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Hewison Insights
Reporting Season

Reporting Season Review

Glenn Fairbairn
Director/Private Client Adviser
28 Mar 2011

With profit reporting season now behind us, many investors will notice a fairly healthy cash injection throughout April as a number of companies pay half yearly dividends. Commonwealth Bank, QBE Insurance, Telstra, Toll Holdings and Woodside Petroleum are just some of the companies due to pay dividends in the coming month.

Overall the reporting season highlighted the continued recovery in corporate earnings, lead by the resources sector – no surprise there.

From a sample of 144 companies in the ASX 200 index that reported results and were covered by our research, 12% exceeded forecasts, 17% were below forecast and 71% were in line with expectations.

In addition, 77% of companies covered by our research experienced growth in operating revenue and 68% saw an increase in after tax profitability. Despite the adverse affects of a higher Australian Dollar many resource companies managed to lift earnings on the back of higher commodity prices. In particular, BHP experienced a 63% increase in earnings per share and Rio Tinto recorded a 46.5% increase.

Whilst earnings growth was broadly strong, dividend growth seemed to lag. However, this was significantly impacted by larger companies such as BHP which only increased their dividend by 10% despite a 68% increase in net profit. Excluding BHP and Rio, which have a pronounced impact on the Australian share index, the overall growth rate in dividends was around 6.1%.

Overall the half yearly reporting season was quite positive, albeit heavily influenced by the large miners. Notwithstanding this, investor confidence has taken a battering in recent months with a number of natural disasters and growing tensions in the Middle East. 

The market has lost more than 9% since its peak in February. This further highlights the ever increasing globalisation of world economies where events thousands of kilometers away impact the performance of our local market, even when conditions seem quite positive in our own backyard.


Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.