An overview of results
Below you will find an overview of today’s results. Particularly, we have focused on those businesses that have above average market liquidity, a measure representative of their size.
As an overall quick summary, what we have seen to today, across a broad range of sectors including port operators, retailers, banks, engineering and healthcare companies, is generally no or low growth.
On average, of those we have summarised below, this collection of businesses have reported just 4 per cent revenue growth and negative 2 per cent Underlying Profit After Tax (UPAT) growth. That’s below average in our view.
Further, whilst there are a handful of outlook statements that point to a better second half in 2015, many are again pointing to a low growth environment and a continuation of challenging conditions. Which does not bode well for those companies gaining the confidence to go out and reinvest in meaningful new projects.
If the above sample was taken in isolation we could assume that the Australian economy is struggling and that we have gone from a one-cylinder economy (Mining and Resources) to a no-cylinder economy. But that’s a big call to make given such a small sample size, so we will reserve judgment until we have seen the bulk of companies report over the next few weeks.
Russell Muldoon is the Portfolio Manager of The Montgomery [Private] Fund. To invest with Montgomery, find out more.
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