Day: 12 May 2022

The Medibank Private Ltd (ASX: MPL) share price is heading south on Thursday following a broader market slump.

This comes amid the private health insurer announcing some key dates for its 2022 calendar this morning.

At the time of writing, Medibank shares are fetching at $3.165, down 0.47%. In comparison, the S&P/ASX 200 Index (ASX: XJO) is struggling throughout the day to trade at 6,977.9 points, down 1.23%.

What’s Medibank’s agenda for the remainder of 2022?

With the year almost halfway done, Australia’s premier health insurance provider, Medibank released its key dates for 2022.

The most important date in the near term is on 18 August, when the company will deliver its full year results.

In addition to its 12-month performance report, a 2022 final dividend will also be announced by the board.

The ex-dividend date is scheduled to occur the following month on 7 September. This is when investors must have purchased Medibank shares to be eligible for payment of the upcoming dividend.

The date for when shareholders will receive the final dividend payment is set for 29 September. 

For context, Medibank returned to shareholders a fully-franked final dividend payment of 6.9 cents per share for FY21.

Lastly, the company will hold its 2022 annual general meeting (AGM) on 16 November. This will likely recap the events over the last 12 months, as well as the near-term outlook for the private health insurer.

Medibank share price snapshot

Since this time last year, the Medibank share price has travelled in circles to post a gain of around 5%.

When looking at year to date, its shares have traversed the other way, down 5%.

Based on today’s price, Medibank commands a market capitalisation of roughly $8.73 billion.

The company currently has a trailing dividend yield of 4.10% and a price-to-earnings (P/E) ratio of 20.06.

The post Own Medibank shares? Here’s what to watch over the coming months appeared first on The Motley Fool Australia.

More reading

• How big will the Medibank dividend be in 2022?
• The Medibank share price has leapt 5% in a month. Could it be on the comeback trail in May?
• This ASX 200 healthcare share has a fully franked dividend yield over 4% right now
• Why is the Medibank share price trailing NIB over the past year?

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 Scott Phillips.

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ASX coal shares are outperforming on Thursday amid surging energy commodity prices.

In fact, the S&P/ASX 200 Energy Index (ASX: XEJ) is one of the best-performing sectors today. It’s recording a slump of just 0.8%.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has dumped 1.23% on Thursday. The index is being weighed down by the tech sector’s whopping 7.8% tumble.

Let’s take a closer look at why most ASX coal shares are buoyed amid a sea of red today.

Why are ASX coal shares outperforming?

Shares in two of the biggest ASX-listed coal companies are doing better than the broader market today.

Right now, the Yancoal Australia Ltd (ASX: YAL) share price is leading. It’s recording a gain of 0.75% and trading at $5.38 apiece.

Meanwhile, shares in ASX 200 energy giant Whitehaven Coal Ltd (ASX: WHC) are flat after surging to 2.6% earlier today. At the time of writing, they’re trading at $4.98.

The coal producers’ shares are likely benefiting from the price of the energy commodity.

Newcastle coal futures are trading 1.99% higher at US$385 a tonne on Thursday afternoon. That’s the highest it’s been since it came off its all-time high of US$415 per tonne in March.

It comes as The Australian reports energy experts have noticed electricity generators are finding it harder to source coal in New South Wales lately.

That’s likely a sign of surging demand and, potentially, an ongoing result of sanctions placed on Russia – a major coal producer – following its invasion of Ukraine.

The price of coal could also be weighing on Australian energy prices.

The average energy spot price in Queensland has more than doubled in 2022 – averaging $144 per megawatt hour for the year so far – compared to 2021’s average of $61.81.

Victoria’s average energy spot price is fairing best this year, having risen around 37% compared to its 2021 average.

The post Why are these ASX coal shares having a top run today? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• 3 ASX 200 energy shares storming to new 52-week highs today
• Why did ASX coal shares having such a stellar run on Thursday?
• Here are the top 10 ASX shares today
• How might the election outcome impact the outlook for ASX energy shares?

Motley Fool contributor Brooke Cooper 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 Scott Phillips.

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Despite sinking over the past month, the Pilbara Minerals Ltd (ASX: PLS) share price has returned unbelievable gains over the decade.

Arguably, investing your money in businesses that are either new to the market or emerging can make you seriously rich. Of course, there is an inherent risk, particularly given when a company is still finding its footing.

Nonetheless, we calculate how much you would have made if you’d bought $10,000 worth of Pilbara Minerals shares a decade ago.

How much would your initial investment be worth now?

If you’d invested $10,000 into Pilbara Minerals shares this time 10 years ago, you would have picked them up for approximately 2 cents apiece. This equates to about 500,000 shares without topping up along the way.

Fast-forward to today, Pilbara Minerals shares are exchanging hands at $2.56 at the time of writing. This means that those 500,000 shares would be now worth a staggering $1.28 million. That’s right! A $10,000 investment in Pilbara Minerals shares and letting time do the work would reap some serious rewards.

When factoring in percentage terms, this implies an incredible gain of 12,600% or an average yearly return of 62.45%.

In comparison, investing the same amount in an ASX 200 index-tracking fund would have given back 62.72% over 10 years. This equates to an average of 4.99% per year.

If you are wondering about the Pilbara Minerals dividends, the company has chosen not to pay a percentage of its profits to date. Instead, it has decided to invest in its business and keep the balance sheet healthy in times of commodity downturns.

And without doubt, that decision by management has paid off for long-term shareholders.

Pilbara Minerals share price summary

Regardless of the recent slump, the Pilbara Minerals share price has continued to accelerate by 114% over the past 12 months.

The company’s shares hit an all-time high of $3.89 in mid-January before treading lower in the following weeks. One can only imagine how much you’re initial $10,000 investment would be then.

Spoiler alert: It would have been close to $2 million at the peak!

Pilbara Minerals presides a market capitalisation of roughly $7.62 billion and has more than 2.97 billion shares on its registry.

The post If you’d bought $10,000 of Pilbara Minerals shares 10 years ago, congratulations! Here’s what you’d have now appeared first on The Motley Fool Australia.

More reading

• Down 20% in a month, is the Pilbara Minerals share price a buy?
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• 2 ASX shares at ‘appealing’ buy prices right now
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Low charge: Is the party over for ASX lithium stocks?

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 Scott Phillips.

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Shares in Polynovo Ltd (ASX: PNV) were 7% higher in early trading today but have since resettled at $1.16, up 2.67% despite no market-sensitive information being released by the medical device company today.

Polynovo shares have risen from the dead, having spiked in a vertical fashion by 35.1% in the past five trading days. This has potentially ended a downwards trend that began at the start of FY22 when the Polynovo shares were trading at $2.82.

The Polynovo share price has also bifurcated away from the S&P/ASX 200 Health Care Index (ASX: XHJ). Over the past five trading days, the broader index gained just 0.6%.

What’s up with the Polynovo share price?

Recently, share purchases by various insiders have made the news.

As we reported on Tuesday: “An entity owned by the company’s chair David Williams splashed out yesterday, snapping up $227,500 worth of Polynovo stock on the market. Additionally, another two of the company’s directors reported buying into its stock last week, each snapping up parcels of 100,000 shares.”

Insider purchases by executives and directors are often interpreted as a vote of confidence by the market. This might be inspiring ASX investors to bid up the Polynovo share price in recent days.

The gain comes at the expense of short-sellers who still appear to have their tentacles wrapped around the stock. Polynovo is the fifth most shorted stock on the ASX, as we reported on Monday.

What do the experts think of Polynovo?

The shift in market sentiment appears to be matched by analyst sentiment. Three out of the five analysts covering Polynovo say it’s a buy right now, according to Bloomberg data.

The teams at Evans & Partners, Macquarie, and Bell Potter say buy. They value Polynovo shares at 12-month target prices of $1.40, $1.60, and $1.50 respectively. Meanwhile, Ord Minnett and Wilsons each rate it as a hold.

Polynovo share price snapshot

In the past 12 months, the Polynovo share price has slipped by 55%.

Polynovo has a market capitalisation of $711.31 million with 661.7 million shares outstanding.

The post Why is the Polynovo share price surging 35% in 5 days? appeared first on The Motley Fool Australia.

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• Why BrainChip, PolyNovo, TPG, and Westpac shares are pushing higher
• Down 40% in 2022, this ASX 200 share is climbing amid insider buying action
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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended POLYNOVO FPO. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Last month, we looked at the Australian Vanadium Ltd (ASX: AVL) share price and how this vanadium hopeful’s shares had rocketed more than 160% over the preceding month. At the time, Australian Vanadium had soared more than 16% in one day, meaning its shares had risen from 4 cents per share to almost 12 cents.

Well, as it turns out, that was about as good as it got for Australian Vanadium. Today, the company is trading 3.5% down for the day so far at a share price of 5.5 cents. That means this company has fallen by around 31% over the past month alone. Since its new all-time high of 12 cents a share that we saw on 4 April, the company has now dropped by 50%. Ouch.

Why has the Australian Vanadium share price crashed more than 30% in a month?

So, what’s going on with this vanadium company? Well, as we covered last month, what really seemed to set investors onto Australian Vanadium shares was the March announcement that the company would be awarded a $49 million grant from the federal government’s Modern Manufacturing Initiative.

As we noted at the time, investors seemed to be flocking to ‘green metals’ shares such as lithium and cobalt. And vanadium looked set to join the list. Vanadium does indeed have potential uses in next-generation battery technology. Some experts believe vanadium can enable batteries known as ‘redox flow batteries’, which have the potential to last for more than 20 years, with little loss of charging capacity.

But unfortunately for investors, enthusiasm for green metals and the companies that mine or produce them, has waned dramatically over the past month. Lithium shares that were red hot only weeks ago, such as Pilbara Minerals Ltd (ASX: PLS) and AVZ Minerals Ltd (ASX: AVZ), have seen steep falls in value recently. We’ve seen this trend extend right across most ASX metals and mining shares for that matter. So it’s probably for this reason that Australian Vanadium shares have had such an awful month.

Even so, the Australian Vanadium share price remains up a pleasing 83% in 2022 so far, and up 175% over the past 12 months.

The post Why has the Australian Vanadium share price crashed 31% in a month? appeared first on The Motley Fool Australia.

More reading

• 3 critical minerals you might not have heard of (and the ASX shares that have surged because of them)

Motley Fool contributor Sebastian Bowen 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 Scott Phillips.

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S&P/ASX 200 Index (ASX: XJO) mining shares have, as a whole, delivered some outsized gains to investors over the past full year.

But despite soaring commodity prices, many ASX 200 mining shares have struggled in 2022.

What’s been happening with the big miners?

Over the past month, for example, the Allkem Ltd (ASX: AKE) share price has fallen 15%. At the current share price, the lithium producer has a market cap of $7.2 billion.

Copper, gold, and nickel miner Oz Minerals Limited (ASX: OZL) also had a rough month, falling 15% since 12 April. It has a current market cap of $7.4 billion.

Lynas Rare Earths Ltd (ASX: LYC) is another ASX 200 mining share giving back gains recently. Though still up 49% over the past full year, the Lynas share price is down 11% over the past month. The world’s second-largest producer of rare earths now has a market cap of $7.9 billion.

For some context, the ASX 200 is down 6.3% over the past month.

Are these ASX 200 mining shares now good value?

With the recent retracement in their share prices, are these ASX 200 mining shares a buy?

According to analysts at Canaccord, led by Reg Spencer, the answer is yes.

“Looking through the short-term volatility, we see the recent pullback as an opportunity to invest in sector leaders with robust balance sheets and near-term earnings growth/positive free cashflow yields, particularly those with leverage to attractive long-term supply/demand fundamentals such as Allkem, Lynas Rare Earths, and Oz Minerals,” they said, as reported by The Australian.

Canaccord said miners like these ASX 200 mining shares haven’t performed as well as expected, given their historically close correlation to commodity prices, likely dragged lower by the wider market sell-off.

Despite some pressure from rising interest rates, the analysts also have a positive outlook for gold, citing supply disruptions and the looming potential of a recession in the United States as supportive of prices.

And miners involved in producing commodities like lithium and copper, required for the global push for electrification, should see strong long-term demand for their products. Canaccord said that’s despite short-term pullbacks in demand due to China’s COVID-19 lockdowns and forecasts of sluggish global economic growth.

The post Falling ASX 200 mining shares ‘an opportunity to invest in sector leaders’: broker appeared first on The Motley Fool Australia.

More reading

• Why is the Lynas share price storming higher today?
• Low charge: Is the party over for ASX lithium stocks?
• The Lynas share price has plunged 6% today! What’s going on?
• Expert warns investors about lithium and battery mineral ASX shares
• Here’s why ASX lithium stocks are rocketing higher today

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 Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Cryptocurrency prices are falling hard across the board today, with Maker (CRYPTO: MKR) being a notable exception. At 11:15 a.m. ET, the price of Maker tokens was up a whopping 19% over the previous 24 hours. And it’s likely because TerraUSD (CRYPTO: UST) and Terra’s Luna tokens (CRYPTO: LUNA) are trending toward zero at the moment. 

So what

For context, a stablecoin is a cryptocurrency for which the price is supposed to always be equal to a government-issued currency — most often the U.S. dollar. MakerDAO is the organization behind a stablecoin called Dai (CRYPTO: DAI). Terraform Labs is behind a stablecoin called TerraUSD. 

There are other U.S. dollar stablecoins as well, including Tether and USD Coin. And to be clear, different stablecoins use different mechanisms to keep their values, well, stable. And right now, these various stablecoin models are trying to demonstrate their merits in order to gain widespread adoption.

Tether and USD Coin both hold real U.S. dollars in reserve, making them close competitors. By contrast, Dai issues new tokens based on crypto assets locked up in the system. Similarly, TerraUSD isn’t backed by dollars but rather by a burning-and-minting symbiotic relationship with Luna.

Without going too far into the weeds, the rivalry between TerraUSD and Dai isn’t imaginary. On March 23, Terra founder Do Kwon said on social media, “By my hand Dai will die.” 

The sad irony is that over the past couple of days, TerraUSD and Luna entered a death spiral, with the value of each declining faster than its algorithmic mechanisms can repair the damage. As of this writing, TerraUSD has bounced off its lows, but it’s still down more than 50% from $1, and it’s fair to wonder if it will ever recover.

Now what

While TerraUSD’s demise would be good for Dai because there’d be one fewer player, I’d be cautious approaching the stablecoin space right now. I believe the true takeaway with TerraUSD’s decline is that these models are still new and still being tested. Because of this, weaknesses are sometimes unexpectedly uncovered, and the fallout can be swift. 

Therefore, if you do chose to buy Maker tokens because of what’s happening with Terra, be sure that — like always — it’s a disciplined investment and not more than you could afford to lose if something goes wrong. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why a crypto called Maker is surging higher as others fall apart appeared first on The Motley Fool Australia.

More reading

• Broker says Webjet share price is a buy ahead of its FY22 results
• Why did the Maggie Beer share price just crumble 17%?
• Scentre share price defies ASX 200 sell-off to lift on strong earnings outlook
• Here’s why the Incannex share price is rocketing 18% today
• Analysts name 2 ASX dividend shares to buy to beat inflation

Jon Quast 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 Scott Phillips. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Webjet Limited (ASX: WEB) share price is sliding lower with the market on Thursday.

In afternoon trade, the online travel agent’s shares are down 2% to $5.39.

This latest decline means the Webjet share price is now in negative territory for 2022.

Is the Webjet share price in the buy zone?

According to a note out of Goldman Sachs, its analysts have reiterated their buy rating and $6.90 price target on the company’s shares ahead of its full-year results release later this month.

Based on the current Webjet share price, this implies potential upside of 28% for investors over the next 12 months.

What did the broker say?

Firstly, Goldman is expecting a soft result from Webjet in FY 2022 due to COVID headwinds. Its analysts have forecast FY 2022 revenue of $143.6 million and EBITDA of $1.5 million.

However, the broker believes that this release will signal the end of the market’s willingness to look through weak results. Particularly given how in April passenger traffic numbers reached 90.5% of pre-COVID levels in the US and 81.4% in London’s Heathrow Airport. It explained:

In our view the market will no longer look through weak results beyond FY22 and we expect stock prices to start being more correlated to company fundamentals as opposed to trading based on news of travel recovery.

However, that shouldn’t matter because Goldman is expecting strong results from Webjet in FY 2023 and FY 2024.

What is expected?

Goldman is bullish on the Webjet share price due to its belief that the company is well-placed for strong growth over the coming years. This is thanks to its Bedbanks business, acquisition opportunities, and the ongoing shift to online booking. It said:

We reiterate our Buy rating on WEB due to the stronger outlook for the Bedbanks business in the longer term, favorable exposure to the growing online channel and the strong balance sheet offering the opportunity to explore bolt-on acquisitions as well as weather interim volatilities driven by COVID-19.

The broker is expecting revenue growth of 152% to $362.2 million in FY 2023 and then 20% to $434.7 million in FY 2024.

Things are expected to be even better for its EBITDA, with Goldman pencilling in a material lift in EBITDA from $1.5 million to $155.4 million in FY 2023 and then a 32.8% jump to $206.4 million in FY 2024.

All in all, this could make Webjet a share to consider if you’re looking for travel sector exposure.

The post Broker says Webjet share price is a buy ahead of its FY22 results appeared first on The Motley Fool Australia.

More reading

• Own Webjet shares? Here’s what to expect from next week’s FY22 results
• Will Webjet pay a dividend in 2022?
• Are ASX 200 travel shares already fully valued in May?
• These are the 10 most shorted ASX shares
• 2 top ASX growth shares Goldman Sachs rates as buys

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 Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Maggie Beer Holdings Ltd (ASX: MBH) share price is sinking after the company released a trading update for financial year 2022.

While sales continued to increase at the company’s core businesses, it’s faced notable unforeseen costs. In reaction, the company dropped its earnings guidance and upped prices charged for its products.

At the time of writing, the Maggie Beer share price is 40 cents, 13.04% lower than its previous close.

However, that’s an improvement on its earlier performance. The stock was swapping hands for just 38 cents at its intraday low, representing a 17% tumble.  

Maggie Beer share price plummets as costs surge

Some of the key points from the Maggie Beer trading update include:

• The company’s core business Hampers and Gifts Australia saw pro-forma sales increase 25.6% over the financial year to April compared to the same period of last financial year
• Fellow core business, Maggie Beer Products, saw a 19.3% increase in sales over the period
• Maggie Beer’s e-commerce sales rose 165.6% while its net sales increased 13.1%.
• The company dropped its earnings guidance by $4.2 million
• It’s on track to announce its maiden dividend at the end of the financial year

What’s happened over the financial year so far?

The Maggie Beer share price is plunging on bad news regarding the company’s full-year earnings.

The company has realised $4.2 million of unforeseen and higher than expected costs. Many of these were born from floods in Australia, the war in Ukraine, lockdowns in China, and global fuel and freight costs.

Maggie Beer’s dairy segment accounted for around $2.8 million of the expenses. It was hampered by ongoing COVID-19 impacts, a shortage of milk, and high commodity prices.

Paris Creek Farms’ branded milk’s launch into 400 stores – scheduled for March – was delayed by COVID-19 disruptions and flood events. The milk reached 200 stores in May with the remainder expected to be on shelves by September. That will dint the company’s earnings for this financial year.

Additionally, its Saint David Dairy has struggled through skills and labour shortages, resulting in the loss of some customers.

The company noted it has now labelled its dairy businesses “non-core”. It expects to outline the segment’s future in its full-year results.

Maggie Beer started working to increase the price of its products to offset the additional costs in March.

However, such increases are slow to hit the major supermarkets. The price rise should be reflected on grocery store shelves later this month.

What did management say?

Maggie Beer CEO and managing director Chantale Millard commented on the news driving the company’s share price lower today, saying:

As with all businesses, the second half of [financial year 2022] has seen many new challenges arise, with further flow-on effects of COVID-19, increases in costs due to the devastating floods in Central Australia and Northern NSW and QLD, and the war in Ukraine.

The group and in particular [Maggie Beer Products] and [Hampers and Gifts Australia] have continued to perform well, with its diversified revenue stream, whilst absorbing the higher costs and delivering industry leading gross margins.

With price increases being implemented across the group we expect to see our earnings growth return to expected levels in [financial year 2023].

What’s next?

The Maggie Beer share price is likely also being dinted by a guidance downgrade.

It’s on track to reach its previously given net sales guidance of between $95 million and $100 million.

However, its earnings before interest, tax, depreciation, and amortisation (EBITDA) for the full year is now expected to fall between $9.25 million and $10.5 million. Previously, its financial year 2022 EBITDA guidance was $13.5 million to $15.5 million.

The company has also brought forward its working capital requirements on the expectation of increased demand and supply chain issues next financial year.

Finally, Maggie Beer expects to declare a maiden dividend or capital return of no less than 1 cent per share alongside its final results.

Maggie Beer share price snapshot

Today’s fall included, the Maggie Beer share price has tumbled 27% in 2022.

Though, it’s 25% higher than it was this time last year.

The post Why did the Maggie Beer share price just crumble 17%? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper 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 Scott Phillips.

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The Scentre Group (ASX: SCG) share price is shaking off the wider market sell-off to gain 0.4% at the lunch hour.

Scentre shares closed yesterday at $2.77 and are currently trading for $2.78. This comes as the S&P/ASX 200 Index (ASX: XJO) is down 1%.

The Australian real estate investment trust (REIT) released its first-quarter update for the three months ending 31 March today.

What happened during the quarter?

Scentre compared many of its quarterly performance statistics to 2019 — before the global pandemic ushered in lengthy store closures for the retail group.

The Scentre share price could be getting a boost today from its report, which shows customer visitation numbers are back to 88% of the 2019 figures and 112% of the 2021 numbers.

The company’s total majors and specialty sales were 7.1% higher in the first quarter of 2022 compared to Q1 2019.

Scentre also reported strong occupancy across its portfolio, with 98.7% leased as of 31 March. The company said that some 80% of its specialty leases are inflation-linked with average annual rent increases of CPI plus 2%. Specialty rent represents approximately 90% of its net operating income.

Stepping a month beyond the Q1 update, Scentre reported its gross rent collections for the first four months of 2022 (through to 30 April) came in at $800 million.

In Q1, the REIT also completed 536 leasing deals. Those deals included signing on 237 new merchants, with 50 new brands introduced into Scentre’s portfolio.

During the first quarter, the Scentre share price fell 6.5%.

What did Scentre management say?

Commenting on the first-quarter results, Scentre CEO Peter Allen said:

I am very pleased with the Group’s operating performance for the first quarter. We have continued to drive more visitation and saw a significant increase in sales for our business partners, above pre-pandemic levels…

During the quarter, we opened the $55 million rooftop entertainment, leisure and dining precinct at Westfield Mt Druitt. During the first month of trading, customer visitation and dwell time has significantly increased, with an overall increase of 56% compared to the same period last year.

Addressing Scentre’s preparations for higher interest rates in the years ahead, Scentre’s CFO and CEO-Elect Elliott Rusanow added:

The Group has restructured its interest rate hedging profile to increase hedging in 2023 and 2024. Interest rate hedging at January 2023 has been increased from 50% to approximately 65%, with a weighted average rate of 1.87%. At January 2024 interest rate hedging has increased from 40% to approximately 50% with a weighted average rate of 1.79%.

What’s next for Scentre Group?

Looking ahead, Allen said he was confident about the future of the business.

“The underlying structure of our revenue with inflation linked leases, provides long-term growth for our securityholders,” he said. “In light of the improving conditions and strong performance of our business, earnings are expected to grow in excess of 5.3% in 2022.”

Scentre said it expects to distribute at least 15 cents per security in 2022, an increase of at least 5.3% year-on-year.

Scentre share price snapshot

The Scentre share price is up 3.5% over the past 12 months. That compares to a 0.5% full-year loss posted by the ASX 200.

The post Scentre share price defies ASX 200 sell-off to lift on strong earnings outlook appeared first on The Motley Fool Australia.

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