Azzet reports on three ASX stocks with price moving updates today.
Alliance Aviation swan dives after dismal market update ~
Shares in Alliance Aviation (ASX: AQZ) were down around 40.5% by 1:50 pm AEDT (2:50 am GMT) after the aviation services provider resumed trading after running numbers on what its revised outlook was going to look like.
While no one thought today’s update was going to be pretty, it was the magnitude of the fall that rattled investors today.
Alliance, which is 15.4% owned by Qantas (ASX: QAN), warned the market today that FY26 results wouldn’t come within a bull’s roar of analyst expectations due to higher aircraft, engine and maintenance costs, plus an unresolved dispute with a major customer.
What is also clearly hard for the market to swallow today are reassurances that the immediate exit of founding managing director Scott McMillan from the board and the resignation of CEO Andrew Evans have nothing to do with today’s market update.
New FY26 guidance implies a profit before tax (PBT) of between $46 million and $50 million and earnings of between $77 million and $85 million – this compares with its FY25 PBT of $82.1 million and earnings of $115.3 million.
Aircraft, engine and maintenance costs aside – which relate to higher purchase prices and higher budgeted maintenance costs - the company has also attributed the downgrade to an unresolved contract dispute, and early implementation costs for its AVIAN inventory management system.
It’s understood that while maintenance, compliance and logistics costs have exceeded budget by $1 million per month, the company also incurred $3.5 million in unplanned costs from the early implementation of its AVIAN inventory management system.
The unresolved contract dispute has put an additional $4.2 million into question.
Alliance also expects depreciation charges to rise by $15 million due to higher aircraft purchase costs and shorter sector operations.
Despite today’s dismal update, the business reminded the market that it continues to trade profitably, with operating cash flow strong, net debt forecast at $392 million by year-end, and net tangible assets of $466 million, or $2.89 per share.
However, the market is clearly more interested in announced remedial measures, including a cost reduction program that targets purchasing and logistics processes.
The company has also initiated a review of wet lease contracts, an expanded finance team, and a sale of non-core assets.
With McMillan bringing forward his resignation, Stewart Tully, previously joint managing director, has taken over.
Meanwhile, Chief Financial Officer Andrew Evans will also depart in early 2026 after completing his short-term tenure, with an interim replacement appointed to ensure continuity during the transition period.
Alliance Aviation has a market cap of $254 million; the share price is now trading slightly above its five-year low of $1.66 in late March 2020.
Consensus is Strong Buy.
Macquarie Group tanks on scratchy 1H result
Shares in Macquarie Group (ASX: MQG) were trading around 7.3% lower after the investment bank’s 1H result fell short of forecasts by between 7-12%, due largely to higher impairment of green investments.
The company reported a 1H net profit of $1.655 billion, up 3% on the previous period, but down 21% on 2H FY25.
While some parts of the company’s 1H update looked reasonable, it was undermined by a $152 million write-down on its wind and solar projects, which are now valued at $1.2 billion.
The decision to move its green investments portfolio from Macquarie Asset Management onto the corporate balance sheet also suggests plans to offload these assets rather than hold.
Asset sales from the company’s green energy projects were down 138 million over the past six months.
While Macquarie remains chipper around its green energy investments, it’s understood that around 60% of them remain in the high-risk development stage and, as such highly exposed to cost blowouts and delays.
Putting a brave face on today’s update, CEO Shemara Wikramanayake told the market that asset under management (AUM) growth in the period was driven by favourable market movements and increased net asset valuations yet offset by outflows in equity strategies and unfavourable foreign exchange movements.
“Looking from all our commodity peers that it's been a much more subdued external environment in terms of volatility and whether that is from other banks ... the trading houses, the hedge fund, the energy companies also said there has been a subdued environment,” Wikramanayake said in an analyst call on Friday.
Key 1H numbers announced today
- AUM totalled $959.1 billion at 30 September, up 2% over six months and up 5% compared to the same time a year ago.
- Capital surplus of $7.6 billion.
- Annualised return on equity was 9.6% compared with 11.2% in FY25.
- Dividend of $2.80 per share, up on last year's interim payout of $2.60 per share.
- Macquarie Asset Management delivered a net profit contribution of $1.175 billion, up 43% year on year, driven by higher performance fees.
- The group's banking and financial services unit provided a net profit contribution of $793 million, up 22% year on year, boosted by growth in its home loan portfolio and deposits, as well as a lower average headcount.
- Macquarie's commodities and global markets (CGM) business - which makes up about 28% of Macquarie's total earnings - saw its net profit contribution slide 15% year on year to $1.113 billion due to higher operating expenses resulting from increased investment in the CGM platform, remediation-related spend and "significant" transaction-related costs.
- Macquarie Capital's net contribution surged 92% year on year to $711 million, following higher M&A activity.
- Capital equity tier 1 ratio of 12.4%.
- Macquarie now has an A$160.3 billion mortgage book and a 6.5% market share, up from A$67 billion and a 3.5% market share five years ago.
Meanwhile, the board has approved Macquarie to buy back as much as $2 billion of shares over the next 12 months, citing its strong capital position.
Macquarie has a market cap of $77 billion; the share price is down 12% over one year and down 8% in the last week.
The stock’s shares appear to be in a near-term downtrend, confirmed by its 20-day moving average.
Specifically, the 20-day moving average is falling and implies that investors see better opportunities elsewhere.
Consensus is Moderate Buy.
Etherstack sky rockets on new ADF project
Shares in Etherstack (ASX: ESK) continued their recent upward trajectory – up another 15% – after the wireless tech small cap told the market it has been awarded another defence contract with the Commonwealth of Australia in the field of advanced defence communications.
The most recent $2.5 million contract cements $15 million of defence communications business between Etherstack and the Australian Commonwealth since 2021.
The company is expected to update the market next week on the impact of this and other recent awards on FY2025 and FY2026 revenues.
Last month, Etherstack’s UK subsidiary secured a £14.2 million contract with the UK Home Office to supply its mission-critical communications software to the country’s Emergency Services Network.
The five-year contract was awarded through a competitive tender process and involves the deployment of its 3GPP LMR-IWF gateway technology, enabling interoperability between legacy TETRA radio systems and the new ESN.
Three months earlier, Etherstack announced a significant Master Supply Agreement (MSA) with AT&T Services Inc., with management expecting the contract to contribute around US$4 million to the company’s revenues in FY25.
To the uninitiated, the company specialises in designing, developing and deploying wireless communications software and hardware and is a global licensor of its wireless technologies across land, sea, air or space.
Etherstack is deploying its carrier-grade mission-critical InterWorking Function (MCPTX IWF) globally, a platform that bridges public safety land mobile radio networks with 4G/5G networks, including on behalf of AT&T FirstNet in the U.S.
At the half year, the company posted a revenue increase of 87% from $3,258 to $6,079, driven by further increases in support revenues and strong project revenues.
Half-year earnings were $2,543, up 1537% from a loss of ($177) in the prior corresponding period (pcp).
The company had strong cash receipts of $7,078 in the half, compared to $4,575 for the prior corresponding period, and had a positive operating cash flow of $3,378.
Etherstack has a market cap of $89 million; the share price is up 246% in one year and up 64% in the last month.
The stock is in a long-term bullish pattern confirmed by multiple indicators.
Consensus does not cover this stock.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.
