Category: Stock Market

Investors are finding more positives than negatives on Wednesday as the S&P/ASX 300 Index (ASX: XJO) takes the stairs higher.

More than half of the benchmark’s constituents are in the green today amid a flood of financial reports. While some of the companies included in the index are having a shocker of a session after releasing their numbers, the portion of positive performers is carrying the index upwards.

Here’s a look at a few ASX 300 shares that are humming along today.

Winner Wednesday for these ASX 300 shares

Starting with the company with the smallest market capitalisation, Polynovo Ltd (ASX: PNV). Investors have pushed shares in the burns treatment business 4.8% higher to $2.20 apiece. Yet, Polynovo is one company that hasn’t reported earnings today.

Instead, it appears the company is running on residual excitement stemming from its announcement on 10 August. As previously reported, Polynovo enrolled its first patient in a clinical trial of NovoSorb SynPath. This trial will evaluate the safety and efficacy of Polynovo’s product for long sufferers of chronic diabetic foot ulcers.

Polynovo shareholders would be jumping for joy with this ASX 300 share indulging in a nearly 40% increase in the last month.

Meanwhile, two other companies experiencing raving reviews on Wednesday are Super Retail Group Ltd (ASX: SUL) and Brambles Limited (ASX: BXB). In contrast to Polynovo, these companies have reported their earnings today.

At present, Super Retail Group is up 7.9% to $11.03 Similarly, Brambles is relishing in a 4.28% return, taking the share price to $12.31.

Oddly enough, investors are shaking off a 20% drop in profits in FY22. In contrast, Brambles delivered an 18% increase in profits. The ASX 300 share won investors over with its rather solid FY22 result.

The post 3 ASX 300 shares having a cracking session today appeared first on The Motley Fool Australia.

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More reading

• Why Brambles, Challenger, Nearmap, and Super Retail shares are rising today
• Why are ASX 200 retail shares having such a stellar run today?
• Super Retail Group share price jumps 8% on soft FY22 results
• Brambles share price soars 6% on profit and dividend boost
• What’s with the Polynovo share price on Wednesday?

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 positions in and has recommended POLYNOVO FPO and Super Retail Group Limited. The Motley Fool Australia has positions in and has recommended Super Retail 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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S&P/ASX 200 Index (ASX: XJO) dividend share Medibank Private Ltd (ASX: MPL) has been a strong performer over the last five years.

The stock has gained 27.5% in half a decade, lifting from $2.76 this time five years ago to trade at $3.52 today.

For context, the ASX 200 has gained around 24% over that time, leaving the health insurance provider outperforming by 3.5%.

And on top of that, the stock has hand investors a portion of its profits every six months.

Indeed, Medibank shares passed their maiden dividend along in 2015, less than a year after the company floated on the ASX.

But how much has it paid out over the last five years? Let’s take a look.

How much have Medibank shares paid in dividends since 2017?

Here’s a recap of all the dividends Medibank has offered its shareholders over the half-decade just been:

Medibank dividend	Amount offered	Franking
September 2017	6.75 cents	100%
March 2018	5.5 cents	100%
September 2018	7.2 cents	100%
March 2019	5.7 cents	100%
September 2019	9.9 cents	100%
March 2020	5.7 cents	100%
September 2020	6.3 cents	100%
March 2021	5.8 cents	100%
September 2021	6.9 cents	100%
March 2022	6.1 cents	100%

All those consistent dividends add up to a grand total of 65.85 cents.

On top of that, long-term investors in the company have seen their shares gain 76 cents apiece in that time.

That would have left them nearly $1.42 better off for each security they held over the last five years – marking a 51.4% return on investment. That’s certainly nothing to scoff at.

And, of course, the franking credits offered alongside the company’s dividends might have brought additional benefits for some investors.

Medibank shares are trading with a 3.7% dividend yield right now.

The post How much have Medibank shares paid in dividends over the past 5 years? appeared first on The Motley Fool Australia.

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More reading

• These ASX 200 shares just cracked new highs today
• Fletcher Building share price lifts on 40% profit boost
• Steadfast share price halted following FY22 results and acquisition
• Redbubble share price tumbles 40% as profit turns to loss
• Why is the CBA share price sliding today?

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 S&P/ASX 200 Index (ASX: XJO) is having a decent, if unimpressive, day of trading so far this Wednesday. At the time of writing, the ASX 200 is up by 0.2% at just over 7,120 points after stints in both positive and negative territory today. But unlike the ASX 200, there is one sector that seems to have made up its mind about what it wants to do – ASX 200 retail shares.

Many ASX retail shares are on fire today. In fact, the current best-performing ASX 200 share on the entire index is Super Retail Group Ltd (ASX: SUL). Its shares have rocketed almost 8% higher.

But we are also seeing robust moves across the whole sector. City Chic Collective Ltd (ASX: CCX) is another standout performer, having gained more than 3.5% so far today. Harvey Norman Holdings Limited (ASX: HVN) is up 1.4%, similarly with JB Hi-Fi Limited (ASX: JBH).

Although it’s not an ASX 200 share, candle retailer Dusk Group Ltd (ASX: DSK) is another strong shower, recording a 3.3% gain so far.

So what’s going on with the ASX 200 retail sector today?

Why are ASX 200 retail shares on fire today?

Well, it could come down to a few factors. The first worth mentioning is Super Retail itself. This company’s 6%-plus surge today comes after the retailer reported its FY22 earnings this morning. As we went through, the company reported increased revenues over its FY21 numbers, but a drop in profits. 

Its declared final dividend of 43 cents per share also came in lower than last year’s final dividend of 55 cents. Nevertheless, investors have clearly liked what they have seen today (or perhaps were expecting worse), judging by the massive gains Super Retail shares are now enjoying. 

This positive sentiment could be spilling into the other ASX 200 retail shares on the market today.

Another factor to consider is last night’s (our time) trading session over in the United States. As our Fool colleagues over in America covered, last night’s session also saw the US retail sector record some strong moves.

The giant retailer Walmart reported earnings of its own. These were well-received, with Walmart stock rising more than 5%. This spilled over into many other US retail shares, including Nordstrom, Stitch Fix and Gap. 

So it’s possible these moves are influencing our own ASX markets today.

Whatever the reasons, it’s certainly been a pleasing day for most ASX 200 retail shares this Wednesday.

The post Why are ASX 200 retail shares having such a stellar run today? appeared first on The Motley Fool Australia.

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More reading

• Super Retail Group share price jumps 8% on soft FY22 results
• 2 surprisingly ‘robust’ ASX shares to buy in current climate: expert
• JB Hi-Fi share price dips as full-year dividend jumps 43%
• Could this ASX 200 share be heading for a short squeeze?
• 2 ASX 200 dividend shares with ~7%+ yields that experts rate as buys

Motley Fool contributor Sebastian Bowen has positions in Dusk Group Limited and Walmart Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Harvey Norman Holdings Ltd., Super Retail Group Limited, and Walmart Inc. The Motley Fool Australia has positions in and has recommended Harvey Norman Holdings Ltd. and Super Retail Group Limited. The Motley Fool Australia has recommended Dusk 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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The Nuheara Ltd (ASX: NUH) share price is rocketing on Wednesday afternoon.

This comes after the company announced the US Food and Drug Administration’s (FDA) landmark ruling for over-the-counter (OTC) hearing aids in the United States.

At the time of writing, the hearing solutions provider’s shares are leaping to 24.5 cents, up 32.43%.

FDA opens Nuheara OTC hearing aids to US market

Investors are driving Nuheara shares higher following the company’s positive release.

In today’s statement, Nuheara advised that the US FDA is allowing hearing aids within the OTC category. Thus, they can be sold directly to consumers in stores or online without a medical exam or fitting by an audiologist.

It noted that the FDA received over 1,000 public comment submissions on the proposed rule change. Most of these submissions were in favour of OTC hearing aids being more accessible for the 38 million Americans experiencing hearing loss.

Currently, hearing aids are considered expensive in the country, with the average cost at around US$4,726 for a pair. However, they can fetch for US$10,000 if going through a licensed audiologist or a licensed hearing aid retailer.

With the landmark ruling, OTC purchases for a pair of hearing aids could cost less than US$1,000 per pair.

At the moment, there’s a 60-day enactment period until OTC hearing aid consumer retail sales can commence. It is likely this will come into effect in mid-October.

Management commentary

US-based Nuheara CEO John Luna said:

The US hearing aid market is forever changed with this OTC hearing aid final rule publication. We’re very excited in the knowledge that the US consumer could very soon be making the decision to self-care, self-fit with affordable non-prescriptive hearing aids available over-the-counter in traditional retail and online.

This historic change will save consumers with perceived mild-to-moderate hearing loss thousands of dollars on a pair of hearing aids.

Nuheara is well positioned with our OTC hearing aids (pending FDA clearance), through our trademark license agreement with HP Inc. that will be initially available at Best Buy retail stores in the US. OTC hearing aids will become a significant part of Nuheara’s future as we continue to innovate to bring new hearing products to market.

Nuheara share price snapshot

Despite rocketing 32% today, the Nuheara share price has fallen by more than 60% over the last 12 months.

After reaching a 52-week high of 72 cents in August 2021, the shares gradually began treading lower throughout the year.

Based on today’s price, Nuheara presides a market capitalisation of approximately $25.38 million.

The post Guess which ASX biotech share is soaring 32% on a ‘landmark’ FDA ruling appeared first on The Motley Fool Australia.

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More reading

• Guess which tiny ASX mining share just rocketed 45% on new copper and gold finds
• These ASX 200 shares just cracked new highs today
• Genex share price leaps 8% on revised takeover bid from Atlassian founder
• Everything you need to know about the latest CSL dividend
• Fletcher Building share price lifts on 40% profit boost

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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You won’t hear investors in this tiny ASX mining share complaining today.

While the All Ordinaries Index (ASX: XAO) is waffling between small gains and small losses, this ASX mining share rocketed 45% on open this morning.

Any guesses?

If you said Tennant Minerals Ltd (ASX: TMS), go to the front of the class.

In afternoon trading, Tennant Minerals has given back some of its earlier eye-popping gains but remains up a healthy 15.4%.

So, what’s piquing investor interest?

Bonanza copper and gold intersections

The Tennant Minerals share price is rocketing after the ASX mining share reported that assay results returned a thick intersection of high-grade copper and gold.

The results come from the first hole of its recently completed six-hole diamond drilling program at the Bluebird copper-gold discovery, located within Tennant’s 100% owned Barkly Project in the Northern Territory.

Assay results are still due in for the other five drill holes. The miner said all of the holes had intersected thick hematite alteration and copper mineralisation.

Commenting on the results driving the ASX mining share higher today, Tennant Minerals chairman, Matthew Driscoll said:

The latest drilling results from Bluebird are stunning. Not only have we continued to intersect thick, high-grade copper, but we have also discovered a distinct high-grade gold shoot within the broader mineralised zone with spectacular intersection grades of up to 38.5 grams per tonne gold.

We have really only scratched the surface at Bluebird, with the copper-gold discovery zone still completely open to the west and below 200 metres depth.

The miner is currently defining new drilling targets along a 5 kilometre corridor to “continue building and expanding this significant new high-grade copper-gold discovery”, Driscoll added.

How has this ASX mining share been tracking?

The Tenant Minerals share price is subject to some big ups and downs.

With more ups than downs, the ASX mining share has gained 50% over the past 12 months. That compares to a full-year loss of 5% posted by the All Ordinaries.

The post Guess which tiny ASX mining share just rocketed 45% on new copper and gold finds appeared first on The Motley Fool Australia.

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More reading

• These ASX 200 shares just cracked new highs today
• Genex share price leaps 8% on revised takeover bid from Atlassian founder
• Everything you need to know about the latest CSL dividend
• Fletcher Building share price lifts on 40% profit boost
• Steadfast share price halted following FY22 results and acquisition

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It’s been a pretty bouncy day of trading for the S&P/ASX 200 Index (ASX: XJO) so far this Wednesday. At the time of writing the ASX 200 has gained 0.15% at just over 7,110 points.

But that doesn’t mean it’s been a boring day for all ASX 200 shares. In fact, here are two that have just hit new highs. Let’s check them out.

Two ASX 200 shares that just hit new highs

Whitehaven Coal Ltd (ASX: WHC)

First up is ASX 200 coal miner Whitehaven. Whitehaven shares have gained a healthy 4.01% at present and are sitting at $6.875 each which is the company’s new 52-week high.

It’s not an all-time record high for Whitehaven, but we have to go back to early 2011 to find the last time Whitehaven was at these kinds of levels. That makes this a new 11-year high for the ASX 200 coal miner. As you might expect, this seems to be the result of record-high coal prices.

As my Fool colleague Aaron covered last week, coal is trading at close to record highs. So it’s perhaps no wonder investors are getting excited by miners like Whitehaven right now, especially with the company’s earnings scheduled for next week (25 August).

Endeavour Group Ltd (ASX: EDV)

Bottle shop and pub operator Endeavour is another ASX 200 share having a cracking day this Wednesday. At present, Endeavour shares have risen by a robust 1.47% to $8.28 each. But today has seen this company rise as high as $8.30 which, as you might guess, is the company’s new 52-week high.

Endeavour has only been listed on the ASX in its own right since June last year. That was when the company was spun out of Woolworths Group Ltd (ASX: WOW). So this new high watermark is also a record high for Endeavour shares.

There haven’t been any obvious catalysts for this new ASX 200 record today. But Endeavour has been gaining steam all year. The company’s shares are up almost 23% over 2022 thus far, and by 4% over the past month alone. Perhaps investors are expecting big things when the company reports its full-year earnings next week (on 23 August).

The post These ASX 200 shares just cracked new highs today appeared first on The Motley Fool Australia.

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More reading

• Fletcher Building share price lifts on 40% profit boost
• Steadfast share price halted following FY22 results and acquisition
• Redbubble share price tumbles 40% as profit turns to loss
• Why is the CBA share price sliding today?
• Magellan share price in freefall despite 44% rise in profits

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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The Genex Power Ltd (ASX: GNX) share price is lifting once more after a consortium of suitors, including the investment fund of Atlassian (NASDAQ: TEAM) co-founder Scott Farquhar, slapped the stock with another takeover bid.

And this one looks like it could stick. The consortium, made up of Farquhar’s Skip Capital and Stonepeak Partners, has offered 25 cents per share to snap up the company. That’s 2 cents higher than its previously rejected offer.

The Genex share price is surging on the news. It’s up 6.82% to 23.5 cents at the time of writing, after repeatedly topping 8% throughout the day.

Let’s take a closer look at the latest from the renewable generation and storage company.

Genex share price soars on upped takeover bid

It’s been a long journey to get here, but Genex has finally granted Skip Capital’s infrastructure fund and Stonepeak Partners due diligence.

The consortium first put forward a 23 cent per share bid, valuing the renewable energy company at $300 million, in late July.

And while the market responded with joy, sending the Genex share price 44% higher, the company wasn’t impressed. Its board turned down the offer earlier this month, saying it undervalued the company.

Though, it allowed the consortium access to some due diligence information in the hopes doing so would result in a higher bid.

And lo and behold, a higher bid has materialised. The new offer represents an 85% premium on the undisturbed Genex share price and a 92% premium on its three-month volume weighted average.

It also values the company at around $346 million.

The company’s board hopes the consortium follows its proposal with a binding bid after it undergoes due diligence.

If such a bid is priced at 25 cents per share or higher, Genex will recommend it to shareholders. That’s as long as an independent expert agrees it’s in investors’ best interests and no better offer comes along.

If all goes to plan, the consortium will snap up Genex via a scheme of arrangement in the not-so-distant future.

The post Genex share price leaps 8% on revised takeover bid from Atlassian founder appeared first on The Motley Fool Australia.

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More reading

• Genex share price climbs 6% amid new takeover rumours
• ‘Massive untapped demand’: The $3 trillion opportunity ASX 200 energy shares could be missing
• No deal: Genex share price lifts as $300m takeover bid rejected
• Genex share price rockets 50% on confirmed takeover bid
• Genex share price in focus amid Atlassian co-founder’s $300m takeover bid

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 positions in and has recommended Atlassian. 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 CSL Limited (ASX: CSL) share price is backtracking 1.24% to $292.73 today following the release of the company’s full-year results.

The biotherapeutics company reported a mixed performance due to a “difficult global environment.”

Nonetheless, the result was in line with expectations, achieving the top end of its guidance.

Here’s a look at the CSL’s latest dividend that was announced to the market.

CSL maintains full-year dividend

After delivering a net profit after tax (NPAT) of $2,255 million in FY22, the CSL board declared a final dividend of US$1.18 per share.

When converted to the Australian currency, this reflects an approximate dividend of $1.68 per share, franked at 10%.

Moreover, despite CSL maintaining its full-year dividend of US$2.22 apiece, this is 6% higher due to favourable currency movements.

The full-year dividend is equivalent to 46.2% of the group’s basic earnings per share (EPS) of US$4.81.

You still have time to scoop up the latest dividend as the ex-dividend date falls on 6 September.

CSL will pay the distribution of its profits to eligible shareholders on 5 October.

What about the FY23 dividend?

While CSL didn’t give any guidance on its dividend for FY23, we take a look at what Goldman Sachs had to say.

The broker released its key takeaways on the back of CSL’s FY22 results.

It said “NPAT is guided to $2.4bn-2.5bn, excluding Vifor (constant currency terms). Consensus expectations are heavily distorted by the impact of Vifor in our view, but our best guess at ‘organic CSL’ consensus is $2.575bn.”

Upside risks included: More supportive pricing dynamic than we already expect, positive results from pipeline/pre-commercialisation products, and plasma donor fee deflation.

However, downside risks involved: Competitive product launches, challenges associated with unemployment/payer mix, and sustained challenges due to COVID-19.

Goldman Sachs has a neutral rating on CSL with a 12-month target price of $307 per share.

CSL share price snapshot

Over the last 12 months, the CSL share price experienced volatility on the back of an uncertain global economic outlook.

After touching a 52-week low of $240.10 on 15 February, its shares hit resistance at around the $270 mark.

Since then, that barrier has been breached with CSL shares trading around 4% under the psychological $300 level.

Based on today’s price, CSL commands a market capitalisation of $141 billion and has a trailing dividend yield of 1.03%.

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

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More reading

• An ASX 200 market darling in the past, but don’t expect fireworks from the CSL share price going forward
• CSL share price drops despite expectations of growth in FY23
• CSL share price on watch following FY22 results
• 5 things to watch on the ASX 200 on Wednesday
• Looking to buy CSL shares? Here’s what to watch when the biotech company reports this week

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 positions in and has recommended CSL Ltd. 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 Fletcher Building Limited (ASX: FBU) share price is well into the green after the company revealed a 42% lift in profit in its FY22 full-year results.

The Fletcher Building share price opened today’s session at $5.14, up 4.26% on yesterday’s close of $4.93.

Shares in the ASX-listed New Zealand company are currently swapping hands for $5.11, up 3.65% for the day so far.

Let’s take a look at the numbers.

Fletcher Building share price up on positive FY22 report

Fletcher Building said it achieved its forecasts for FY22. Here are the key metrics:

• Revenue NZ$8,498 million, up 5% from the prior corresponding period (pcp)
• Net profit after tax (NPAT) of NZ$432 million, up 42% from pcp
• EBIT before significant items of NZ$756 million, up 13% from pcp
• Return on Funds Employed (ROFE) before significant items of 19.3%, compared to 18.8% pcp
• Cash flows from operations of NZ$592 million, compared to NZ$879 million pcp
• Fully imputed final dividend of 22 NZ cents per share to be paid on 6 October. ASX shareholders will receive a dividend of 25.882353 NZ cents.

Fletcher Building says it has a strong balance sheet with “solid cash flows partly offset by some inventory rebuild and housing investment”.

The profit increase will result in a 33% bump in total annual dividends to 40 cents per share.

What else happened in FY22?

Over the year, Fletcher Building also completed an NZ$274 million share buyback program.

The buyback was announced on 26 May 2021.

What did management say?

Fletcher Building CEO Ross Taylor said:

Fletcher Building delivered strong results in FY22 across all key metrics. Our performance highlighted our ability to deal with a dynamic operating environment, while remaining focused on delivering long term, sustainable growth.

Our balance sheet remains robust with $1.1 billion liquidity and net debt of $670 million at year end. This positions us well as we move into the new financial year and continue to invest in the growth of the business.

What’s next?

Fletcher Building said it was “well positioned to deliver strong growth in FY23 at present market levels”.

It is targeting a more than $100 million improvement on its FY22 EBIT in the next financial year.

Fletcher Building share price snapshot

The Fletcher Building share price is down 27% over the year to date.

This compares to a 6% dip in the S&P/ASX 200 Index (ASX: XJO).

The post Fletcher Building share price lifts on 40% profit boost appeared first on The Motley Fool Australia.

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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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The Steadfast Group Ltd (ASX: SDF) share price is in a trading halt today.

It comes after the insurance broker announced its acquisition of Insurance Brand Australia and a solid set of results for FY22 this morning.

There’s a lot to unpack here, so let’s dive into the latest developments on Steadfast.

What did the company report?

Steadfast reported a string of highlights for FY22. Here are the key results:

• Revenue rose 21.3% to $911.4 million compared to FY21
• Underlying earnings before interest, taxation and amortisation (EBITA) increased 29.5% to $340.4 million
• Net profit after tax (NPAT) lifted 20% to $171.6 million
• Declared a fully franked final dividend of 7.8 cents per share, up 11.4% from FY21
• Total full-year dividend of 13 cents per share, up 14% from FY21

Steadfast said EBITA growth was driven by a 16.2% contribution from acquisitions and organic growth of 13.1%. Organic growth was primarily due to increases in premiums and some volume uplift.

Across FY22, Steadfast completed $552 million of earnings per share (EPS) accretive acquisitions, based on its latest annual report.

The company’s increased dividend for FY22 represents a dividend payout ratio of 75% of underlying NPAT. It will be paid on 9 September.

Acquisition of Insurance Brands Australia

Steadfast has also announced it will acquire Insurance Brands Australia (IBA) and its subsidiary companies.

IBA is one of Australia’s largest privately owned insurance distribution businesses with a strong focus on the small to medium enterprises segment.

The total consideration for the acquisition is $301 million. This is comprised of an initial payment of $276 million and an earn-out payment of $25 million.

The initial payment is made up of both cash and scrip dividends.

The cash will be sourced from Steadfast’s corporate debt facilities. Certain IBA management and employee shareholders will have the choice of opting for shares instead of cash dividends (scrip dividends). However, this is limited to a value of $56.1 million.

The earn-out payment is subject to achieving performance criteria in FY23 and any additional payment will be made in the first half of FY24.

Management expects this acquisition to be EPS accretive in the first full year.

The acquisition is expected to be completed by 23 August.

Further acquisitions ahead

Steadfast management continues to flex its roll-up strategy, identifying further Trapped Capital acquisition opportunities worth around $400 million.

The average EBITA multiple for these purchases is estimated at around 10 times.

Management expects to complete around $220 million of these acquisitions in FY23.

What did management say?

Steadfast Managing Director and CEO Robert Kelly said:

Our enduring business model, the skills and stability of our executive team, our prudent approach to acquisitions and the strong performance of our equity owned businesses resulted in a 26.2% increase in commission and fee revenue for FY22, improved margins and a 29.3% increase in underlying NPAT to $169.0 million for FY22.

More growth ahead for Steadfast

Management is guiding the following key financial targets for FY23.

• Underlying EBITA of between $400 million and $420 million
• Underlying NPAT of between $190 million and $202 million
• Underlying diluted EPS growth of 5% to 11%

Steadfast foresees price increases by strategic partners across the market to continue in FY3.

Steadfast share price snapshot

The Steadfast share price has performed quite well compared to the broader market recently.

In the last year, the Steadfast share price has risen 10% and 13% across the last six months.

The S&P/ASX 200 Index (ASX: XJO) has fallen by 5.6% in the past year and dropped 2.80% across the last half year.

Steadfast shares will remain in a trading halt at $5.39 apiece until market open on Friday 19 August or when the company’s announcement is released to the market, whichever is earlier.

Foolish takeaway

I’d like to highlight Kelly’s comment about management’s prudent approach to acquisitions.

Future growth lies in Steadfast’s ability to become a dominant player in the insurance broking industry. Steadfast is looking to devour its smaller competitors.

However, Steadfast appears to remain disciplined and selective in what it acquires. In such roll-up strategies, I believe an investor needs to focus on management’s acquisition track record.

This requires a lot of groundwork as it involves understanding the value contributed by past acquired companies.

The post Steadfast share price halted following FY22 results and acquisition appeared first on The Motley Fool Australia.

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More reading

• Redbubble share price tumbles 40% as profit turns to loss
• Why is the CBA share price sliding today?
• Magellan share price in freefall despite 44% rise in profits
• Super Retail Group share price jumps 8% on soft FY22 results
• Why these 2 ASX shares rocketed 40% last month

Motley Fool contributor Raymond Jang 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 Steadfast Group Ltd. The Motley Fool Australia has recommended Steadfast Group 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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