Category: Stock Market

The ASX’s most popular exchange-traded fund (ETF) to invest in is the Vanguard Australian Shares Index ETF (ASX: VAS). We know this because VAS currently has more than $10 billion in assets under management, far greater than its next rival with just over $5 billion.

But we also know that VAS was far from the best performing ETF in 2021. It didn’t even make the top five. Some of the ETFs that beat out VAS, such the BetaShares Crude Oil Index ETF (ASX: OOO) had stellar years last year, but don’t beat the Vanguard Australian Shares Index ETF over a longer period of time. But funds like those are not index funds; they instead cover specific corners of the market (in this case, oil futures).

But let’s look at some of the index funds that can shine a light on VAS over the past decade.

How does VAS measure up against other ASX index funds?

As a benchmark, VAS has returned an average of 9.41% per annum over the past ten years (as of 31 January).

One index fund that has exceeded this return is the ASX’s second-most popular ETF by assets under management, the iShares S&P 500 ETF (ASX: IVV). This ETF tracks the S&P 500 Index, which is the conventional pick for US share exposure as well as being the most widely-tracked index in the world. Over the past decade, IVV has more than doubled VAS’s return, giving investors an average return of 20.07% per annum.

But that’s not the only index fund that has pipped VAS over the past decade.

The iShares Global Consumer Staples ETF (ASX: IXI) has averaged a return of 13.72% over the same period.

The iShares Asia 50 ETF (ASX: IAA) has given investors an average of 12.59%. The iShares Global 100 ETF (ASX: IOO) Tracking 100 of the largest companies in the world, this fund has averaged 17% per annum since 2012.

Even the iShares MSCI Japan ETF (ASX: IJP) has beaten out VAS, giving investors a return of 11.39% over the past ten years.

So VAS is certainly not infallible. But that doesn’t mean you shouldn’t invest in it. Perhaps Australian shares may outshine those other markets over the next decade. Past performance is no guarantee of future returns, after all. But ASX investors have voted with their wallets and VAS still remains king of the ASX index fund hill.

The post Think VAS is the best ASX index fund? These ETFs have beaten it over the past decade… 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 owns and has recommended iShares Global Consumer Staples ETF. The Motley Fool Australia has recommended iShares Trust – iShares Core S&P 500 ETF. 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 Judo Capital Holdings Ltd (ASX: JDO) share price is bucking the wider market selloff today and is currently up 0.4%.

Judo shares closed yesterday at $1.98 and are currently trading for $1.99.

The bank, focused on lending to Small and Medium Enterprises (SMEs), is a newcomer to the ASX, listing on 1 November 2021.

Below we look at its financial results for the half year ending 31 December (1H FY22).

Judo share price up amid bullish guidance

• Pro forma profit before tax of $3 million, up from a loss of $700,000 in 1H FY21
• Gross loans and advances increased 37.8% year-on-year to $4.85 billion
• Net interest income of $73.5 million up 48.5% from the prior corresponding period
• Underlying net interest margin of 2.73%, up from 2.65% in 1H FY21

What else happened during the half year?

While Judo’s pro forma profits for the half year handily beat the losses posted during 1H FY21, the bank reported a statutory net loss of $16.1 million. That compares to a statutory net profit of $1.9 million in the prior corresponding period.

Judo attributed that loss to one-off costs associated with its initial public offering (IPO).

The bank’s underlying net interest margin of 2.73% came in above prospectus guidance of 2.69%.

Term deposits remained a key funding source during the half year, and the bank received an investment grade credit rating from S&P. It said this rating enabled it to access new forms of wholesale funding and “a broader universe of term deposit investors”.

As at 31 December, Judo had drawn $2.9 billion from the RBA’s Term Funding Facility. This is expected to continue to be beneficial to its fundings costs for the full 2022 financial year. Judo said it’s “well positioned” to refinance the drawing before it expires in June 2024.

What did management say?

Commenting on the results, Judo’s CEO, Joseph Healy said:

Judo has delivered a strong first half result underpinned by growth in our loan book together with an improvement in underlying margins…

We are confident that we have the right strategy in place with a clear aim of expanding the reach of our banking services so that more SMEs across Australia have access to a relationship bank that listens, understands, and boldly backs business.

What’s next?

Looking ahead Healy said, “We are expecting 2022 to deliver the strongest business credit growth in 14 years.”

He added that Judo is targeting a lending portfolio of $15 billion to $20 billion, with net interest margins of more than 3%. Judo is also targeting a return on equity in the “mid-teens” and a cost-to-income ratio in the range of 30%.

The company said it “is confident of achieving its prospectus FY22 GLA forecast of $6 billion and of modestly exceeding revenue and profit forecasts”.

Judo share price snapshot

The Judo share price has struggled in the new year, down 8.1%. That compares to a year-to-date loss of 6.3% posted by the All Ordinaries Index (ASX: XAO).

The post Judo (ASX:JDO) share price lifts on bullish guidance appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Judo Capital Holdings Limited. 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 Wesfarmers Ltd (ASX: WES) share price has dropped around 11% after reporting. It has just hit a 52-week low. Wesfarmers hasn’t been this low since late 2020. Is the smart money now jumping on the diversified business?

Considering the Wesfarmers market capitalisation is in the tens of billions of dollars, an 11% drop represents a large fall in dollar terms.

What did investors see in the FY22 half-year result?

Total revenue fell 0.1% to $17.76 billion, whilst net profit after tax (NPAT) dropped 12.7% to $1.2 billion.

Management said that the first half of FY22 was the most disruptive for its businesses since the start of COVID-19, with store closures in NSW, Victoria and New Zealand.

The biggest profit generator for Wesfarmers is Bunnings, which the company said generated a pleasing result. However, this represented a 1.2% earnings before tax (EBT) decline to $1.26 billion. This division can have a big impact on the Wesfarmers share price.

Kmart Group saw a 63.4% decline of EBT to $178 million and an 18% drop of EBT for Officeworks to $82 million.

Management blamed store closures for the Kmart Group difficulties – 25% of store trading days were lost – as well higher costs and lower stock availability. It also paid employees when there was no meaningful work during lockdowns and when they were required to isolate. But Catch transaction value increased 1% year on year and 97.5% over two years, but earnings were lower as it invested for long-term growth.

Officeworks saw declining sales in higher-margin office supplies and print and copy categories, as well as higher costs for elevated levels of online orders.

The Wesfarmers chemicals, energy and fertilisers (WesCEF) EBT jumped 36.3% to $218 million.

Wesfarmers decided to cut the dividend by 9.1% to $0.80 per share.

Management said that overall economic conditions in Australia remain favourable, but it’s managing increasing inflation and will leverage its scale to mitigate the impact of rising costs. The retail businesses will increase their focus on price leadership. It wants to keep providing customers with great value in this rising cost-of-living environment.

Retail conditions were subdued in January due to COVID, but trading momentum has improved in recent weeks. It’s still seeing extra costs and stock availability impacts because of supply chain disruptions. These impacts are expected to continue in the second half.

However, the company continues to invest in its data and digital ecosystem to provide customers with a more personalised digital experience.

The acquisition of Australian Pharmaceutical Industries Ltd (ASX: API) is expected near the end of the 2022 calendar year first quarter.

Is the Wesfarmers share price an opportunity?

Most brokers don’t think so.

UBS recognised that COVID impacts caused the difficulties in the first half, but ongoing impacts into the second half were discouraging for the broker. UBS is ‘neutral’ on the business. However, the UBS price target is $54 – 10% higher than right now.

Plenty of other analysts also rate Wesfarmers as neutral/a hold.

But, there is one broker that is positive on the Wesfarmers share price. Morgans rates it as a buy, with a price target of $58.50, implying a potential upside of around 20% over the next 12 months. This broker believes that Wesfarmers will see a good recovery once the current impacts subside.

On Morgans’ numbers, Wesfarmers is priced at 25x FY22’s estimated earnings and 22x FY23’s estimated earnings.

The post The Wesfarmers (ASX:WES) share price just hit a new 52-week low. Is the smart money buying? 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 no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Wesfarmers 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 Uniti Group Ltd (ASX: UWL) share price is plummeting after the release of the company’s earnings for the first half of financial year 2022.

At the time of writing, the Uniti share price is $3.325, 10.38% lower than its previous close.

Uniti share price plunges despite record results  

• Revenue came to $109.5 million ­– 98% higher than that of the first half of financial year 2022
• Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA)­ of $70.5 million ­– a 140% increase
• Reoccurring revenue now makes up 90% of total revenue, coming to $99.2 million
• Operating cash flow reached $65.4 million ­– a 130% increase

The market is seemingly disappointed by the technology infrastructure constructor’s performance over the first half. That’s despite it posting a record result.

Additionally, in calendar year 2021, the company’s underlying EBITDA grew by 30% to $135 million.

According to Uniti, that demonstrates “exceptional wholly organic growth” from its acquisitions of Opticomm and Velocity in 2020.

The largest indicator of growth, said Uniti, is its ‘win rate’ of new fibre-to-the-premises (FTTP) developments and strategic partnerships with apartment and housing developers.

It secured 115,000 new FTTP contracts in 2021, taking its contracted order book to 292,000.

However, the company’s earnings growth from construction revenue was around $5 million lower than the second half of financial year 2021. The drop was due to delays caused by lockdowns in Eastern Australia.

That will see revenue from construction deferred to later periods.

Uniti’s wholesale, enterprise, and infrastructure (WEI) digital infrastructure and technology business accounted for around 95% of its EBITDA before overheads last half.

Meanwhile, the company’s telecommunications business unit grew its customer base and earnings. It contributed EBITDA of around $4 million.

What else happened in the half?

The company’s EBITDA margins expanded to 64% of revenue in the first half.

It believes that leaves it in a strong position to fight against macroeconomic inflationary pressures.

It also paid $36.5 million off its borrowings last half, leaving it with $172 million of net debt.

Uniti also announced an upcoming on-market share buyback program.

What did management say?

Uniti managing director and CEO Michael Simmons commented on the company’s first-half results, saying:

Our commitment to our shareholders is to build a strong, sustainable company. We are doing that by continuing to win in market, building best-in-class fibre access networks, and filling those networks with customers – ‘Win, Build, Fill’ remains our core strategy.

Well over 90% of our earnings are now generated from high margin, recurring, annuity revenues which are delivered predominantly on our owned super-fast FTTP networks, and this ratio will continue to expand as our contracted FTTP order book of nearly 300,000 premises deploys over the years ahead.

With integration and simplification largely completed in 2021, Uniti is now primed for continued organic growth in greenfields and adjacent property markets and inorganic growth through asset acquisitions aligned to our core infrastructure business.

What’s next?

Uniti believes it is on track to meet its financial year 2022 consensus underlying EBITDA of $145 million, notwithstanding COVID-19‘s impact on construction.  

Additionally, its property developer partners are committed to maintaining and expanding their pipelines.

Particularly, as residential buyer demand and population growth are expected to return to pre-pandemic levels in financial year 2023 and will likely be driven higher by international migration.

Uniti share price snapshot

Today’s fall puts the Uniti share price well and truly in the year-to-date red.

It is currently around 27% lower than it was at the start of the year. Though, it’s still 70% higher than it was this time last year.

The post Uniti (ASX:UWL) share price tumbles 10% despite revenue surging 98% 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 Uniti 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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Shares in Virtus Health Ltd (ASX: VRT) are on the move 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 Virtus Health share price is trading down in the red at $7.29 apiece.

Investors were seeking more from the company today, as net profit came in lower and the company failed to provide any firm earnings guidance, must to the dismay of investors on Tuesday.

Virtus Health share price tanks amid mixed earnings growth

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

• Group revenue of $171.3 million up 1.8% from the prior corresponding period (pcp)
• Reported earnings before interest, tax, depreciation and amortisation (EBITDA) of $37.9 million, versus $59 million
• Reported net profit after tax (NPAT) attributable to equity holders is $15.1 million, down from $29.9 million
• Improved leverage (Net Debt/Adjusted EBITDA) ratio of 1.3x at 31 December 2021
• New clinic developments in Australia and Europe progressing towards completion
• Restructure of Virtus Fertility Diagnostics & Reproductive Genetics service completed
• 12 cents per share interim dividend for 1HFY22, fully franked

What else happened last period for Virtus Health?

The company notes that its fresh cycle activity in Australia increased by 1.3% over the prior year, compared to “an increase in Virtus Health’s available Australian market growth of 3.4%”.

Premium service volumes increased by 1.2% during the period with growth secured across all regions. This represents approximately 80-85% of Virtus Australia and builds on 28% growth in the pcp, the company says.

Overall, EBITDA in the Australian segment decreased by $12.5m compared to the pcp, underscored by a $2.8 million gain in employee costs. Gross margins were also impacted by around $2 million from COVID-19 related costs.

Virtus Health says its international operations “also demonstrated resilience”, yet recognised that EBITDA decreased by approximately $1.5m compared to pcp in this segment.

The company also managed to reduce its net debt from $108 million to $76.5 million as at 31 December 2021.

Even with the mixed results, Virtus Health’s board declared an interim dividend of 12 cents per share, fully franked. The interim dividend will be recorded on 24 March 2022 and paid on 14 April 2022.

“The interim dividend represents a payout ratio of approximately 65% with the target forward dividend payout ratio to be based on a full year dividend range of 45-55% to enhance balance sheet flexibility for investment in organic and inorganic growth initiatives”, the company said.

Management commentary

Speaking on the results, Virtus Health Group CEO, Kate Munnings said:

It was a resilient performance across all our services globally, in the face of ongoing COVID-19 operating restrictions and heightened infection control requirements. These results are a testament to all Virtus Health staff and specialists who have worked extremely hard throughout the period to progress Virtus’s ability to help more people become parents.

What’s next for Virtus Health?

Virtus Health did not provide any specific earnings or revenue guidance today. It says it is focused on “growth investments in FY22 and FY23” in areas of precision fertility, genetics capability and infrastructure.

It hopes to realise a collective incremental EBITDA of $5-10 million per annum from FY23 onwards “from a mix of revenue and efficiency”.

It suggested that operating expenditure will increase over the next 12 months “but with greater fixed cost margin leverage going forward”, without going into any detail to define what that means.

Nevertheless, the company is motivated to perform well into the coming periods.

“H2 started with a disrupted Jan-22 due to Omicron, primarily in Australia in Dec21 & Jan-22, with International
impacted to a lesser but longer extent over Q2 & Jan-22. We have confidence in the ongoing resilience of the sector, but deferrals and cancellations may not all be caught up within H222″, it remarked.

Virtus Health share price snapshot

The Virtus Health share price has gained more than 16% in the past 12 months and is up over 6% this year to date.

The post Why are investors selling the Virtus Health (ASX:VRT) share price post-earnings today? appeared first on The Motley Fool Australia.

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• ASX 200 (ASX:XJO) midday update: Coles and Cochlear impress, Nanosonics sinks
• Alumina (ASX:AWC) share price sinks despite dividend boost
• Down but not out: AMA Group (ASX:AMA) share price holds amid CEO’s optimism
• The Westpac (ASX:WBC) share price has gained less than $4 in 10 years. Have the dividends been worth it?

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 recommended Virtus Health 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 Whispir Ltd (ASX: WSP) share price is not in the good books of investors today.

At the time of writing, the cloud-based communications company’s shares are down 5.5% to $1.89. The negative sentiment towards the share price follows Whispir’s half-year results.

Whispir share price gets shouted down by rising costs

• Record revenue of $39.4 million, up 70.4% over prior corresponding period
• Record increase in annual recurring revenue (ARR), rising 26.6% to $60 million
• Operating expenses increased 75% to $29.9 million
• Earnings before interest, taxes, depreciation and amortisation (EBITDA) losses widened to $4.6 million compared to $1.8 million
• Net customer revenue retention of 122.4%
• Cash position of $38.1 million at 31 December 2021 with no debt

What happened during the first half?

While Whispir achieved record revenue for a six-month period in the first half, investors are not letting it get away with the significant increase in expenses. Record revenue is fantastic for shareholders if it can be done without a disproportional increase in spending.

The communications workflow company witnessed a runaway train for its cost of services during the financial period. A 78.7% surge in cost of services chewed up $16.4 million of the company’s $39.4 million of revenue. Given this outpaced revenue growth, margins were compressed.

Likewise, the bottom line felt the pain of rising costs during the first half. This was due to a 75% increase in operational expenses, a line item that removed a further $30 million from Whispir’s income for the period. Investors appear to be focusing on this aspect today as the Whispir share price tumbles.

According to the release, a major portion of the increase comes from the addition of 169 employees. Another contribution to the higher costs was Whispir’s continued marketing push, resulting in marketing spend rising by 49%.

On the positive side, the Australian and New Zealand business segment achieved the bulk of revenue growth. The region benefitted from a dramatic uplift in high-value contracts across government departments. Additionally, ASX-listed Whispir highlighted particular uptake among utility companies.

Management commentary

Whispir chief executive officer Jeromy Wells said:

The global mega trends of digital transformation are providing strong tail winds, as our established customer base continue to expand use cases and enhance the way they communicate.

It is clear the market is recognising the benefits of the Whispir platform, evidenced by the acceleration in revenue growth in the first half of the current financial year, with ARR increasing 26.6% on the previous corresponding period, to $60.0 million.

Moreover, Wells touched on the benefits that customers can see from the company’s technology, stating:

New customers are leveraging the benefits of our technology, particularly the no-code/low-code capability, which means they can get started quickly with no up-front costs or the need for developers. Whispir puts the power of predictive, data-driven communications intelligence at the fingertips of all employees, driving engagement, informing stakeholders with actionable insights to deliver better business and community outcomes.

What’s next?

Despite revenue in Whispir’s Asia segment falling, the company is pushing forward with its global expansion. Through the expansion of its customer base and increasing platform usage, Whispir still believes cash flow breakeven is possible in the next two years.

November’s FY22 guidance has been maintained, targeting $64 million to $68 million in revenue. Whispir’s CEO highlighted the platform’s low revenue churn (1.8%) as a good indicator these numbers are achievable.

Whispir share price snapshot

Simply put, it hasn’t been Whispir’s week, month, or even year as we look at the company’s share price performance.

In the past 5 trading days, the ASX-listed Whispir share price has fallen more than 12%. Meanwhile, in the last month, the view gets bleaker, with shares down 18%. However, the one-year performance is the most disappointing, with the Whispir share price down by 56%.

The post Why is the Whispir (ASX:WSP) share price sliding 5% 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. owns 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 Bruce Jackson.

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At lunch on Tuesday, the S&P/ASX 200 Index (ASX: XJO) has followed the lead of European markets and tumbled lower. The benchmark index is currently down 0.9% to 7,164.9 points.

Here’s what is happening on the ASX 200 today:

Coles half year results impress

The Coles Group Ltd (ASX: COL) share price is charging higher today after the supermarket giant’s half year results impressed the market. Although Coles reported a 4.4% decline in EBIT to $975 million, this was ahead of the Visible Alpha analyst consensus estimate of $965 million. Analysts at MST Marquee thought the result was solid and are expecting it to lead to “small upgrades to earnings” estimates.

Nanosonics’ shares sold off following half year results

The Nanosonics Ltd (ASX: NAN) share price hit a new 52-week low this morning after the infection prevention company’s half year update disappointed. Although Nanosonics reported strong growth over the prior corresponding period, this was due to COVID impacts a year ago. When judged against the second half of FY 2021, Nanosonics reported a 45% reduction in profit. It also warned that its full year operating expenses would be up markedly year on year.

Cochlear share price jumps

The Cochlear Limited (ASX: COH) share price is jumping on Tuesday after the hearing solutions company delivered a 26% increase in half year underlying net profit to $158 million. As mentioned here last week, the market consensus estimate was for a net profit of $127.6 million. Despite this outperformance, management has only reaffirmed its full year guidance.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Tuesday has been the Monadelphous Group Limited (ASX: MND) share price with a gain of 9%. This follows the mining services company’s half year update. The worst performer has been the Nanosonics share price with an 11% decline. This follows the release of its disappointing results.

The post ASX 200 (ASX:XJO) midday update: Coles and Cochlear impress, Nanosonics sinks appeared first on The Motley Fool Australia.

More reading

• Cochlear (ASX:COH) share price 6% higher on juicy 35% dividend spike
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• Coles (ASX:COL) share price on watch after COVID costs hit earnings
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 shares stage comeback amid Russia optimism

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 Cochlear Ltd. and Nanosonics Limited. The Motley Fool Australia owns and has recommended COLESGROUP DEF SET and Nanosonics Limited. The Motley Fool Australia has recommended Cochlear 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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Shares in Alumina Limited (ASX: AWC) are edging lower today after the company released its preliminary report and financial results for the full-year ended 31 December 2021.

At the time of writing, the Alumina share price is trading less than 1% in the red at $2.12 apiece.

Alumina share price flat despite 9% dividend spike

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

• Alumina net profit after tax (NPAT) of US$187.6 million up 18% year on year
• Final dividend 2.8 US cents per share, a 9% increase
• Alumina prices constrained by higher freight costs but bounced following supply disruptions in second half
• EBITDA of US$1,146.2 million, an increase of US$250.3 million from the previous corresponding period (pcp)
• Margin for alumina refineries was US$85 per tonne, an increase of US$16 per tonne compared to the pcp
• Net cash inflow of US$488.1 million, an increase of US$9.6 million

What else happened for Alumina this period?

Alumina’s half was hallmarked by a statutory net profit after tax of US$187.6 million for the full-year 2021 compared to $146.6 million in 2020.

EBITDA was recognised at US$1.14 billion after climbing more than US$250 million during the year, which carried through to free cash flow (before dividends) of $146 million – down 12% on the pcp.

Average realised price of alumina was US$321/tonne and signified a 20% gain from the previous year, whereas the cash cost per tonne of alumina produced gained 19% to $236.

Net debt also closed higher on the pcp at US$56 million. However, this was partially offset by a 6% increase in net receipts from AWAC, also known as Alcoa World Alumina & Chemicals, which is owned 40% by Alumina and 60% by Alcoa Corporation.

Aside from that, the market has been kind to Alumina, seeing as aluminium prices continue to rally in 2022, building on the past two years of returns.

“Primary aluminium prices are at record highs due to stronger demand, supply disruptions and higher energy costs. Alumina prices have also increased and are currently above $420 per tonne”, it says.

“In particular, demand for aluminium for electric vehicles and the construction sector continues to grow. As
a participant in the aluminium supply chain, Alumina Limited is well placed to support this growth.”

Management commentary

Speaking on the announcement, Alumina’s Chief Executive Officer, Mike Ferraro said:

In 2021 AWAC demonstrated resilience in moderate markets of the first half, and took full advantage of opportunities once markets turned positive in the second half. As a result, Alumina Limited has been able to increase dividends to shareholders for 2021 by 9 percent. The realised alumina price for the year was higher but API was still constrained by higher freight costs attributed to global shipping disruptions. Distributions, whilst still above last year, were partially impacted by higher input costs and unplanned outages. AWAC’s average cash cost in 2021 was once again in the lowest quartile of the global cost curve and our alumina refining portfolio has the lowest average CO2 emissions intensity amongst major refiners.

What’s next for Alumina?

The company is forecasting 12.8 million tonnes of alumina production for the 2022 full year, a small change on this year’s result.

With respect to aluminium, the company estimates it will produce 165,000 tonnes of the metal, a 14% jump on the current result.

It also expects sustaining capital expenditures (capex) to circle around US$300 million for the year which is a 73% change whilst it anticipates growth capex to hit approximately $40 million.

Alumina share price snapshot

In the last 12 months, the Alumina share price has gained 25%. It has climbed another 14%.

The post Alumina (ASX:AWC) share price sinks despite dividend boost appeared first on The Motley Fool Australia.

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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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The AMA Group Ltd (ASX: AMA) share price has fought back from the red after the company released its earnings for the first half of financial year 2022.

At the time of writing, the AMA Group share price is 35 cents, the same as yesterday’s close. This morning, the company’s shares hit a high of 36.5 cents each before dipping into the red then settling at 35 cents apiece.

Here are the highlights of the automotive aftercare and accessories company’s 1H FY22 results:

AMA Group share price slips as profits tumble

• Revenue $418.1 million ­­– down from $435.1 million in the first half of financial year 2021
• Earnings before interest, tax, depreciation, amortisation, impairment, and fair value adjustments for continuing operations (EBITDAI) of around $2.8 million – down from $55.7 million
• Operating loss before tax of $52.4 million – down from a $7 million profit
• Total loss of $48 million – down from a $4.6 million profit
• No dividend declared

The first half of financial year 2022 has hit the automotive repair service provider hard.

In fact, it saw the lowest number of repairs completed in a six month period since the onset of the pandemic due to COVID-19-induced lockdowns, restrictions, and a resulting drop in vehicle use.

According to the company, fewer repairs dinted its revenue last half while its raw material costs increased.

Additionally, its employee benefits expenses grew in the first half of financial year 2022, mainly due to the end of JobKeeper assistance.

For context, the company received $28.4 million of JobKeeper in the first half of financial year 2021.

It also reported a $16.7 million non-cash impairment expense, mostly related to its hibernation and consolidation of sites.

However, AMA Group’s balance sheet is looking strong.

The company ended the half with a cash balance of $81.3 million, $8.2 million of undrawn debt facilities, and $307.6 million of net assets.

It has also paid off $175 million of debt since mid-2020, leaving it with debts of just $165 million.

The company says this leaves it in a good position to continue battling the ongoing COVID-19 impacts.

What else happened in the half?

The company’s vehicle collision segment brought in $357.5 million of revenue last half – down from $380.3 million in the first half of financial year 2021.

Its heavy motor segment’s revenue increased to $27.8 million – up from $25.4 million.

The company’s supply leg’s revenue grew around $2.5 million to approximately $42.7 million. It also began to evolve its strategy to create an integrated parts supply chain for the collision repair industry.

Meanwhile, its corporate and eliminations segment recorded a $9.9 million loss. Though, that’s better than the prior comparable period’s $10.7 million loss.

The company also underwent a capital raise during the half. AMA Group raised around $53 million through an institutional entitlement offer where its shares were offered at a price of 37.5 cents apiece.

A retail entitlement offer raised another $46 million at the same offer price.

Finally, the company placed $50 million of subordinated notes.

Most of the capital raised went towards paying off the company’s debt.

What did management say?

AMA Group CEO and managing director Carl Bizon commented on the company’s outlook, saying:

Repair volume challenges are situational, not structural. We are well placed to weather the ongoing effects of COVID and are actively tackling the industry’s parts and labour supply issues.

The continued downtrend in COVID-19 cases leaves me optimistic about return to historical repair volumes.

What’s next?

The company is expecting its vehicle collision repair segment to recover as vehicle use normalises post-COVID.

It’s ready to hit the ground running with its workforce mostly intact despite the competitive labour market.  

Additionally, the company’s heavy motor segment’s future performance looks good. Its forward workbook has continuously remained strong.

However, the company’s supply business has lost a complete vehicle wreck insurer agreement that brought revenue of $6 million. However, its recycling business is still going strong and its parallel import performance has improved.

The supply chain segment’s new procurement business is expected to bring around $10 million of annual benefits, identified and in place for 2022.

The company is also targeting several acquisitions in collision repair and associated industries.

Additionally, AMA Group took on 71 new apprentices in January 2022. Apprentices now represent 10% of its workforce while skilled visa holders represent another 8%.

Thus, the company is expecting the reopening of Australia’s borders to positively impact its workforce as it looks to hire from the international talent pool.

Looking to the company’s performance for early 2022, its repair volumes are slowly recovering after the summer holidays.

However, COVID-19 is still challenging its business, with customers delaying superficial repairs.

There has also been an increase in customers not turning up for appointments due to being in isolation.

Staff absenteeism also increased to between 15% and 20% in January.

AMA Group share price snapshot

2022 has been rough on the AMA Group share price.

It has fallen around 20% since the start of this year. It’s also currently 50% lower than it was this time last year.

The post Down but not out: AMA Group (ASX:AMA) share price holds amid CEO’s optimism 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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58.4%. That’s how much the Westpac Banking Corp (ASX: WBC) share price has appreciated since late March of 2020 and today. For investors who have held Westpac shares since early 2020, this ASX 200 bank has been a reasonably well-performing investment. Heck, Westpac shares are even up close to 9% in 2022 so far, handily outperforming the S&P/ASX 200 Index (ASX: XJO).

So it might come as a surprise for many investors to hear that Westpac has been an exceptionally unimpressive investment over the past 10 years. As you can see on the chart below:

Yes, roughly a decade ago, the Westpac share price was sitting at $20.52. Today, it’s at $23.56 at the time of writing, down 1.22% for the day so far. That’s a 10-year gain of 14.8%. Not exactly ‘set-the-world-on-fire’ stuff. In contrast, the ASX 200 is up approximately 66.1% over the same period. So Westpac has been a clear market laggard over the past decade.

But, as most investors would know, Westpac shares are often held purely for the dividends they generate. So let’s see if the dividends of the past decade have made an investment in Westpac worth it.

Can Westpac’s dividends make up for its poor share price performance?

So since February 2012, Westpac has paid out a total of $16.16 in dividends per share.

Let’s now assume that an investor bought $10,000 worth of Westpac shares back in February 2012. At the price named above, that would have resulted in the owner receiving 487 shares, with some change left over.

Today, those 487 shares would be worth roughly $11,473.70. But this shareholder would have also enjoyed an approximate $7,870 in dividend income over that time as well. That would have boosted the shareholder’s total return to around $19,343.70. That equates to a 10-year return of 93.44%, or an annual average of 6.82%.

So yes, Westpac’s dividends have had a meaningful impact on its shareholders’ total returns over the past 10 years. Throw in franking credits and the returns would be even higher. So the vast majority of Westpac’s total returns have come from dividends, perhaps as you would expect from an ASX 200 banking share.

That’s still not quite in the same league as the returns an ASX 200 index fund would have given an investor. For example, the iShares Core S&P/ASX 200 ETF (ASX: IOZ) has returned 142.5% in total, or an average of 9.26% per annum over the past decade (as of 31 January) when you account for dividend distributions.

But even so, it certainly puts Westpac’s laggardly share price performance over this period in a far rosier light.

At the current Westpac share price, this ASX 200 bank has a market capitalisation of $85 billion, with a trailing dividend yield of 5.1%.

The post The Westpac (ASX:WBC) share price has gained less than $4 in 10 years. Have the dividends been worth it? appeared first on The Motley Fool Australia.

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