Half-yearly insights: bite sized summaries from the week
With reporting season coming to an end, companies listed on the Australian Securities Exchange (ASX) have released their half-year results, offering insights into their financial performance and strategic direction. I have summarised the results of seven companies, highlighting key earnings surprises, market reactions, and potential opportunities for investors.
Lifestyle Communities (ASX:LIC)
Lifestyle Communities exceeded expectations with an 18.7 cents per share operating earnings result, beating consensus by eight per cent. With the share price down almost 46 per cent over the last 12 months, the company took steps to improve its financial structure, extending debt maturities and renegotiating covenants, while opting to halt dividends until sales pick up. Ja nuary and February sales showed promise, recovering from a sluggish prior period. A key leadership change saw Henry Ruiz, formerly of REA Group (ASX:REA), appointed CEO. With an important legal hearing scheduled for May, Lifestyle Communities remains confident of its position. Investors might consider whether the legal battles are temporary in nature.
Domino’s Pizza (ASX:DMP)
Domino’s first-half results met prior guidance, but the broader trading environment remains challenging, and this is reflected in a share price that is 37 per cent lower over 12 months. The company continues to grapple with weak performances in Japan and France, raising questions about whether these markets are worth a turnaround effort. Domino’s Pizza will close more than 200 loss-making stores globally in a move it says will position the business for sustainable growth. Asia will be the region heaviest hit by the 205 closures, with 172 eateries to be shut in Japan. Investors should note that divestment could present a more appealing route for shareholders. There is also concern that focusing on struggling markets could dilute performance in stronger regions like Australia, the Netherlands, and Germany. With limited signs of progress, earnings before interest and taxes (EBIT) forecasts for FY25-FY27 have been trimmed by analysts. Expect investors to remain cautious until tangible improvements materialise.
Iress (ASX:IRE)
Iress left investors somewhat uncertain after releasing its latest guidance. Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) projections of $127-135 million for FY25 fell short of expectations, but the real surprise was net profit after tax and amortisation (NPATA) guidance of $54-62 million – significantly below prior estimates. While this includes ‘transformation’ and mergers and acquisitions (M&A) costs, investors and sell-side analysts were understandably left to recalibrate expectations. However, Iress has demonstrated a track record of outperforming its guidance in the past, exceeding its adjusted EBITDA target for FY24. The company remains committed to long-term growth with further price increases and cost reductions in the pipeline. The share price is up just five per cent in the past year, underperforming the small cap index, and the forward price-to-earnings (P/E) is now 20.5 times for FY25.
Propel Funeral Partners (ASX:PFP)
Propel Funeral Partners once again demonstrated resilience, tracking ahead of its guidance. First-half net profit fell slightly short of expectations due to weaker revenue in the second quarter, but trading momentum has remained positive in the early second half of 2025. While volume growth remains volatile in the short term, the long-term trajectory is expected to accelerate. Propel Funeral Partner’s market multiple is high at 29 times forward earnings. On the positive side however, its strong M&A pipeline, disciplined expansion strategy, funding capacity, and defensive business model may be considered attractive by some investors.
Adairs (ASX:ADH)
Adairs’ first-half profit came in slightly below expectations, with solid revenue growth dampened by margin pressures and rising costs. It’s fair to say the market saw this coming with the share price up just four per cent in the last twelve months. Encouragingly, sales for the second half are tracking about four per cent ahead of prior estimates. However, ongoing cost headwinds and tougher year-on-year comparisons have led analysts to downgrade earnings forecasts for FY25. Investors would have to look further ahead, to the FY26 outlook, where interest rate cuts and market share gains may offer more promise. The forward P/E sits for Adairs sits in line with historical averages.
Jumbo Interactive (ASX:JIN)
Jumbo Interactive posted an underlying EBITDA of $31 million, slightly below consensus estimates. While margin targets were reaffirmed, the lack of new acquisitions or contract wins suggests more of the same. But investors should note, that unlike this time last year, the share price is 35 per cent lower. A key shift in strategy has also emerged, possibly adding uncertainty, with Jumbo Interactive now focusing on lottery business-to-customer (B2C) acquisitions instead of its previous emphasis on business-to-business (B2B) expansion. Following the results, analysts have trimmed their EBITDA forecasts by mid-single digit percentages over the next three full-year reports and lowered their price targets to around the current price of $11.50. The share price is down 40 per cent since its December 2021 highs.
SkyCity Entertainment (ASX:SKC)
SkyCity Entertainment’s earnings took another hit, with first-half EBITDA falling more than 10 per cent below consensus expectations. Weak consumer sentiment in Auckland and rising regulatory costs in Adelaide continue to weigh on the company’s profitability. These pressures led management to downgrade FY25 EBITDA guidance by about eight per cent at the midpoint. Forecasts for FY25-FY27 have been revised downward by sell-side analysts, and earnings uncertainty is considered high. Understandably, given the ongoing challenges, the near-term investment outlook for SkyCity Entertainment remains challenged.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
