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ASX closes lower; Megaport, Data#3 lead tech plunge

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The news: The Australian sharemarket finished lower as Megaport and Data#3 contributed to a slump in the tech sector after the release of their half-year earnings.

The benchmark ASX 200 fell 0.61% to end at 9,026.0, as eight of the 11 sectors finished in the red.

Megaport (-17.5%) led losses on the ASX 200 after posting its half-year earnings result. Citi analysts said that the recently acquired Latitude business “appears to be tracking to the lower end of the expectations” for the second half and there is “additional pressure on future capex”.

Data#3 (-14.4%) also contributed to the plunge in the tech sector (-4.6%) as it faced a decline in gross margin and profit in the software solutions business despite overall first-half net profit coming in ahead of expectations

Biggest movers:

  • Perenti (-13.8%) — Recorded an 11% uplift in first-half profit to $71 million but Citi analyst described the result as a “miss across the board” with higher-than-expected costs from its technology-driven service offering Idoba.
  • Austal (-11%) — Reported a 21.4% increase in half-year net profit after tax to $30.5 million, from $25.1 million a year prior, driven by a shipbuilding agreement with the Australian government.
  • Lendlease (-7.2%) — Swung to a first-half statutory loss of $318 million after confirming $118 million in negative investment property revaluations and impairments across its global portfolio.
  • Nuix (+15.1%) — Swung to a first-half net profit after tax of $11.1 million due to an increase in revenue, particularly from multi-year licences to use on-premise software.
  • Reece (+13.9%) — Reported a 20% decrease in half-year statutory net profit after tax to $144 million, down from $181 million a year ago, citing challenging housing market conditions affecting demand.
  • Adairs (+10.5%) — Reported a 34% decline in first-half statutory profit to $12.8 million after its gross margin dropped by 170 basis points during the period.
  • Pantoro Gold (+8.6%) — Announced a 10% on-market share buyback to be conducted over the next 12 months.
  • Regis Healthcare (+7.6%) — Reported underlying half-year net profit of $29.7 million, a slight increase from $29.6 million a year ago.

Other earnings news:

  • Aussie Broadband (-2.7%) — Posted a 58.3% drop in first-half profit to $5.1 million, despite a lift in revenue and EBITDA, following a goodwill impairment of $14.8 million. Also announced plans to acquire Infotrust’s cloud and communications segment, which includes Nexgen Investment Group for a total consideration of $50 million.
  • EVT (-2%) — Reported a 21.6% increase in interim net profit after tax to $37.8 million, driven primarily by the hotel business division.
  • Ampol (-2.1%) — Reported a 33% drop in full-year statutory profit to $82.4 million as earnings from its fuel and infrastructure division halved due “unpredictable” global demand.
  • Nib Holdings (-0.2%) — Reported an interim net profit after tax of $82.9 million, unchanged from the prior corresponding period.
  • Kogan (+5.5%) — Reported a 20.2% slide in first-half statutory profit to $8.2 million, dragged down by lower earnings from its Mighty Ape subsidiary.
  • Fisher & Paykel (+4%) — Raised its full-year revenue and earnings guidance, as the company said it “continues to work through” implications of the US Supreme Court’s ruling on the country’s global trade tariffs.
  • IMDEX (+2.6%) – Underlying NPAT lifted to $28.8 million, up from $21.9 million in the previous period. This was ahead of the Visible Alpha expectation of $25.8 million.

Other news:

  • Coronado Global Resources (-6.6%) — Announced CEO and managing director Douglas Thompson has resigned.
  • Mayne Pharma (-1.5%) — CEO Shawn Patrick O’Brien stepped down on 20 February and has been replaced by CFO Aaron Gray in the wake of its collapsed $600 million deal to be acquired by Cosette Pharmaceuticals.
  • Harvey Norman (-1.3%) — Is facing class action proceedings in connection with the promotion of interest-free payment plans by Latitude Finance Australia.

What’s ahead:

  • HMC Capital, Regal Partners, ARB Corporation, Viva Energy, Woodside Energy Abacus Group, Nine Entertainment and WiseTech Global are among the company reporting earnings tomorrow.
  • Australian Business Economists will host its Annual Forecasting Conference on Tuesday. Speakers include assistant minister for science, technology and the digital economy Andrew Charlton and Reserve Bank head of economic analysis Michael Plumb.

By Brandon How