Category: Stock Market

The South32 Ltd (ASX: S32) share price is rising today.

The miner has a new addition to its explorations portfolio — one it expects to reap financial benefits from very quickly.

At the time of writing, the South32 share price is up 2.27% to $4.51.

Here are the details of its acquisition.

What asset has South32 bought?

Yesterday, the miner officially completed its acquisition of a 45% stake in the Sierra Gorda copper mine located in the Antofagasta region of Chile.

The mine holds more than a billion tonnes of copper-molybdenum-gold sulphide mineral reserve. It has a lifespan of more than 20 years.

The miner announced its plans to acquire Sierra Gorda back in October. The news excited ASX investors, with the South32 share price leaping as high as 11% to $4.07.

South32 paid US$1.4 billion for its stake, with a “contingent price-linked consideration component” of up to US$500 million. The company said the US$500 million is payable at “threshold copper production rates and prices” between now and 2025.

South32 funded the acquisition using US$600 million in cash and US$800 million in debt.

Looking forward, the miner anticipates mine life extension and improvement costs to be US$15 million. Operating unit costs are estimated at US$1.63 per pound of copper equivalent production.

What did management say?

Chief executive officer, Graham Kerr, said:

Our acquisition of an interest in the Sierra Gorda copper mine is a major milestone for South32.

By adding copper to our portfolio, along with our recent commitments to substantially increase our green aluminium production, we are making significant progress reshaping our portfolio for a low carbon future.

Sierra Gorda will immediately contribute to earnings, improve Group operating margins and give South32 long term exposure to a metal that is increasingly hard to discover, develop and produce.

We believe copper will play a key role in the world’s decarbonisation and energy transition.

South32 share price snapshot

Over the past 12 months, the South32 share price has increased by 58%. The share price hit a 52-week low of $2.66 in March 2021 and a high of $4.65 just last week. This followed the release of the company’s latest financial results.

The miner declared an interim dividend of US 8.7 cents per share fully franked. This was a giant 621% increase against its H1 FY21 payment.

The company has a market capitalisation of $20.9 billion and a price-to-earnings ratio (P/E) of 18.99.

The post South32 (ASX:S32) share price up following completion of ‘major milestone’ copper acquisition appeared first on The Motley Fool Australia.

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Motley Fool contributor Alice de Bruin 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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The Worley Ltd (ASX: WOR) share price is taking off this morning following the release of the company’s earnings for the first half of financial year 2022.

At the time of writing, the Worley share price is $12.50, 5.93% higher than its previous close.

Worley share price gains on boosted profits

• Revenue of around $4.66 billion – down 4% on that of the first half of financial year 2021
• Net profit after tax (NPAT) of $79 million – a 259% increase
• Underlying earnings before interest, tax, and amortisation of $251 million – up 21%
• Underlying earnings per share (EPS) of 28.6 cents – a 28% increase
• Unfranked 25 cent interim dividend

The professional project and asset services provider performed well over the first half on the back of improved market conditions.

It ended the period with an underlying operating cash flow of $110 million – down from $280 in the prior comparable period.

Its underlying earnings before interest, tax, and amortisation margin increased 1.1% to 5.7%.

While the company’s revenue slipped slightly, its ongoing cost cutting activities helped its profits surge.

The company surpassed its operational savings target of $350 million of annual savings 6 months ahead of schedule. It announced a new target of $375 million in annualised savings.

The new target will be delivered by mid-2023 and will come from the company’s shared services transformation. The transformation is estimated to cost around $90 million over 3 years. $30 million has been spent year to date.

The company’s sustainability work accounted for $1.4 billion of aggregated revenue at the end of the half. Sustainability as a portion of its sales pipeline and backlog also increased over the period.

As of 31 December 2021, Worley’s backlog was $15.1 billion – a 6% increase on where it stood on 30 June 2021 and 12% more than it was 12 months prior.

The company’s chemicals sector experienced the greatest backlog growth, as demand and customer investment levels recovered. Meanwhile, the company’s long-term operations and maintenance contracts mostly returned to pre-COVID-19 activity levels.

Worley stated that it’s not seeing material COVID-19 impacts on its supply chains or site access. It’s also not experiencing project deferrals and cancellations due to the pandemic.

What else happened in the half?

Worley’s business in the Americas region brought in $1.98 billion of aggregated revenue last half – a $78 million improvement – and recorded a segment result of $112 million – down $5 million.

In Europe, the Middle East, and Africa, the company reported aggregated revenue of around $1.55 billion – down $119 million – and segment result of $132 million – a $55 million improvement.

Meanwhile, in the Australia, Pacific, Asia, and China region, the company saw aggregated revenue of $835 million – down $89 million – and a segment result of $91 million – $2 million higher.  

The company’s work in the energy sector saw a slightly lower aggregated revenue last half, but an improved segment result.

They came to around $2.13 billion and $150 million respectively. In the prior comparable period, they came to around $2.18 billion and $128 million.

Worley’s work in the chemicals sector brought in aggregated revenue of $1.62 billion and a segment result of $133 million. In the first half of financial year 2021, those figures came to $1.65 billion and $107 million respectively.

Finally, the resources sector saw Worley pocketing $617 million of aggregated revenue and reporting a segment result of $52 million. In the prior comparable period, those numbers were $661 million and $48 million.

What did management say?

Worley CEO, Chris Ashton commented on the company’s half year results, saying:

Our H1 FY22 result is indicative of the continued market improvement which is consistent with the outlook we presented at the full year FY21 results

Our capital management position continues to be supportive of our growth plans, with gearing below the target range and leverage well within our covenant definitions. We have good liquidity and continue to enjoy access to flexible debt capital sources, at attractive pricing.

We’re seeing stronger market activity as our customers continue to invest in their traditional business as well as increasing investment in line with the fundamental shift towards net-zero. Our business is positioned for long-term success and our strategy places us at the centre of this investment activity.

What’s next?

Worley didn’t provide clear financial guidance for the remainder of financial year 2022, but it did post a positive outlook for the period.

It’s expecting to spend $35 million on strategic operating expenditure in financial year 2022.

Including the expense, the company thinks it will be posting similar earnings before interest, tax, and amortisation margins in the second half as it did for the first half.

It also stated that it looks like the current half could bring improved revenue and earnings.

That belief is due to the mix and timing of projects from both the company’s backlog and growth in its factored sales pipeline.

Additionally, sustainability is expected to provide a higher rate of the company’s future growth. It aspires to bring 75% of its revenue from sustainability-related business within 5 years.

To speed up its sustainability-focused growth, the company is investing $100 million over 3 years.

The funds will go towards new solutions and strategic hires, digital enablement, technology selection and development, internal training, and strategic partnerships.

$13 million of that $100 million was spent last half.

Worley share price snapshot

Today’s gains included, the Worley share price is 12% higher than it was at the start of 2022.

It has also gained 14% since this time last year.

The post Worley (ASX:WOR) share price launches 6% as net profits triple 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 Bruce Jackson.

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The Accent Group Ltd (ASX: AX1) share price is pushing higher today. This comes after the company released its half-year results for the 2022 financial year late yesterday afternoon.

At the time of writing, Accent shares are up 6.25% to $2.04.

Below, we take a closer look to see how the footwear retailer performed for the period.

Accent delivers softened result for the first half of FY22

The Accent share price is on the move following the company’s results for the six months ending 26 December 2021. Here are some of the key highlights:

• Total sales increased to $594 million, up 9.7% on the prior year (H1 FY21 $541.3 million);
• Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) fell to $99.5 million, down 27.9% (H1 FY21 $138.1 million);
• Net profit after tax (NPAT) plummeted to $14.8 million, down 72% (H1 FY21 $52.7 million);
• Earnings Per Share (EPS) dropped to 2.73 cents, down 72% (H1 FY21 9.74 cents per share); and
• Fully-franked interim dividend declined to 2.5 cents per share, down from 8 cents per share declared in H1 FY21.

What happened in H1 FY22 for Accent?

Trading for the half-year was materially impacted by the continuing COVID-related disruptions and lockdowns across Australia and New Zealand. From the months of July to October, more than 55% of the Group’s stores (representing 400 of the 700 stores) were required to close due to government-mandated lockdowns.

Despite these challenges, the group delivered total sales of $594 million, up 9.7% on the prior year. Net profit after tax stood at $14.8 million, delivered through its omnichannel operating model, coupled with the ongoing focus on VIP, Vertical, and Virtual.

Online sales soared by 47.9% on H1 FY21’s result to $159.8 million, accounting for 31.2% of the group’s total retail sales. This was underpinned by the group’s investment in new websites, loyalty programs, and customer data.

Owned retail sales took up the bulk of earnings, rising by 7.7% on the prior comparable year to $443.3 million. Management estimated the impact of COVID lockdowns and disruption on owned retail sales to be at least $95 million.

In addition, Accent opened up 104 new stores during the year and closed 4 stores when rent could not be paid. In total, there are 738 stores operating across Australia and New Zealand.

What did management say?

Accent group CEO, Daniel Agostinelli touched on the result, saying:

Trade in the first half of the year was severely impacted by the COVID related disruption and lockdowns that occurred across Australia and New Zealand…

In this context I am pleased with the results that have been achieved along with the continued progress the group has delivered against its growth plan objectives.

The continued focus on VIP (our loyalty customers), Vertical and Virtual, along with our integrated digital and store operating model, has enabled the group to grow online sales, continue to grow its customer database and loyalty programs and successfully trade through our inventory.

Key achievements for the half include opening 104 new stores, growing our customer database by a further 600,000 customers, signing a 10-year distribution agreement for Reebok and continuing to drive our key growth business.

What’s next for Accent?

In the first eight weeks of H2 FY22, Accent stated that trade has been significantly impacted by reduced customer traffic due to COVID-19.

Like for Like (LFL) sales over the last two months were down 10% when compared to the prior year.

When looking at the first four weeks of 2022 (until 23 January), LFL sales plunged 19.1% over H1 FY21.

On a positive note, LFL sales for the four weeks from 24 January to 20 February improved considerably. This brings them in line with last year’s performance.

Following the post-Christmas sales period, Accent has driven price, margin sales, and gross margin over the first eight weeks. For now, this is in line with expectations and ahead of the prior year.

Whilst the uncertain trading environment relating to COVID-19 is unknown, the company remains cautious on the near-term outlook. As such, it did not provide sales or profit guidance for both the second half and the FY22 full-year.

The post Accent (ASX:AX1) share price lifts 6% despite ‘severely impacted’ first half results appeared first on The Motley Fool Australia.

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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 recommended Accent Group. 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 Stockland Corporation Ltd (ASX: SGP) share price has been a positive performer on Wednesday.

In morning trade, the property company’s shares are up 5% to $4.21 following the release of its half year results.

Stockland share price higher following strong half

• Statutory profit up 150% over the prior corresponding period to $850 million
• Funds from operations (FFO) down 9.3% to $350 million
• FFO per share down 9.3% to 14.7 cents
• Commercial Property rent collection of 97.5%
• Distribution of 12 cents per share declared in December
• FY 2022 FFO per share guidance range tightened

What happened during the first half?

Stockland had a positive first half to FY 2022 thanks to strong rent collections and commercial property revaluations. For the six months, the company reported a 150% increase in statutory profit to $850 million. This includes $543 million of net commercial property revaluation gains, which equates to a 5.5% uplift versus June 2021 book values.

Management advised that the latter reflects improved investor demand for high quality, essentials-based retail assets, strong transactional evidence for high quality logistics assets, and a broadly stable asset pricing environment for workplace assets.

In respect to its FFO, it came in 9.3% lower than the prior corresponding period at $350 million or 14.7 cents per share. Stockland is expecting its FFO to be more heavily skewed to the second half due partly to the timing of residential settlements and COVID-related tenant assistance.

In other news, the company has signed an agreement with EQT Infrastructure for the sale of its Retirement Living business for $987 million.

Management notes that this is broadly in line with its book value and delivers on Stockland’s strategy to release capital for redeployment into higher growth opportunities and refocus the Communities business.

Management commentary

Stockland’s Managing Director and Chief Executive Officer, Tarun Gupta, said: “We delivered a solid operational and financial result in 1H22, and have tightened our full year FFO per security guidance range. While maintaining our focus on operational excellence across our core business, we have also made significant progress toward implementing the strategy that we outlined in November of last year.”

“The formation of two new capital partnerships, divestment of the Retirement Living business and further sale of non-core assets in our town centres portfolio over the half concentrates our focus on the core of our business. It enables us to redeploy capital toward opportunities in the residential, logistics and workplace sectors that we believe will generate superior returns on a sustainable basis,” he added.

Outlook

Mr Gupta appears confident on the company’s outlook following its solid first half.

He said: “The solid operational performance delivered in 1H22 provides us with good earnings visibility for the remainder of the financial year, notwithstanding the broader market uncertainty brought about by the ongoing COVID19 pandemic, elevated input cost inflation, and interest rate volatility. Accordingly, we are tightening our FFO per security guidance range.”

“The strategic transactions that we have announced post-balance date provide us with an extremely strong balance sheet position and are also expected to be accretive to earnings in FY23.”

Stockland’s FY 2022 FFO per share is now expected to be in the range of 35.1 cents to 35.6 cents. This compares with previous guidance of 34.6 cents to 35.6 cents per share.

As for distributions, the company’s distribution per share is expected to be within Stockland’s targeted range of 75% to 85%.

The post Stockland (ASX:SGP) share price up 5% on solid half, guidance update, and asset sale 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 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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The Woolworths Group Ltd (ASX: WOW) share price is advancing on Wednesday morning. This comes after the retail conglomerate announced its first-half results for the 2022 financial year.

At market open, Woolworths shares were swapping hands for $36.63, up 4.06%.

Woolworths delivers results for H1 FY22

The Woolworths share price is heading north today despite a softened performance by the company. Here are Woolworths’ key financials for the 27 weeks ending 2 January 2022:

• Groups sales of $31,894 million, up 8% on the prior corresponding period (H1 FY21 $20,535 million)
• Group earnings before interest and tax (EBIT) of $1,382 million, down 11% (H1 FY21 $1,554 million)
• Group net profit after tax (NPAT) of $795 million, down 6.5% (H1 FY21 $850 million)
• Earnings per share (EPS) of 64.3 cents, down 5.1% (H1 FY21 67.8 cents per share)
• Fully-franked interim dividend of 39 cents per share, down 26.4% (H1 FY21 53 cents per share)

How did Woolworths perform in H1 FY22?

The financial performance of the group was materially impacted by the COVID-19 pandemic.

While strong sales growth experienced an 8% lift from continuing operations, this was offset by $239 million of COVID costs. Compared to the second half of FY21, COVID costs increased due to the outbreak at Woolworths’ stores and distribution centres.

In addition, group EBIT from continuing operations declined to $1,237 million for the period. This reflected a challenging operating environment in the Australian food segment, which led to increased COVID-related costs and Big W store closures.

The company’s biggest business, Australian food, grew by 3.4% in sales but moderated over the half as lockdowns eased, before rebounding again in December.

Nonetheless, EBIT declined to $1,217 million, reflecting the higher operating costs caused by COVID and a delay in implementing productivity initiatives.

What did management say?

Woolworths Group CEO Brad Banducci touched on the results:

While the far-reaching impacts of COVID resulted in one of the most challenging halves we have experienced, we ended H1 strongly with positive trading momentum and helped our customers enjoy a much-needed Christmas celebration and festive holiday season.

Omicron created new challenges in early January with a record number of team members isolating and material supply chain and stock flow issues. However, having learned from the Delta outbreak, we responded with agility and are gradually moving into a more consistent operating rhythm.

What’s the outlook for Woolworths?

For the current second half, the Omicron outbreak has led to strong sales growth for the first seven weeks in Australian food. However, this has negatively impacted Big W’s sales.

In New Zealand, sales growth has benefitted from higher inflation, with Omicron not yet having a material impact on customer shopping behaviour.

Group COVID costs in the first seven weeks were approximately $34 million or 0.4% of sales. Indirect COVID costs have also remained high, mainly due to continued end-to-end supply chain disruption.

Furthermore, Woolworths expects inflationary pressures to continue to intensify due to industry-wide cost increases.

Assuming a continued normalisation in the operating environment during Q3, management is forecasting an improved financial performance in the second half.

In New Zealand, the company is preparing to lessen the impact of Omicron in minimising disruption to customers and staff.

For Big W, the group predicts a challenging half but anticipates the business to report a profit in the second half.

The post Profit drop: Woolworths (ASX:WOW) share price pushes higher despite ‘challenging’ first-half results appeared first on The Motley Fool Australia.

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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 Bruce Jackson.

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When an ASX 200 share goes ex-dividend, it can be quite the event. As new investors in a company going ex-dividend won’t receive the dividend payment, its value typically leaves the share price. This can spark some wild share price moves as investors adjust.

Here are five such S&P/ASX 200 Index (ASX: XJO) shares that are going ex-dividend today. So let’s see how their new dividend payments measure up.

5 ASX 200 shares going ex-dividend today

JB Hi-Fi Ltd (ASX: JBH)

Entertainment retailer JB Hi-Fi is our first ASX 200 share going ex-dividend today. JB is set to pay out its interim dividend of $1.63 per share, fully franked, on 11 March. JB’s last interim dividend was worth $1.80 so this payout is a little lower than its last. At the latest JB Hi-Fi share price of $50.27, the company has a dividend yield of 5.37%.

Domain Holdings Australia Ltd (ASX: DHG)

ASX 200 property company Domain is next up. This classifieds business will be paying out its own interim dividend on 15 March next month. This dividend will be worth 2 cents per share, fully franked. That’s flat with last year’s interim payment. At the latest Domain share price of $4.02, this company has a dividend yield of 1.49%.

Netwealth Group Ltd (ASX: NWL)

The next cab off the rank is ASX 200 wealth manager Netweath. Netwealth will be forking out its interim dividend of 10 cents per share, fully franked, on 24 March. That’s a slight increase on this company’s last interim dividend, which came in at 9.06 cents per share. At the latest Netwealth share price of $14.10, the company has a dividend yield of 1.38%.

Magellan Financial Group Ltd (ASX: MFG)

Magellan pleasantly surprised investors last week with its interim dividend of $1.101 per share, partially franked at 75%. This ASX 200 fund manager will be paying out this dividend, which is its highest interim payment ever, on 8 March. Its previous interim dividend was worth 97.11 cents per share. At the latest Magellan share price of $20.38, this company has a rather meaty dividend yield of 11%.

AGL Energy Ltd (ASX: AGL)

AGL made headlines early this week when it received a takeover offer. But that won’t stop AGL from paying out its interim dividend of 16 cents per share, unfranked, on 30 March. Unfortunately for investors in this ASX 200 energy generator and retailer, that’s a significant reduction from the company’s previous interim dividend of 31 cents per share. At the latest AGL share price of $7.68, the company has a dividend yield of 6.51%.

The post These 5 ASX 200 shares are trading ex-dividend today 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. owns and has recommended Netwealth. The Motley Fool Australia owns and has recommended Netwealth. 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 Steadfast Group Ltd (ASX: SDF) share price is triumphantly trekking to the upside on Wednesday.

This follows the release of the company’s first-half results for FY22 after markets had closed yesterday afternoon.

Steadfast share price jumps following upgraded earnings

• Underlying revenue up 19% over the prior corresponding period to $520.9 million
• EBITA up 22.7% to $153.9 million
• Statutory net profit after tax (NPAT) up 42.9% to $104.9 million
• Diluted earnings per shares (EPS) up 20.5% to 8.41 cents per share
• Interim fully franked dividend of 5.2 cents per share, up 18.2%
• Gross written premium (GWP) of $5.2 billion during the half, up 15.6%

What else happened during the first half?

The six months ended 31 December 2021 was a cracking display from ASX-listed Steadfast Group, delivering both organic and acquisition growth.

During the six-month period, the broker network segment of the business added another acquisition to its name. In August last year, Steadfast swept up Australian insurance broker Coverforce for an enterprise value of $411.5 million.

The deal means the ASX-listed company has now captured 18 completed acquisitions as part of its ‘Trapped Capital Project’. This acquisition success has been a key component in the growing Steadfast share price.

Furthermore, Steadfast’s broker network is now 434 brokers strong. This includes 361 in Australia, 54 in New Zealand, and 19 across Singapore. Through these brokers, GWP was grown by 15.6% to $5.2 billion during the half. For reference, the company delivered outside of acquisitions, achieving 8.3% organic growth in GWP.

Meanwhile, the underwriting agencies part of the business also performed strongly with a 16.3% increase in GWP to $852 million. Additionally, the majority of this growth was organic, with 14.5% organic growth compared to 1.8% acquisition growth.

Steadfast’s tech platform offering experienced strong uptake during the first half. The Steadfast client trading platform (SCTP) reached 19,201 active users, with $458 million in GWP transacted via the platform — an increase of 31.6%.

Notably, the majority of Australian and New Zealand brokers are now using SCTP.

What did management say?

Steadfast managing director and CEO, Robert Kelly commented:

Steadfast’s business has grown strongly since listing on the ASX in 2013, and I am pleased to report Steadfast has again delivered a record financial and operating result for the six months to 31 December 2021. Our underlying earnings growth for the period was again driven by sustained organic growth in the Group’s insurance broking and underwriting agencies and our prudent acquisition strategy.

Regarding the Coverforce acquisition, Kelly stated:

The Coverforce acquisition in late August and other network broker acquisitions, including those from our Trapped Capital Project, are performing in line with expectations. The cash conversion of earnings continues to be strong, with more than 100% of underlying NPATA converting into cash during the period.

What’s next?

For the Steadfast share price, the good times are expected to keep on rolling, with its FY22 guidance being upgraded. As a result, underlying NPAT is now expected to be between $163 million and $170 million. Previously, Steadfast had guided between $159 million and $166 million.

However, the upgrade did come with a number of assumptions, including:

• Moderate premium price increases
• Organic growth exceeding original guidance
• No impacts from COVID-19

Finally, shareholders can expect to receive their Steadfast dividend on 23 March 2022.

Steadfast share price snapshot

Over the past year, the Steadfast share price has been a worthwhile investment. The broker network has managed to outperform the S&P/ASX 200 Index (ASX: XJO) with a return of 15% in the 12-month window. Although, the performance has been rockier so far in 2022, slipping 12.9%.

The post Trifecta: Steadfast (ASX:SDF) share price jumps 5% amid record results 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. owns 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 Bruce Jackson.

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The Bubs Australia Ltd (ASX: BUB) share price has been a strong performer on Wednesday.

At the time of writing, the infant formula company’s shares are up 10% to 47.5 cents following the release of its half year results.

Bubs share price jumps on strong first half growth

• Gross revenue up 73% over the prior corresponding period to a record of $38.5 million
• Gross margin improved to 38%
• Underlying EBITDA of $1.2 million
• Loss before tax of $0.6 million
• Cash balance of $30.6 million
• Outlook: Modest half on half growth expected in the second half

What happened during the first half?

For the six months ended 31 December, Bubs reported a 73% increase in gross revenue to a record of $38.5 million.

This top line growth was underpinned by the doubling of its infant formula revenue during the period thanks largely to record revenue from the Corporate Daigou channel. Gross revenue in the channel grew 276% and now exceeds pre-COVID levels. This is being driven by early success from its Daigou 2.0 strategy.

Bubs Australia also notes that it continues to be the fastest growing infant formula manufacturer in Chemist Warehouse and Australia’s big two supermarket chains. Though, it is worth remembering that it the company is growing from a much smaller base than its main rivals. So, these statistics are encouraging, but may be best taken with a pinch of salt. It now has a 3.9% market share.

Management commentary

Bubs Founder and CEO, Kristy Carr, was pleased with the half.

She said: “Bubs is pleased to report its first half year to realise an underlying EBITDA profit. This was a product of management’s uncompromising focus and ability to execute on strategic initiatives with precision, notwithstanding challenging macro-economic conditions.”

“The fact we have been able to return to a growth trajectory speaks to our corporate DNA and our ability to navigate ways forward in a volatile environment. We see potential upside in Australia’s borders reopening with the return of Chinese students, although continuing challenging market conditions are expected to remain for some time.”

Outlook

One thing that could be holding back the Bubs share price from charging even higher is its outlook.

Bubs Executive Chair, Dennis Lin, revealed that the company’s growth is expected to moderate in the second half, with only modest half on half growth.

He said: “Management expects 2H22 to deliver modest Half on Half growth in Revenue, and underlying EBITDA with revenue realisation from earlier new business development coming through in Q4 and after taking into account the seasonally quieter Q3.”

“While our forward plans aren’t contingent on COVID dislocations resolving quickly, we continue to exercise caution as pandemic related effects and macro-economic uncertainties remain that could result in transitory variability,” Mr Lin concluded.

The post Bubs (ASX:BUB) share price jumps 10% amid 73% revenue growth 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 BUBS AUST FPO. 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 Flight Centre Travel Group Ltd (ASX: FLT) share price has roared higher over the last 30 days, likely leaving the travel agent’s investors excited for its future.

But the stock’s surge may have left market watchers wondering if it’s too late to jump on the bandwagon.

At market open on Wednesday, the Flight Centre share price is $19.53 – 17.9% higher than it was this time last month. That’s despite the stock taking a 5.4% tumble yesterday.

So, with its half-year earnings set to be released tomorrow, could the travel stock take off again? Let’s take a look.

Will Flight Centre shares continue their up-and-up trajectory?

After a turbulent January, the Flight Centre share price has rebounded to serve investors an 18% gain.

The boost came amid the complete reopening of Australia’s international border this week, as well as news Western Australia’s hard border is set to lift on 3 March.

Though, while the grass is certainly looking greener, it might not be blue skies ahead for Flight Centre.

As The Motley Fool’s Bernd Struben reported earlier this week, it could be years before the travel industry fully returns to its pre-pandemic self.

Additionally, the travel agent’s stock remains the most shorted on the ASX.

Flight Centres shares had a short interest of 15.45% in The Motley Fool’s most recent weekly short-selling breakdown.

Of course, that suggests there’s significantly bearish sentiment regarding the Flight Centre share price among short-sellers.

Such sentiment might be explained by the company’s valuation.

As Airlie Funds Management portfolio manager Matt Williams told the Australian Financial Review, the company’s enterprise value is already higher than it was prior to the pandemic.

That means its recovery looks to be already priced into its shares.

Not to mention, the company underwent a $700 million capital raise in April 2020, handing out 97.2 million new shares. That represents a 96.1% increase on the number of outstanding shares in the company.

It later issued $400 million of convertible notes, due in 2027.

That also helped boost its market capitalisation to higher than it was pre-pandemic.

All in all, Williams warned investors to be wary of buying into the company at its current price. Particularly, as there could be a way to go before the Australian travel industry returns to its pre-pandemic self.

The post Up 18% in a month, is it too late to buy Flight Centre (ASX:FLT) shares? 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 recommended Flight Centre Travel Group 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 Pilbara Minerals Ltd (ASX: PLS) share price has taken a tumble on Wednesday morning. This follows the release of the lithium miner’s half year results.

At the time of writing, the Pilbara Minerals share price is down 7.5% to $2.58.

Pilbara Minerals share price lower on results and shock announcement

• Shipments up 49% to 170,228 dry metric tonnes (dmt) of spodumene concentrate
• Half year sales revenue up 394% to a record of $291.7 million
• EBITDA of $151.1 million, up from $3.2 million a year earlier
• Cash balance of $191.2 million
• Underlying profit after tax of $84.2 million
• CEO Ken Brinsden to step down by the end of 2022

What happened during the first half?

For the six months ended 31 December, the lithium giant reported a 394% increase in revenue to a record of $291.7 million. Management advised that this result reflects continued improvement in lithium market conditions over the period, which has continued its strong momentum into the current half.

During the half, Pilbara Minerals achieved an average selling price of ~US$1,250/dmt (~A$1,700/dmt). However, since the end of the half, the company notes that reporting agencies are currently indicating spot spodumene concentrate prices in the range of ~US$3,750-US$4,500/dmt.

This bodes well for its performance in the second half, particularly given its unit operating costs. While these costs have increased due to higher royalties and sea freight costs, lower spodumene rates, and the tight labour market, at US$486/dmt (A$666dmt) Pilbara Minerals is operating with huge profit margins.

CEO exit

Taking some of the shine off the strong result is news that Pilbara Minerals’ CEO, Ken Brinsden, plans to step down by the end of 2022.

Mr Brinsden revealed that he believed it was the right time for him to step back after what will be approximately seven years in the role. The decision is motivated by his desire to be able to spend more time with his family and to pursue personal interests after a lengthy career at senior executive levels.

Pilbara Minerals has commenced an executive search process for its next CEO.

Management commentary

The outgoing CEO was pleased with the company’s performance during the half.

Mr Brinsden said: “We are very pleased to announce an outstanding inaugural profit for the half-year to 31 December, which marks a significant milestone for Pilbara Minerals in our journey to become one of the world’s leading suppliers of lithium raw materials.”

“Our financial performance for the period is a direct reflection of the incredible turnaround which has been experienced in the lithium raw materials supply chain over the past year or so. The combination of strong underlying demand growth and Pilbara Mineral’s ability to create a transparent spot price outcome via the Battery Material Exchange has driven very strong increases in prices for our product,” he added.

Outlook

Mr Brinsden is confident on the company’s outlook despite the widespread labour shortage issues and cost inflation being experienced in the Western Australian resource sector.

He commented: “Despite these challenges, the outlook for Pilbara Minerals in the second half of FY2022 and beyond remains extremely bright. The current momentum in lithium markets continues to demonstrate higher price outcomes and we are very well placed to participate in this as production and sales volumes from the combined Pilgangoora Operation continue to increase. I am confident that a combination of hard work, innovation and focus on production growth will continue to drive our success.”

The post Pilbara Mineral (ASX:PLS) share price sinks 7% amid half year results and CEO exit 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 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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