The out-of-season reporting cycle has revealed important incremental information that allow us to assess where companies we cover stand in relation to our theses. This report explores the results of TechnologyOne and James Hardie, and what led us to slightly readjust the weightings of the Focus Portfolio.

There have been out of season results over the past month, which in conjunction with global macro developments have seen aggregate ASX 200 EPS forecasts for FY26 lowered. This report provides a detailed view of Aristocrat and Xero’s 1H25 and FY25 results, with both companies still core holdings of the Focus Portfolio.

The outperformance of Australia’s Big 4 Banks over the last year has been extraordinary considering valuations have been demanding for this entire period while sector earnings growth has remained uninspiring. This report reiterates our cautious sector view and recaps the latest interim results of the banks.

The current market environment is plagued by global macro and geopolitical tail risks, which has driven elevated volatility and uncertainty in the outlook for equities. In this report, we explore which high-quality growth companies and defensives offer attractive long-term value. We also provide an update on how the Focus Portfolio is positioned across sectors/styles.

The rapidly evolving global trade environment, particularly between the US and China, has driven significant uncertainty in the outlook for commodity demand. In light of heightened macro risks, we have reduced the Focus Portfolio’s energy sector exposure and increased our overweight to the gold sector.

Following the latest US tariff news, we have increased our exposure to defensives by adding Woolworths and upweighting Brambles. We have also increased our exposure to gold by upweighting Evolution Mining. These additions have been funded by the removal of Breville and WEB Travel, which both face an increasingly challenging global macro outlook.

The outlook for M&A activity in 2025 is broadly positive and should be supported by several key macro factors. This report explores the key M&A themes that we expect to play out in 2025 and screens the ASX for potential takeover candidates. We also assess James Hardie’s recent A$14bn acquisition of US-listed AZEK.

The ASX 200 has followed US equities lower, with the index now down ~8% since mid-February, which represents the largest drawdown in the local market since late 2023. Looking through the near-term macro uncertainties, this market pullback has created attractive buying opportunities, which is the focus of this report.