Why Freedom Foods and Vocus shares soared higher today

Here's why Freedom Foods Group Ltd (ASX: FNP) shares and Vocus Group Ltd (ASX: VOC) shares soared higher today.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The S&P/ASX 200 Index (INDEXASX: XJO) ended 1.10% higher today at 6,395.7 points, buoyed by gains in the US market overnight.

Here are two ASX shares that performed particularly well today. Let's take a look at what was driving their share prices higher.

Freedom Foods Group Ltd (ASX: FNP)

The Freedom Foods share price ended a very healthy 6.07% higher today to close at $4.72. Today's strong gain appears to be linked to an impressive set of financial results released last week despite high volatility in the company's share price since that time.

For the six months ended 31 December 2019, Freedom Foods delivered net sales of $299.7 million, a 43% increase over the prior corresponding period (pcp). Meanwhile, earnings before interest, tax, depreciation and amortisation (EBITDA) also grew strongly to $32.7 million, representing an increase of 55.6%. These impressive results were driven by strong sales and earnings growth from Freedom Foods' Dairy Beverage, Nutritionals and Plant Beverage business units.

At the time of the announcement, the company noted that it expects some short-term disruption to China demand over the next few months due to the coronavirus outbreak. However, the company further added that the underlying medium-term demand from key customers in this market remains unchanged. Freedom Foods remains scheduled to start supply to new China-based customers from June 2020.

Over the next few years, Freedom Foods is confident of continuing strong growth with regards to both earnings and revenue.

Vocus Group Ltd (ASX: VOC)

The Vocus share price lifted a strong 4.23% today to close at $3.45 per share. I believe that today's rise was partially linked to the ACCC decision released earlier today not to appeal the TPG-Vodafone merger.

The merger will reduce competition in the fixed broadband sector and this has seen a positive overall uplift to a number of ASX telco shares today. Vodafone Hutchison Telecommunications (Aus) Ltd (ASX: HTA) closed 13.3% higher, TPG Telecom Ltd (ASX: TPM) ended the day up 9.6%, while Telstra Corporation Ltd (ASX: TLS) shares saw a 2.01% increase. These gains would have also been buoyed by the overall positive sentiment on the ASX today.

Vocus also released a reasonably strong set of financial results back on February 19, 2020, in what was a very challenging market. For the six months to December 31, Vocus reported a 2% increase in underlying EBITDA to $179.3 million. Meanwhile, net profit after tax was down slightly on the pcp to $54.4 million.

These results were driven by a reduction in both direct costs and overheads. Management reiterated its guidance for group underlying EBITDA in the range of $359 million to $379 million for FY20.

Motley Fool contributor Phil Harpur owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended Freedom Foods Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

a man sits back from his laptop computer with both hands behind his head feeling happy to see the Brambles share price moving significantly higher today
Industrials Shares

Up 39% in a year, is there more growth to come for this ASX 200 share?

IML Equity Analyst Josh Freiman shares his views on a major ASX 200 industrial stock.

Read more »

Man looking at his grocery receipt, symbolising inflation.
Share Market News

What the latest US inflation print means for ASX 200 investors

The ASX 200 is likely to benefit if the US Fed cuts interest rates again in December. But will it?

Read more »

guy helping girl invest in shares and dividends
Opinions

5 ways for investors buying ASX shares to stay focused during economic uncertainty

AMP Chief Economist, Dr Shane Oliver, offers advice on how to handle the Trump factor.

Read more »

A worried man holds his head and look at his computer.
Share Fallers

Why Graincorp, Light & Wonder, Orica, and Wildcat shares are falling today

These shares are having a tough time on Thursday. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Catapult, Flight Centre, Nufarm, and Xero shares are storming higher today

These shares are having a strong session on Thursday. But why? Let's find out.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Opinions

1 ASX growth stock down 30% I'd buy right now

This international business is growing core earnings at a strong rate.

Read more »

Concept image of a man in a suit with his chest on fire.
Record Highs

How long can the CBA share price keep this up?

Australia's biggest bank is running hot. Does it make any sense?

Read more »

Four people on the beach leap high into the air.
Broker Notes

4 ASX All Ords shares offering 10% to 30% annual growth: brokers

These ASX All Ords stocks have caught the eye of brokers this week.

Read more »