Key Takeaways
- February 2025 reporting season highlights corporate Australia’s resilience amid softer trading conditions.
- Investors should focus on companies showing margin resilience and positive earnings trends.
- Key companies to watch: Pinnacle Investment Management (PNI), Superloop (SLC), and Lovisa (LOV).
- Currency fluctuations and high valuations may impact FY25 results.
- Monitoring large-cap stocks and sector-specific performance is critical for informed investment decisions.
Overview of February Reporting Season 2025
February Reporting Season 2025 has commenced, offering crucial insight into corporate Australia’s health. Company-specific performance now takes precedence over broader macroeconomic trends. While earnings and share prices have shown resilience since August, the focus shifts to companies’ ability to maintain margins and sustain growth amid subdued trading conditions.
With a modest earnings outlook, companies are adapting to softer trading environments. Investors should monitor sectors demonstrating margin resilience and positive earnings trends, particularly among large-cap stocks with historically high valuations. Currency swings in the AUD may further affect FY25 earnings, particularly for companies exposed to foreign exchange volatility.
In this month’s report, we highlight three key companies whose results are of interest: Pinnacle Investment Management (PNI), Superloop (SLC), and Lovisa (LOV).
Pinnacle Investment Management (PNI)
Result Date: 5 February 2025
Outperformance Driven by Performance Fees
We expect strong results from PNI, primarily driven by higher FUM and performance fee contributions. Underlying 1H25 NPAT is forecasted to increase +105% on pcp to A$61.9m, with affiliate profit share forecast +82% on pcp to A$68.1m.
Core Flows and Horizon 2 Spend
Momentum in fund flows remains a key focus. Commentary on new affiliates (e.g., Lifecycle) and the impact of Horizon 2 investments, particularly Metrics, will be closely watched.
Ample Capital Ready
Following an equity raise in November 2024, PNI holds sufficient ‘dry powder.’ Investors will be keen on early performance updates for recently acquired stakes.
Superloop (SLC)
Result Date: 21 February 2025
FY25 Outlook
SLC forecasts FY25 underlying EBITDA of $83–88 million, with 1H25 expected at $35.8 million (slightly below market consensus of $38 million). One-off expenses of $5.5 million include legal fees from ABB’s failed takeover and Optus/Uecomm fibre acquisition costs.
NBN Subscribers
Organic NBN net adds in 1H25 are forecast at +31k yoy to 354k, slightly lower than 1H24, primarily due to the Origin migration. Origin is expected to contribute significantly to EBITDA in FY25.
Business Segment Performance
While price erosion affects business segments, growth opportunities remain. The Optus fibre acquisition is expected to improve operational efficiency and support new product launches.
Lovisa (LOV)
Result Date: 24 February 2025
Double-Digit Earnings Growth
Lovisa is forecast to deliver double-digit revenue and income growth, driven by network expansion and higher gross margins. EBIT is projected at $93.1m, a 14% increase on 1H24. LFL sales are expected to rise by 1%, with a store count increase to 939.
Pace of Expansion
The net addition of 39 stores in 1H25 is below previous periods but aligns with Lovisa’s strategy to consolidate in new markets. Store rollout is expected to accelerate in 2H25, with net openings forecast at 63 and LFL sales growth picking up to +3%.
Get Professional Insights
Morgans clients receive exclusive insights, including access to the latest stock and sector coverage featured in The Month Ahead. Start your investment journey with Morgans today to stay informed and make confident financial decisions.
Contact us today to learn more.
FAQs
What is the February reporting season?
The February reporting season is when Australian listed companies release half-year financial results, providing insight into corporate performance and sector trends.
Why focus on PNI, SLC, and LOV?
These companies have been highlighted due to strong performance indicators, growth potential, and market relevance in February 2025.
How do currency fluctuations affect results?
Companies with international exposure can see earnings impacted by changes in the AUD, which may affect revenue, profits, and forecasts.
What should investors monitor during reporting season?
Investors should track margin resilience, earnings trends, sector performance, large-cap valuations, and any commentary on future guidance.
How can I access detailed stock reports?
Morgans clients receive exclusive access to detailed stock and sector reports. Contact a Morgans Adviser to become a client and gain full access.
