Category: Stock Market

The Lake Resources N.L (ASX: LKE) share price has seen better days than today.

Around midday, shares in the lithium exploration company are southbound despite the absence of any news. At present, the Lake Resources market capitalisation is 8.5% lighter than it was yesterday, with a share price of $1.23.

Let’s take a closer look.

Cool your jets

Some investors are calling time on their Lake Resources investment on Wednesday. Though, the lack of announcements from Lake directly suggests there could be other factors at play.

On Monday, we reported on the heightened short interest in Lake Resources shares. The lithium explorer managed to make the top 10 most shorted ASX shares last week, attracting a noteworthy 10.8% short interest.

To give some context, the Lake Resources share price had been on a tear prior to Thursday last week. In the space of less than a month, investors bid the company’s shares up more than 150%. A rewarding return for those lucky shareholders.

Hence, it’s unsurprising that some investors might be opportunistically taking their bags of cash and running for the hills.

Looking at lithium more broadly, the landscape remains relatively unchanged. In fact, S&P Global reported on Friday that industrial-grade lithium carbonate prices had edged higher. Furthermore, Trading Economics shows lithium carbonate prices holding steady at around US$70,500 per tonne.

Lake Resources is slated to report its full-year results on 30 September.

Lake Resources share price in review

Today might look grim for Lake Resources shares, but zooming out, it looks a whole lot better. In the last 12 months, the lithium explorer has notched a gain of 116%. That is a severe outperformance of the S&P/ASX 200 Index (ASX: XJO) and its dismal fall of 5.5%.

However, the mighty return doesn’t coincide with mighty margins. For now, Lake is yet to derive any revenue from operations. In turn, the company recorded a $6.1 million loss for the 12 months ending 31 December 2021.

The post Why is the Lake Resources share price sinking 8% on Wednesday? appeared first on The Motley Fool Australia.

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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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The Dexus Property Group (ASX: DXS) share price has given back some small early gains and is currently down 0.7%.

Dexus shares closed yesterday trading for $9.16 and are now at $9.10.

This comes following the release of the commercial real estate group’s full-year results for the 12 months ending 30 June (FY22).

Dexus share price wobbles despite strong FY22 results

• Net profit after tax (NPAT) increased 41.9% year on year to $1.62 billion
• Distributions of 53.2 cents per security, up 2.7% from FY21 and beating guidance
• Occupancy of 95.6% for the Dexus office portfolio and 98.1% for the Dexus industrial portfolio
• $1.9 billion of cash and undrawn debt facilities as at 30 June

What else happened during the year?

Dexus attributed much of its NPAT boost to fair value gains on investment properties, share of net profit of equity-accounted investments, and a favourable net fair value movement of interest rate derivatives.

Milestones during the year included securing $1.6 billion of investment onto its funds management platform with “a number” of new investors coming aboard.

Also topping the list in FY22 was Dexus’ agreement to acquire AMP Capital’s real estate and domestic infrastructure equity business. The company said it remains focused on completing the transaction, which will provide it with up to $21.1 billion of funds under management.

On the environmental, social and governance (ESG) front, Dexus highlighted that it was the only real estate company to achieve a Gold Class distinction in the S&P Global Sustainability Yearbook 2022.

What did management say?

Commenting on the results, Dexus CEO Darren Steinberg said:

We’ve achieved a lot this year in what has been a complex environment. We have selectively recycled assets and made investments to support long term growth which involved over $10 billion of industrial, office, retail and healthcare transactions across the group.

Sustainability is integrated across our entire business. For more than a decade, we have been focused on energy efficiency as well as reducing the group’s emissions and environmental footprint.

Dexus’ CFO Keir Barnes added:

Dexus achieved 2.7% growth in distributions per security for the 12 months ended 30 June 2022. This result is particularly pleasing given our initial market guidance for distribution growth of not less than 2% which was upgraded in the second half to growth of not less than 2.5%.

What’s next?

The Dexus share price is likely facing some headwinds today after the company forecast a challenging period over the next two years. Dexus cited increasing interest rates, continuing supply chain disruptions, the global energy crisis and geopolitical risks as creating ongoing uncertainties.

Looking ahead, Steinberg said:

Based on current expectations regarding interest rates, continued asset sales and barring unforeseen circumstances, Dexus expects distributions of 50.0 – 51.5 cents per security for the 12 months ended 30 June 202313, below the 53.2 cents per security distribution delivered in FY22.

In 2024 and beyond, he added, “We are set to emerge as one of the leading real asset managers in the Asia-Pacific region positioned to capitalise on underlying structural trends, and we are confident of continuing deliver long-term value.”

Dexus share price snapshot

The Dexus share price is down 19% in 2022. That compares to a year-to-date loss of 7% posted by the S&P/ASX 200 Index (ASX: XJO).

The post Dexus share price wobbles amid strong FY22 results and reduced FY23 dividend guidance appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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 ReadyTech Holdings Ltd (ASX: RDY) share price is in the red in midday trade amid the company reporting a strong performance in its FY22 results.

Shares of the software as a service (SaaS) company are currently changing hands for $3.18 each, a fall of 1.24% on the day so far.

Let’s go over the highlights of the report.

What did ReadyTech Holdings report?

• Revenue up 16.8% year on year (YoY) to $78.3 million
• Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) up 45.50% YoY to $27.5 million
• Net customer revenue retention rate of 106%, up from 104% in FY21
• Gross opportunity pipeline up 31.57% YoY to $25 million

The company reported healthier top and bottom lines combined with a strong net customer retention rate. Sales momentum also picked up, with the company significantly growing its opportunity pipeline.

ReadyTech reported a 27% compound annual growth rate (CAGR) for its revenue over the last four years.

This was helped through the company onboarding 48 marquee brands, each contributing $50,000 in subscription and implementation revenue. The combined total of these companies was said to be $8 million.

What else happened in FY22?

The company announced four acquisitions in various sectors to boost the brand’s competitive standing. These included Open Windows, Avaxa, Itvision, and PhoenixHRIS. During the financial year, these companies contributed revenue of $4.3 million.

However, the company’s operating expenses also grew 63.1% to $50.8 million, with most of the increase attributed to increased research and development (R&D) and sales and marketing costs.

A major contributor to the company’s finances was the justice sector, contributing $23.9 million in revenue and $8.8 million in earnings. These figures grew 18.6% and 25.7% respectively on a YoY basis.

What did management say?

ReadyTech co-founder and CEO Marc Washbourne said:

FY22 was a highly successful year for ReadyTech driven by the disciplined execution of our vertical SaaS playbook strategy. Our investments in product-market fit, sales and marketing – with a particular focus on enterprise accounts – saw the Company deliver strong organic growth across all verticals.

What’s next?

ReadyTech said it’s expecting organic revenue growth to be in the mid-teens for FY23, with $2 million added to its income statement from its acquisitions.

The company said the justice sector continues to be a major tailwind. ReadyTech said its delivery of case management solutions represents a serviceable market of $250 million. This is spread across courts, legal services, tribunals, and public prosecutors.

The company also stated it has already partnered with the Ministry of Justice in the UK, providing a scheduling and listing module. It also has the potential to port its products to other Commonwealth countries.

ReadyTech share price snapshot

The ReadyTech share price has taken a beating over the last year, down 17% year to date

But it’s still fared better than the S&P/ASX All Technology Index (ASX: XTX). It’s lost more than 24% over the same period.

At its current share price, ReadyTech has a market capitalisation of around $350 million.

The post ReadyTech share price slips despite earnings increase appeared first on The Motley Fool Australia.

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Motley Fool contributor Matthew Farley 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 Pact Group Holdings Ltd (ASX: PGH) share price is bleeding today after the rigid packaging plastics manufacturer delivered its FY22 full-year results.

The Pact Group share price opened at $2.03 this morning, down 6.9% on yesterday’s closing price of $2.18. The shares have since fallen to $2.01, down 7.8% for the day so far as investors digest the news.

Pact Group is the largest rigid packaging plastics manufacturer in Australia and New Zealand, with a growing footprint in Asia.

Let’s take a look at their results.

Pact Group share price slides on profit drain

Here are the key points of Pact’s results:

• Revenue of $1.838 billion, up 4% on the prior corresponding period of FY21 (pcp)
• Underlying earnings before interest and tax (EBIT) of $156 million, down 15% on pcp
• Underlying net profit after tax (NPAT) of $70 million, down 25% on pcp
• Net debt of $561 million, $24 million lower than pcp
• Final dividend of 1.5 cents per share with 65% franking to be paid on 10 October.

Pact Group said revenue was up due to “solid demand for sustainable packaging and recycled products”.

It said a 25% drop in underlying NPAT was “due in part to the absence of one-off revenue in the Contract Manufacturing segment recorded in FY21”.

The underlying EBIT for the contract manufacturing segment was in the negative at ($4 million) in FY22 compared to $24 million in FY21, a 117% drop.

The EBIT was down but in line with the guidance that Pact Group provided in its 1H FY22 update.

The total dividends paid in FY22 will amount to 5 cents per share compared to 11 cents in FY21.

What else happened in FY22?

Pact talked up its cost recovery initiatives, saying they “broadly offset” increased material prices and labour costs due to supply chain challenges and “the cost of the continuing impact of COVID-19“.

In an investor presentation released with the results today, Pact Group said its vision was to “lead the Circular Economy through reuse, recycling and packaging solutions”.

Progress on its circular economy strategy in FY22 included acquiring Synergy Packaging, a specialist manufacturer of PET and 100% recycled PET packaging for health and beauty packaging.

It also commenced operations at Circular Plastics Australia, a PET recycling facility in Albury-Wodonga. The facility has international food grade certification and produces recycled resin for Pact Group’s joint venture partners.

Pact Group aims to be the largest PET plastic recycler in the Australasian market. In its statement, Pact said its recently announced sustainability partnership with Woolworths Group Ltd (ASX: WOW) is “proof that the company is the end-to-end provider of recycled content into recycled packaging”.

Pact Group has set an emissions target to reduce scope 1 and 2 emissions by 50% by 2030 in Australia and New Zealand from an FY21 baseline. It also aims to increase its average recycled plastics to 30% by FY25.

The Pact Group share price halved in FY22. It reached a 52-week high of $4.63 in August 2021 after the company released its FY21 full-year results. It reached a 52-week low just last month of $1.80.

What did management say?

Pact Group managing director and CEO Sanjay Dayal said:

We achieved sound revenue during the 2022 financial year, against the backdrop of a challenging market and tough economic conditions. While we continue to see escalating demand for recycled content, our performance was impacted by higher costs of both input materials and labour, as well as additional costs due to the ongoing impact of COVID and supply chain disruption.

We were able to recover some of these costs during the latter half of the year and will continue to do so and our focus remains on cash flow generation.

What’s next?

Pact Group said it expected a continuation of supply chain availability issues, rising raw material costs, and elevated energy prices in 1H FY23 before normalisation in 2H FY23.

As a result, the company expects underlying EBIT to “grow slightly in FY23”.

Pact Group share price snapshot

The Pact Group share price is down 21% in the year to date.

This compares to a 7.5% fall in the S&P/ASX All Ordinaries Index (ASX: XAO).

The Pact Group has a market capitalisation of approximately $750 million.

The post Pact Group share price tumbles on 25% profit decline and halved dividends in FY22 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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

It’s been four months since Pershing Square’s Bill Ackman unloaded his short-lived stake in Netflix (NASDAQ: NFLX). He sold the position on April 20, as the stock plummeted following a brutal quarterly report for the leading premium streaming service. Netflix stunned the market with a sequential dip in global subscribers, forecasting a much larger decline for the second quarter.

Ackman held Netflix for less than three months, and it proved costly. The stock’s swift decline accounted for a 400-basis-point hit on Pershing Square’s performance. The hedge fund’s filing this week confirms the April sale, and that Ackman didn’t buy back into the company. 

It’s a shame. Depending on when someone cut Netflix loose on April 20, the shares are 2% to 17% higher as of Monday’s close. This doesn’t mean that Pershing Square is feeling any seller’s remorse (at least not yet). Many of Ackman’s investments in his concentrated portfolio have fared better. However, with some interesting catalysts working Netflix’s favor, it could be more than just the recent gains that he will be missing out on. 

Tudum

Things did get better for Netflix after Ackman took the proceeds from his realized loss elsewhere. Netflix would go on to lose less than half as many net subscribers in the second quarter than it was expecting. It also sees a return to sequential membership growth in the current quarter. It’s a good start, but the company will still have to do better than that if it wants to win back its racing stripes.  

Netflix isn’t dead as a growth stock. Even after back-to-back quarters of retreating subscriber counts, revenue is still 13% higher now on a constant currency basis than it was a year ago. As a globetrotter with 56% of its revenue being generated outside of the U.S. and Canada, reported growth is feeling the pinch of the potent greenback. Whether or not that continues to be a headwind, Netflix has a lot of interesting things working in its favor. 

Let’s start with Disney (NYSE: DIS), the company that has emerged as its biggest threat given the swift success of Disney+ and Hulu. Disney shares have been climbing since the House of Mouse announced that the monthly rate for Disney+ in its current ad-free form will soar 38% later this year. Hulu is also getting a price boost. Disney will be rolling out an ad-supported tier at the old price. 

If you like Disney’s move of introducing a new ad-supported plan, well, Netflix has been public about working on the same thing for months. If you can trace back the steps of the Netflix sub slide, you may find yourself at an ill-advised January price hike. Will Disney suffer a similar fate — or worse, since this is a much larger increase? Netflix should be a beneficiary of Disney trying to make its flagship streaming service profitable within the next two fiscal years.

There are also some homegrown catalysts cooking at Netflix beyond its upcoming ad-backed option. It’s been working on mobile games and in-person experiences based on some of its more popular proprietary content. There’s also chatter about Netflix rolling out live programming, as well as theatrical runs for some of its high-profile movies. 

There’s a glut of premium streaming video platforms these days. Netflix is still the king of streaming service stocks, but it’s not content about the state of its content. With subscriber counts growing again this summer and new toys for it to play with, investors may want to think twice about following Ackman through the exit door.

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

The post Did Bill Ackman give up on Netflix too soon? appeared first on The Motley Fool Australia.

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Rick Munarriz has positions in Netflix and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Netflix and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2024 $145 calls on Walt Disney and short January 2024 $155 calls on Walt Disney. The Motley Fool Australia has recommended Netflix and Walt Disney. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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The Magellan Financial Group Ltd (ASX: MFG) share price is in freefall this Wednesday after this company released its full-year earnings for FY2022.

At the time of writing, Magellan shares have dropped a painful 7% to $13.94. That comes after the ASX 200 fund manager closed at $15 a share yesterday and opened at $15.20 this morning.

Magellan share price falls on lacklustre full-year results

• Average funds under management of $94.3 billion, down 9% from FY21’s $103.7 billion
• Statutory net profit after tax (NPAT) of $383 million, up 44% on FY21’s $265.2 million.
• Adjusted NPAT of $399.7 million, down 3% on FY21’s $412.4 million
• Adjusted diluted earnings per share (EPS) of 215.9 cents, a fall of 4% over FY21’s 224.9 cents
• Final dividend of 68.9 cents per share declared, a drop of 39.6% over last year’s final payout of $1.1411

Magellan reported that the difference between statutory and adjusted profit after tax was due to “strategic, non-recurring, non-cash or unrealised items”.

Meanwhile, profit before tax and performance fees came in at $4770.7 million, an 11% fall from FY21’s $526.4 million.

The final dividend of 68.9 cents per share, fully franked, brings the company’s total dividends for FY22 to 179 cents per share. That’s down 15% on FY21’s total of 211.2 cents per share.

What else happened in FY22?

It was a tough year for Magellan over FY22. A number of negative developments hit the company. These included the loss of a major institutional mandate in St. James Place, the departure of co-founder and former high-profile stock picker Hamish Douglass and continued lacklustre performance from Magellan’s funds.

Continuing declines in funds under management (FUM) also battered the company. Although the company’s FY22 average FUM was $94.3 billion, earlier this month, Magellan reported that its current FUM as of 31 July was at $60.2 billion.

However, Magellan has also made some capital management moves in recent months that are benefitting shareholders. The company reported this morning that, as of 30 June, it had bought back 626,960 of its own shares under its 10 million share buyback policy.

Shareholders have also been issued with bonus 5-year options on a one-for-eight basis. These options expire in 2027 and have an exercise price of $35.

What did management say?

Hamish McLennan, Magellan’s chair, had this to say on these results:

Whilst it has been a difficult year for the business, we delivered a number of capital management initiatives that we believe are consistent with our aim to deliver capital efficiency, pay solid dividends and generate attractive returns to shareholders.

Magellan is highly focused on its core funds management business, and we look forward to the next chapter of the company’s growth under new CEO and Managing Director, Mr David George

What’s next?

Over FY22, Magellan sold out of its 11.6% stake in fast food chain Guzman y Gomez. It reiterated this morning that “Magellan does not plan to make further investments via Magellan Capital
Partners“.

Here’s some of what CEO David George had to say about the company’s FY23:

Magellan has faced a number of significant challenges in FY22 which have impacted our financial results for the period. Whilst the material client outflows experienced in the second half of the year will impact FY23, we are very positive on the business moving forward.

Despite recent challenges, Magellan’s goal of protecting and growing our clients’ wealth remains undiminished. The current investment landscape is a volatile and difficult one, that should reward outstanding fundamental company research and active management of portfolios, qualities that are trademarks of Magellan products.

Magellan share price snapshot

It’s been a tough few months for Magellan shares. The ASX 200 fund manager remains down by 26.66% in 2022 and more than 66% over the past 12 months.

At the current share price, Magellan has a market capitalisation of $2.59 billion, with a trailing dividend yield of 16.05%.

The post Magellan share price in freefall despite 44% rise in profits 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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The Vicinity Centres (ASX: VCX) share price is falling after the company revealed a $1.2 billion after-tax profit for financial year 2022.

After opening slightly lower at $2.04, the stock plunged to reach $2.01 at the time of writing. That marks a 1.95% tumble.

Vicinity Centres share price slips despite $1.5b profit jump

Here are the key takeaways from the S&P/ASX 200 Index (ASX: XJO) shopping centre-focused real estate investment trust (REIT)’s full year earnings:

• Net profit after tax (NPAT) of $1.215 billion – up from financial year 2021’s $258 million loss
• Funds from operations (FFO) came to $598 million, or 13.1 cents per share – a 7.1% improvement
• Net tangible assets (NTA) per security reached $2.36 – a 10.3% rise
• Net property valuation gain of $554 million
• Occupancy rate increased to 98.3%
• 5.7 cents per share final dividend, bringing full year dividends to 10.4 cents per share

Vicinity Centres’ FFO growth was driven by an 8% lift in net property income, which came in at $803 million.

That mostly reflects sustained strength of retail and improved negotiation outcomes with retailers. It was partially offset by higher interest costs.

The company’s gearing of 25.1% is still at the lower end of its target range. Vicinity’s weighted average cost of debt for financial year 2022 was slightly higher at 4% and the weighted average maturity was 4.3 years based on limits and 4.8 years based on drawn debt.

What else happened in FY22?

The major news from Vicinity Centres last financial year was its acquisition of a 50% stake in the Gold Coast’s Harbour Town Premium Outlets. The $358 million acquisition saw the Vicinity Centres share price dip 0.3%.

On top of that, Vicinity completed its inaugural green bond in June, issuing $300 million of six-year notes. Despite volatility in debt markets, demand from investors saw an oversubscribed issuance at attractive pricing.

What did management say?

Vicinity CEO and managing director Grant Kelley commented on the company’s earnings, saying:

Our results highlight strong operational and financial execution in a recovering retail landscape.

While we are mindful of inflation, rising interest rates, and increased building costs, we are still seeing positive retail sales trends in our centres.

Vicinity is also relatively well positioned for a rising interest rate environment given our continued prudence with respect to fixed debt costs. Vicinity concluded financial year 2022 with approximately 85% of its drawn debt hedged and approximately 80% of our drawn debt is hedged over financial year 2023, with a very modest step down in financial year 2024.

What’s next?

Vicinity Centres also revealed guidance for financial year 2023 today.

It expects to post between 13 cents and 13.6 cents of FFO per share this fiscal year. It also predicts its adjusted FFO per share will come in between 10.9 cents and 11.5 cents. Its full year dividends will likely be within 95% and 100% of adjusted FFO.

The company is currently transitioning from planning to execution of its $2.9 billion development pipeline. That comprises of projects expected to be completed between financial year 2023 and financial year 2027.

Vicinity expects its development capital expenditure to increase to around $200 million to $250 million this fiscal year and average at approximately $300 million to $400 million each year over the medium term.

Vicinity Centre share price snapshot

Today’s fall included, the Vicinity share price is 13.5% higher than it was at the start of 2022.

It’s also 28% higher than it was this time last year.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has dumped 6% so far this year and 6% over the last 12 months.

The post Vicinity Centres share price slides despite $1.2b FY22 profit appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Whispir Ltd (ASX: WSP) share price is trudging its way upwards on Wednesday amid the release of full-year results for FY22.

At the time of writing, shares in the communications platform provider are 3.8% in the green at $1.24. However, the share price did reach a high of $1.27 earlier in the session.

Whispir share price rallies despite costly growth

• Revenue up 48% on the prior corresponding period to a record $70.6 million
• Annual recurring revenue (ARR) up 22% to $65.4 million
• Gross margins slipped from 59.8% to 58.5%
• EBITDA loss deepened to $10.6 million from $3.8 million
• Net loss expanded to $19.5 million from $9.5 million
• Cash balance at the end of June 2022 of $26.08 million

While the bottom line worsened in FY22, the company took its revenue to the next level. The full-year reports indicate that this substantial growth was mostly underpinned by the Australia and New Zealand operations (ANZ).

Specifically, the ANZ business conjured up a 56% improvement in revenue. Whispir highlighted its partnership with major healthcare providers throughout COVID-19 as a part driver of this improvement.

Additionally, despite making a concerted effort to reduce expenses in the third and fourth quarters, operating expenses outpaced revenue growth year on year. These increases were said to have been driven by greater marketing, research and development, and admin expenses.

However, looking at the positive Whispir share price, it appears investors are focusing on the solid revenue growth today.

What else happened in FY22?

Turning to key events during the financial year, Whispir landed several notable deals. For example, the company signed a 36-month contract with The Department of Education South Australia, enabling 900 schools to make use of the platform for a variety of purposes, including internal communications.

Furthermore, an 8-year long contract was secured with a ‘significant’ Australian government department in FY22.

Pleasingly, while still a small portion of the business, Whispir grew its revenues in Asia and North America. Asia witnessed a marginal 1% increase, whereas North America delivered a 38% jump.

What did management say?

Commenting on the result, Whispir CEO Jeromy Wells said:

Whispir has again delivered a strong financial performance, with record revenues secured while reducing operating expenses in Q4. Our strengthened leadership team has contributed to Whispir’s continued success as we set our sights firmly on becoming EBITDA positive in the second half of FY23.

Further bolstering confidence in the Whispir product, Wells stated:

Governments, enterprises and other organisations are now clearly committed to a future where digitisation plays an essential role in ensuring communications are targeted, efficient and effective. The benefits of incorporating artificial intelligence, algorithms and data to inform how and when to communicate are becoming clear, and this realisation continues to drive our business in all markets. Put simply, it is becoming costly for organisations not to invest in intelligent communication services.

What’s next?

Rather than a distinct range of financial expectations for FY23, management opted to go for a more general outlook commentary today. This might make the Whispir share price difficult to forecast in the near term.

Generally, the company is aiming to continue delivering strong revenue growth across all regions. In addition, management is aiming for gross margin improvements.

Finally, Whispir is eyeing positive EBITDA in the second half. Management believes this is achievable without further capital requirements.

Whispir share price snapshot

It has been a slobber-knocker of a last 12 months for the Whispir share price. Over this time, investors have watched as their shares have eroded 41% in value.

Likely the company’s valuation has been punished during this time as the market abandoned its desire for unprofitable businesses. This is demonstrated by the 27% fall in the S&P/ASX All Technology Index (ASX: XJO) over the last year.

The post Whispir share price roars higher on record revenue appeared first on The Motley Fool Australia.

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

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The Super Retail Group Ltd (ASX: SUL) share price is trading higher this morning after the company posted a soft set of results for FY22.

At the time of writing, the retail group’s shares are trading for $11.03 apiece, a 7.93% gain.

Super Retail has four core retail brands: Supercheap Auto, Rebel, BCF, and Macpac.

Let’s take a look at the company’s FY22 results.

What did the company report?

Here’s a quick snapshot of the report’s takeaways.

• Sales went up 2.8% to $3.55 billion due to a strong second-half performance
• Gross margin dropped from 48% to 46.8%
• Net profit after tax (NPAT) declined 19.9% from $301 million to $241.2 million
• Operating cash flow plummeted 43% to $340.4 million
• Declared a fully franked dividend of 43 cents per share, resulting in a full-year dividend of 70 cents per share

All four key retail brands experienced growth in revenue. Supercheap Auto and BCF led the pack, contributing $63 million in extra revenue relative to FY21.

However, Macpac New Zealand experienced a fall in like-for-like sales of 6.5% because of reduced travel and tourism.

It’s interesting that marketing expenditure went backwards yet Super Retail Group still grew its top line. On top of this, online sales jumped 44% to $601 million.

This is why it’s important for Super Retail Group to focus on improving its loyal customer base, who are more likely to purchase more frequently. Active club members are up 14% to 9.2 million.

Company challenges

However, the increase in revenue wasn’t enough to offset the adverse impact of global supply chain disruptions and rising inflation.

The drop in gross margins is a reflection of this impact as manufacturers and suppliers pass on increased costs.

Unallocated operational costs also pushed down Super Retail Group’s bottom line. This amounted to a $7.8 million jump on FY21, resulting in $38.5 million of unallocated costs.

One of the primary unallocated costs relates to expenses incurred to launch new loyalty programs and make personalised offers to customers through first-party data.

Such costs are a necessary evil to ensure customers engage in repeat purchases.

The significant lift in cost of sales and operational costs meant operating cash flow plummeted from $600 million to $340.4 million.

What else happened in FY22?

Investors should be reminded that FY21 was a particularly strong year where Super Retail Group recorded record gross margins and net operating margins.

The government payments to encourage people to go out and spend played a strong influence on FY21 results. This ought to be considered when evaluating FY22 results.

The company is debt free and continues to generate free cash flow.

It’s encouraging to see Super Retail Group invest $65.9 million in omni-retail, loyalty and personalisation, and IT projects.

In addition, $58.8 million was spent on new stores and refurbishments.

What did management say?

Super Retail Group Managing Director and CEO Anthony Heraghty highlighted the numerous initiatives that the business is undertaking to improve its competitive position.

He emphasised the importance of deploying capital to improve the company’s digital offering, store formats, and customer value proposition.

In response to major risks, Heraghty said:

The Group’s conservative balance sheet, our customer value proposition, the strength of our brands and the resilience of our key auto and sports businesses positions us well to manage inflationary pressures and a more challenging retail environment.

What’s in store for Super Retail Group?

Super Retail Group is planning on rolling out up to 30 new stores across its four key brands, including a BCF superstore in Townsville, Queensland.

On top of this, Super Retail Group plans to upgrade another five Rebel stores to a new format.

Super Retail is guiding $125 million of capital expenditure in FY23, which will be used to fund its store development program and investment in digital capability and customer retention strategies.

In terms of unallocated costs, Super Retail Group expects to incur $25 million in corporate costs and $19 million for personalisation and loyalty strategies.

Super Retail share price snapshot

In the last year, the Super Retail share price has fallen by 22% but managed to claw back some gains with a jump of 7% across the past month.

The S&P/ASX 200 Index (ASX: XJO) has dropped by 6% in the last year but has bounced back in a similar fashion, rising 6% in the last month.

Recent interest rate rises could present an opportunity to invest, as people can become overly pessimistic about retail stocks.

The post Super Retail Group share price jumps 8% on soft FY22 results appeared first on The Motley Fool Australia.

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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 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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The CSL Limited (ASX: CSL) share price is currently down 4% after the healthcare giant reported its FY22 result.

CSL is Australia’s biggest ASX healthcare share. But, it’s a little smaller today in market capitalisation terms as the market didn’t respond positively to the company’s report and guidance.

The headline number was that its net profit after tax (NPAT) fell 6% to $2.255 billion, using a constant currency comparison. That was despite revenue going up by 3%. In Australian dollar terms, the annual FY22 dividend is up 6% to AU$3.11 per share.

CSL said the performance was “as expected” in a difficult global environment. Nonetheless, it managed to reach the top end of its guidance.

The company reported higher collection costs, and it also significantly grew its investment in research and development. Its growth was limited by FY21 plasma collections being reduced due to the pandemic, which then constrained subsequent sales of core plasma therapies in FY22, due to the long-term nature of its manufacturing cycle.

Markets are usually forward-looking

Investors are learning about how FY22 went for the company. But they may be paying particular attention to what the company is expecting in FY23, as investors like to ‘price in’ what’s happening next. Is this what’s affecting the CSL share price today?

CSL said that as FY22 progressed, its plasma collections grew significantly. Collections were up 24%, which it expects will “underpin strong sales growth” in core plasma products going forward. But, the pandemic put it two years behind the projected growth in plasma collections, which is “suboptimal for patient care”.

However, the company warned that the current higher cost of plasma is “also expected to prevail into FY23”. But, it predicted that its influenza business, CSL Seqirus, will deliver another strong year driven by demand for its differentiated products. Seqirus saw revenue growth of 13% in FY22.

In FY23, CSL expects net profit after tax for FY23 to be between $2.4 billion and $2.5 billion at constant currency, “returning to strong sustainable growth”. This guidance excludes the earnings and costs of Vifor, the recently-acquired business. The company will update guidance to include Vifor when it can.

The idea behind buying Vifor is that CSL will expand its leadership across an “attractive portfolio focused on renal disease and diseases of iron deficiency”.

CSL share price snapshot

Since the beginning of 2022, CSL is down by around 2%.

The post CSL share price drops despite expectations of growth in FY23 appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison 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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