Day: 26 September 2021

The Sandfire Resources Ltd (ASX: SFR) share price has fallen into the red in early trade today after the company announced a key update.

Sandfire shares are now changing hands at $5.42 apiece, a 13% drop from the market open a few moments ago.

Here’s what we know.

What did Sandfire announce?

In what’s been deemed a negative for the Sandfire Resources share price, the mining company announced it had completed an institutional placement and entitlement offer.

Sandfire is raising the money to finance the purchase of Minas De Aguas Tenisas (MATSA) mining complex in Spain for $2.572 billion, announced last week.

It is acquiring the complex on a 4.8x FY21 EBITDA multiple and is going in with Trafigura and Mubadala Investment Company on the deal.

As per the release, the placement portion will raise approximately $285 million, whereas the institutional entitlement offer will raise an additional $641 million.

The retail component of the offer is fully underwritten also and will raise around $322 million as well. As it stands, the total expected capital to be raised is approximately $1.25 billion.

Interestingly the proposal was made at an offer price of $5.40 per share – a slight discount to Sandfire’s current market price – and a 13.2% discount to its “last traded price of $6.22 per share on 22 September 2021”.

Sandfire will use an additional $297 million of its own cash reserves and draw down $200 million of an existing debt facility to make up the remaining balance of the transaction.

Superannuation fund AustralianSuper also got in on the deal, on the receiving end of a $120 million strategic placement.

In a year full of merger and acquisition (M&A) activity, there have been mixed results on the share price of companies participating in the trend.

On this basis, it is unclear what long-term effect the acquisition will have on the Sandfire Resources share price.

Alas as it stands today, Investors appear to have sold on the news, perhaps favouring a different outcome or method of financing the transaction.

Sandfire Resources share price snapshot

The Sandfire Resources share price has had a difficult year to date and posted a return of just 1.3% since January 1 of this year.

Nonetheless, over the last 12 months, it has climbed 29% into the green, ahead of the S&P/ASX 200 Index (ASX: XJO)’s return of about 25% in this time.

Despite this, the Sandfire share price has slipped 15% over the past month and is down 13% in the last week.

The post The Sandfire (ASX:SFR) share price drops 13% on entitlement offer completion appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to buy today
• Is this ASX 200 miner one of the best value shares to buy today
• Sandfire Resources (ASX:SFR) share price frozen amid acquisition and cap raise
• 5 things to watch on the ASX 200 on Wednesday
• The latest ASX 200 mining shares to get hit by broker downgrade

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Synlait Milk Ltd (ASX: SM1) share price is climbing on Monday morning after the Kiwi dairy company released its full-year 2021 (FY21) results.

At the time of writing, the Sunlait share price is up 3.42%, trading at $3.33.

Sunlait share price lifts despite net loss

Synlait results for the year ended 31 July 2021 including the highlights below:

• Revenue down 5% on the prior corresponding period (pcp) to $1,367.3 million
• Earnings before interest, tax, depreciation and amortisation (EBITDA) of $37.3 million
• Net loss after tax of $28.5 million versus a $103 million net profit in FY20
• Operating cash flow down 85% on pcp to $15.9 million
• Debt to EBITDA, a measure of leverage, up 416% on pcp to 12.9 times.

The Synlait share price is climbing following this morning’s update which represented the company’s largest ever financial loss after 9 years of profitability.

What happened for Synlait in FY2021?

The key takeaways in this morning’s investor presentation were quite telling. Synlait said FY2021 was “very challenging” and that the board and management team have now “begun to execute a plan to rebuild”.

That includes the appointment of Grant Watson as company CEO who will join Synlait in January 2022. Mr Watson is currently the CEO of the indigenous Māori dairy company, Miraka, in New Zealand.

Operationally, Synlait was impacted by many of the same factors that have smashed the A2 Milk Company Ltd (ASX: A2M) share price this year.

The company said consumer-packaged infant formula volumes declined as demand subsided while liquids volumes normalised after strong FY20 numbers.

In its Q4 2021 review, the board and management found three key areas of concern impacting Synlait’s performance. Those included:

• New business areas had been slower to develop than planned
• Cost structures had been allowed to grow at a faster rate than earnings, and
• The use of capital had become suboptimal.

What did management say?

Synlait chair Graeme Milne ONZM touched on the result, saying:

Our financial result for the 12 months to 31 July 2021 (FY21) unfortunately reaffirmed our over-reliance on one product, one customer and one market.

While we have invested significantly in our diversification strategy, we did not anticipate the impact COVID-19 would have on The a2 Milk Company, our key customer, and consequently, our own financial performance.

While this is an extremely disappointing financial result, we continued to execute our strategy and are planning a strong recovery.

What’s next for Synlait and its share price

The Synlait share price has been under pressure this year. Shares in the Kiwi dairy company are down more than 30% in 2021 to A$3.28 per share.

Synlait is expecting demand for consumer-packaged infant formula to stabilise in FY2022, combined with a return to normality in global shipping to help reduce inventory levels this year.

The post Synlait (ASX:SM1) share price climbs despite largest ever financial loss appeared first on The Motley Fool Australia.

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• ASX 200 falls, Macquarie jumps, Aussie Broadband climbs

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Zip Co Ltd (ASX: Z1P) share price has dropped 15% in three months. But could that make the buy now, pay later operator an interesting opportunity?

Some brokers don’t think so.

Sell rating on the Zip share price

One of the brokers that doesn’t believe Zip shares are good value is Macquarie Group Ltd (ASX: MQG). The analysts note that there are higher bad debts at the moment, notably in the US.

However, some areas of Zip’s growth seem to be slowing, so Macquarie currently has a price target of $5.70 on the business. That suggests that the broker believes the Zip share price could drop by almost 20% over the next 12 months.

UBS is another broker with a sell rating on the Zip share price. Whilst UBS is expecting Zip to generate strong growth, it will come with higher expenses as well.

However, Morgans believes that Zip shares are good value, with a price target of $8.87. The broker thinks that Zip can continue to grow at a good pace.

Expanding globally

The buy now, pay later company has plans to be a global player. It wants to support regional and global partners in multiple markets.

Last week it announced it had agreed to invest in ZestMoney, a leading Indian buy now, pay later operator. It already has 11 million registered users and has more than 10,000 online merchants on the platform with a presence in more than 75,000 physical stores.

Zip said that India has the potential to become one of the largest markets globally and by FY26 is forecast to have more than US$300 billion of buy now, pay later payment volume.

There are a few different drivers of that expectation.

Zip noted the changing consumer spending trends, particularly young aspirational individuals’ view of credit and how they use financial services.

Next, it said there is a current low penetration of online shopping. Only 100 million shoppers currently shop online, which is less than 10% of India’s population and is expected to increase to 220 million.

Another factor that could help ZestMoney and perhaps the Zip share price over time, is the population age demographics of India. More than half of the 1.4 billion population is under 30. More than 50% is expected to be aged between 15 to 49 by 2026, with this group expected to drive the Indian consumption economy into the future.

The price of this Indian investment is US$50 million. This investment has been executed using a similar strategy that has been successful in the US with Quadpay.

Zip’s global growth strategy

The buy now, pay later business has made a number of investments to expand its global reach.

It has officially launched in the UK and it’s “building momentum” here. Zip has also launched into Canada and Mexico. In FY21, Zip saw $1.8 million of revenue from the UK, from $25.2 million of transaction value.

Europe and the Middle East are also regions that Zip wants to grow. That’s why it has invested into regional BNPL operators Spotii and Twisto.

In FY21, $214.5 million of revenue came from Australia and New Zealand (from a total of $392.3 million). As time goes on, more of Zip’s revenue is expected to come from international sources.

The post Is the Zip (ASX:Z1P) share price good value? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Woodside Petroleum Limited (ASX: WPL) share price has climbed 10.45% in the past week to a 1-month high of $23.03. Its resurgence has been supported by the bullish performance of oil.

WTI crude oil is currently fetching US$74.8 a barrel and within an arm’s reach of 7-year highs.

Similarly, Brent crude oil prices have rallied 6.3% in the past week to a 3-year high of US$78.99 a barrel.

Analysts bullish on oil prices

Analysts at Australia and New Zealand Banking Grp Ltd (ASX: ANZ) observed that Brent crude oil prices were holding steady, above three-year highs of US$77/b. They noted Hurricane Ida disruptions and strong demand were chipping away at oil stockpiles, according to S&P Global.

“Other analysts shared similar sentiment, with IG market strategist Yeap Jun Rong saying that recent drawdowns in US crude inventories have added support in the oil market,” S&P Global added.

Hurricane Ida made its way through the Gulf of Mexico in late August, shutting down nearly all the Gulf’s oil production. A recent report from the Bureau of Safety and Environmental Enforcement said that approximately 16.18 percent of total Gulf oil production remains shut in.

The Bureau commented that facilities are currently being inspected by authorities and once all standard checks are completed, production in undamaged facilities will be brought back online immediately. However, facilities sustaining damage may take longer to bring back online.

In addition, S&P Global also pointed to further tailwinds for oil coming from “expectations of a spillover impact from higher gas prices as the natural gas market continues to trade at elevated levels amid supply tightness going into [northern hemisphere] winter”.

Woodside share price snapshot

The Woodside share price has traded flat in 2021, down 0.5% year-to-date.

At the time of writing, Woodside shares are trading for $22.92, up 3.38% on Friday’s closing price.

Recent supply disruptions and strong demand have seen a sudden re-rate for Woodside shares, surging 16.8% in September.

The post Up 3%, the Woodside (ASX:WPL) share price is surging in September. Here’s why. appeared first on The Motley Fool Australia.

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Cimic Group Ltd (ASX: CIM) share price is pushing into positive territory this morning. This comes after the global engineering company announced a renewed contract to the ASX.

At the time of writing, Cimic shares are up 1.57% to $20.11. A strong rebound of more than 6% since closing at $18.98 apiece on 21 September.

Details of the latest award

In today’s statement, Cimic advised that major oil and gas company BP has awarded its UGL subsidiary a contract extension.

UGL is a diversified engineering company in end-to-end asset solutions. The business delivers critical assets and essential services in power, water, resources, transport, defence and security, and social infrastructure.

As a result of the multiyear deal, UGL will provide asset management and project-related services at BP fuel terminals across Australia. This includes engineering and maintenance services.

Furthermore, the contract extension is effective from this month and will generate expected revenues of around $150 million for UGL. Shareholders would hope this has a positive influence on the Cimic share price.

Australian Terminal Operations Management (ATOM), a joint venture between UGL and BP, awarded the contract.

Cimic group executive chair and CEO Juan Santamaria said:

UGL and CIMIC have a longstanding relationship with BP, and we’re pleased to continue that with the delivery of safe, reliable and effective terminal operations, maintenance and engineering services.

In addition, UGL managing director Doug Moss said:

UGL is pleased to extend our partnership with BP through this ATOM contract extension. UGL is proud of its reputation for providing safe and innovative project and maintenance services across Australia and we look forward to continuing that to enhance our client’s capabilities through this contract.

Cimic share price snapshot

Over the past 12 months, Cimic shares have travelled in circles to register relatively little gains, up 3%. However, the year-to-date figure paints a different picture, with the company’s share price deep in the red, down close to 20%.

Based on today’s price, Cimic commands a market capitalisation of roughly $6.16 billion, and has 311.3 million shares on issue.

The post Cimic (ASX:CIM) share price edges higher on contract extension news appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Woolworths Group Ltd (ASX: WOW) share price has had a strong year so far. Shares in the retail conglomerate are up more than 15% year to date compared to a 10% gain for the S&P/ASX 200 Index (ASX: XJO).

Valuing ASX shares is never an easy task. That’s especially true for a conglomerate-type company such as Woolworths. The Aussie company has interests divided across its Supermarkets, New Zealand Food and Portfolio segments.

Shares in the retail group are trading at $39.21 per share at the time of writing. So, how can investors work out how that compares to its “true” valuation?

How do you value the Woolworths share price?

A valuation can oftentimes be more of an art than a science. There are a few generally accepted ways to value shares and they all have their pros and cons.

The first, and perhaps most common, is a fundamental valuation via a discounted cash flow (DCF) method. This involves forecasting future earnings based on a variety of key assumptions and determining the present value of those cash flows.

The idea is that investors should be willing to pay approximately what they expect to receive in risk-adjusted future cash flows. Of course, if the Woolworths share price was trading under this value, it would be seen as a bargain.

The big knock on DCF models is the power of key assumptions. Simply changing the assumed annual growth rate of earnings, or the discount rate used, can have a huge impact on valuation.

Investors keen on valuing the Woolworths share price could also apply relative valuation techniques. That includes assessing how Woolworths’ dividend yield and price to earnings (P/E) ratio compares to its peers.

The obvious comparison here is against Coles Group Ltd (ASX: COL) as a pure-play supermarket. Woolworths shares are currently trading on a 2.75% dividend yield and 32.1 P/E ratio.

Coles shares are trading on a 3.58% dividend yield and 22.7 P/E ratio at the time of writing. On a basic level, that would imply that Coles shareholders are receiving more bang for their buck than Woolworths shareholders.

Of course, there are many differences between companies that can make comparisons difficult. These include exposure to other areas (such as Woolworths’ other retail exposures) and capital gains versus dividends.

Finally, investors wanting to value the Woolworths share price could use a comparable transactions approach. That would involve finding similar, recent retail takeover transactions and applying the transaction multiples paid (such as EBITDA to enterprise value multiple) to Woolworths’ numbers.

This approach can be difficult to find comparable, current data that provides meaningful valuations.

Foolish takeaway

Valuing the Woolworths share price is a difficult business. What a fair price for the retail group looks like will depend on future growth assumptions which could be impacted by current group initiatives.

Investors often use multiple valuation approaches to calculate a range of values and find a median or average price to compare against the current share price.

The Woolworths share price is outperforming the ASX 200 this year, but it’s up to value-driven investors to see if there’s more value left in the ASX retail conglomerate.

The post How do you value the Woolworths (ASX:WOW) share price? appeared first on The Motley Fool Australia.

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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The National Australia Bank Ltd (ASX: NAB) share price is in the green to start off this week’s trading.

Shares in the banking giant are on the move this morning after news it is about to embark on a hiring spree in a couple of its business segments.

Read on for more details.

What’s NAB up to this time?

The “big 4 of banking” member wants to place an additional 60 new staff in its private banking and JBWere businesses as part of its growth vision into wealth management.

For reference, JBWere is an Australian wealth manager founded in 1840 with more than $36 billion in funds under administration (FUA). NAB took full ownership of it around 5 years ago.

The decision to increase its headcount follows NAB’s previous moves in October 2020 of adding an additional 500 new employees to support its banking businesses across Australia.

As investing trends in Australia shift towards a split of retail investors and tailored products for high net worth individuals (HNWI’s), NAB’s moves position itself “where the puck is going” so to speak – not where it’s coming from.

Some reports even see a 3.7% growth period in the Australian wealth management industry over 2020–21. That’s after an incredible growth period from 2018 to date.

For instance, the ASX Australian Investor Study in 2020 found that “close to a quarter of all investors have started investing in the past 2 years”.

And for NAB, it appears confident it can deliver on planned moves. The additional 60 staff, made up of bankers, investment advisers and professionals, is set to chip in.

According to reporting from The Australian, NAB’s CEO Ross McEwan believes there is significant growth potential in both segments as they are now more embedded within the bank.

This has come about primarily as a result of the royal commission into banking that started in 2018. It unveiled widespread skullduggery on the part of major financial institutions, NAB included.

As such, NAB has been active in its private banking arm for some time now and is now focused on aligning with the broader trends of the Australian investing crowd going forward.

At the time of writing, NAB shares are 1.17% higher than their opening price, now trading at $27.67 apiece.

NAB share price snapshot?

The NAB share price has been on an interesting ride this year to date, climbing 22% into the green since January 1.

This extends its return over the past 12 months to 50%, well ahead of the S&P/ASX 200 Index (ASX: XJO)’s gain of around 25% in this time.

However, over the last month, it has edged lower and now sits around 0.3% in the red.

The post The NAB (ASX:NAB) share price rises amid hiring frenzy in private banking appeared first on The Motley Fool Australia.

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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Since reporting its full-year results, the Flight Centre Travel Group Ltd (ASX: FLT) share price has been in lift off!

At the time of writing, shares in the travel agency are trading for $20.43 – up 3.23%. For context, the S&P/ASX 200 Index (ASX: XJO) is 0.32% higher. In fact, shares hit a new 52-week high of $20.45 earlier in trading.

Let’s take a closer look at the company.

Flight Centre’s full year results

For the 12 months to 30 June, Flight Centre reported the following:

• Total revenue down 79.1% to $396 million
• Underlying loss before tax flat at $507 million
• Underlying loss after tax improved to $364 million
• Cash balance of $1.36 billion

With many ASX travel shares, the COVID-19 pandemic had an adverse effect on the company’s financial performance. With Australia’s international borders effectively shut, and the states shutting borders at a moment’s notice, the entire tourism sector took a massive hit throughout the financial year.

Just to understand just how hard the pandemic has hit the sector, at the beginning of 2020, the Flight Centre share price was $39.66 per unit. That’s 94% higher than the current share price.

Looking forward, however, Flight Centre management believes its worst days are behind it. CEO Graham Turner said the company could declare a profit in FY22. He doesn’t expect the company to return to pre-COVID levels until mid-2024, however.

What about the Flight Centre share price?

The day before reporting its full-year results, the Flight Centre share price closed at $16.35. As of writing, the company’s value has appreciated by 25%. At the same time, the S&P/ASX 200 Index (ASX: XJO) has fallen about 2%.

Investors, perhaps looking at Australia’s accelerating vaccine rollout, may be sharing the optimism of Flight Centre’s management looking forward. As Motley Fool’s own Scott Phillips says, share prices are more about expectations going forward than on past performance. The rising Flight Centre share price may indicate many traders are feeling positive about the travel agency.

Flight Centre share price snapshot

Over the past 12 months, the Flight Centre share price has increased 45%. Year-to-date the company’s value has appreciated 27%. Flight Centre Travel Group has a market capitalisation of about $4 billion.

The post How has the Flight Centre (ASX:FLT) share price been performing since reporting results? appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It has been a very positive day for the AVZ Minerals Ltd (ASX: AVZ) share price.

In morning trade, the lithium explorer’s shares are up 8% to 35 cents.

This leaves the AVZ share price trading within a whisker of its record high of 35.5 cents.

Why is the AVZ share price charging higher?

Investors have been bidding the AVZ share price higher today after it made a milestone announcement.

According to the release, the company has entered into a transaction implementation agreement with Suzhou CATH Energy Technologies (CATH).

The release advises that CATH will pay US$240 million in cash for a 24% equity interest in a multi-faceted joint venture to develop the Manono Lithium and Tin Project. CATH will also contribute its pro rata portion of funding for the development of the project.

In total, the company expects CATH to contribute more than US$400 million, subject to final project development costs being verified. These funds will be used by AVZ to advance the project into production.

AVZ will retain a controlling 51% interest in the Manono Project post-completion of the transaction.

Further, the release also highlights that CATH will pay a US$20 million break fee. This is payable in the event the required Chinese regulatory approvals are not obtained.

Management commentary

AVZ’s Managing Director, Nigel Ferguson, was very pleased with the milestone agreement.

He said: “This is a very significant day for the Company and all of our stakeholders as we move closer to making the Manono Project a leading global producer of lithium products. We are delighted to enter into this deal with someone of the calibre of Mr Pei and CATL both of whom have the financial capacity, technical expertise and credibility within the lithium conversion and lithium-ion battery industry to compliment the world class Manono Project.”

“We look forward to updating our shareholders in the near future with respect to award of the Mining Licence and execution of the Collaboration Development Agreement, which are progressing extremely well through Government channels.”

“Once this transaction and the associated agreements are finalised, 100% of our saleable lithium products will be accounted for and a significant portion of the Manono Project will be financed via the equity contributions provided by this transaction,” he added.

The AVZ share price has now doubled in value in 2021.

The post Why the AVZ (ASX:AVZ) share price is surging 8% higher today appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The ReadyTech Holdings Ltd (ASX: RDY) share price is on the move on Monday. This follows the announcement of an acquisition by the ASX-listed software company.

In early trade, shares are trading 3.24% higher to $3.50 apiece.

What’s happening with the ReadyTech share price today?

This morning the ReadyTech share price has gained momentum after its latest announcement to the market.

According to the release, the company has expanded its footprint with another strategic acquisition. In a $2.2 million deal, ReadyTech has acquired specialist enterprise student management software business, Avaxa. This deal comes approximately 6 months after ReadyTech finalised its previous acquisition.

Avaxa supports many of Australia’s leading enterprises, TAFE, and higher education institutions. Importantly, Chisolm Institute and Melbourne Polytechnic use the Avaxa software to manage the student journey from enquiry to graduation. This includes everything from course lifecycles and timetables to finance and compliance.

Shareholders will be hoping that the Avaxa offering with its key customer integrations will benefit the ReadyTech share price.

In terms of payment for the acquisition, ReadyTech will make an upfront payment of $0.7 million. From there, a maximum of $1.5 million will be in deferred consideration, consistent with a recurring revenue multiple of 2.2 times.

ReadyTech will pay out the total consideration of $2.2 million from the company’s cash reserves within the next 12 months.

Moreover, the integration of Avaxa is expected to deliver incremental recurring revenue in FY21 of $670,000. This will be a partial addition, beginning from October 2021. Meanwhile, earnings before interest, tax, depreciation, and amortisation (EBITDA) margins will be 15%.

Management commentary

Today’s announcement marks another milestone after the company hit a new 52-week high last week. Commenting on the latest acquisition, ReadyTech CEO Marc Washbourne stated:

Avaxa have built deep domain and specialist expertise and exhibit strong TAFE and enterprise capability, as well as client engagement, through their existing relationship with six of Australia’s leading TAFE institutions that are supported by Avaxa’s Strata software.

The acquisition is highly complementary to our education business and will allow us to leverage Avaxa’s relevant customer base and reputation in the TAFE sector to position ReadyTech as a key technology partner for enterprise education institutions.

ReadyTech share price trends upwards

Although ReadyTech is a small-cap company, its performance has been anything but tiny over the past year. In fact, the ReadyTech share price has far exceeded the S&P/ASX 200 Index (ASX: XJO) with a return of 78% over the past 12 months.

Since reporting its FY21 result, the ReadyTech’s shares have climbed 19% in value.

The post ReadyTech (ASX:RDY) share price jumps on new acquisition appeared first on The Motley Fool Australia.

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• Readytech (ASX:RDY) share price reaches 52-week high

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Readytech Holdings Ltd. The Motley Fool Australia has recommended Readytech Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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