Appen Ltd (ASX:APX) and Kogan.com Ltd (ASX:KGN) shares were among the worst performers on the ASX 200 in February. Here’s why…
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Despite a very disappointing end to the month, the S&P/ASX 200 Index (ASX: XJO) managed to record a gain of 1% in February.
Unfortunately, not all shares on the index were able to follow the market higher. Here’s why these were the worst performers on the ASX 200 last month:
Service Stream Limited (ASX: SSM)
The Service Stream share price was the worst performer on the ASX 200 in February with a disappointing 39.6% decline. The essential network services provider’s shares were sold off following the release of a disappointing half year result. Service Stream reported a 17.7% reduction in revenue to $409.9 million and a 40.5% decline net profit after tax to $16.2 million. But even worse, management warned that the stronger second half it had been expecting was unlikely to materialise. This is due partly to COVID-19 related and client-initiated delays to work programs.
NRW Holdings Limited (ASX: NWH)
The NRW share price wasn’t too far behind with a 29.7% decline last month. Investors were selling the contractor’s shares following the release of its half year results. For the six months ended 31 December, the contractor delivered a 44% increase in revenue to $1,168 million and a 28% jump in EBITDA to $132.8 million. However, this strong form didn’t carry to the bottom line, with NRW posting a disappointing 17% decline in net profit to $29 million. This was driven largely by a significant increase in depreciation.
The Appen share price was a poor performer in February and recorded a decline of 25.3%. The majority of this decline came in the final week of the month after the artificial intelligence data services company released its full year results. For the 12 months ended 31 December, Appen posted a 12% increase in revenue to $599.9 million and an 8% lift in EBITDA to $108.6 million. This fell short of the market’s expectations. It was a similar story with its guidance, with Appen forecasting EBITDA growth of 18% to 28% in FY 2021. Analysts appear concerned that increasing competition could be putting pressure on pricing and weighing on its growth.
The Kogan share price was an uncharacteristically poor performer in February and fell 22.3%. This appears to have been driven by a combination of weakness in the tech sector and the release of its half year results. In respect to the latter, the ecommerce company reported a 97.4% increase in gross sales to $638.2 million and a 250.2% lift in adjusted net profit after tax to $36.5 million. This was underpinned by a 76.8% increase in Kogan active customers to 3 million, its acquisition of Mighty Ape, and growth in the Kogan Marketplace and Exclusive Brands segments. Slowing sales growth in January may also have weighed on its shares.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd and Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com ltd and Service Stream Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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