The Noumi Ltd (ASX: NOU) share price was out of form on Monday and tumbled lower.

The leading Australian dairy and plant-based beverages, nutritional products, and ingredients producer’s shares ended the day down 12% to 25 cents following the release of its half year results.

Noumi share price falls after COVID weighs on performance

• Net revenue down 7% to $265.3 million
• Adjusted operating EBITDA down 79% to $4.6 million
• Net loss after tax of $65.8 million
• Net loss excluding litigation settlement costs flat at $15.1 million
• Cash at bank of $16.3 million

What happened during the first half?

For the six months ended 31 December, Noumi, formerly known as Freedom Foods, reported a 7% decline in net revenue to $265.3 million.

Management advised that this reflects lower traded milk sales, the removal of an unprofitable product line, lactoferrin sales timing, and the impact of COVID-19 across the business. This was offset partially by growth in out-of-home sales and exports.

One positive was that plant-based Beverage revenue and profit growth continues, with MILKLAB and Australia’s Own sales up strongly and with healthy margins.

This couldn’t stop the company’s margins from being crunched during the six months, though. Noumi’s adjusted operating EBITDA fell 79% to $4.6 million due to the impact of COVID-19 on sales volumes, productivity and costs

On the bottom line, the company reported a net loss after tax of $65.8 million. However, this includes litigation settlement costs. If we exclude these costs, Noumi’s loss was $15.1 million and in line with the prior corresponding period.

Management commentary

Noumi’s Chief Executive Officer, Michael Perich, appeared disappointed with the half but pleased with the performance of some of its key brands.

He said: “The impacts of COVID-19 and the restrictions imposed to combat the pandemic have been felt across the business in this six-month period. While we were hopeful of a return to normal trading conditions, the ongoing disruption caused by COVID-19 here and overseas, as well as the emergence of the Omicron strain late in the year, resulted in a reduction in sales and earnings.”

“Despite these impacts, we have continued to deliver strong growth in sales of key brands, particularly MILKLAB in the out-of-home channel, and we are making significant gains in Asian export markets. In addition, and despite delays to key improvement initiatives, we are starting to see the results of our operational turnaround program and expect these to accelerate through the balance of 2022.”

Mr Perich spoke positively about the future and expects the company’s strategy to start bearing fruit soon.

He commented: “The Company is now firmly in the Transform phase of our Reset, Transform and Grow turnaround strategy. As the impact of COVID-19 restrictions ease, and notwithstanding uncertainty created by rising geopolitical risks worldwide, we expect to see a recovery in financial performance across the business, with positive operating cashflows and increasing economies of scale driving earnings improvement.”

“With the sale of Speciality Seafood and the resolution of our US litigation, we are fully focused on our two growth engines and have the certainty we need to pursue our ambitions and deliver long-term sustainable growth,” Perich concluded.

The post Noumi (ASX:NOU) share price falls 12% on results but ‘growth engines’ ready to fire 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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Investing in the small side of the share market carries more risk than other areas.

However, if your risk tolerance allows for it, having a bit of exposure to this side of the market could be a good thing for a balanced portfolio given the potential returns on offer.

With that in mind, here are three small cap ASX shares that could be worth watching closely:

Alcidion Group Ltd (ASX: ALC)

The first small cap share to watch is Alcidion. It is a growing healthcare informatics solutions company. Alcidion provides software which has been designed to improve the efficacy and cost of delivering services to patients and reduce hospital-acquired complications. It appears well-placed for growth in the future thanks to increasing demand and the ongoing shift to a paperless environment in the healthcare sector.

Bigtincan Holdings Ltd (ASX: BTH)

Another small cap ASX share to watch is this leading provider of enterprise mobility software to businesses globally. Bigtincan’s software allows teams to perform at higher levels and deliver better business results by maximising their use of sales collateral to engage with customers and prospects more effectively. Demand for its software continues to grow and has been underpinning strong annualised recurring revenue (ARR) growth in recent years.

Silk Laser Australia Limited (ASX: SLA)

A final small cap to watch is Silk Laser. It is one of Australia’s largest specialist clinic networks, offering a range of nonsurgical aesthetic products and services. Silk’s five core offerings comprise laser hair removal, cosmetic injectables, skin treatments, body contouring and skincare products. Thanks to a combination of growing demand and store expansion opportunities, Silk has been tipped to continue its solid growth long into the future. It released its half year results this morning and revealed a 70% increase in network sales and a 20% lift in EBITDA.

The post 3 growing small cap ASX shares going places 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. owns and has recommended Alcidion Group Ltd and BIGTINCAN FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended SILK Laser Australia Limited. The Motley Fool Australia has recommended Alcidion Group Ltd, BIGTINCAN FPO, and SILK Laser Australia 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 Domino’s Pizza Enterprises Ltd (ASX: DMP) share price started the week deep in the red.

The pizza chain operator’s shares dropped 4% to $78.95.

This means the Domino’s share price is now down almost 36% since the start of the year.

Why did the Domino’s share price tumble?

Investors were selling down the Domino’s share price on Monday after the pizza chain operator was the subject of a broker note out of Goldman Sachs.

According to the note, the broker has downgraded the company’s shares to a neutral rating and cut the price target on them by 34% from $136.20 to $89.90.

While this is still meaningfully higher than where the Domino’s share price trades today, it doesn’t appear to have been enough for some investors to stick with it.

What did Goldman say?

Goldman Sachs was disappointed with the company’s performance during the first half. And while it remains positive on its growth outlook in the ANZ and European markets, it fears that medium term risks in Asia are building.

It commented: “DMP reported 1H22 NPAT at -10.3% below GSe and -9.1% vs. Visible Alpha Consensus Data. About 75% of this earnings miss came from the Asia region, largely driven by underperformance of sales in Japan from early 2Q22. The operating deleverage from this factor was greater than GSe as underperformance from fortressed stores was strong.”

“We continue to see a strong earnings growth outlook in the ANZ and Europe regions at c. 6.8% and +17.7% CAGR respectively over FY21-24e. Additionally, we expect the group to continue to engage in M&A activity over the short term either in terms of expansion to new regions or bolt-on acquisitions within the existing regions in line with its stated strategy. However, the emerging risks in Japan remain stronger than these growth opportunities for DMP, in our view,” it added.

The post Why this top broker just downgraded Domino’s (ASX:DMP) shares 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 recommended Dominos Pizza Enterprises 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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If you’re looking for new ASX shares to buy, then you may want to check out the ones listed below.

These two shares have just been named as buys by the team at Morgans. Here’s what the broker is saying:

Adbri Ltd (ASX: ABC)

Morgans was pleased with this building materials company full year results. The broker highlights that Adbri’s result came in ahead of expectations and its outlook remains positive.

Its analysts said: “ABC’s FY21 result came in ahead of our forecasts and consensus expectations and was supported by ongoing net cost savings, strong volume growth across cement, concrete and aggregates, an increased contribution from its JVs and realisation of property profits. Outlook comments were positive and confirmed that earnings growth is targeted in FY22.”

And with its shares trading at just 17x estimated FY 2022 earnings, the broker feels its valuation is undemanding and sees scope for a rerating to higher multiples. Morgans has an add rating and $4.03 price target on its shares. This implies potential upside of 22% for investors over the next 12 months.

GQG Partners Inc (ASX: GQG)

Another ASX share that Morgans believes is attractively priced is fund manager, GQG Partners. Following the release of its full year results, which were in line with the broker’s expectations, Morgans has retained its add rating but trimmed its price target to $2.27.

Morgans explained why it thinks the fund manager is a buy. It said: “GQG has seen a valuation de-rate along with the broader sector, however we view it as unwarranted. Both relative investment performance and flows remain strong. We view GQG’s ~11x FY22 PE as attractive versus its diversity of earnings; current flows momentum; and expected growth. Add maintained.”

Based on the current GQG share price of $1.47, this price target implies potential upside of 54% for investors over the next 12 months.

The post Analysts names 2 ASX value shares to buy with 20%+ upside potential appeared first on The Motley Fool Australia.

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• GQG (ASX:GQG) share price up 5% amid strong FY21 profit growth

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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