Category: Stock Market

Shares in Scentre Group (ASX: SCG) are on the move today after the company released its financial results for the full-year ended 31 December 2021.

At the time of writing, the Scentre Group share price is trading in the red at $3.015 apiece.

Scentre Group share price tanks amid earnings growth

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

• Operating profit of $845.8 million (16.32 cents per security, up 10.9%)
• Funds From Operations (FFO) for the year was $862.5 million (16.64 cents per security, up 12.7%)
• Statutory result for the full year, inclusive of unrealised non-cash items was $887.9 million, up from ($3,731.8) million
• Net operating cash flows (after interest, overheads and tax) were $913.6 million, an increase of 24.8% per security on 2020
• Distribution of $738.7 million for the year equates to 14.25 cents per security, a growth of 103.6% on 2020.

What else happened this period for Scentre Group?

Scentre Group say’s that its investment in Westfield Mt Druitt is “progressing well”. Today’s release notes that the $55 million rooftop entertainment, leisure and dining precinct is fully leased and on track to open next month. Scentre Group has a $28 million share in the venture.

The group has also commenced a $33 million investment at Westfield Penrith. It says the project will result in “a large-format entertainment offer and upgrades and additions to the centre’s vertical transport systems”.

Operating profits also came in at over $845 million for the year, a gain of 11%, whereas FFO recognised a 13% spike from the previous year to $826 million.

Although with this result, net operating cash flows were nearly 25% per security higher on the year and represented $913.6 million from the 12 months to 31 December 2021.

Impressively, the company distributed a total of $787.7 million or 4.25 cents per security, which represented a growth of 103.6% on the previous year.

Management commentary

Speaking on the announcement, Scentre Group CEO Peter Allen said:

I am very pleased with the Group’s performance. Our team delivered better results in 2021 than 2020, even with more COVID-19 restrictions. This demonstrates our proactive approach to generating long term value for our securityholders. We have positioned the Group for growth for many years to come. We are focused on the customer, leveraging the strengths of our leading platform and pursuing our ambition to grow by becoming essential to people, communities and the businesses that interact with them.

What’s next for Scentre Group?

The company says it is focused on “driving customer visitation, engagement and occupancy in order to deliver earnings growth in 2022 and future years”.

As such, it expects to distribute at least 15 cents per security in 2022, which would signify approximately 5% growth.

“Earnings are expected to grow at a higher rate in 2022” the company says, and it also notes that it remains on track to achieve at least 50% of its net zero target by 2025.

Scentre Group share price snapshot

In the last 12 months, the Scentre Group share price has gained 5% but is down just over 45 this year to date. It has curled back up in the past month of trading and is also in the green during the past 5 days.

The post Dividend up 103%, but Scentre Group (ASX:SCG) share price down. What gives? 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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At lunch on Wednesday, the S&P/ASX 200 Index (ASX: XJO) is back on form and pushing higher. The benchmark index is currently up 0.25% to 7,179.9 points.

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

Woolworths higher on half year results

The Woolworths Group Ltd (ASX: WOW) share price is pushing higher today following the release of the retail giant’s half year results. Woolworths reported an 8% increase in group sales to $31,894 million but a 6.5% decline in net profit to $795 million. The latter was ahead of expectations and includes $239 million of COVID costs.

Domino’s tumbles on disappointing result

The Domino’s Pizza Enterprises Ltd (ASX: DMP) share price is tumbling today after the pizza chain operator’s half year earnings fell short of expectations. Domino’s reported an 11.1% increase in network sales but a 5.3% decline in underlying net profit after tax to $91.3 million. Goldman Sachs responded to the result. It said: “Earnings was a -7.3% miss at the EBITDA line largely driven by the underperformance in Asia. However, the store outlook and topline sales growth remain encouraging.”

WiseTech delivers strong growth

The WiseTech Global Ltd (ASX: WTC) share price is edging higher today after the logistics solutions technology company delivered strong top and bottom line growth during the first half. WiseTech reported an 18% increase in revenue to $281 million and a 77% jump in underlying net profit after tax to $77.3 million. This strong performance has led to management upgrading its FY 2022 earnings guidance.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Wednesday has been the Worley Ltd (ASX: WOR) share price with a 7% gain. This follows the release of the engineering company’s half year update. The worst performer has been the Domino’s share price with a 16% decline following the pizza chain’s earnings miss.

The post ASX 200 (ASX:XJO) midday update: Woolworths impresses but Domino’s crashes after earnings miss appeared first on The Motley Fool Australia.

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• Domino’s Pizza (ASX:DMP) profit nosedives: how will market digest result?
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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. owns and has recommended WiseTech Global. The Motley Fool Australia owns and has recommended WiseTech Global. The Motley Fool Australia has recommended Dominos Pizza Enterprises 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 PEXA Group Ltd (ASX: PXA) share price is surging today, up 9.8%.

PEXA shares closed yesterday at $17.01 and are currently trading at $18.68.

The online property exchange network operator is a newcomer to the ASX. Having listed in July last year.

Below, we take a look at the highlights from the company’s financial results for the half year ending 31 December (1H FY22).

PEXA share price lifts off on strong outlook

• Revenue of $145.4 million, up 46% from 1H FY21
• Pro forma earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 71% year-on-year to $75.5 million
• Pro forma net profit after tax (NPAT) of $25.9 million, up $29.7 million from the prior corresponding period
• Pro forma net free cash flow before interest and tax of $45 million increased 39%

What else happened during the half year?

The boost in revenue and strong outlook that’s seeing the PEXA share price lift off today was helped by a 37% increase in PEXA Exchange transactions during the half, which reached 2.1 million.

The company also reported that it has now facilitated more than 10 million property transactions since launching. Those transactions are worth more than $2 trillion. PEXA reported it is currently supporting more than 9,600 practitioners, 160 financial institutions and 1.1 million consumers.

During the 1H FY22, PEXA Insights also launched its first two products. These are designed to help improve financial institution efficiency.

On the international expansion front, the company said that “momentum continues to build in PEXA International”, reporting “significant progress” during the half year with its United Kingdom market entry strategy.

What did management say?

Commenting on the results, PEXA’s CEO Glenn King said:

The company’s growth trajectory continued over the first half of FY22. Our PEXA Exchange platform has continued to perform strongly, with the positive property market conditions of FY21 continuing into FY22…

In addition to our current strong operating performance, we have made meaningful progress on our growth initiatives. Following successful Bank of England payments solution testing with seven lenders in January, we have signed up the first lenders onto our platform in the UK, making PEXA the UK’s 7 th net settlement payment system to clear through the Bank of England.

The PEXA share price could also be getting a boost today from King’s bullish outlook for the full year. “We now expect to materially exceed previous Prospectus guidance across FY22 and have increased guidance across all key earnings metrics,” he said.

What’s next?

PEXA said that it’s on-track with its UK entry plans and expects to go live later in 2022. And ASX investors look to be bidding up the PEXA share price in response.

The company said following the strong half year results, it expects to exceed its FY22 Prospectus forecasts. PEXA upgraded guidance across key financial metrics.

That includes:

• Boosting its forecast revenue to $265 – $275 million, up from $246.9 million
• Increasing its forecast pro forma NPATA to $70 – $80 million, up from $59.2 million
• And lifting its pro forma EBITDA projection for FY22 to $120 – $130 million, up from the previous estimate of $107.6 million

PEXA share price snapshot

Despite today’s big boost, the PEXA share price remains down 9% in the new year. That compares to a year-to-date loss of 5% posted by the S&P/ASX 200 Index (ASX: XJO).

The post PEXA (ASX:PXA) share price rockets 10% on guidance boost appeared first on The Motley Fool Australia.

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• ‘Clear leader in a defensive industry’: Cochlear (ASX:COH) share price jumps on broker upgrade
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• South32 (ASX:S32) share price up following completion of ‘major milestone’ copper acquisition
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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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The Cochlear Limited (ASX: COH) share price has been charging higher again on Wednesday.

In morning trade, the hearing solutions company’s shares are up 7% to $222.02.

This means the Cochlear share price is now up over 16% in the space of two days.

Why is the Cochlear share price storming higher?

Investors have been bidding the Cochlear share price higher since the release of a stronger than expected half year result.

For the six months ended 31 December, Cochlear delivered a 26% increase in half year underlying net profit to $158 million. This was well ahead of the market consensus estimate and has led to many brokers upgrading their estimates and recommendations.

One of those is the team at Goldman Sachs.

What did Goldman say?

According to a note this morning, the broker has upgraded the company’s shares to a buy rating with a $237.00 price target.

It was very pleased with its performance and notes that Cochlear is a “clear leader in a defensive industry with improving fundamentals.”

Goldman commented: “There is little doubt around the long-term, defensive nature of the cochlear implant (CI) market, or COH’s competitive position within it. Rather, the largest recent debates have revolved around the extent to which surgery restrictions, staffing limitations and changes to patient/physician behaviour will preclude a strong volume profile from returning.”

“Whilst volatility clearly remains, on all fronts we are now more comfortable than any time since the start of the pandemic. Even after today’s +5% upgrade, we believe guidance appears more realistic/beatable than for several years (COH has shown a mixed track record in this regard for some time). Covid-driven disruption is falling in most key markets, and we see scope for a clear sequential improvement in both earnings and sentiment towards this stock,” it added.

Goldman Sachs also highlights the company’s huge cash balance of $506 million. It notes that “COH has little need to maintain such a material cash balance and, as conditions continue to improve, we expect management to more strongly prioritise any number of accretive deployment opportunities.”

The post ‘Clear leader in a defensive industry’: Cochlear (ASX:COH) share price jumps on broker upgrade 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. owns and has recommended Cochlear Ltd. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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

Becoming a millionaire can seem like a goal that’s only attainable for a select few. However, it’s possible to become a millionaire by investing in the stock market — even if you’re not already wealthy.

The right strategy is key, though, to reaching millionaire status. While not everyone will be able to accumulate $1 million or more in the stock market, there are a few investing moves that will give you a better chance of achieving that target.

1. Start investing as early as possible

Time is your most valuable resource when it comes to generating wealth in the stock market. The more time your money has to grow, the more you will accumulate over time — and the less you’ll need to invest each month to get there.

Regardless of your age or how much you can afford to invest, it’s wise to get started now. It’s never too early to begin investing and waiting just a few years could make it more challenging for your money to grow. Even if you can’t afford to invest much, investing a little now is better than putting it off.

2. Invest consistently

Whether you’re investing $200 per month or $2,000 per month, consistency can help your money go further.

When you invest a set amount on a consistent basis, you’re taking advantage of a strategy called dollar-cost averaging. The stock market is constantly fluctuating. When you invest a certain amount on a set schedule throughout the year, sometimes you’ll be buying when prices are high, and other times when prices are lower.

Over time, those highs and lows should average out. If you were to invest a large amount of money once or twice a year, you could risk only buying when prices are high. Similarly, if you stop investing when the market is in a slump, you’ll miss out on the opportunity to buy when prices are lower.

3. Stick to long-term investments

The investments you choose can make a significant impact on how much your money will grow. Invest too aggressively and you could risk losing more than you gain. Invest too conservatively, though, and you could have a tough time reaching $1 million.

While everyone’s portfolios will be slightly different depending on personal preferences, it’s wise to keep a long-term outlook when choosing investments.

Long-term investments may not experience explosive growth, but they are more likely to see positive average returns over decades. This slow-but-steady approach is safer than buying high-risk, high-reward stocks, and it can make you more likely to achieve $1 million in the stock market.

When choosing long-term investments, keep an eye on the stock’s underlying fundamentals. Is the company in a strong place financially? What does its leadership team look like? How has it handled market downturns in the past? Questions like these can help you choose solid investments that are more likely to grow over time.

Reaching millionaire status isn’t always easy, but it is possible. With the right strategy — and the right investments — you’ll be on your way to a million-dollar portfolio.

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

The post 3 investing moves that could make you a millionaire appeared first on The Motley Fool Australia.

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The Motley Fool has a disclosure policy.

 

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

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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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