mogo) were forced to close for extended periods of time due to severe Australian bushfires and measures to contain the spread of COVID-19.

On 4 June 2020, Elanor Wildlife Park Fund (EWPF, Company) released its results for the period from 29 November 2019 (fund inception) to 31 March 2020. Results were considerably softer than forecasts as Featherdale Sydney Wildlife Park (Featherdale) and Mogo Wildlife Park (Mogo) were forced to close for extended periods of time due to severe Australian bushfires and measures to contain the spread of COVID-19.