ASX 200 shoots 1.3% higher on Thursday

The S&P/ASX 200 Index (ASX:XJO) went up by 1.2% on Thursday. A highlight was big 4 bank National Australia Bank Ltd (ASX:NAB) reporting.
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ASX 200

The US election results are nearly over – the S&P/ASX 200 Index (ASX: XJO) has gone up 1.3% to 6,140 points in reaction to the ongoing political situation.

Here are some of the highlights from the ASX:

Ingham’s Group Ltd (ASX: ING) jumps higher

The Ingham’s share price jumped higher today by around 16%.

The poultry business held its annual general meeting (AGM) today. It gave a couple of updates at the meeting.

It said that poultry demand has strengthened, with trading volumes in the first quarter of FY21 up 6.3% compared to the first quarter of FY20 and up 7.5% on the last quarter of FY20.

Management said that there has been solid progress in the reduction of poultry inventory levels resulting from COVID-19 impacts in FY20 with initiatives continuing to deliver further reductions in inventory levels by the end of FY21, supported by Christmas demand.

The ASX 200 poultry business anticipates feed cost reductions in the second half of FY21, Ingham’s expects to fully realise the benefits in its cost of sales by the last quarter of FY21.

The board of Ingham’s has reviewed its dividend policy after adopting the new accounting lease standard AASB 16 and revised the policy to a range of 60% to 80% of underlying net profit after tax (NPAT). The board said it recognised the importance of dividends to shareholders.

The FY21 interim dividend, which will use this new policy, is expected to be paid in April 2021.

It was the best performer in the ASX 200 today.

National Australia Bank Ltd (ASX: NAB)

The big ASX bank released its full year result for the 2020 financial year to September 2020.

NAB reported that its statutory profit after tax was $2.56 billion, which was significantly impacted by COVID-19 effects.

The cash earnings were also hurt heavily, down 36.6% to $3.71 billion. Even after excluding the large notable items, cash earnings dropped by 25.9% to $4.73 billion. The $1 billion of notable items including things like royal commission remediation and changes to accounting policies for software amortisation.

NAB’s board decided to declare a final dividend of 30 cents per share, bringing the full year dividend to 60 cents per share. That was a cut of around 64%.

The ASX 200 bank disclosed that its ratio of loans that are over 90 days past due rose 10 basis points to 1.03%, largely due to rising delinquencies in the Australia home loan portfolio where customers are not part of the COVID-19 deferral program.

On the economy, NAB said: “Economic activity in Australia has been materially impacted by COVID-19 with GDP falling 7% in the June quarter 2020 and forecast to decline 4.7% over the year to December 2020. Recovery is likely to be gradual, supported by stimulatory fiscal and monetary policy combined with an expected relaxation of Victorian restrictions and a more complete reopening of state borders. This sees forecast GDP growth of 4.6% over 2021 and 2.9% over 2022, albeit the outlook for the business sector remains highly uncertain and the pace of the recovery is likely to be uneven across industries.”

The NAB share price went up 3.25% in reaction today.

Treasury Wine Estates Ltd (ASX: TWE)

The Treasury Wine Estates share price fell by around 8% today in reaction to an update.

In Asia, Treasury Wine Estates said that in has seen a progressive and consistent recovery in consumer demand for its brands. It also saw “strong” consumption throughout the Golden Week holiday season and mid-autumn festival in September and into early October with business growth and a return of social gathering occasions.

The company referred to the fact that the Chinese Alcoholic Drinks Association has applied to MOFOCOM requesting that imports of Australian wine in containers of two litres or less into China be subject to retrospective tariffs. The ASX 200 wine maker is unsure if this will be successful. It wasn’t able to comment on a potential embargo of Australian exports, including wine, into China.

In the Americas, particularly in the US, the wine category is still seeing strong growth in retail channels with 12% value growth in the first quarter. Treasury Wine said the upcoming Thanksgiving and Christmas holidays will be very important.

In Australia, the business is seeing an elevated retail performance driven by the above $10 price points. The masstige portfolio is growing ahead of the market, up 21% in value in the first quarter.

In Europe, the Middle East and Africa the business saw continued strong performance in its retail channels in the UK, along with mainland Europe. However, COVID-19 impacts continue to hamper the Middle East and Africa.

It was the worst performer in the ASX 200 today.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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