The ASX 200 (ASX: XJO) is currently down around 1%, reversing some of the gains of yesterday.
Growth shares go backwards
After a strong rise earlier in the week, many of the ASX’s ‘growth’ shares are heading backwards today. Here are some examples:
The Pro Medicus (ASX: PME) share price is down 6%.
The WiseTech Global (ASX: WTC) share price is down 4.2%.
The Afterpay (ASX: APT) share price is down 3.5%.
The Appen (ASX: APX) share price is down 2.5%.
The Xero (ASX: XRO) share price is down 2.2%.
And so on.
But it’s not like every share is in the red. The Challenger (ASX: CGF) share price is up 4.8%, the Beach (ASX: BPT) share price is up 3.7% and the Treasury Wine Estates (ASX: TWE) share price is up 3%.
QBE (ASX: QBE) share price up 2.4%
QBE shares are up after the insurer announced an FY20 update.
On a constant currency basis, and adjusting for asset sales completed in 2019, gross written premiums grew by around 10% in the half.
QBE now expects to report a combined operating ratio of around 104% which reflects COVID-19 impacts of approximately $335 million, adverse catastrophe experience of around $60 million and adverse prior accident year claims development of around $120 million. Excluding COVID-19, the combined operating ratio is expected to be around 98%.
The COVID-19 underwriting impact includes $150 million of net incurred claims and $115 million of additional risk margin.
QBE estimates total COVID-19 related costs to be around $600 million, including $265 million of potential further net claims.
The company expects a first half statutory loss of around $750 million, largely due to COVID-19.
Baby Bunting (ASX: BBN) FY20 growth
The Baby Bunting share price is up another 10% after announcing impressive underlying growth in FY20.
The company expects to report total sales of approximately $405 million, representing growth of around 12%. Comparable store sales growth in the second half of FY20 of 10.5%, with full year comparable store sales growth of 4.9%.
Online sales (including click and collect) grew 39%, which represented 14.5% of total sales. In FY19 online sales were 11.8% of FY19 sales.
Baby Bunting is expecting to report a gross profit margin of 36.2%, an increase of 120 basis points (1.2%) against the prior corresponding period.
‘Pro forma’ is the company’s attempt to calculate a reasonable comparison compared to last year. Pro forma EBITDA (click here to learn what EBITDA means) is expected to show growth of 22% to 25% to be between $33 million and $34 million.
Pro forma net profit after tax is expected to grow by 29% to 35% to be between $18.5 million to $19.5 million.
However, statutory/reported net profit after tax is expected to be between $9.5 million to $10.5 million, down from $11.6 million in FY19.
At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.
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