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The Reporting Season results so far

We are coming to the end of company results season proper. Now that most of the data is in, we shift our focus towards digesting the broader themes at play.

Date published
31 Aug 2022
Reece Birtles Chief Investment Officer, Australia

Revisions reflect weaker outlook

Despite the great surprise in the results, brokers trimmed their forecast earnings based on management’s guidance outlook statements and consideration of the poor macro-outlook. Sales trends remained positive on good pricing power but there were more EPS and DPS downgrades than upgrades.

DPS Revision
EPS Revision
Sales Revision

This reporting season’s negative EPS revision skew made this the weakest since the onset of Covid-19, but far from an outlier versus history.


Delving deeper, the EPS and DPS downgrades were driven by three dominant themes across all stocks:

  • Profit margin pressure was evident from elevated inflationary and staff pressures and digital investment.
  • Capex increased to invest in organic pipelines, business transformation and carbon reduction plans.
  • Companies ended up with more debt on working capital build due to supply chains and retained more cash for future investment.
Debt Revision
Capex Revision
Profit Margin Revision

Earnings growth outlook down on previous


The bar has now been set at 4.9% EPS growth for the year ahead. This net positive (but weaker than previous) growth expectation includes double digit growth for industrials sectors but profit declines for resources.

The hard work for us doesn’t finish once the data is in.

We continue to meet with management teams of our 100+ investee companies to digest their ability to insulate costs from inflation and enjoy an uptick in revenue from the rising prices across the economy.

In late September, we will publish our semi-annual Reporting Season Wrap, which will bring together our full analytical framework, and delve into the key fundamental views and insights from company engagements.