Category: Stock Market

The Hannans Ltd (ASX: HNR) share price is surging on the back of an update to the company’s plan to recover battery metals from spent lithium-ion batteries.

The company has previously signed a memorandum of understanding with Critical Metals‘ subsidiary, LiB Recycling.

Under the agreement, the pair will plan to form a joint venture to commercialise lithium-ion battery recycling technology in Europe’s Nordic region.

Today, Hannans announced that the understanding’s first precedent has been fulfilled, with Critical Metals’ shareholders voting in favour of the partnership.

At the time of writing, the Hannans share price is 3 cents, 30.34% higher than its previous close.

Let’s take a closer look at today’s announcement from the battery metal exploration company-turned-battery recycler.

One step closer to battery recycling

The Hannans share price is surging on the back of news of its plan to retrieve battery metals by recycling lithium-ion batteries.

The company is hoping to enter into a joint venture with LiB Recycling to commercialise a battery recycling project in Norway, Sweden, Denmark, and Finland.

The memorandum of understanding between Hannans and LiB Recycling – the first step towards a joint venture – has passed its first hurdle.

There are now only 2 conditions on which the agreement is balancing on. Hannans believes the last conditions will be satisfied by 30 November.

LiB Recycling has exclusive rights to commercialise Neometals Ltd‘s (ASX: NMT) technology in the Nordic region. Neometals’ technology can recover battery metals from spent lithium-ion batteries.

Under the joint venture, Hannans will earn its interest by funding and managing certain tasks and activities. These include funding the battery recycling project through to a final investment decision.

According to Hannans, the lithium-ion battery recycling technology has gone through pilot plant and validation test work programs, leaving it substantially derisked.

The company also states the Nordic region has the highest electric vehicle penetration rates in the world.

Additionally, Europe doesn’t produce enough metals to meet its massive growth in the uptake of batteries.

Lastly, European battery and electric vehicle manufacturers must reuse metals to meet legal, social, and environmental obligations.

Hannans share price snapshot

2021 has been a big year for the Hannans share price.

Right now, it is 500% higher than it was at the start of this year. It has also gained 400% since this time last year.

The post Here’s why the Hannans (ASX:HNR) share price is rocketing 30% today appeared first on The Motley Fool Australia.

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• ASX 200 up but energy down, and economic upside as NSW opens. Scott Phillips on Nine’s Late News
• Is the Fortescue (ASX:FMG) dividend yield really 25%?
• US warns Evergrande crisis could affect ‘entire world’
• ASX 200 (ASX:XJO) midday update: EML crashes, mining shares rise

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 Fortescue Metals Group Limited (ASX: FMG) dividend was among the most generous on the Australian share market in FY 2021.

Thanks to sky high iron ore prices, the mining giant was generating significant free cash flow and returned the majority of it to shareholders.

So much so, if you were to look on financial websites such as Google Finance, you will see that the Fortescue dividend yield shows up as 25%.

To put that into context, this means that a $10,000 investment would give you a $2,500 dividend.

Is the Fortescue dividend yield really 25%?

The answer to this question depends upon what you class as the Fortescue dividend.

For example, in FY 2021 Fortescue paid out fully franked dividends totalling $3.58 per share. Based on the current Fortescue share price of $14.23, that indeed equates to a 25% dividend yield.

However, that is on a trailing twelve months (ttm) basis. This dividend has been and gone, so has become largely irrelevant.

What’s the real yield?

The dividend of most significance is the one the miner pays over the 12 months.

And as you might have guessed from the very sharp and recent pullback in the Fortescue share price (and iron ore price), that dividend is not expected to be anywhere near as large as the one paid in FY 2021.

For example, a note out of Goldman Sachs this week reveals that its analysts are expecting a fully franked US$1.02 per share dividend from the mining giant in FY 2022. After which, the broker has forecast a dividend of just 61 US cents per share in FY 2023.

Based on the current Fortescue share price and exchange rates, this will mean yields of 9.7% and 5.8%, respectively, over the next two financial years. While these are still great yields in a low interest rate environment, anyone buying shares recently hoping to receive a 25% yield will be thoroughly disappointed.

So, to circle back to the original question, is the Fortescue dividend yield really 25%? The answer is, sadly no.

The post Is the Fortescue (ASX:FMG) dividend yield really 25%? appeared first on The Motley Fool Australia.

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• US warns Evergrande crisis could affect ‘entire world’
• CBA (ASX:CBA) warns iron ore price will fall by 27% in the next year
• Could the Fortescue (ASX:FMG) share price slide to $12.50 by Christmas?
• Leading brokers name 3 ASX shares to sell today
• Broker warns Fortescue (ASX:FMG) share price could sink a further 20%

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 giant real estate developer Evergrande Group could impact the entire world, according to the US.

These comments came from the US Secretary of State, Antony Blinken, when he was talking about the ongoing crisis with the Chinese property giant.

News.com.au reported that Mr Blinken spoke to Bloomberg Television and said:

China has to make sovereign economic decisions for itself, but we also know that what China does economically is going to have profound ramifications, profound effects, on literally the entire world because all of our economies are so intertwined.

So certainly when it comes to something that could have a major impact on the Chinese economy we look to China to act responsibly and to deal effectively with any challenges.

What’s happening with Evergrande’s debt?

Evergrande has a huge pile of debt, reportedly more than A$400 billion.

Various media, such as Nikkei, have reported that Evergrande has missed a second bond payment in two weeks. It was reportedly meant to pay $46 million to investors, but those investors said that they didn’t receive the payment that was due.

Both investors reportedly said that they and other bondholders have started working with advisers to form a committee that would be able to jointly press their claims with the company.

There are reportedly $7.7 billion of Evergrande bonds that are maturing next year.

Not only that, but two Hong Kong property agencies are looking to sue the company regarding unpaid commissions, according to Reuters, to the tune of around $8 million.

Another Chinese real estate developer, called Fantasia, also didn’t make a US$206 million bond payment. Could that mean there’s more trouble ahead?

How is this impacting ASX 200 shares?

China is Australia’s largest economic trading partner, so there may be some indirect effects on the S&P/ASX 200 Index (ASX: XJO) if there were to be the problems that Mr Blinken could be foreshadowing.

Analysts have been considering the impact of a Evergrande failure on ASX 200 iron shares. Businesses like Fortescue Metals Group Limited (ASX: FMG), BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) may have a closer connection to Evergrande than the ASX 200 as a whole. Evergrande happens to be one of the biggest individual users of steel (and therefore iron) in the world.

Some share prices of iron ore miners have fallen quite a bit in recent months. For example, the Rio Tinto share price has dropped by 23% in just two months.

Despite that fall, the broker UBS still thinks that Rio Tinto is a sell with a price target of $86. The rapid fall in the iron ore price makes the broker think that Rio Tinto’s profit in FY22 will be materially impacted. It also believes that non-Australian iron ore supply is going to increase in the coming years, with more steel scrap in China as well.

Time will tell what happens with the Evergrande Group crisis. It is interesting the US Secretary of State decided to make a comment about what’s going on.

The post US warns Evergrande crisis could affect ‘entire world’ appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: EML crashes, mining shares rise
• BHP (ASX: BHP) share price gains amid CEO’s ‘strong growth outlook for China’
• What happened on the US stock market last night?
• October is ‘crash’ month: Will history repeat for the ASX 200?
• CBA (ASX:CBA) warns iron ore price will fall by 27% in the next year

Motley Fool contributor Tristan Harrison owns shares of Fortescue Metals Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia 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 Friday, the S&P/ASX 200 Index (ASX: XJO) is pushing higher again. The benchmark index is currently up 0.7% to 7,305.4 points.

Here’s what’s happening on the ASX 200 on Friday:

EML Payments shares sink

The EML Payments Ltd (ASX: EML) share price is crashing lower today after releasing an update on regulatory action by the Central Bank of Ireland (CBI). According to the release, the CBI is planning to take action against its PFS Card Services (Ireland) business. Management has warned that the potential directions “could materially impact the European operations of the Prepaid Financial Services (PFS) business.”

Mining shares lift ASX 200

One area of the market helping to drive the ASX 200 index higher today is the mining sector. The likes of BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) shares are pushing higher today following a decent night for base metals. Copper, nickel, and aluminium prices all pushed higher amid global economic growth optimism.

ANZ BNPL offering

The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price is struggling today amid broad weakness in the banking sector. Not even news that the bank is planning to offer a buy now pay later solution with its credit cards has been able to support its shares. Once launched in 2022, the new Visa Instalments feature will provide ANZ credit card customers with an option at the checkout or online to make purchases through interest free instalments across a wide range of terms.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Friday has been the Chalice Mining Ltd (ASX: CHN) share price with a 5% gain. This is despite there being no news out of the gold explorer. The worst performer has been the EML Payments share price with a 14% decline following the update on its Ireland business.

The post ASX 200 (ASX:XJO) midday update: EML crashes, mining shares rise appeared first on The Motley Fool Australia.

More reading

• EML (ASX:EML) share price plunges 13% following regulatory update
• How did ASX fintech shares perform in the FY22 first quarter?
• BHP (ASX: BHP) share price gains amid CEO’s ‘strong growth outlook for China’
• ANZ (ASX:ANZ) share price flat despite BNPL plans
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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 shares of and has recommended EML Payments. The Motley Fool Australia owns shares of and has recommended EML Payments. 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 Sezzle Inc (ASX: SZL) share price has taken off over the past 2 days after the United States cult retailer Target Corporation (NYSE: TGT) launched the buy now, pay later (BNPL) service.

Those shopping with the retail giant ahead of the holiday season will now be able to pay for their purchases in instalments through Sezzle or Affirm, which is owned by Affirm Holdings Inc (NASDAQ: AFRM).

The Sezzle share price stormed 12.6% higher yesterday and is continuing to gain today.

At the time of writing, the Sezzle share price is $5.85, which is 3.54% higher than its previous close.

That means the BNPL provider’s stock is now trading for 18.66% more than it was at Wednesday’s close.

Let’s take a closer look at the news that’s got the market excited about Sezzle this week.

Sezzle share price soars on Target launch

The Sezzle share price is rocketing higher this week after Target announced it has launched the BNPL provider in-store and online.

Target shoppers can now split their payments into 4 instalments using Sezzle’s platform.

They can also split large purchases into monthly instalments using Affirm.

Sezzle announced the partnership in June after the companies signed a 3-year agreement.

Under the agreement, Sezzle can be used by customers shopping on Target.com and the Target app. Target shoppers can also use Sezzle on orders that use the retailer’s same-day fulfillment services.

Additionally, those shopping in-store can access Sezzle’s BNPL service by paying with Apple Pay, which is owned by Apple Inc (NASDAQ: AAPL), or Google Pay which is owned by Alphabet Inc (NASDAQ: GOOGL).

Target’s president of financial and retail services, Gemma Kubat, commented on the news that’s been driving the Sezzle share price over the past 2 days, saying:

We know our guests want easy and affordable payment options that work within their family’s budget.

Through our partnerships with Affirm and Sezzle, Target is investing in new financial tools that make our shopping experiences more flexible and personalised to guests’ needs, right in time for the holiday season.

The post The Sezzle (ASX:SZL) share price has leapt 19% in 2 days. Here’s why appeared first on The Motley Fool Australia.

More reading

• How did ASX fintech shares perform in the FY22 first quarter?
• Which ASX 300 shares are the biggest winners and losers on Thursday?
• Why Collins Foods, Pilbara Minerals, Sezzle, & Super Retail are pushing higher
• Why the Sezzle (ASX:SZL) share price is storming 9% higher on Thursday
• ASX 200 tech shares set to slide as Nasdaq plunges 2%

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Affirm Holdings, Inc., Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Apple. 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 EML Payments Ltd (ASX: EML) share price is nosediving during early morning trade on Friday. This comes after the payments company provided a regulatory update relating to the Central Bank of Ireland (CBI).

At the time of writing, the EML share price is down a sizeable 12.97% to $3.22. Today’s fall means shareholders have lost more than 20% in a month.

What happened?

As pointed out last night by my colleague Tristan, EML Payments advised its Irish-based subsidiary, PFS Card Services (PCSIL), had received further correspondence from CBI.

As such, regulatory concerns were raised about PCSIL’s directions in respect to its remediation plan and material growth. EML Payments noted this could impact its European operations of PSCIL’s business from a material standpoint.

While CBI acknowledged the remediation program and governance improvements, the proposed material growth policy is higher than expected.

Consequently, CBI proposed certain limits be applied to programs. But if implemented, this may potentially have a negative impact on the PCSIL business. This appears to have had a detrimental effect on the EML share price today.

Subject to endorsement by the PCSIL board, EML Payments will submit its plan next week. This involves a significant and detailed analysis of limits applied across almost 27,000 programs. In addition, some of these programs could be recalibrated to different limits within.

PCSIL’s submission outlining potential directions is due to the CBI by 28 October.

EML Payments noted while its remediation plan remains on track, this does not affect its operations in other parts of the world. This includes its business in Australia, North American, and other subsidiaries listed in the United Kingdom, Ireland, and France.

About the EML share price

Over the course of the last 12 months, the EML share price accelerated to an all-time high in April before freefalling. As a result, its shares crashed below $2.80 and have since moved sideways, down by more than 20% year-to-date.

Based on valuation grounds, EML Payments has a market capitalisation of roughly $1.24 billion, with 373 million shares on issue.

The post EML (ASX:EML) share price plunges 13% following regulatory update appeared first on The Motley Fool Australia.

More reading

• How did ASX fintech shares perform in the FY22 first quarter?
• 5 things to watch on the ASX 200 on Friday
• EML Payments (ASX:EML) share price on watch with CBI update
• ASX 200 tech shares set to slide as Nasdaq plunges 2%
• How has the EML (ASX:EML) share price been performing compared to Tyro?

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

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ASX 200 darling Afterpay Ltd (ASX: APT) has had quite the year in 2021 so far, capped off of course by the company’s pending acquisition by the US payments giant, Square Inc (NYSE: SQ).

Afterpay and Square announced this blockbuster marriage, which will be the largest acquisition in Australia’s corporate history, back in early August. So, examining Afterpay’s share price performance over the first quarter of FY2022 (1 July – 30 September) might be especially illuminating.

Let’s dig in.

How did the Afterpay share price perform over the FY22 first quarter?

Afterpay shares started the 2022 financial year on 1 July at a share price of $118.17. On 30 September, the buy now, pay later (BNPL) giant ended the quarter at a share price of $121.32. That puts its raw gains for the quarter at 2.67%.

Afterpay doesn’t pay a dividend, so that’s the absolute return shareholders are left with.

Here’s something else to consider, though. Square and Afterpay announced their merger plans on the morning of Monday 2 August. Up until that point, Afterpay had lost a stunning 18.2% since the start of the quarter, closing on Friday 30 July at a price of $96.66.

The deal Square put forward to acquire Afterpay values the Afterpay share price at 0.375 of one Square share. That’s because Square’s offer was all-scrip, putting up 0.375 Square shares for every Afterpay share held.

That intrinsically ties the Afterpay share price to the Square share price. As it stands today, Square last traded at a price of US$249.43. That works out to be $340.94 in Aussie dollars at the current exchange rate.

That places Square’s offer at a value of $127.85 for every Afterpay share as of today.

Looking at Afterpay’s share price history, the Square acquisition offer is probably largely to thank for Afterpay’s positive first quarter.

At the time of writing, the Afterpay share price is $123.43, up 2.32% so far on Friday.

Afterpay has a market capitalisation of $34.93 billion.

The post Here’s what happened to the Afterpay (ASX:APT) share price in the FY22 first quarter appeared first on The Motley Fool Australia.

More reading

• How did ASX fintech shares perform in the FY22 first quarter?
• Here’s why ASX 200 tech shares are surging today
• Why Afterpay, Austal, Baby Bunting, & Nick Scali shares are storming higher
• Why the Afterpay Ltd (ASX:APT) share price is bouncing back on Wednesday
• ASX 200 (ASX:XJO) midday update: A2 Milk class action, tech shares rebound

Motley Fool contributor Sebastian Bowen owns shares of Square. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and Square. The Motley Fool Australia owns shares of and has recommended AFTERPAY T 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 Energy Resources of Australia Limited (ASX: ERA) share price is selling off on Friday, down 4.05% to 35.5 cents.

The company is currently undergoing a rehabilitation program for the area surrounding its uranium Ranger Mine in the Northern Territory.

What’s driving the Energy Resources share price?

This morning, Energy Resources announced that the Ranger rehabilitation project will overrun both initial cost and schedule forecasts.

According to the release, the full extent of the overrun is not yet known and the company will update the market in due course.

Production at the Ranger Mine ceased in early 2021 after 40 years of operation.

The company will undergo an extensive cleanup of the area with activities such as managing contaminated materials and reinstating the affected landform.

The company estimates that over 18 gigalitres of process water need to be treated over the next five years and 90 million tonnes of material will need to be moved to create the final landform.

According to Energy Resources’ June half-year results, the rehabilitation project is a strategic priority to demonstrate the company’s commitment to “long-term sustainable operations in the region, create a sustainable, positive legacy and underpin potential future growth opportunities.”

The completion of the rehabilitation project was initially projected by January 2026.

Energy Resources held total cash resources of $725 million at 30 June 2021, comprised of $191 million in cash at bank and $534 million held by the Commonwealth Government as part of its Ranger Rehabilitation Trust Fund.

What’s next for Energy Resources?

Energy Resource’s near-term focus will be on completing its rehabilitation project.

During this time, the company said that it will attempt to maximise cash flow generation from its remaining inventories of drummed uranium oxide. As well as progress inorganic growth options for evaluation.

The Energy Resources share price is up 9.4% year-to-date.

The post Here’s why the Energy Resources (ASX:ERA) share price is falling on Friday appeared first on The Motley Fool Australia.

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• Why ASX uranium shares are diving double-digits on Monday
• This week’s top ASX share versus top altcoin winner revealed
• Is there a uranium ETF listed on the ASX?
• Why are ASX uranium shares in focus today?
• Why Energy Resources of Australia, Incitec Pivot, Sydney Airport, & Talga are rising

Motley Fool contributor Kerry Sun 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 Imdex Limited (ASX: IMD) share price has started the day off in the green and is climbing 2% higher at $2.68.

Imdex shares have rallied 13% this past week, and another 13% this month as well.

That’s well ahead of the S&P/ASX 200 index (ASX: XJO) which has posted a loss of 3% in that time.

Why is the Imdex share price gaining ground lately?

Imdex shares had been trading sideways since the company released its FY21 earnings report.

At that time, the provider of technology and equipment to the mining industry’s share price popped 11% on the day, but returns had been fairly uninteresting from that point.

That is however until we finished the walk through September, where investors began to show love for Imdex in the markets again.

Despite no price-sensitive news, bullish investors began driving the price action from $2.32 to $2.45 per share in the first week of October.

Then, yesterday, the company announced some positive updates from its annual general meeting (AGM), noting it had made a positive start to FY22.

It stated that Q1 FY22 revenue was already up 41% from the same time last year, and 13% higher than the previous quarter.

This is the highest Q1 top-line earnings result the company has achieved since 2018 by at least $18 million, per the AGM presentation.

Can Imdex keep up the momentum? One leading broker seems to think so. Let’s take a look at what investment firm Jeffries is saying about the Imdex share price.

Can Imdex keep growing its earnings?

Jeffries certainly believes it can, especially given the company’s record quarterly revenue result. The broker has updated its modelling and raised its earnings outlook for Imdex from the company’s updates.

As such, it reiterated its buy recommendation on Imdex shares, which implies analysts see further growth potential as a possibility.

The broker feels there are upcoming catalysts investors might want to consider as well too, as “the pace of recovery continues to surprise to the upside”, referring to broad ASX earnings growth and the recovery of the real economy.

With this in mind, it “expect(s) the next catalyst to be earnings and the inherent operating leverage that would drive further upgrades”, which it says could be bolstered by product development after the pandemic.

With FY22 revenue coming in so strong this early in the year, the broker lifted its FY22-24 estimates on Imdex’s EBITDA by 13-15% and its net profit after tax (NPAT) forecasts by 18-20%.

As The Motley Fool reported in August, some fund managers are seeing this upside in Imdex shares too, with Fairmont Equities managing director providing an optimistic look on the company’s shares in a note to clients.

Imdex share price snapshot

The Imdex share price has climbed 55% this year to date and has posted a return of 98% in the last 12 months.

These outsized gains have outpaced the broad index’s 12 month return of around 25%.

The post What this broker is saying about the Imdex (ASX:IMD) share price appeared first on The Motley Fool Australia.

More reading

• The Imdex (ASX:IMD) share price leaps 7% following AGM

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Imdex 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 Woolworths Group Ltd (ASX: WOW) share price is gaining this morning after the company settled a class-action lawsuit brought about by its employees.

A class action against Woolworths was filed to the Federal Court of Australia in 2019 after the supermarket found it had underpaid around 5,700 employees.

Today, the retail giant announced it has provisionally settled the class action. The company has also agreed to pay a $2,500 ex-gratia payment plus superannuation to around 20,000 current and former employees.

At the time of writing, the Woolworths share price is $39.86, 0.4% higher than its previous close.

That’s roughly in line with the broader market’s movements. Right now, the S&P/ASX 200 Index (ASX: XJO) and the All Ordinaries Index (ASX: XAO) have gained 0.16% and 0.21% respectively.

Let’s take a closer look at today’s non-price-sensitive news from Woolworths.

A quick refresher

Woolworths has been battling against the now-settled class action for nearly 2 years. In October 2019 a review found Woolworths had underpaid some of its salaried employees.

Around a month later, employees filed a class action lawsuit against the company to the Federal Court of Australia.

Woolworths has since repaid what was owed to affected employees, including interest and superannuation. The remediation payments have pulled around $370 million from Woolworths’ coffers so far.

However, the company believes the underpayments began in 2010. That’s beyond the time period the supermarket keeps records of rosters. Therefore, it’s unclear as to whether employees were underpaid between 2010 and 2013.

Today’s news

The Woolworths share price is up amid news the company has settled a class-action lawsuit brought against it.

Additionally, Woolworths has agreed to provide around $50 million worth of ex-gratia payments to previously underpaid employees.

Unfortunately for Woolworths, it no longer has records of employee rosters from between 2010 and 2013. That means the company can’t verify if employees were indeed underpaid during that time.

However, the underpayments likely stem from the 2010 implementation of the modern General Retail Industry Award.

As a result, the company will provide every employee who was potentially affected by the underpayments from 2010 until 2013 with a $2,500 payment, plus superannuation.

Woolworths’ CEO Brad Banducci commented on the news released today:

We said at the outset that we would extend our review beyond our legal obligations and look back to 2010. With detailed analysis challenging in the earlier years, we felt an equal and broad-based payment to all potentially impacted team members was a fair and equitable way to approach remediation for this period.

Woolworths share price snapshot

Today’s gains for the Woolworths share price have added to its already strong performance.

The company’s share price has gained 17% since the start of 2021. It is also 24% higher than it was this time last year.

The post Woolworths (ASX:WOW) share price gains amid class action settlement appeared first on The Motley Fool Australia.

More reading

• The final Woolworths (ASX:WOW) dividend will be paid today. Here’s what you need to know
• 5 things to watch on the ASX 200 on Friday
• 3 ASX shares protected from rising inflation and interest rates
• 5 defensive ASX shares to guide you through the market correction
• What happened for the Woolworths (ASX:WOW) share price in the FY22 first quarter?

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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