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ASX 200 flat, Westpac rises after HY21, Premier returns jobkeeper

The S&P/ASX 200 Index (ASX:XJO) was flat today. However, the Westpac Banking Corp (ASX:WBC) share price jumped after the HY21 result.
The post ASX 200 flat, Westpac rises after HY21, Premier returns jobkeeper appeared first on The Motley Fool Australia. –

A graphic showing share price movement, ASX market watch

The S&P/ASX 200 Index (ASX: XJO) was essentially flat at 7,029 points.

Here are some of the highlights from the ASX:

Westpac Banking Corp (ASX: WBC)

The Westpac share price went up more than 5% today in reaction to the bank’s half year result which showed a strong recovery of profit.

The big four ASX bank reported that its statutory profit increased by 189% to $3.44 billion. Cash earnings increased 256% to $3.54 billion. First half earnings were largely higher because of an impairment benefit of $372 million.

Excluding notable items, cash earnings went up 60% to $3.82 billion. The net interest margin (NIM) fell 4 basis points to 2.09% whilst the common equity tier 1 (CET1) ratio rose another 153 basis points to 12.34%.

The Westpac board decided to pay an interim dividend of $0.58 per share.

The ASX 200 bank plans to fix its risk governance as well as simplify the business. That includes the target of an $8 billion cost base by FY24 to materially improve its efficiency.

Westpac CEO Peter King said on the outlook:

Most significantly, unemployment is falling and there are more people employed now than pre-COVID. A strong labour market will continue to support growth in the economy.

While challenges remain, we expect the Australian economy to expand by 4.5% in 2021, supporting a 4.6% increase in total credit with residential lending expanding 6.5%.

New lending for housing has surged, up 49% over the past year, including a 75% jump from the May 2020 low. While most interest has been from owner occupiers, investors are beginning to return to the market, with investor lending up 31% over the four months to February.

Premier Investments Ltd (ASX: PMV)

The Premier Investments Limited (ASX: PMV) share price fell 1.6% after the retailer announced it was returning the jobkeeper money it had received.

Premier Investments previously said that it was keeping the jobkeeper money to pay the wages of employees who may be stood down under future state government mandated COVID-19 lockdowns.

During the recent Queensland and WA lockdowns, the company used the jobkeeper funds to keep people in jobs and pay the full time and part time team members their contracted hours whilst they were stood down and unable to attend work.

Critically, the ASX 200 company said, following the lockdowns and upon reopening, increasing trading from the combined states has fully offset the cost of supporting the teams through the lockdowns. Premier said that jobkeeper funds were not required to support the teams.

After looking at these outcomes, and the Australian success of managing COVID-19, the board decided to refund the net jobkeeper benefit of $15.6 million to the ATO.

Subject to macro economic trading conditions remaining stable and no further COVID-19 lockdowns, and after accounting for the ATO $15.6 million repayment, Premier is confident in its ability to meet the market consensus of Premier Retail’s FY21 earnings before interest and tax (EBIT) pre-AASB 16 of $318 million.

ELMO Software Ltd (ASX: ELO)

The HR software business announced today the launch of its new predictive people analytics module for customers.

This module was developed in collaboration with the University of Technology Sydney. It utilises artificial intelligence to predict employee behaviour as well as providing “insightful data visualisation tools”.

One of the examples of the uses of this software is that it identifies high-performing employees who might be a “flight risk”.

ELMO said that the new module further strengthens ELMO’s value proposition and will provide an additional revenue stream.

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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Elmo Software. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool Australia has recommended Elmo Software. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post ASX 200 flat, Westpac rises after HY21, Premier returns jobkeeper appeared first on The Motley Fool Australia.

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