Category: Stock Market

The Fortescue Ltd (ASX: FMG) dividend has been supercharged after a big jump in profitability in its FY24 first-half result.

As a major ASX iron ore share, Fortescue’s profitability has benefitted from an increase in the iron ore price. Average revenue per dry metric tonne (dmt) has jumped 24% to US$108.19, helping Fortescue’s revenue rise by 21% to US$9.5 billion. This led to net profit after tax (NPAT) growth of 41% to US$3.34 billion.

Big increase to the Fortescue dividend

Fortescue’s board has boosted the interim dividend by 44% to A$1.08 after a 44% rise in earnings per share (EPS) to A$1.66. This translates to a dividend payout ratio of 65%, so Fortescue is keeping approximately a third of its net profit within the business.

The company’s dividend policy is to pay between 50% to 80% of full-year of underlying NPAT to shareholders.

At the current Fortescue share price, the declared dividend has a cash yield of 3.9% and a grossed-up dividend yield of 5.6%.

Ex-dividend date

The ex-dividend date is an important one for investors who want the upcoming payment. Interested investors must own Fortescue shares before the ex-dividend date, otherwise they’ll miss out on the payment.

Fortescue’s nominated ex-dividend date is next Wednesday, 28 February. This means investors will need to own shares by the end of trading on Tuesday to gain the dividend.

It will be paid on 27 March 2024 — just over a month away, so investors won’t have long to wait.

The company’s balance sheet has improved materially since June 2023. This includes a 45% improvement of net debt to $569 million, following free cash flow of US$2.66 billion over the period.

Fortescue share price snapshot

Despite today’s rise, Fortescue shares are down more than 5% in 2024 to date.

The post Everything you need to know about the supersized Fortescue dividend appeared first on The Motley Fool Australia.

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More reading

• Fortescue share price rises on huge 41% profit growth in FY24 half-year result
• The Fortescue share price is down almost 10% in February, time to buy?
• Will Fortescue stock be worth more than CBA by 2026?
• ASX mining shares up amid Labor plan to spend multibillions on renewables revolution
• Which ASX 200 large-cap shares offer the best dividend yields in 2024?

Motley Fool contributor Tristan Harrison has positions in Fortescue. 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 300 stock PWR Holdings Ltd (ASX: PWH) hit a new 52-week high of $12.20 per share on Thursday.

The retail stock is currently up 11.4% at $12.13 after the auto industry cooling solutions provider released its 1H FY24 results.

Let’s check out the report.

ASX 300 stock rises on news of 25% profit growth

The key metrics for the six months to 31 December 2023 are as follows:

• Revenue of $64,215 million, up 22.2% on the prior corresponding period (pcp) of 1H FY23
• EBITDA $18,379 million, up 27.2% pcp
• Net profit after tax (NPAT) $9,781 million, up 25.5% pcp
• Operating cash flow $17,227 million, up 53.8% pcp
• Earnings per share (EPS) 9.74 cents, up 25.4% pcp
• Interim dividend 4.8 cents, fully franked, up 33.3% and payable 22 March

What else happened in FY22?

PWR said strong growth in the aerospace and defence segment as well as motorsport programs, along with various cost and operating efficiency improvements, drove its revenue increase in 1H FY24.

Aerospace and defence revenue grew by 124% as the number and size of programs continued to rise.

Motorsport revenue grew by 19% due to increased demand for emerging technologies including micro matrix and cold plates.

What did PWR management say?

Founding shareholder and managing director Kees Weel said:

The half year result reflects a solid performance across all parts of the business and PWR is well prepared to deliver on opportunities in the next few years as we continue to invest in our people, vertical integration, capacity and capability.

What’s next for this ASX 300 stock?

PWR released an investor presentation alongside its results today.

Looking ahead, the company said it was “investing now to collect later”.

It spent $6 million in capex and increased its workforce by 50 staff to 535 people during the half.

PWR said it intends to expand its aerospace and defence manufacturing capacity in the United States and increase its United Kingdom-based engineering and manufacturing.

In the automotive aftermarket segment, PWR plans to focus on growth in North America and Europe.

Last month, PWR announced the appointment of David Proctor as the new General Manager for North America.

Proctor is a mechanical engineer with significant experience in strategic and innovative manufacturing, engineering, and operations leadership.

ASX 200 stock price snapshot

The PWR share price is up 16.8% over the past 12 months while the ASX 200 is up 4%.

PWR is tracking in line with its sector peers over the period.

The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) rose by 16.1% over the same time frame.

The post This ASX 300 stock just hit a new 52-week high on strong profit growth appeared first on The Motley Fool Australia.

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More reading

• IGO share price dodges a fall as profits crater 53%
• How has the DroneShield share price gained 90% in a month?
• Are Woolworths shares dirt cheap following the selloff?
• Tabcorp share price tumbles 13% on half-yearly earnings loss
• 3 under-the-radar ASX shares going gangbusters on results

Motley Fool contributor Bronwyn Allen 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 PWR Holdings. The Motley Fool Australia has positions in and has recommended PWR Holdings. 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 IGO Ltd (ASX: IGO) share price is rising today following the release of its FY24 first-half results.

Shares in the lithium and nickel producer are changing hands at $7.23, up 2.3%, as we head into the afternoon. In contrast, the ASX materials sector is only slightly ahead by 0.2% amid flat performances from some of the bigger businesses.

IGO share price shakes off deep earnings wound

• Revenue down 19% to $438 million
• Underlying EBITDA down 39% to $515 million
• Net profit after tax (NPAT) down 53% to $288 million
• Interim fully franked dividend of 11 cents per share, down 21%
• Net cash at the end of the half of $276 million, down 33%

In addition to the above, IGO reported a 4% increase in spodumene production to 771,000 tonnes in the half. Similarly, lithium hydroxide production leapt 57% to 1,224 tonnes. Despite the increase in volume, spodumene costs escalated 36% to A$306 per tonne.

What went on during the half?

A decline in commodity prices severely affected IGO’s figures compared to last year’s first-half result. The reduced spodumene price and sales volumes within its joint lithium venture, Tianqi Lithium Energy Australia, shrunk its share of profits from $631.4 million to $495.2 million.

Adding more margin pressure, the Australian miner experienced rising costs as the scale benefits unwinded with reduced production. For instance, cash costs per pound of nickel at the Nova operation rose from $3.99 to $4.18. Likewise, the Forrestania operation saw its per-pound nickel costs increase to $11.83.

As pictured above, a hefty impairment charge has also put a dent in IGO’s half-year result. According to the release, the $171.8 million impairment relates to its Cosmos and Forrestania assets as a result of the decline in nickel prices.

On 13 December 2023, IGO said it would transition the Cosmos project to an ore trucking operation while it concluded its review. Last month, it was decided to place the project into care and maintenance. The IGO share price was mostly flat between these two updates, as shown in the chart below.

What did management say?

Steering away from the bleak set of numbers, IGO managing director and CEO Ivan Vella painted an optimistic view of the company:

While we have faced some challenges in recent months, our business remains in a great position. The declaration of an 11c per share interim dividend today, in line with our capital management framework, reflects our strong underlying free cash flow and robust balance sheet position.

Going on to say:

This strength, combined with our asset portfolio, highly credentialled partners, and unique, purpose-led culture gives me great confidence in what IGO can achieve in the future.

The road ahead

Forecasts for the full year of FY24 indicate continued weakness in commodities. Some of the key points from IGO’s revised guidance are as follows:

• Total nickel production of 28,500 to 31,000 tonnes (narrowed from 29,000 to 32,500 tonnes)
• Nickel cash costs of $5.75 to $6.50 per pound (up from $5.00 to $5.75)
• Spodumene production of 1,300 to 1,400 tonnes (down from 1,400 to 1,500 tonnes)
• Lithium cash costs of $330 to $380 per tonne (up from $280 to $330 per tonne)

The lower spodumene production guidance stems from the mine operator’s “need to manage production and stockpiles following a reduction in sales”, according to the report.

The IGO share price is down 45% over the past 12 months.

The post IGO share price dodges a fall as profits crater 53% appeared first on The Motley Fool Australia.

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More reading

• Buy this ASX stock for ‘the best lithium mine in the world’
• Here are the top 10 ASX 200 shares today
• Why ASX nickel shares are ending the week with a spring in their step
• ASX mining shares up amid Labor plan to spend multibillions on renewables revolution
• Here are the top 10 ASX 200 shares today

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. 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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It’s been an extraordinary day for the DroneShield Ltd (ASX: DRO) share price this Thursday. 

Yesterday, the Droneshield share price closed the day at 68 cents a share. However, at the time of writing, those same Droneshield shares are going for 76 cents each, up a whopping 11.76% for the day.

76 cents per share happens to be a new record-high share price for the company.

Today’s gains for Droneshield shares compare against a 0.05% loss for the broader All Ordinaries Index (ASX: XAO) this Thursday thus far.

But it gets even better for Droneshield investors. Today’s move means that the Droneshield share price has now gained an eye-watering 92.3% over the past months alone.

Yep, this time in January, this company was asking just 39 cents a share. Check that out for yourself below:

The funny thing is that we haven’t heard much in the way of news or announcements from Droneshield. Not in February thus far anyway, and certainly not today.

So it’s a bit of a mystery why this counter-drone technology stock is experiencing such a dramatic surge in valuation.

Why has the DroneShield share price gained 90% in a month?

Perhaps one thing we can point to is a seeming acceptance by ASX investors that Droneshield, as my Fool colleague Bernd put it earlier this month, “finds itself offering the right suite of products at the right time”.

With conflicts raging around the world, drones are an ever-growing feature in modern warfare. And that makes the anto-drone technology that Droneshield specialises in a valuable commodity. Earlier this month, we also looked at how a major investment in combat drone technology by the Federal Government was boosting the Droneshield share price at the time.

But the company is also making tangible progress on its balance sheet. Back in January, we covered Droneshield’s announcement that the company has hit a record $48 million in customer cash receipts and grants over the three months to 31 December 2023.

As we reported at the time, this figure was five times larger than the next largest quarter on record. Additionally, Droneshield’s $73.5 million total in cash receipts and grants for the 2023 calendar year was five times more than what the company reported in 2022.

So clearly, investors are getting caught up in what looks like a compelling growth story. Let’s see where the Droneshield share price heads to next.

The post How has the DroneShield share price gained 90% in a month? appeared first on The Motley Fool Australia.

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More reading

• Why Boral, Dicker Data, Droneshield, and Novonix shares are charging higher
• Forget Fortescue shares: This ASX stock could be poised for a bull run in 2024
• Up 80% in 6 months, is a monumental earnings boom just around the corner for this tiny ASX stock?
• Why is the DroneShield share price jumping to a 52-week high today?

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 positions in and has recommended DroneShield. The Motley Fool Australia has recommended DroneShield. 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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Woolworths Group Ltd (ASX: WOW) shares are trading lower again on Thursday.

At the time of writing, the supermarket giant’s shares are down 1% to $33.17.

This means that its shares are now down 8% over the last two trading sessions.

Investors have been hitting the sell button in response to a softer than expected half-year result and news that its CEO, Brad Banducci, has fallen on his sword and is quitting the role later this year.

Should you buy Woolworths shares?

The team at Goldman Sachs believes this recent weakness has created a buying opportunity for investors.

According to a note from this morning, the broker has retained its conviction buy rating with a trimmed price target of $40.40. This implies potential upside of 22% for investors over the next 12 months.

And with the broker forecasting a fully franked 3.3% dividend yield in FY 2024, the total potential return stretches beyond 25%.

What did the broker say?

Goldman was a touch underwhelmed with Woolworths’ results but saw enough to remain positive on the company. It explains:

WOW reported 1H24 with +10% EBIT in AU Foods YoY the key bright spot, though this was dragged by weaker-than-expected H2 first 7 weeks AU Foods sales growth of +1.5% and further guidance of a slower EBIT growth in 2H. Additionally, the ongoing ACCC pricing inquiry and earlier-than-expected announcement of CEO Brad Banducci’s retirement weighed on the share price.

Goldman also believes the above overshadowed its new growth engine – the Woolies X business. It said:

Woolies X the scaling new growth engine: The segment (eCom + Digital & Media and Rewards & Services and Homerun) grew DAP by A$96mn vs. pcp, contributing to 68% of 1H24 AU Foods EBIT growth. This has been central to our Buy thesis – that the continued scaling of the company’s omni-channel offer and advanced data and analytics capabilities to drive high growth/high margin ancillary services such as Retail Media will drive strong growth and returns above peers.

In 1H24, eCom DAP margin reached 3.2% and Digital Media DAP margin (on external revenue) reached 36.3%. Our channel checks suggest that WOW leads this growth lever by multiple years and management confirmed that eComm sales has larger baskets, higher GPM (due to long-life products skew).

All in all, the broker believes now could be an opportune time to snap up a high-quality company and a great price.

The post Are Woolworths shares dirt cheap following the selloff? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• Everything you need to know about the Woolworths dividend
• Why Corporate Travel Management, Iress, Rio Tinto, and Woolworths shares are crashing
• Woolworths share price dives 7% following Banducci bombshell

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 positions in and has recommended Goldman Sachs Group. 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 Tabcorp Holdings Ltd (ASX: TAH) share price is down 13.1% to 63 cents following the release of the ASX betting company’s 1H FY24 results.

This is a new 52-week low for the company.

Let’s look into the earnings report.

Tabcorp share price dives to new 52-week low

Key metrics for the six months ending 31 December 2023:

• Group statutory net loss after tax of $636.8 million
• Group revenue of $1,210 million, down 5% on 1H FY23
• Increased variable contribution (VC) margin of 40.1%, up from 39.2% in 1H FY23
• Group EBITDA of $170 million, down 14% on 1H FY23
• Non-cash impairment charge of $731.9 million after tax to the wagering and media business
• Interim dividend of 1 cent per share, fully franked, payable 21 March

Tabcorp said the dividend represented a payout ratio of 111% and reflected “confidence in the business and a strong financial position”.

What else happened in 1H FY24?

A highlight of the half was the Victorian Government awarding Tabcorp the new 20-year Victorian Wagering and Betting Licence.

The company said the licence was a “game-changer” because it levelled the playing field in Victoria on taxes and fees and would generate a step-change in earnings.

Investors loved the news and pushed the Tabcorp share price 22% higher on the day of the announcement in December.

What did Tabcorp management say?

Managing director and CEO Adam Rytenskild said Tabcorp’s transformation was on track.

TAB’s improving market share trend highlights this, and the broader operational result demonstrates the substantial progress we have made as a company.

Total market share and digital market share grew compared to the prior half. This is another positive step having stopped the decline.

We are seeing positive signs from targeted investment in product, brand, data, technology and retail as we start to leverage the strength of an extensive integrated wagering and media network throughout the country.

Rytenskild noted that had the Victorian licence been in place during FY23, EBITDA would have been $140 million higher on a pro forma basis.

What’s next for Tabcorp?

Rytenskild said investments in AI, data and new technology platforms enabled Tabcorp to become a more digital-oriented business.

Combined with our TAB brand embedded in over 4,000 venues, we see a significant omni-channel opportunity that we are yet to capitalise on.

The Australian wagering market is healthy, we’re confident it will return to growth and Tabcorp’s position in it will be much stronger when it does.

Tabcorp share price snapshot

The Tabcorp share price has dropped by 37% over the past 12 months, while the ASX 200 has risen 4%.

The post Tabcorp share price tumbles 13% on half-yearly earnings loss appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today

Motley Fool contributor Bronwyn Allen 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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A few under-the-radar ASX shares are catching the eye of investors on Thursday after releasing their half-year results.

Here’s what is getting investors excited today:

Hipages Group Holdings Ltd (ASX: HPG)

The Hipages share price is up 11% to $1.02. This morning, this online tradie marketplace operator reported a 15% increase in both revenue and recurring revenue to $37.4 million and $35.2 million, respectively, and a 45% jump in EBITDA to $8.4 million. This was driven by increases in connection volumes, subscription tradies, and average revenue per user.

Hipages’ CEO and co-founder, Roby Sharon-Zipser, said:

Our marketplace has benefitted from ongoing momentum arising from the current uncertain macroeconomic environment, where we have seen a clear increase in demand from tradies using the hipages platform to connect to jobs posted by consumers. Consumers are benefiting from increased engagement and competition for those jobs.

MMA Offshore Ltd (ASX: MRM)

The MMA Offshore share price is up over 6% to $2.10. Investors have been buying the marine service provider’s shares after it reported a 28% lift in revenue to $204.3 million and massive 339% jump in underlying net profit after tax to $39.5 million.

MMA Offshore’s Managing Director, David Ross, commented:

Market conditions continue to be positive with strong demand for our vessels and services and ongoing rate improvements driving a 97% increase in EBITDA as compared to the first half of FY2023. The medium-term outlook for offshore activity remains strong with over US$500 billion in greenfield oil and gas projects forecast to be sanctioned globally over the next five years including over US$180 billion in our key operating regions.

Superloop Ltd (ASX: SLC)

The Superloop share price is up 7% to 81 cents after investors responded positively to the telecommunications company’s half-year results. Superloop posted a 32.7% increase in revenue to $197.6 million and a profit after tax (before amortisation) of $1.2 million. The latter compares favourably to a loss of $8.3 million a year earlier.

Superloop’s CEO and Managing Director, Paul Tyler, said

We are very pleased to report another period of strong financial performance, delivering record organic revenue and net new customer growth over the period. Importantly, all three segments contributed to this growth.

The post 3 under-the-radar ASX shares going gangbusters on results appeared first on The Motley Fool Australia.

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More reading

• Is buying investment property in regional areas like buying ASX small-cap shares?
• ‘Substantial returns over years ahead’: 2 ASX small caps starting 2024 with a bang
• 3 no-brainer ASX stocks I’d buy before a bull run

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 positions in and has recommended Hipages Group. The Motley Fool Australia has positions in and has recommended Hipages Group. The Motley Fool Australia has recommended Mma Offshore. 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 Bega Cheese Ltd (ASX: BGA) share price is soaring today after the ASX 200 food and drinks producer reported its first-half earnings for the 2024 financial year (1H24) this morning.

Yesterday, Bega Cheese shares closed at $3.55 each. But this morning, the company opened at $3.66 a share before climbing up as high as $4.06 per share – a new 52-week high for the company. At present, Bega has cooled slightly but is still asking $3.95 a share, up a whopping 11.27%.

Bega Cheese shares rocket on solid half-year result

• Revenue of $1.73 billion, up 3.2% over the first half of the 2023 financial year (1H23)
• Statutory earnings before interest, tax, depreciation and amortisation (EBITDA) of $86.1 million, up 20.25% over 1H23
• Normalised EBITDA of $76.5 million, up 2.55% over 1H23
• Statutory profit after tax of $26.5 million, up 263% over last year’s $73 million
• Statutory earnings per share (EPS) of 8.7 cents, up 262.5% over last year’s 2.4 cents
• Interim dividend of 4 cents per share (fully franked) declared, an 11.1% drop over last year’s interim dividend of 4.5 cents.

Although Bega’s statutory profits jumped by 263%, normalised profits increased by a far tamer 41% to $13.3 million. Likewise, normalised EPS increased by 42% to 4.4 cents per share. These normalised results include the Canberra property sales, the acquisitions of Betta Milk and Meander Valley Dairy, and restructuring costs.

Bega also revealed that it has made a big dent in the company’s debt. Bega reported net debt of $250.9 million as of 24 December, a $70.5 million reduction from the $321.4 million reported this time last year.

What else happened in 1H24?

As we just touched on, the acquisitions of Betta Milk and Meander Valley Dairy were some of the biggest events for Bega over the first half of the 2024 financial year. These acquisitions were announced back on 29 August and saw Bega acquire both brands from TasFoods Ltd (ASX: TFL) for a sum of $11 million, plus inventory.

Investors didn’t seem that keen on the purchase at the time though, with the Bega Cheese share price declining in the days following the announcement:

What did the company’s management say?

Bega Cheese management stated the following on these half-year results:

The result reflected the importance of the diversity of the Group with strong performance in Branded more than offsetting the decline in the Bulk segment.

The Group’s revenue exceeded $1.7 billion, an increase of 3% on the prior year. This included growth of 8% in the Branded segment demonstrating continued strong demand for the categories we participate in and the brands in our portfolio.

The Bega Group maintained guidance of $160-170 million normalised EBITDA for FY2024.

Bega 2024 half-year earnings report

What’s next for Bega Cheese?

As we just quoted, Bega management has opted to maintain its full-year guidance for the 2024 financial year at $160-170 million in normalised EBITDA. That’s despite management’s expectation of a moderation of “Australian economic circumstances” over the rest of the financial year.

Bega is anticipating that its ongoing cost and efficiency programs, as well as “improving industry environment for bulk business” will assist the company in this endeavour.

Bega Cheese share price snapshot

With today’s stocks price gains under the belt, the Bega Cheese share price has had a pleasing few months. The company is up more than 24% over the past six months, and up 8.5% over the past year.

At the current pricing, Bega Cheese shares are trading on a market capitalisation of $1.08 billion, with a trailing dividend yield of 1.9%.

The post Bega Cheese shares soar 11% on profit jump appeared first on The Motley Fool Australia.

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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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There has been a good amount of results released from the retail sector on Thursday.

Some have gone down well with investors, others have not.

Three ASX retail shares making big moves are listed below. Here’s what they reported:

Reject Shop Ltd ASX: TRS)

The Reject Shop share price crashed as much as 19% to $4.34 following the release of the discount retailer’s half-year results. The company posted a 4.2% lift in sales to $458.3 million but a 12.5% decline in net profit after tax to $14.3 million. Management notes that its profits were “below the Company’s expectations, with higher than anticipated shrinkage and product mix shift being the key negative impacts on gross margin.”

Management also decided not to provide profit guidance for the full year and warned that the “first half performance should not be used as an indicator for the second half of the financial year as the Company typically generates a higher proportion of sales in the first half.”

Super Retail Group Ltd (ASX: SUL)

The Super Retail share price is down 6% to $15.75. This follows the release of the retail conglomerate’s half-year results which revealed a 3% lift in sales to $2 billion but a 6% decline in normalised net profit after tax to $145 million.

Super Retail revealed that its cost of doing business (CODB) as a percentage of sales increased by 90 basis points to 35.3% due to the impact of inflation on wages, rent, and electricity.

Also weighing on sentiment was its trading update, which revealed that like for like sales are down 3% during the first seven weeks of the second half.

Universal Store Holdings Ltd (ASX: UNI)

The Universal Store share price is up 14% to $4.65. Investors have been buying the youth fashion retailer’s shares following the release of a strong half-year update.

The company defied consumer spending weakness to deliver an 8.5% increase in sales to $158 million and 16.7% jump in net profit after tax to $20.7 million. This allowed the company’s board to boost its interim dividend by almost 18% to 16.5 cents per share.

Management also revealed that the second half has started positively.

The post Here are 3 ASX retail shares moving up to 19% on half-year results today appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Universal Store. 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 positions in and has recommended Super Retail Group. 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 Medibank Private Ltd (ASX: MPL) share price is under pressure after releasing its latest results this morning.

At the time of writing, shares in the health insurer are down 5.3% to $3.66. The downward move makes it the worst-performing company in the financials sector on Thursday.

Medibank share price scrapes its knee on ‘competitive market’

• Group revenue up 3.3% to $4,024 million
• Net investment income up 49.6% to $83.6 million
• Net profit after tax (NPAT) up 104.8% to $491.9 million
• Underlying NPAT up 16.3% to $262.5 million
• Interim fully franked dividend of 7.2 cents per share, up 14.3% from 6.3 cents

Importantly, the doubling of statutory NPAT is heavily influenced by a change in accounting standards. The adoption of AASB 17 means first-half profits were boosted by $80.7 million due to how COVID-19 claim savings and givebacks had to be recognised.

What happened in the first half?

In the six months ending 31 December 2023, Medibank’s resident health insurance segment remained resilient. The company marginally grew its resident policyholders by 3,400 or 0.2% during the half. This was restrained by a competitive market, leading to a ‘modest increase’ in customers switching funds.

The non-residents (overseas visitors and students) segment fared much better in the half. Medibank achieved a net increase in non-resident policyholders of 33,800 or 12.3%.

On the investment side of the business, it is clear Medibank is benefitting from the hoisted interest rates. Income sourced from the company’s investments jumped 49.6% versus the prior corresponding period to $83.6 million.

Medibank expensed $17.6 million in non-recurring cybercrime costs during the half. Management anticipates an additional $30 million to $35 million will be spent in FY24 to improve its IT security further and cover regulatory/litigation costs associated with the hack in October 2022.

The Medibank share price is up approximately 5% since the cyber incident was originally disclosed, as shown below.

What did management say?

Medibank CEO David Kockzkar emphasised the company’s pursuit of a health-first transition, stating:

The health transition is underway. From overnight stays in expensive acute care hospitals to virtual, short stay and home care. From treatment to prevention and from general care to personalised health.

We have been at the forefront of this transition by making targeted investments in growing health markets to better support our customers and improve the way healthcare is delivered in Australia.

Our new partnership with healthcare technology group Amwell will enable us to deliver virtual prevention programs at scale.

The Amwell partnership hit the grapevine earlier this week. As part of the coalition, Medibank will implement Amwell’s technology to promote wellness and prevent chronic disease.

What’s next for Medibank Private?

No specifics were provided about revenue or profits in today’s release. However, shareholders were supplied with some guidance on policyholder growth and resident claims, as follows:

• 1.2% to 1.5% resident policyholder growth expected in FY24
• 2.2% to 2.4% expected claims per policy unit growth (down from 2.6%)

Furthermore, organic and inorganic growth for Medibank Health and Health Insurance segments were named ‘areas of focus’.

Medibank share price snapshot

Shares in Medibank have performed solidly over the last year, beating out many of its S&P/ASX 200 Index (ASX: XJO) included peers, rallying 21.4%. The rise in value gives the 48-year-old insurance company a market capitalisation of $10.2 billion.

Medibank trades on a price-to-earnings (P/E) ratio of roughly 20 times earnings. This is on par with its ASX-listed peer NIB Holdings Limited (ASX: NHF). However, it does suggest that Medibank’s share price trades at a premium to the global insurance industry (12 times earnings).

The post Medibank share price slumps 5% despite surging earnings appeared first on The Motley Fool Australia.

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More reading

• Medibank share price hits 52-week high on US tech partnership
• Here’s why I’ll be watching the Medibank results like a hawk
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• I’d buy these two resilient ASX dividend shares for big income
• Want a large and growing dividend? Medibank shares might be the answer

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. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended NIB Holdings. 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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