Category: Stock Market

The Woodside Petroleum Limited (ASX: WPL) share price is enjoying a strong start to the trading week.

Shares of the S&P/ASX 200 Index (ASX: XJO) energy giant are currently up 2%, having earlier posted gains of 3%. That compares to the curtain gain of 0.6% posted by the ASX 200.

So, why is the Woodside share price off to a good start this week?

Crude oil surges on Russian hostilities

Numerous factors impact Woodside’s performance including the company’s management and the quality of its energy assets.

But energy prices certainly count amongst the big influencers on the Woodside share price.

And crude oil prices are rocketing following a wave of Western sanctions against Russia over its invasion of neighbouring Ukraine.

Brent crude jumped 4.9% over the past 24 hours to trade at US$102.76 per barrel.

West Texas Intermediate (WTI) leapt 5.8% to US$96.81 per barrel.

Don’t forget, Russia is the world’s third largest producer of crude oil.

Among the sanctions sending crude prices skywards is the West’s agreement to deny some Russian banks access to the SWIFT bank messaging system.

If you’re unfamiliar, SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. And it’s used by banks and companies the world over to deliver secure finance messaging.

So, why is removing some of Russia’s banks from SWIFT sending crude oil prices, and the Woodside share price, higher?

According to Andy Lipow, president of Lipow Oil Associates (quoted by Bloomberg), “Removing some Russian banks from SWIFT could result in a disruption of oil supplies as buyers and sellers try to figure out how to navigate the new rules.”

And these disruptions don’t look to be over yet.

“The surge that we’re seeing today was guaranteed, given the considerable deterioration of the Ukraine situation over the weekend. Markets should brace for plenty of aftershocks,” said Vandana Hari, founder of Vanda Insights.

In bad news for motorists and energy intensive industries – but good news for the Woodside share price – Goldman Sachs had lifted its 1-month forecast for Brent to US$115 per barrel. That’s up from the prior forecast of US$95 per barrel and 12% higher than the current Brent crude price.

Woodside share price snapshot

With today’s intraday moves factored in, the Woodside share price is up 25.6% year-to-date. That compares to the 7.3% loss posted by the ASX 200 over that same time.

And, including its outsized final dividend payment (sorry, shares went ex-dividend last Thursday), Woodside pays a trailing dividend yield of 6.7%.

The post Why is the Woodside (ASX:WPL) share price having such a stellar start to the week? appeared first on The Motley Fool Australia.

More reading

• Analysts name 2 top ASX dividend shares to buy
• 5 things to watch on the ASX 200 on Monday
• How might the Ukraine crisis impact the Woodside (ASX:WPL) share price?
• 5 things to watch on the ASX 200 on Friday
• The oil price has just hit an 8-year high. What might this mean for ASX shares?

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 Bruce Jackson.

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Origin Energy Ltd (ASX: ORG) is edging higher on news the company is planning a new hydrogen hub in the Hunter Valley region of New South Wales.

The Origin share price is $5.725 at the time of writing, a 0.26% gain. For perspective, the S&P/ASX 200 Index (ASX: XJO) is 0.53% in the green today.

Let’s take a look at what the energy giant announced.

What did Origin announce?

Origin will partner with Orica Ltd (ASX: ORI) in a new hydrogen hub. The hub would deliver green hydrogen from water and renewable electricity using a grid connected to a 55-megawatt electrolyser.

Origin said the hub would produce a “safe, reliable and commercial scale” green hydrogen supply chain in Newcastle.

The hydrogen could provide fuel for trucks and buses in the Hunter, Central Coast, and Sydney, according to the company.

Origin stated the plan supports the NSW government’s goal for 10,000 fuel cell electric vehicles by the end of the decade.

Recently, Origin revealed it would be exiting coal-fired power generation early. Origin plans to retire the Eraring power station in NSW by August 2025.

On February 18, the Origin share price fell 8% amid the company completing the sale of a 10% interest in Australia Pacific LNG.

Management comment

Commenting on the news, Origin CEO Frank Calabria said:

By collaborating with Orica and other partners, we have an invaluable opportunity to further explore how green hydrogen could help to power a cleaner future for manufacturing, transport and industrial customers in Australia.

Both Origin and Orica are well established in the Hunter region and bring considerable expertise in different aspects of the hydrogen value chain, which will help contribute to the continued development of this emerging industry.

Origin share price snapshot

The Origin share price has surged 6% in the past month.

In the last year, it has gained around 27% and is up more than 9% year to date.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has climbed around 5% over the past 12 months.

Origin has a market capitalisation of about $10 billion.

The post Origin (ASX:ORG) share price lifts amid green hydrogen news appeared first on The Motley Fool Australia.

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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 Bruce Jackson.

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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Appen Ltd (ASX: APX)

According to a note out of Citi, its analysts have retained their buy rating but cut their price target on this AI data services company’s shares by 38% to $9.15. Citi appears concerned by the lack of earnings visibility after Appen decided against providing short term guidance. However, it feels the share price decline has been an overreaction. And while the broker isn’t convinced the company will achieve its FY 2026 targets, it still sees enough value to maintain its buy rating. The Appen share price is trading at $7.02 this afternoon.

GQG Partners Inc (ASX: GQG)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating on this fund manager’s shares with a price target of $2.33. Goldman highlights that GQG delivered a full year profit result ahead of prospectus forecasts thanks to a much better than expected performance on costs. Overall, it believes GQG shares are a buy due to strong operating momentum, low fees, and management having significant skin in the game. The GQG share price is fetching $1.46 today.

Medibank Private Ltd (ASX: MPL)

Analysts at Morgans have upgraded this private health insurer’s shares to an add rating with a $3.43 price target. This follows the release of the company’s half year results, which came in ahead of consensus estimates. In addition, Morgans believes the benign claims environment is favourable and sees positives from its productivity program. The Medibank share price is trading at $3.18 on Monday afternoon.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• 2 high-yield ASX dividend shares for March 2022
• Embattled Appen (ASX:APX) share price bounces despite a top broker downgrade
• Own Medibank (ASX:MPL) shares? Here’s all you need to know about the latest dividend
• Top brokers name 3 ASX shares to sell next week
• These were the worst performing ASX 200 shares last week

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. owns and has recommended Appen Ltd. The Motley Fool Australia owns and has recommended Appen Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Xref Limited (ASX: XF1) share price is in the red today after the company released its interim report and financial results for the half-year ended 31 December 2021.

At the time of writing, the Xref share price is trading 5% in the red at 57 cents.

Xref share price tanks amid earnings growth

Key takeouts from the reference check company’s earnings results today include:

• Gross Sales – a record first half period of upfront sales of $10 million, up 95% from $5.1 million in H1 FY21
• Cash receipts from sales of $10.3 million, up 65% from $6.2 million the same time last year
• Record first-half revenue result of $8.9 million, up 73% from $5.1 million year on year
• Net loss for the half year of $0.03 million – significant 98% reduction from $1.98 million in H1 FY21
• Operating cash surplus of $2.3 million compared to an operating cash deficit of $500,000 last year
• Cash balance of $10.4 million at 31 December 2021, compared to $8.1 million at 30 June 2021.

What happened this period for Xref?

Xref notes that its growth pattern continued throughout the half. It says, traditionally, this period has the lowest sales due to “seasonal fluctuations in the Australian recruitment industry following the financial year-end, and the summer holiday season in the Northern Hemisphere”.

Nevertheless, the company achieved record first-half revenue of $8.9 million, an impressive jump of 73% compared to the same period last year.

Throughout the pandemic, Xref says it has also been successful in gradually reducing reliance on its traditional sales team by increasing the digital acquisition of new clients.

“Xref has improved all marketing metrics relating to effectiveness and lead generation with the continual optimisation of channels and marketing investment,” the company said.

“Invoice value, client size, initial adoption and sales cycle periods have all improved as we continue to execute our digital marketing strategy and 3,200 leads were captured during H1 FY22 resulting in a 124% increase in lead flow over the same period in the previous year.”

As such, the group almost broke even at the bottom line, backed by an operating cash surplus of $2.3 million that was well ahead of a deficit of $500,000 this time last year.

Management commentary

Speaking on the announcement, Xref’s CEO and co-founder Lee-Martin Seymour said:

As a marketing led, data-driven organisation, Xref continues to execute a data-driven multi-channel marketing strategy generating an increased number of inbound leads. B2B buyers are becoming increasingly reliant on reviews as a source of truth when considering a sofware purchase. Xref’s online brand presence continues to be strong and successful on platforms such as G2, Capterra and Google My Business.

On G2’s review platform, Xref repeatedly ranks among the best SaaS [software as a service] in the reference check category, including Top 10 in ANZ. The most recent winter report saw Xref win seven badges for leadership, usability and relationships, ranking number one in usability.

What’s on the horizon for Xref?

The company says the staged release of its enhanced platform, including its Xref Pulse Surveys and Xref Marketplace, will continue throughout FY22.

These new services are set to “dramatically increase Xref’s global addressable market”, according to the company.

“In particular, this strategy is expected to grow Xref’s share of the North America market via channel partners, wholesale and self-serve subscription sales.”

Xref reckons that geographic expansion will also reduce seasonality in overall usage moving forward. Along with the “growing demand for additional pre-employment survey and checking services via the Xref Platform and connected Marketplace, Xref expects it will be able maintain its achievement of a net profit after tax [NPAT] for FY22 along with cash flow profitability”, it concluded.

Xref share price snapshot

In the last 12 months, the Xref share price has surged around 98% but it is down more than 15% this year to date.

During the past month of trading, shares have collapsed 19% and Xref is thus trailing the broad index’s return this year.

The post Xref (ASX:XF1) share price slides 5% despite surge in gross sales appeared first on The Motley Fool Australia.

More reading

• Expert reveals 2 small-cap ASX shares for the jobs boom

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Xref Limited. The Motley Fool Australia has recommended Xref Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) has had a bumpy start to the week’s share trading. At the time of writing, the ASX 200 is up by 0.47% at 7,031 points after stints in both positive and negative territory so far today. 

But let’s dive a little deeper and take a look at the ASX shares that are currently topping the ASX 200’s volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume so far this Monday

Telstra Corporation Ltd (ASX: TLS)

Telstra is our first ASX 200 share experiencing high volumes to look at today. So far, an impressive 14.84 million of this telco’s shares have traded on the markets this Monday. There have been no major announcements out of Telstra so far today. 

However, the company has released a notice that reveals it is continuing to buy back its own shares on the open market. In addition, the Telstra share price is currently up a robust 1.14% at $3.98 at the time of writing. This combination is likely behind the high volumes we are seeing with this company. 

Pilbara Minerals Ltd (ASX: PLS)

ASX 200 lithium company Pilbara Minerals is next up. So far today, a notable 20.38 million Pilbara shares have crossed the proverbial Nullabor. Again, there hasn’t been much news out of the company to speak of at this point. However, we have seen some choppiness with the Pilbara share price that might be relevant to this volume. 

Pilbara shares are currently down by close to 1.5% at $2.70. However, the company opened strongly in the green today and rose as high as $2.82 a share before falling to the current level. It’s this volatility that could be behind all of that volume. 

Paladin Energy Ltd (ASX: PDN)

Paladin Energy is our third and final share to examine today. So far this Monday, an eye-catching 30.03 million Paladin shares have been traded on the markets. Nothing of note has come out of this uranium miner today. However, the company did report its half-year results on Friday last week, which could be still sparking some market aftershocks. 

The company has also had a wild day today to boot. It’s currently up 1.3% at 78 cents a share after bouncing between 77 and 81 cents per share over the trading day so far. Again, volatility seems to be the cause of so many shares flying around the boards this Monday, perhaps in addition to the earnings from last week. 

The post These 3 ASX 200 shares are topping the volume charts on Monday appeared first on The Motley Fool Australia.

More reading

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• InvoCare (ASX:IVC) share price jumps as earnings surge 22%
• Which ASX 200 shares have delivered the biggest dividend payout increases this earnings season?
• ASX 200 (ASX:XJO) midday update: Zip to buy Sezzle for $491m, GrainCorp storms higher
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Sebastian Bowen owns Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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ASX mining shares are off to a stellar start in 2022 amid a two-year-long commodities rally that is seeing listed miners realise record levels of revenue and free cash flow.

The S&P/ASX 300 Metals & Mining Index (XMM) has climbed over 4% into the green this year to date, having spiked 3% in the last month alone.

Thus, amid this rally – plus with earnings season in full swing – it’s not surprising to see 3 names within the ASX mining basket lunge past their 52-week highs during Monday’s session. Let’s take a look.

South32 Ltd (ASX: S32)

Shares in South32 are cruising 4% higher today to set new single-year highs in this afternoon’s session. At the time of writing, the diversified mining company’s share price is fetching $4.79 apiece.

In fact, the $21.5 billion company by market cap saw its equity value surge to record highs following a string of positive catalysts in 2022, not in the least related to its half-year earnings.

In its report, the company recognised statutory after-tax profit of US$979 million and underlying earnings of more than US$1 billion.

The rotation out of speculative high-growth names back into value-type propositions has also helped ASX mining shares in 2022, and South32 is no exception.

Plus, with the commodities rally driving cash straight down to the bottom line for these names, South32 recorded an astounding US$942 million in free cash flow for H1 FY22 – a gain of US$806 million on the year.

This enabled the board to declare a 621% jump in the company’s interim dividend to US8.7 cents a share, a gain that safely beats the level of inflation.

It’s no wonder investors are piling into South32 lately in order to secure a spot in the future of this company, seeing as investors aren’t paying the exorbitant premiums for growth into the future anymore.

Grange Resources Ltd (ASX: GRR)

Shares in Grange Resources are setting new single-year highs today after the company released its financial full-year results late on Friday afternoon.

Investors have responded well to the company’s earnings and have sent shares over 37% higher to set a new 52-week high of $1.025 on Monday.

In its results, the company recognised revenue from operations of $782 million compared to $526 million last year. This came through to net profit after tax (NPAT) of $322 million, a year on year gain of 59%.

Grange’s earnings were helped this year by the fact it remained quite immune to the effects of COVID-19 lockdowns in 2021, suffering no material impacts to operations.

It also adopted an Environmental, Social, and Governance (ESG) framework to integrate with its governance moving forwards.

Grange reckons it has started the program using “21 core metrics and disclosures as created by the World Economic Forum (WEF)”.

In the last 12 months, the Grange Resources share price has spiked over 118% and is up more than 33% this year to date.

Base Resources Ltd (ASX: BSE)

Shares in Base Resources are also cruising higher today and set new 52-week highs of 35.5 cents during Monday’s session.

Base Resources released its results for the six-month period ended 31 December 2021 before the open today, and investors appear to have absorbed the outcome well.

In its report, Base says it achieved a record first-half revenue result of US$104.6 million “following increased production and an 18% increase in average realised unit sales price” from this time last year.

It also recognised net profit after tax (NPAT) of US$19.2 million, a substantial jump up from a net loss of US$6.4 million in H1 FY21.

The company generated free cash flow of US$8.8 million but say’s this figure “was impacted by the previously announced US$18.8 million catch-up royalty payments to the Government of Kenya during the period”.

Nonetheless, the board still declared a 3 cents per share dividend, meaning that, upon payment of this particular dividend, the company will have returned a total of 13.5 cents per share to shareholders since October 2020 – equal to around $160 million.

Commenting on the results, Tim Carstens, managing director said that “ongoing strong demand for all products is resulting in significant price increases which have contributed to increases in group revenue, EBITDA and NPAT”.

Investors appear to agree with the positive momentum and have piled into the company on a volume more than 280% of its 4-week average.

The post 3 ASX mining shares smashing 52-week highs today appeared first on The Motley Fool Australia.

More reading

• $120m profit jump sends Grange Resources (ASX:GRR) share price 37% higher
• These 3 ASX 200 shares are topping the volume charts this Friday
• Brokers name 2 ASX 200 mining shares to buy
• South32 (ASX:S32) share price up following completion of ‘major milestone’ copper acquisition
• These 3 ASX 200 shares are topping the volume charts on Tuesday

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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 Bruce Jackson.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week on a positive note. At the time of writing, the benchmark index is up 0.6% to 7,037.4 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are rising:

Core Lithium Ltd (ASX: CXO)

The Core Lithium share price is up over 2.5% to 77.5 cents. This morning the lithium developer announced the purchase of six granted mineral leases that include over 30 historic pegmatite mines. Management notes that the acquisition adds significant value to the Finniss Project, enabling the acceleration of resource and mine-life expansion objectives.

Dicker Data Ltd (ASX: DDR)

The Dicker Data share price is up 2% to $14.10. This follows the release of the IT distributor’s full year results. For the 12 months ended 31 December, Dicker Data reported a 24.2% increase in revenue to $2,484.5 million and a 28.6% jump in net profit after tax to $73.6 million. This was driven by the digital transformation, which is being accelerated by the adoption of technology as businesses experienced a changing work environment with global and national lockdowns.

GrainCorp Ltd (ASX: GNC)

The GrainCorp share price is up 6.5% to $8.52. Investors have been buying the grain exporter’s shares despite there being no news out of it. However, it appears as though investors may believe GrainCorp will benefit from sanctions being placed on Russia. After all, Russia is one of the world’s largest grain exporters.

InvoCare Limited (ASX: IVC)

The InvoCare share price is up 4.5% to $12.92. This follows the release of the funerals company’s full year results. For the 12 months ended 31 December, InvoCare reported an 11% increase in revenue to $532.5 million and a 51% jump in operating earnings per share to 31.6 cents. This was driven by a recovery in key value drivers and a robust improvement in the mark-to-market valuation of Prepaid Funds Under Management.

The post Why Core Lithium, Dicker Data, GrainCorp, and InvoCare shares are rising appeared first on The Motley Fool Australia.

More reading

• InvoCare (ASX:IVC) share price jumps as earnings surge 22%
• ‘Significant growth trajectory’: Dicker Data (ASX:DDR) share price rises following strong full year results
• ASX 200 (ASX:XJO) midday update: Zip to buy Sezzle for $491m, GrainCorp storms higher
• ‘Adding significant revenue’: Dicker Data (ASX:DDR) share price edges higher on takeover announcement
• Why is the Dicker Data (ASX:DDR) share price frozen today?

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. owns and has recommended Dicker Data Limited. The Motley Fool Australia owns and has recommended Dicker Data Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The ex-dividend date is an important point in time for an ASX 200 share, as the market reassesses the share price.

Buyers of a share on its ex-dividend date will not receive the company’s next dividend payment. Because of this, investors usually prescribe a lower share price to the ASX share to reflect the absence of the dividend. Depending on the size of the payout, there can be drastic changes in what the market is willing to pay for shares.

Keeping that in mind, here are five S&P/ASX 200 Index (ASX: XJO) shares that have closed the curtains on their dividend payment today.

ASX 200 shares calling time for their next divvy

Fortescue Metals Group Limited (ASX: FMG)

Iron ore mining giant Fortescue Metals is getting plenty of unwanted attention on Monday as it goes ex-dividend. The mining company is set to pay a fully franked interim dividend of 86 cents per share on 30 March. The Fortescue share price has reacted to trading ex-dividend with a 5% fall this morning, before recovering somewhat. At the latest Fortescue share price of $18.14, the company is offering a dividend yield of 16.4%.

Worley Ltd (ASX: WOR)

Landing next on our list of ASX 200 shares going ex-dividend today is engineering services company Worley. Keeping pace with its recent trend dividend payments of 25 cents per share, Worley will be paying another 25 cents payment on 30 March. At the latest Worley share price of $11.86, the company is trading on a dividend yield of 4.2%.

Steadfast Group Ltd (ASX: SDF)

Steadfast is an ASX 200 share that won over investors last week after announcing record results in the FY22 first half. Exciting passive income seekers, the broker network operator increased its interim dividend to a record 5.2 cents per share. For reference, this represents an ~18% rise from the previous payment. At the latest Steadfast share price of $4.62, the has a dividend yield of 2.6%.

Aurizon Holdings Ltd (ASX: AZJ)

The share price of Australia’s largest rail freight operator is running off the tracks on Monday as this ASX 200 share goes ex-dividend. Investors who snagged Aurizon shares prior to today can expect to receive 10.5 cents per share on 30 March. This is down 27% from the company’s previous interim dividend of 14.4 cents. At the latest Aurizon share price of $3.51, the company is offering a hefty dividend yield of 7.1%.

Evolution Mining Ltd (ASX: EVN)

Finally, Evolution Mining is the one ASX 200 shares on this list that has avoided the red on its ex-dividend date. Shares in the gold mining company are currently up 1.4% from their previous close. Shareholders can expect a dividend on 25 March of 3 cents per share. At the latest Evolution Mining share price of $4.25, the miner is reflecting a dividend yield of 2.9%.

The post 5 ASX 200 shares trading ex-dividend today appeared first on The Motley Fool Australia.

More reading

• InvoCare (ASX:IVC) share price jumps as earnings surge 22%
• Which ASX 200 shares have delivered the biggest dividend payout increases this earnings season?
• Why is the Fortescue (ASX:FMG) share price falling 5% today?
• ASX 200 (ASX:XJO) midday update: Zip to buy Sezzle for $491m, GrainCorp storms higher
• 5 things to watch on the ASX 200 on Monday

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. owns and has recommended Steadfast Group Ltd. The Motley Fool Australia has recommended Aurizon Holdings Limited and Steadfast Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Electro Optic Systems Hldgs Ltd (ASX: EOS) share price is plunging today amid the company’s 2021 full-year earnings results.

The defence, space, and communication technology company’s shares are currently trading at $1.83 apiece, down 12%. They fell as low as $1.77 earlier in the session. For perspective, the S&P/ASX 200 Index (ASX: XJO) is up 0.51% at the time of writing.

Let’s take a look at what the company reported today.

Electro Optic share price dives as profits slip

Highlights of the company’s FY21 results include:

• Net loss after tax of $16.8 million, 33.2% improvement on the loss in FY20
• Underlying EBIT declined 12.2% to $14.3 million
• 11.8% boost in revenue, including other income, to $212.8 million
• 17.5% increase in revenue from ordinary activities to $211.8 million
• Net cash outflow of $6.9 million
• No dividend was declared

What else happened in the half?

Electro Optic said the FY21 loss was due to deferral of revenue and EBIT into 2022. However, the company’s cash conversion improved in 2021.

COVID-19 had a significant impact on the business, the company said. This included supply chain costs, product delivery delays, contract negotiation and execution deferrals, less production, and restricted access to customers. This impacted operating performance and the awarding of new work locally and internationally.

The underlying EBIT loss of $14.3 million included investment of $27 million on critical product development.

The company’s space revenue fell 28% due to the end of contracts. There were also delays in the awarding of new contracts. Lower earnings from contracts ending and more investment in research and development impacted the Space segment’s EBIT.

Defence Systems revenue, including other income, surged 17.6%, while underlying EBIT strongly rebounded as profit delayed in 2021 was realised.

Electro Optic’s Communications business achieved a 20.4% boost in revenue and solid profit. However, underlying EBIT in this business fell significantly due to higher SpaceLink operating expenses.

The company invested $37 million in Spacelink in FY21 to spearhead engineering and business development.

Consolidated revenue fell just below the market guidance of $215 to $220 million.

What’s next for Electro?

Elecro Optic said it is well-positioned to support “allies” currently under intense national security pressure. It also said there remains a risk that new COVID-19 variants could impact suppliers, customers, employees, and operations. However, since the start of COVID-19, the company and its suppliers have improved resilience.

Electro Optic commented on “rising geopolitical tensions in Eastern Europe, COVID-19 and the federal election creating uncertainty for future outlook in 2022. However, management expects revenue to grow in 2022.

In its preliminary final report to the ASX, Electro Optic said:

The Company enters 2022 with substantial positive momentum from 2021, as well as headwinds [which] emerged in 2021.

Revenue deferred from Q4 2021 is on track to be received in 2022, and provided Q4 2022 deliveries are maintained on schedule, could add momentum to 2022

Electro Optic share price summary

The Electro Optic share price has plunged almost 60% in the past 12 months, while it is down 22% year to date.

Electro Optic shares have shed nearly 13% of their value in the past week.

For perspective, the benchmark ASX 200 index has returned around 5% over the past year.

The company has a market capitalisation of about $277 million.

The post Electro Optic (ASX:EOS) share price plunges 13% on net loss appeared first on The Motley Fool Australia.

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The A2 Milk Company Ltd (ASX: A2M) share price is pushing higher on Monday.

In afternoon trade, the infant formula company’s shares are up almost 2% to $5.50.

Can the A2 Milk share price keep rising?

As far as one broker is concerned, the A2 Milk share price could have a lot further to run from where it trades today.

According to a recent note out of Bell Potter, its analysts have responded to the company’s half year results by retaining their buy rating and lofty $7.70 price target on its shares.

Based on the current A2 Milk share price, this implies potential upside of 40% for investors over the next 12 months.

What did the broker say?

Bell Potter has run the rule over the company’s half year results and was pleased with what it saw. All in all, this appears to support its view that A2 Milk’s adjusted net profit can double in FY 2024 from FY 2021’s levels.

The broker continues to forecast an adjusted net profit after tax of NZ$167.8 million in FY 2024. This will be up from NZ$80.7 million in FY 2021.

Commenting on the result, Bell Potter said: “Our Buy rating remains unchanged. We saw plenty to like in this result: (1) growth in stage 1 market share in the MBS [mother and baby store] channel from 2.1% to 2.5% (indicative of new customer recruitment); (2) a beat in China direct channels sales in 1H22 and a closer alignment of sell-in and sell-out levels in 2Q22; (3) reinvestment of outperformance into marketing, to support FY23-24e revenue growth; and (4) progress on articulating a margin capture strategy at MVM [Mataura Valley Milk].”

All in all, the broker appears to believe now could be the time to make a patient investment in this former market darling.

The post Why the A2 Milk share price can climb 40%: broker appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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