Covid-19 batters leading Oz tech stocks

By on
Covid-19 batters leading Oz tech stocks

Webjet withdraws earnings guidance.

Australia’s tech stocks on the freshly minted S&P All Tech Index have been given a baptism of fire just weeks into its operation with heavyweights Webjet and Computershare either withdrawing or updating their guidance only weeks after the February reporting season came to a close.

The index graph perhaps shows the impacts of the virus the best, with a moderate downturn since mid-February counteracting a slight upward trend.

For some, like Webjet, the impacts of lockdowns, travel bans and consumer uncertainty have completely upended forecasts given to the market less than a month ago.

The online travel agency had originally issued a guidance on 19 February that it expected the impacts from covid-19 to be “one-off in nature,” with customers re-booking deferred travel once global anxieties subsided - contributed to an expected EBITDA (earnings before interest, tax, debts and amortisation) of $162-$172 million for the 2020 financial year.

Webject withdrew that guidance on Wednesday following mounting lockdowns and event cancellations in Europe and North America, telling the market that “ while forward bookings beyond three months remain in line with previous expectations, cancellations are now occurring at short notice prior to travel and therefore reducing visibility on future earnings”.

Webjet closed the day down 5.21 percent.

Webjet's share price in the 6 months to 11 March 2020. Source: Google

Fellow All Tech member Computershare also revised its earnings guidance on Wednesday, with earnings per share expected to be down 15 percent for the full year compared to FY19, rather than the 5 percent initially heralded in the company’s half-year results.

Computershare also cited softening conditions in the US and Canada, where interest rates have been cut by 50bps. At the close of trading on Wednesday Computershare’s stock was down 3.98 percent.

Computershare's share price in the six months to 11 March. Source: Google.

WiseTech Global, also on the All Tech Index, has also had a tumultuous few weeks on the back of a downgrade in its full-year guidance, despite booking a 147 percent increase in earnings per share for the first half of FY20 compared to 1H19.

The software developer also closed Wednesday down 5.75 percent, edging out the All Ords loss of 3.44 percent.

WiseTech Global's share price in the six months to March 11. Source: Google.
Got a news tip for our journalists? Share it with us anonymously here.
Copyright © iTnews.com.au . All rights reserved.
Tags:

Most Read Articles

You must be a registered member of iTnews to post a comment.
| Register

Log In

Username / Email:
Password:
  |  Forgot your password?