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.
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.
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.
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Tech in Gov 2024
