Over half of firms see profits rise in 1H21

Over half of companies which have reported their first-half 2021 results have seen their profits rise as the recovery from the pandemic begins to take effect.

The figure of 61% of companies which had seen profits rise compared to 36% of companies six months ago.

A further 46% of companies had beaten expectations, compared to 32% in the previous half.

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When it comes to dividends, 54% of companies had increased their dividends which was a turnaround from the 55% who slashed dividends in the previous half. Several financials had already announced an increase in dividends including Centrepoint Alliance, Pinnacle and Fiducian.

Earnings were expected to rebound with technology stocks expected to rise by 109% and resources up 47%. Healthcare, media and gaming stocks were also expected to do well.

Companies still set to report this week included BHP, Coles, Charter Hall and Whitehaven.

Shane Oliver, chief economist at AMP Capital, said: “It’s still early days in the December half earnings reporting season with only around 19% of companies having reported so far. While there have been some notable disappointments there has been a big turnaround from the lockdown impacted June half.

“Retailers and miners are doing well, and banks are boosting dividends, but insurers and utilities have been weak.

“Key themes are likely to be a rebound in dividends, stocks benefiting from a surge in housing activity and a likely outperformance of value and cyclicals over growth stocks, and small caps outperforming large caps.”

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