Reporting Season Wrap & Outlook – FY17

Headline aggregate results from the FY17 reporting season were strong, with 18% earnings growth recorded. However, the result was heavily supported by the Resources sector. Disruptive and cyclical challenges remain a feature of the market and weighs heavily on the outlook for certain market segments. Strong liquidity, a supportive dividend yield and a focus on capital discipline are key supports for the market, although these characteristics are not uniform across the market.

Key themes emanating from the results season include:

                            1) Strong headline growth, but patchy underneath

                            2) Strong free cash flow underpinned capital return and improved balance sheets

                            3) Disruptive and cyclical challenges persist

The market’s valuation has remained reasonably consistent with longer term measures, but a fair degree of uncertainty remains. Fortunes across the market will be mixed and therefore reliant upon active fundamental analysis and professional portfolio management to yield the best outcomes.

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This article has been prepared by Pendal Fund Services Limited (PFSL) ABN 13 161 249 332, AFSL No 431426 and the information contained within is current as at September 2017. It is not to be published, or otherwise made available to any person other than the party to whom it is provided.

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