The ASX lifted in the first week of August with investors pushing ASX shares higher despite the rising economic toll of Victoria's coronavirus outbreak. The first week of reporting season saw the S&P/ASX 200 (ASX: XJO) lift 1.3%, with gold prices surging. The price of the precious metal reached a record of US$2075 on Friday, fueling mining shares.
In last week's company reports, Insurance Australia Group Ltd (ASX: IAG) reported a 60% drop in profits as bushfires and coronavirus took their toll. REA Group Limited (ASX: REA) managed to lift profits 7% despite turmoil in housing markets. On that positive note, let's take a look at five of last week's best performing ASX shares.
Last week's best performing ASX shares
Ardent Leisure Group Ltd (ASX: ALG)
The Ardent Leisure share price rose 22.73% last week to close the week at 40 cents. The theme park operator announced the reopening of Dreamworld and WhiteWater World last week. Both are expected to recommence operations from mid-September at 50% capacity. Ardent also announced the receipt of government financial assistance under the Queensland Government's COVID-19 industry support package.
The government is providing the company with a $66.9 million loan plus a grant of $3 million. The grant can be used to fund working capital and approved capital expenditure. Nonetheless, the Ardent Leisure share price remains 75% down from its high for the year, having plunged following the closure of its main attractions. The financial impact of these closures is likely to have been severe and will be revealed when this ASX share releases its full year results on 27 August.
Nick Scali Limited (ASX: NCK)
The Nick Scali share price rose 19.32% last week to finish the week at $8.71. The furniture retailer released its FY20 results last week which showed only a small drop in sales revenue despite store closures caused by COVID-19. Net profit was on par with the previous year at $42.1 million. A final dividend of 22.5 cents per share, fully franked, was declared. This brings full year dividends to 47.5 cents per share and represents a payout ratio of 90%.
Following the temporary closure of stores in April, May and June, sales orders grew 72% year on year. Store closures prompted the retailer to launch an online store which achieved greater than $3 million in sales in the June quarter. Managing Director Anthony Scali said, "In recent months, the furniture industry has experienced unprecedented year on year growth as consumers reallocated their spending into the home given an inability to travel, combined with an increased amount of time spent at home."
Integrated Research Limited (ASX: IRI)
The Integrated Research share price rose 17.94% last week to close the week at $4.80. There was no news out of the technology provider to prompt the rise in the share price, however it previously advised it expected record profit in 2020. Integrated Research is due to report its full year results on 20 August and has forecast total revenue of $109.5 million to $111 million, up 9% to 10%. Profits of $23.6 million to $24.2 million are forecast, representing growth of 8% to 11%.
In the first half, this ASX share reported record interim revenue and profit, and this momentum has continued despite the onset of COVID-19. Revenue increased 6% in the first half to $53.2 million and net profit was up 1% to $11.8 million. The company has a blue-chip customer base with clients including Telstra Corporation Ltd (ASX: TLS), Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW). With technology solutions that support customers' evolution to cloud technology, Integrated Research is seeing increased demand as work goes digital.
Pilbara Minerals Ltd (ASX: PLS)
The Pilbara Minerals share price gained 17.14% last week to finish the week at 41 cents. The lithium producer has been struggling with softer market conditions with lithium prices at record low levels in August. Nonetheless, there is positive market sentiment following the introduction of post COVID-19 stimulus packages by various governments for the electric vehicle and renewable energy sectors. This is expected to see sales of electric vehicles jump, which should cause lithium prices to rally.
Pilbara Minerals says market signaling indicates lithium prices may be approaching the bottom. Industry analysts have forecast a demand surge and price turnaround in 2021 – Tesla recently surpassed Toyota as the most valuable car company in the world. Pilbara Minerals also recently announced it had received binding commitments for a senior secure debt facility from BNP Paribas and the Clean Energy Finance Corporation. This represents a substantial cost saving compared to existing finance arrangements, and quarterly principal repayments do not commence until September 2022.
Mesoblast Limited (ASX: MSB)
The Mesoblast share price rose 16.4% last week to finish the week at $4.40. The company's product, remestemcel-L, is currently undergoing phase 3 clinical trials in the treatment of COVID-19 patients. Food and Drug Administration (FDA) approval is also being sought for its use treating children with acute graft versus host disease. According to Chief Executive, Dr Silviu Itescu, "these key milestones will take the company into the most significant period in its history."
Interim analysis of the phase 3 trial of remestemcel-L in COVID-19 patients with severe acute respiratory distress syndrome (ARDS) is due to be completed in early September. These results will inform whether the trial should proceed as planned or terminate early. There are currently no approved treatments for COVID-19 ARDS so, if remestemcel-L proves effective, it should see strong demand. A pilot study using the treatment found 75% of patients were successfully taken off a ventilator and discharged from hospital in a median of 10 days.
FDA approval for the use of Mesoblast's product to treat graft versus host disease is expected at the end of September. If approved, Mesoblast plans to launch into the United States in 2020 and has product inventory in place. The ASX share completed a $138 million capital raise in May leaving it with cash on hand at the end of the June quarter of $188.4 million. This will support operating activities including research and development and manufacturing as Mesoblst prepares for commercial launch in the United States.
