Author: therawinformant

The Centuria Industrial REIT (ASX: CIP) share price is in a trading halt today after the real estate investment trust (REIT) announced a $171 million cold storage portfolio acquisition.

The latest addition to Centuria’s logistics portfolio follows a series of major acquisitions this year. They include the $417 million Telstra Data Centre in Victoria in August and the $167 million Visy Glass manufacturing facility in New Zealand in October.

With the new acquisition, Centuria’s industrial portfolio now stands at 59 assets worth $2.3 billion. The company says the occupancy rate is 96.8% with a 9.7-year weighted average lease expiry (WALE).

What does Centuria do?

Centuria Industrial REIT is Australia’s largest domestic pure play industrial REIT. Centuria’s portfolio of quality industrial assets are located across Australia’s major cities. The company’s hands-on, active management style provides investors with regular dividend payments and the potential for capital growth.

Centuria Industrial REIT is part of the S&P/ASX 200 Index (ASX: XJO).

About the acquisition

In this morning’s ASX announcement, Centuria reported it has acquired 3 cold storage assets worth $171 million, providing an average initial yield of 5.62%. The facilities – located in Victoria, New South Wales, and Queensland – are 100% occupied.

Centuria also revealed a $125 million fully underwritten institutional placement to partly fund the purchase.

Commenting on the acquisition, Centuria fund manager Jesse Curtis said:

The cold storage portfolio acquisition leverages a key growth focus for CIP to acquire assets supporting non-discretionary, food and pharmaceutical distribution and refrigerated logistics industries. These industries are experiencing strong tailwinds underpinned by a rapid increase in online food sales creating favourable supply and demand dynamics.

The three assets are strategically located within core industrial markets of Sydney, Melbourne and Brisbane, with excellent connectivity to distribution networks. They provide secure income streams supported by high-quality tenant customers.

Centuria funds management head Ross Lees added:

Throughout the 2020 calendar year, there has been a considerable consumer shift towards non-discretionary online retailing due to the impact of COVID-19. Adding to this is the unmet demand for cold storage facilities from the grocery and pharmaceutical sectors. These metrics have underpinned Centuria’s rapid portfolio expansion within the industrial and logistics sector.

Within the past 12 months, Centuria’s funds have acquired approximately $1.1 billion in industrial assets. It has been a resilient sector and one we believe will continue growing in the near future.

The Centuria share price is down 5% year-to-date and up 39% since the 24 March lows. It was priced at $3.15 prior to the trading halt.

More reading

• Is the Goodman Group (ASX: GMG) share price the best REIT of 2020?
• Centuria Capital (ASX:CNI) delivering on FY21 strategy

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Piedmont Lithium Ltd (ASX: PLL) share price has been a very strong performer on Tuesday.

At the time of writing, the lithium-focused mineral exploration company’s shares are up a sizeable 13.5% to 42 cents.

Why is the Piedmont Lithium share price zooming higher?

Investors have been buying the company’s shares after it provided an update on its drilling campaign at the Piedmont Lithium Project in the United States.

According to the release, the company has expanded its current drilling campaign by an additional 25,000 meters. This will see three additional rigs arriving in the field in the coming weeks.

Management notes that the expanded drill program is designed to complete infill drilling on the core property with the objective of upgrading its mineral resource classification category for select areas. This will mean these areas move from inferred category to the measured and indicated categories.

What’s next?

Piedmont intends to publish its mineral resource estimate update for the core property in the second quarter of 2021. After which, it is aiming to complete a definitive feasibility study (DFS) in mid-2021.

The company’s President and CEO, Keith D. Phillips, is optimistic that the company is sitting atop an asset that will benefit greatly from the electric vehicle (EV) revolution.

He said: “We are excited to be aggressively expanding our drill program with five drill rigs soon to be in the field. Our dual objectives are to upgrade the current Inferred Resources within the Core Property to support our upcoming DFS, while also growing the overall scale of our mineral resource tonnage.”

“The Carolina Tin-Spodumene Belt is one of the world’s most prolific lithium belts and we are hopeful that we will ultimately delineate North America’s largest spodumene resource, ideally located in North Carolina to power North America’s clean energy storage and EV revolution,” he concluded.

More reading

• Here’s why the Piedmont Lithium (ASX:PLL) share price is dropping lower today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Uniti Group Ltd (ASX: UWL) share price is pushing higher on Tuesday morning.

At the time of writing, the growing telecom company’s shares are up 2% to $1.61.

Why is the Uniti share price pushing higher?

Investors have been buying the company’s shares after it announced a new acquisition.

According to the release, Uniti has entered into a binding agreement to acquire 100% of the issued capital of specialist broadband Retail Service Provider (RSP), Harbour ISP.

Harbour is a fast-growing RSP, specialising in the delivery of retail broadband services to greenfield housing estates and multi-dwelling unit (MDU) developments.

At present, the ISP has more than 30,000 broadband customers nationwide. Uniti notes it also has a reputation for delivering high quality customer service, evidenced by its strong customer retention levels and sustained growth in customer numbers.

Harbour is a current RSP on the Opticomm Ltd (ASX: OPC) and Uniti owned fibre networks and is a reseller of NBN.

What will this cost Uniti?

The two parties have agreed a purchase consideration of $9.25 million and 1 million Uniti options with an exercise price of $1.54.

Management is forecasting an earnings contribution, including synergies, of $3 million+ in FY 2022, which represents a purchase multiple of ~3x EBITDA.

It feels it is a highly strategic and accretive acquisition, enabling greater penetration and revenue expansion on Uniti-owned fibre networks, including those added via the recent OptiComm acquisition.

Uniti’s CEO and Managing Director, Michael Simmons, commented: “We are delighted to have acquired Harbour ISP. Functional separation now enables us to actively promote retail broadband offerings on our owned networks and Harbour ISP, with its proven pedigree in the greenfield broadband market, is an outstanding platform for us to build specific capability as well as scale in our CBE business unit.”

“With the now confirmed addition of OptiComm to the Uniti Group, our network of private fibre premises (connected, under construction or contracted to be connected) exceeds 400,000 connections. Given this large and growing footprint, the strategic value of acquiring Harbour as a specialist greenfield RSP is significant and timely. We look forward to our CBE business, inclusive of Harbour ISP, continuing to profitably expand as further penetration and growth in average revenue per user on our owned fibre networks is delivered,” he added.

More reading

• Leading brokers name 3 ASX shares to buy today
• Why Dicker Data, South32, Tyro, and Uniti shares are pushing higher today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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SRG Global Ltd (ASX: SRG) shares have lifted this morning, after the company announced 3 new separate contracts worth $55 million. The engineering company says the contracts relate to bridge, dam, and tank project with various government bodies. At the time of writing, the SRG Global share price is trading up 4.7% at 33.5 cents.

What are the new projects?

SRG Global has secured 3 projects, to be executed concurrently:

1. Specialist balanced cantilever bridge contract variation with Transport for NSW as part of the New England Highway upgrade at Bolivia Hill, NSW

2. Specialist design and construct contract with Water Corporation for a 20ML water tank in Karratha, WA

3. Specialist dam remedial works at Paradise Dam, QLD for Sunwater and CPB Contractors

Commenting on the news: SRG Global managing director David Macgeorge said:

These contract awards highlight our diverse capability using specialist construction methods in our core markets of dams, bridges and tanks. We look forward to continuing our relationship with Transport for NSW, Water Corporation, Sunwater and CPB Contractors and building on our strong track record in these markets.

Today’s project announcements follow another major contract that SRG Global won back in July. At the time, the company said that it had secured an 8-year contract for the the provision of inspection and specialist maintenance services on the Auckland Harbour Bridge.

What is SRG Global?

SRG Global is an engineering company that provides asset services, mining services and construction operating across the entire asset lifecycle. It has a global portfolio of work, including The Emirates Tower in Dubai.

How has the SRG Global share price performed in 2020?

The SRG Global share price started the year at 40 cents. It dropped dramatically to 18 cents in March before recovering to today’s level of 33.5 cents. The company commands a market cap of $143 million.

More reading

• Uniti (ASX:UWL) share price pushes higher after announcing another new acquisition
• Douugh (ASX:DOU) share price on the move again. Here’s why
• Could this ASX 200 healthcare share be set to recover in 2021?
• Afterpay (ASX:APT) share price lower despite leadership and AGM update
• Here’s why the Volpara (ASX:VHT) share price is pushing higher today

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Douugh Ltd (ASX: DOU) shares are on the move today following the launch of the company’s financial wellness app in the United States. In early morning trade, the Douugh share price rocketed as high as 40.5 cents before pulling back to 37 cents at the time of writing. This represents a 5.7% gain for the day so far. In comparison, the All Ordinaries Index (ASX: XAO) is up 0.35% to 6710.4 points.

Launch into world’s largest market

The Douugh share price is surging higher this morning after the company announced the official launch of its app into the US following a successful 18-month trial.

Targeting millennials and gen-Z consumers, Douugh revealed it will be utilising Google’s ad bidding platform. In addition, the company will focus on developing distribution channels to create awareness and harness new customers. This will be created through word of mouth and expanded marketing programs across online and social media platforms.

The app uses artificial intelligence (AI) and machine learning to tailor individual financial solutions to a user’s personal income and spending data. The objective is to help users spend wisely, save more and accumulate wealth over time.

With the launch, Douugh introduced an industry-first ‘Bills Jar’ feature with a linked virtual card. This assists users to track and cover their fixed and recurring outgoing expenses.

Commenting on the offering, Douugh founder and CEO, Mr Andy Taylor said:

Through our beta phase, we found that one of our customers’ biggest pain was keeping track of their fixed and recurring bills, especially subscriptions. Bills Jar flags upcoming bills, allowing customers to sweep in funds and use the dedicated virtual card to become the principal card on file to pay recurring bills, outside of the main Douugh checking account.

It’s a key foundational component, along with our integrated Savings Jars, Rainy Day Jar and Spending Targets, which allow our users to better manage their money and stop living paycheck-to-paycheck. A task that will become automated and self-learning over time with the introduction of Autopilot.

Another highlight of the Dough app is the ability for customers to connect it to their existing bank, investment accounts and credit cards. It essentially provides the end-user with a snapshot of their financial position.

As the launch takes place, Douugh will look to roll-out its Autopilot and Investment Jars in the coming months. This will be prior to the introduction of a monthly subscription fee.

What else did management say?

Furthermore, Mr Taylor went on to talk about how Douugh is aiming to make tailwinds in the industry. He added:

We want to build a global brand and platform business, and the U.S is the place we need to start to allow us to build the scale needed to execute on our long-term business plan. We are trying to do to banking what Tesla is doing to the automotive industry.

We see open banking and autonomous AI technology to be the next frontier in fintech, and the biggest disruption to happen to such a stale industry vertical that has only really experienced linear improvement to date.

About the Douugh share price

Douugh raised $6 million when it listed on the ASX in October, through a reverse takeover of ZipTel Ltd. Since then, the Douugh share price has been on an incredible run, jumping from 4.8 cents last month to its current price of 37 cents. This represents a gain of over 670% for shareholders in just over 6 weeks.

More reading

• Why the Douugh (ASX:DOU) share price is storming 16% higher today
• Here are the 3 best performing IPO shares in 2020
• Douugh and Ioupay were among the most traded shares on the ASX last week
• Why the Douugh (ASX:DOU) share price is up almost 1000% since its IPO
• Douugh and Afterpay were among the most traded shares on the ASX last week

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Tesla. The Motley Fool Australia has recommended Alphabet (A shares) and Alphabet (C shares). We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Ramsay Health Care Limited (ASX: RHC) share price has largely been flat since 2015. The company had previously delivered Afterpay Ltd (ASX: APT) like returns for many years before its plateau. 

With the company’s first quarter update pushing its share price 5% higher last Friday, could Ramsay be a turnaround story in 2021? Here’s what big brokers had to say. 

First quarter FY21 recap 

Ramsay Australia reported a 1.5% increase in total revenue, or a 6.6% increase excluding Victoria. This reflects a 1.7% increase in surgical admissions (ex-Victoria up 8%) and lower non-surgical activity. The Australian business experienced a decline in earnings before interest, tax, depreciation, amortisation (and restructuring or rent costs) (EBITDAR) compared to the prior corresponding period. This was impacted by the coronavirus restrictions on activity in Victoria’s second lockdown and the increased costs. 

The company’s European division reported a 5.4% increase in surgical volumes combined with lower non-surgical activity. A similar narrative to the Australian business. 

Ramsay UK reported a 9.9% decline in total revenue with volumes picking up in the latter part of the quarter. The United Kingdom and France currently operate under government support arrangements which both run until 31 December 2020. 

The company was unable to provide a guidance for FY21 given the near-term uncertainties in the market. Notwithstanding the current environment, it believes that over the medium to long term, the healthcare industry fundamentals remain positive.

The Ramsay share price rallied 5% on the day of its first quarter announcement but remains near its post-COVID highs, just shy of $70.  

Broker updates 

Citi raised its Ramsay share price target from $70 to $71. It upgraded expected earnings for Australian operations but anticipates that Europe will likely take longer to return to normal. Overall expected earnings for FY22 and FY23 were upgraded by 2% each. 

Credit Suisse lowered its Ramsay share price target from $70 to $69 and retains a neutral rating. The broker is not impressed with the first quarterly trading update but notes the improvement in Australian operations. Overseas earnings are still at risk and costs are rising. 

Macquarie Group Ltd (ASX: MQG) raised its Ramsay share price target from $73.15 to $73.65 and retains an outperform rating. The broker sees the positives in the first quarter trading update, particularly in Australian activity levels. It notes rising costs due to the pandemic, but still sees longer term growth and value. 

More reading

• Leading brokers name 3 ASX shares to buy today
• ASX 200 drops 0.2% on Friday
• Why Orocobre, Ramsay, Webjet, & Xero shares are dropping lower
• ASX 200 down 0.35%: Ramsay Q1 update, NEXTDC’s international expansion, gold miners surge
• Ramsay Health Care (ASX:RHC) share price on watch after Q1 update

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Afterpay Ltd (ASX: APT) share price is trading lower on Tuesday despite the release of two positive updates.

In early trade the payments company’s shares are down 2% to $99.59.

What did Afterpay announce?

This morning Afterpay is holding its virtual annual general meeting. Ahead of the meeting, the company provided an update on changes in its leadership.

According to the release, the company has appointed Nick Molnar as co-CEO and Managing Director, sharing the role with current CEO and Managing Director, Anthony Eisen.

Afterpay Chair, Elana Rubin, commented: “Since Anthony and Nick co-founded Afterpay, the ability to leverage their complementary skills and experience has culminated in a strong and very successful partnership and has been key to Afterpay’s global success.”

“As Afterpay continues to expand globally, the focus on its international operations has never been greater, as such, the co-founders and the Board believe that it is important to have an appropriate level of oversight, executive prominence and presence both internationally and domestically.”

“To achieve this, Anthony and Nick will become co-CEOs of Afterpay. They will continue to share responsibility for executing on our strategy and their performance will be measured on the same key objectives. Nick will return to the US as soon as is practicable and Anthony will continue to be based in Australia,” she added.

Annual general meeting.

Afterpay’s annual general meeting presentation touched on its performance in FY 2020, the recent ASIC report into the buy now pay later industry, and trading so far in the new financial year.

In respect to the latter, as was announced a few weeks ago, Afterpay’s active customers and underlying sales continued to grow during the first quarter.

Its active customers reached 11.2 million at the end of September and the company was generating $4.1 billion of sales from them. This was up 115% from $1.9 billion in the first quarter of FY 2020.

Pleasingly, this morning Afterpay revealed that October was yet another strong month for the company and November has been even stronger.

The company’s co-CEO, Anthony Eisen, commented: “October was another record month for underlying sales globally and we are performing ahead of this in November. The growth of new customers is accelerating since the end of Q1 in both the US and UK as the pipeline of new merchants go live on our platform.”

“On our key financial and performance metrics, there is no change to the comments we made around gross losses, net transaction losses and Net transaction Margins in our Q1 business update and we are pleased with how the business is tracking in the first 6 weeks of Q2 FY20,” he added.

Global expansion update.

Fellow co-CEO Nick Molnar provided investors with an update on its global expansion.

He commented: “Launching into Canada in August was a really exciting moment for the team. We have had a solid start with a number of large merchants now live, integrating or signed.”

In respect to Europe, Mr Molnar revealed that Afterpay is busy developing integration plans to ensure that it is ready to launch as soon as the Pagantis acquisition is completed.

Over in Asia, its expansion plans are also progressing with a base now established in Singapore. This will enable Afterpay to drive the development of a strategy for the South East Asia market.

Mr Molnar also spoke about the launch of its new Cross Border Trade offering.

He said: “Our Cross Border Trade also builds on our global expansion by enabling our merchants to offer their products to customers across the world. Specifically, all Afterpay merchants can now open their ecommerce sites to Australian, British, Canadian and New Zealand shoppers. Next year, global merchants will also be able to sell to US consumers.”

All in all, the chief executive appears confident on its prospects globally and intends to continue to use its successful ANZ operations as a blueprint for execution.

More reading

• Macquarie (ASX:MQG) picks best ASX stocks to buy for 2021 post-COVID recovery
• 5 things to watch on the ASX 200 on Tuesday
• These ASX shares have been unstoppable in FY 2021
• ASX ends trading early, ASX 200 up 1.2%
• This cheap ASX share is supplying US giants: fundie

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Volpara Health Technologies Ltd (ASX: VHT) share price is on the move today following the release of a new product update.

At the time of writing, the healthcare technology company’s shares are up 2.5% to $1.38.

What did Volpara announce?

This morning Volpara announced the launch of BreastED, a first-of-its-kind online breast density training tool in collaboration with DetectED-X.

According to the release, radiologists around the world will have access to this first-of-its-kind online breast density training tool designed to improve their ability to correctly identify women’s breast density categories to comply with the Breast Imaging-Reporting and Data System (BIRADS).

The new training module, DensityED, integrates key technologies from Volpara and DetectED-X.

DetectED-X was founded by two University of Sydney radiation and imaging experts. It was the winner of the Best Startup for Social or Community Good at the Australiasian Startup Awards in 2019.

DetectED-X’s CEO and Chair of Diagnostic Imaging at University of Sydney, Patrick Brennan, commented: “While we have seen tremendous advances in medical imaging and AI tools to improve the detection of breast cancer, varying levels of skill and experience among radiologists reading mammograms can contribute to interpretation errors and variations in assessing breast density.”

“Such errors and variations can delay diagnosis and impact the effectiveness of the treatment of disease, which may have important clinical and economic implications,” he added.

What now?

Volpara’s founder and CEO, Dr. Ralph Highnam, sees a lot of promise from the collaboration.

He said: “DensityED will help radiologists improve their ability to correctly and consistently perform BIRADS density assessment, which is becoming increasingly important in light of the personalization of screening and expected FDA density reporting regulations. Accurate, reproducible density information is needed to empower women in their breast health journey.”

This is opportune timing for the release given potential changes to regulations in the United States. A potential new federal regulation, first proposed in February 2019, would require mammography facilities across the United States to include whether a patient has dense breast composition in the report following her screening mammogram.

More reading

• 2 exciting small cap ASX shares for your watchlist
• Volpara (ASX:VHT) share price on watch after Q2 trading update
• These exciting small cap ASX shares could smash the market in the 2020s

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of VOLPARA FPO NZ. The Motley Fool Australia has recommended VOLPARA FPO NZ. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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News of another promising COVID‐19 vaccine will spur a further rally on the market but the best ASX stocks to buy for 2021 won’t be the same as 2020.

The S&P/ASX 200 Index (Index:^AXJO) jumped 0.4% in morning trade after Moderna Inc (NASDAQ: MRNA) said its vaccine trial was 94.5% effective.

This is the second COVID drug in the past week that yielded a more than 90% success rate during human testing.

Best ASX buys are COVID losers

The best way to gain upside from this thematic is to rotate into ASX value stocks and so-called COVID losers, according to Macquarie Group Ltd (ASX: MQG).

In many cases, both stocks are one and the same. The reason why ASX stocks are in the “value” category is usually due to their underperforming share prices.

There’s a wide range of ASX stocks that have lagged during the pandemic. These include stocks exposed to tourism, property and financials.

Rotation from ASX growth to value stocks

We have already been seeing this shift towards value from growth. Growth stocks tend to be those that trade at a premium as investors are happy to cough up for better than market profit growth.

These include those best placed to benefit from social restrictions due to COVID like the Afterpay Ltd (ASX: APT) share price and Kogan.com Ltd (ASX: KGN) share price.

“Buying the laggards and selling winners was a good short-term strategy in the rally,” said Macquarie.

“We note there was an 18% return spread in favour of Covid losers in the recent value rally, and we think investors should continue to rotate to Covid-losers.”

ASX stocks on earning upgrade cycle

The broker pointed out that the ongoing annual general meeting (AGM) season is supportive of the rotation.

With around two-thirds of ASX companies providing updates during their AGMs, Macquarie noted there have been five times more companies upgrading their FY21 outlook than downgrading.

“Earnings upgrades are already at their highest level since 2005, and we have not even started to experience the post-vaccine boom,” said the broker.

“Maybe the FY22 PE is not high, it’s just that analysts’ forecasts are too conservative?”

Rising bond yields to also favour ASX value buys

Further, Macquarie believes bond yields are set to rise in 2021. It’s tipping the 10-year US Treasury yield will jump to 1.5% next year as successful vaccines will prompt central banks to remove some stimulus measures which have been depressing the yield to under 1%.

Rising bond yields are good news for embattled ASX banks and insurers.

Best ASX stocks to buy for 2021

Some of the stocks that Macquarie is urging investors to buy for 2021 include the Worley Ltd (ASX: WOR) share price and Telstra Corporation Ltd (ASX: TLS) share price.

Others on its list include the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price, Seven Group Holdings Ltd (ASX: SVW) share price and Westpac Banking Corp (ASX: WBC) share price.

More reading

• Aussie companies blast ‘knee-jerk’ COVID-19 border closures
• ASX 200 on watch after study shows Moderna’s COVID-19 vaccine is 94.5% effective
• 5 things to watch on the ASX 200 on Tuesday
• ASIC to investigate if ASX is fit to hold market licence
• These ASX shares have been unstoppable in FY 2021

Brendon Lau owns shares of Seven Group Holdings Limited, Telstra Limited, Westpac Banking, and WorleyParsons Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Kogan.com ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 MoneyMe Ltd (ASX: MME) share price is charging higher on Tuesday following the release of an update.

At the time of writing, the digital credit company’s shares are up 3% to $1.53.

What did MoneyMe announce?

This morning MoneyMe provided investors with an update on its funding costs following a recent refinancing of its funding facilities.

According to the release, the company’s funding costs have reduced to 4.8% from today following the refinancing of its Velocity warehouse facility and the AOFM’s investment into its new major bank warehouse facility.

This is down significantly from 11.4% at 30 June 2020.

In light of this, MoneyMe intends to grow its customer base and target higher loan transaction value and higher quality customers with lower personal loan pricing.

Trading update.

In addition to the funding update, MoneyMe provided the market with an update on its performance in FY 2021.

It advised that its strong loan origination growth momentum is continuing. Originations were up 8% month on month in October to $19.3 million.

This is the highest level of originations since January 2020 and follows the 30% month on month increase in originations in September.

Management notes that its strong origination and gross loan book growth continues to be achieved while maintaining tightened underwriting parameters to reflect the COVID-19 environment.

The company’s closing gross loan book was $145.1 million at the end of October, a 30% increase on the prior corresponding period.

MoneyMe expects its loan book to grow significantly during the current financial year, supported by more competitive pricing, wider product offers, recent product innovations such as PayAnyOne and MoneyMe+, and an improving trading environment.

The company’s Managing Director and Chief Executive Officer, Clayton Howes, said: “Fully realising the step change reduction in its cost of funding is a truly fantastic and exciting landmark achievement for the MoneyMe Group. We welcome the AOFM as a mezzanine debt investor and look forward to fully leveraging the lower cost of funds and capacity from the new Major Bank warehouse funding facility to further grow and diversify our balance sheet to meet the needs of Generation Now.”

More reading

• Why the MoneyMe (ASX:MME) share price is tumbling lower today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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