Hot Stocks: Catapult, Nufarm, James Hardie, Webjet

Wall Street ended its six-day rally on Tuesday as investors took profits and turned cautious following strong recent gains. The S&P 500 fell 0.39% to 5,940, with the Nasdaq and Dow Jones also dipping. Tech stocks led the retreat, with Nvidia, Apple, Microsoft, and Meta all lower, though Tesla bucked the trend, rising 0.5% after Elon Musk committed to staying on as CEO. Meanwhile, President Trump’s tax bill is facing internal Republican opposition over the state and local tax (or “SALT”) cap and proposed Medicaid reforms, threatening its passage ahead of Memorial Day.

In Australia, the Reserve Bank cut the cash rate by 25 basis points to 3.85%, its second rate cut in the current easing cycle, citing easing inflation, weak wage growth, and global tariff risks. AMP’s Shane Oliver expects further cuts in August, November, and February, bringing rates down to 3.1%. The RBA has become more dovish, now forecasting inflation near target and growth at 1.8%. While the rate cuts should support both the sharemarket and housing sector, gains are expected to be modest given geopolitical uncertainties and the gradual pace of easing.

Separately, a political rupture occurred as the Nationals split from the Liberal Party, formally ending their 80-year Coalition. Citing unmet demands on nuclear energy, regional funding, and supermarket reform, Nationals leader David Littleproud said the party would now sit as a minor force. The Liberals remain the official opposition but must now rebuild their identity alone. Though some view the break as a strategic reset, others—including former PM John Howard—warn it may hurt conservative chances unless reconciled before the next election.

James Hardie Industries (ASX:JHX) reported its results for the fiscal year ending 31 March 2025, with net sales down 1% to US$3.88bn and net profit falling 17% to US$424m. Despite a softer housing market and increased raw material costs, the company achieved an adjusted EBITDA of US$1.08bn with a margin of 27.8%, supported by cost controls and efficiencies from its Hardie Operating System. North American operations showed resilience, while Asia Pacific results were impacted by the closure of its Philippines operations. In Europe, moderate sales growth was offset by margin pressure. James Hardie also announced the proposed acquisition of The AZEK Company Inc., expected to enhance growth, deliver US$500m in commercial synergies, and be accretive to margins and cash flow. The company provided FY26 guidance for low single-digit organic sales and EBITDA growth, and at least US$500m in free cash flow. Separately, a KPMG actuarial report estimated James Hardie’s asbestos-related liabilities at US$1.47bn, reflecting an increase due to a higher-than-expected number of mesothelioma and asbestosis claims in FY25.

Catapult Group International (ASX:CAT) reported strong results for FY25, with revenue up 16.5% to US$116.5m and net loss nearly halved to US$8.8m. The company achieved record free cash flow of US$8.6m and crossed the US$100m milestone in Annualised Contract Value (ACV), growing 18% year-on-year. Both core verticals – Performance & Health and Tactics & Coaching – drove this growth, supported by new product launches including the Vector 8 athlete monitoring system and Hub Pro video platform. The average ACV per pro team rose 12% to over US$26.8k, and the number of multi-vertical pro teams grew 53% to 741. Management EBITDA surged to US$14.8m, reflecting operating leverage and cost discipline. Catapult ended FY25 in a net cash position of over US$7m after reducing its debt to US$3.5m. CEO Will Lopes described the year as a milestone, citing sustainable profitability, innovation, and global expansion, with FY26 expected to deliver continued ACV growth, low churn, and higher free cash flow.

Nufarm (ASX:NUF) reported a statutory net profit after tax of $29.8m for the half year ended 31 March 2025, down from $49.2m in the prior corresponding period, with underlying EBIT falling 15% to $102.7m. The decline was driven by weaker performance in Seed Technologies, particularly due to low fish oil prices impacting omega-3 margins. In contrast, Crop Protection delivered a strong recovery, with EBIT up 34%, supported by volume growth and improved market conditions. Europe led this rebound with a 96% lift in EBIT. Revenue grew 3% to $1.81bn, and gross profit rose 9%, but the company reported a $607m cash outflow, driven by seasonal working capital needs and investment in Seed Technologies. Net debt rose to $1.4bn, pushing leverage to 4.5x. No interim dividend was declared. Nufarm also launched a strategic review of its Seed Technologies business, citing opportunities to unlock value and accelerate commercialisation, with UBS appointed to assist. Management remains focused on cost reduction, working capital efficiency, and delivering $50m in annualised savings by FY25, though outlook uncertainties persist due to weak omega-3 pricing, tariffs, and weather conditions.

Webjet Group (ASX:WJL) delivered a solid FY25 result following its demerger from Web Travel Group in September 2024. Underlying revenue fell 3% to $139.7m and bookings dropped 7%, but underlying EBITDA rose 1% to $39.4m, supported by disciplined cost management and a focus on higher-margin international bookings and ancillaries. The Webjet OTA division remained highly profitable with a 43% EBITDA margin, despite subdued domestic travel and Rex Airlines’ collapse. Cars & Motorhomes EBITDA held at $1.6m, reflecting restructuring gains. The Group ended FY25 with $118.1m in net cash and plans to initiate dividends and potential buybacks from FY26. A five-year strategic plan targets doubling total transaction value (TTV) by FY30 through international expansion, brand refreshes, and new loyalty and business travel offerings. Trip Ninja’s AI technology continued to support growth, with further rollout planned. Despite macroeconomic headwinds, the company remains optimistic, with early FY26 trading showing strength in international bookings.