Category: Stock Market

The S&P/ASX 200 Index (ASX: XJO) rose by around 0.9% today to 6,839 points.

Here are some of the highlights from the ASX:

Adbri Ltd (ASX: ABC)

The Adbri share price was the best performer in the ASX 200, rising by 10.5%.

Construction business Adbri announced its FY20 report, showing that revenue dropped by 4% over the year to $1.45 billion. It blamed lower residential activity which affected its concrete and cement volumes. This offset improved sales of lime and concrete products.

Underlying net profit after tax (NPAT) fell by 6% to $115.6 million, but this was actually better than the guidance that it had previously given before it was withdrawn due to COVID-19.

It generated $93.7 million of statutory profit, with cashflow from operations growing by 32.6% to $256.2 million.

The Adbri board announced a final dividend of 7.25 cents per share, which brought the total FY20 dividend to 12 cents per share.

In terms of the outlook, Adbri said that trading conditions are expected to remain challenging until the stimulus measures completely offset underlying softness in east coast construction markets. However, some areas of the business will be supported by a growing number of mining projects.

SEEK Limited (ASX: SEK)

The SEEK share price fell over 7% in reaction to its updates today. It was one of the worst performers in the ASX 200.

It said that Andrew Basset will step down as managing director and CEO, to transition to the new full-time role of executive chair and CEO of SEEK Investments. Ex-Commonwealth Bank of Australia (ASX: CBA) Ian Narev will become the boss.

The SEEK board believes the SEEK Asia Pacific and Americas and SEEK Investments businesses can benefit from a greater degree of independence and focus, and is in a unique position to have two experienced executives lead its operating business and its investment arm.

SEEK wants the Investments business to be an investor and business builder that partners with emerging leaders to support their aspirations and deliver strong long-term returns. Keys to its success will include the ability to operate independently and access third party capital.

For SEEK, the focus is on the growth opportunities for the Asia Pacific and Americas business and relevant adjacencies, whilst retaining economic exposure to Investments and Zhaopin.

However, the company did say that Zhaopin and itself are in advanced discussions with a consortium looking to acquire an ownership interest in Zhaopin.

In terms of the FY21 half-year result, the ASX 200 share reported that group revenue was down 6% to $819.1 million. SEEK ANZ revenue was down 1%, Zhaopin revenue was down 8% and SEEK Asia revenue was down 23%.

Looking at group earnings before interest, tax, depreciation and amortisation (EBITDA), it dropped by 1% to $245.9 million. The EBITDA margin improved from 28% last year to 30%.

SEEK’s reported net profit dropped 8% to $69.7 million. It spent 8% more on depreciation and amortisation because of product and technology investment.

There was no FY21 half-year dividend declared, though the board intends to restart dividends at the full year result.

Regarding the full year forecast, it’s expecting revenue to be around $1.7 billion, EBITDA to be approximately $460 million and reported net profit to be around $100 million.

Other hefty ASX 200 movements

A number of ASX tech shares and growth shares were sold off today. The Afterpay Ltd (ASX: APT) share price dropped 7.2% and the Domino’s Pizza Enterprises Ltd. (ASX: DMP) share price dropped 8.5%.

Two businesses fell more than 10%. They were: the Perenti Global Ltd (ASX: PRN) share price after reporting its result and the Austal Limited (ASX: ASB) share price after losing its US boss.

At the green end of the ASX 200, the AUB Group Ltd (ASX: AUB) share price rose by 10% after reporting its result.

More reading

• The Mercury NZ (ASX:MCY) share price zaps up. Here’s why
• Why the Afterpay (ASX: APT) share price is down 8% today
• ASX investors watch out for a rise in interest rates in 2022
• Adbri (ASX:ABC) share price soars on strong FY20 result
• Why the Austal (ASX:ASB) share price got torpedoed today

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited and SEEK 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 Select Harvests Limited (ASX: SHV) share price will be on watch after announcing the conclusion of its comprehensive strategic review of growth options and supply chain solutions for the food division.

Divestment plan for a Select Harvests asset

Select Harvests explained that the strategic review found that the Thomastown facility is not a core part of the future supply chain requirements and the strategic focus of the business is best directed to investing in the Carina West processing facility where it adds value and markets its almonds for sale in the domestic and export markets.

How did it reach that decision?

The conclusion was reached after considering multiple options including upgrading the existing Thomastown facility, developing a new production facility, outsourcing value-added production or investing in the Carina West facility and moving more value-added almond processing from Thomastown to Carina West, merging the Carina West and Thomastown facilities.

Select Harvests said that the decision has been made to restructure the food division to focus on Select Harvests’ competitive advantage in growing, value adding and marketing almonds in the domestic and export markets by expanding the Carina West facility.

The nut company announced that it has appointed its corporate adviser, Kidder Williams, to seek expressions of interest in the consumer branded business and Thomastown processing facility.

Carina West plan

Select Harvests revealed that it’s working on a progressive 18-month transition plan to move more almond processing from Thomastown to Carin West. That will mean investing in more jobs at the facility, as well as production capacity, new technology and new warehousing.

The nut business isn’t hanging around, it’s going to start investing immediately, with the stock pad currently being increased and a new paste machine arriving in April. Some of the investment was already in the long-term plan but has been brought forward due to the recent Piangil acquisition.

The Carina West facility will remain as an almond-only facility to avoid allergen contamination.

Select Harvest managing director Paul Thompson said:

We are focussed on delivering the best long-term return for our business and outstanding customer service to our customers. The expansion of the Carina West facility will create a supply chain that enables us to strengthen our competitive advantages in growing, value adding and marketing almonds in the domestic and export markets.

More reading

• The Uniti (ASX:UWL) share price is up 20% in 2021: Can it go higher?
• Platinum (ASX:PTM) share price on watch after strong profit growth
• What I’m paying attention to, this earnings season
• The Lefroy (ASX:LEX) share price rose by 237% today. Here’s Why
• Why the Atomo Diagnostics (ASX:AT1) share price closed 7% down today

Motley Fool contributor Tristan Harrison 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.

The post Select Harvests (ASX:SHV) share price on watch after asset sale and restructure plans appeared first on The Motley Fool Australia.

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It was a very positive day of trade for the Uniti Group Ltd (ASX: UWL) share price on Tuesday.

The telecommunications provider’s shares rose 9% to a record high of $2.15 before closing at $2.10..

This means the Uniti share price is now up 20% since the start of the year.

Why is the Uniti share price surging higher?

Investors were bidding the Uniti share price higher on Tuesday after the release of its half year results. Those results revealed strong growth in revenue, earnings, and free cash flow.

For the six months ended 31 December, Uniti reported a 148% increase in revenue compared to the prior corresponding period to $54.6 million.

Thanks to stronger margins, earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 307% to $29.3 million.

Furthermore, based on its performance in December, Uniti’s annualised revenue and EBITDA run-rate was $200 million and $116 million, respectively.

It was a similar story for its free cash flow. Operating free cash flow less capital expenditure was $18.3 million for the half. But at the end of December, its annualised operating free cash flow run-rate was $72 million.

What were the drivers of its growth?

The key drivers of Uniti’s growth during the half were a series of acquisitions.

During the period, the company completed three accretive acquisitions. These were OptiComm, Harbour ISP, and the Velocity network assets from Telstra Corporation Ltd (ASX: TLS). Positively, the integration and synergy realisation plans are on or ahead of schedule for these acquisitions.

In addition to this, management notes that all of Uniti’s business units are benefiting from various strong tailwinds. These include greater digital services uptake, consumption, technology, strengthening residential property markets, and lifestyle factors. The latter are making fibre broadband an essential service.

While no guidance has been given for the full year, Uniti’s Group Managing Director and CEO, Michael Simmons is very positive on the future.

He explained: “The fact that 75% of our existing fully funded, contracted fibre order book will be deployed in the coming 5 years , and is continuing to grow at improving rates, assures our shareholders of continued steep earnings growth and free cash generation over both the near and longer term.”

Can the Uniti share price go higher?

Late last month, Bell Potter put a buy rating and $2.20 price target on its shares.

With the Uniti share price now trading within sight of this, the upside may be limited in the short term.

However, Bell Potter is likely to reassess its price target in the coming days after fully digesting the result. This could potentially lead to a higher price target. Investors may want to watch out for that.

More reading

• Why the Uniti (ASX:UWL) share price just broke its record high?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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 Platinum Asset Management Ltd (ASX: PTM) share price will be one to watch on Wednesday.

This follows the release of the asset manager’s half year results after the market close.

How did Platinum perform in the first half?

The company was a positive performer during the first half, which could bode well for the Platinum share price tomorrow.

According to the release, for the six months ended 31 December, Platinum recorded an 8.5% increase in revenue to $166.6 million and a 14.4% lift in net profit to $90.4 million. Earnings per share came in at 15.6 cents.

Management advised that the main contributor of the increase in revenue, profit, and earnings per share was the mark to market gains on its seed investments, including dividends. These made an overall gain for the half year of $36.2 million before tax. This compares to a gain of just $7.7 million before tax in the prior corresponding period.

Also supporting its profit growth was a reduction in costs. Platinum’s total costs were $37.3 million for the half, which was down $3.3 million from a year earlier. This was achieved through cost savings on custody and registry fees, business development expenses, and legal, compliance, and other professional expenses.

In light of its profit growth, a fully franked interim dividend of 15.6 cents per share was declared. This represents 100% of its earnings per share. Management advised that this was possible due to its limited capital requirements. It continues to expect that that most, if not all, future profits will be distributed by way of dividends

Funds under management growth

At the end of the period, Platinum’s funds under management (FUM) stood at $23.6 billion. This represents an increase of 10.4% since the end of June.

Platinum’s FUM increase was driven by its investment performance, which contributed $3.3 billion to its FUMs. This more than offset the net fund outflows of $1 billion.

Positively, its investment returns were strong for all of its funds and mandates for the half year.

Outlook

No guidance has been given for the full year, but management appears positive on its prospects.

It notes that the company is well positioned for future opportunities thanks to its highly differentiated product and strong position in the Australian retail market.

It also believes its offshore initiatives provide a platform for growth over the medium-term and notes that its investment team continue to deliver high research quality and a large idea base.

The Platinum share price is up 6.1% since the start of the year.

More reading

• Top brokers name 3 ASX shares to sell today

Motley Fool contributor James Mickleboro 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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Today has been one heck of a news day.

Craig Kelly resigns from the Liberal Party.

The Job Seeker boost still finishes, as scheduled, but the ‘old’ rate will be increased (so, a cut and an increase, which should make absolutely no-one happy!).

SEEK Limited (ASX: SEK) co-founder Andrew Bassat is stepping aside as CEO.

Oh, and at the time of writing, the Aussie dollar has gained 2% in just 24 hours to now be buying 79.3 US cents.

Not to mention the regular earnings season ‘firehose’ of ASX companies reporting. My rough count was about a dozen of note, and another dozen or so that also delivered numbers today.

And there’s more news, again, with Moody’s cutting Victoria’s credit rating… and on and on it goes.

Frankly, I’ve spent quite a bit of time looking at earnings this morning.

But, in keeping with my note about Domino’s the other day, I thought it was worth sharing a few reflections.

Given the amount of information, I need to make sure I’m using my time effectively. I’m trying to put the 80:20 principle into play.

So, you know what I’m looking for most, this earnings season?

Big picture stuff.

I’m looking for companies that have delivered remarkable numbers – good, or bad.

They can provide opportunities to buy and/or sell, depending on the market’s reaction.

I’m looking for evidence of a trend continuing or changing.

That can show you when something has started working, is still working, or might be breaking down.

I’m looking for ‘proof of concept’ from businesses that talk a good game but are yet to show us the money.

That can be things like continued revenue growth, and/or evidence of scale benefits accruing to the bottom line, even if a company is still losing money.

Now, I don’t want to give you the impression that it’s only about the big picture.

Debt matters. Margins matter. Competition (present or potential) matters. So does leadership and a dozen other things.

And, depending on your style of investing, they can matter more than almost anything else.

But one way of harnessing good returns is seeing something that others don’t (or won’t), or finding it before the whole market catches on.

Or – and this is deceptively simple, and remarkably common, but under-practiced – simply looking out far enough to see the long term potential.

And while you can’t simply extrapolate (there’s a reason Kodak isn’t known, today, for being the dominant photographic printmaker), it’s worth considering whether a business’ momentum might suggest long term success.

The medical field is a good example, here.

Yes, there have been better (and worse) times to buy shares in CSL Limited (ASX: CSL), Cochlear Limited (ASX: COH) and ResMed (ASX: RMD).

But their success, over the long term, owes relatively little to the minutiae of financial ratios calculated to two decimal places. 

Again, I’m not saying they are irrelevant or worthless. Far from it.

But those companies have been successful, in the main, by having a head start. Being best at what they do. Having large and growing markets. And with business models that rewarded that growth, delivering gobs of profit for shareholders.

Now, that doesn’t mean those opportunities will go on forever. Of the three, there are real questions as to CSL’s growth opportunities and its response to competing technologies. 

And none of these companies are conventionally cheap, today. There is a price at which you should be prepared to sell and walk away.

But their stories of investment success owe much to their ability to take advantage of the bigger picture.

So, today, I’m reminding myself not to miss the forest for the trees.

That might work for you, too.

Fool on!

More reading

• Platinum (ASX:PTM) share price on watch after strong profit growth
• The Lefroy (ASX:LEX) share price rose by 237% today. Here’s Why
• Why the Atomo Diagnostics (ASX:AT1) share price closed 7% down today
• Why did Qantas (ASX:QAN) shares soar 4% on Tuesday?
• Why the Apollo Tourism & Leisure (ASX:ATL) share price crashed 18% lower today

Scott Phillips has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and CSL Ltd. The Motley Fool Australia has recommended Cochlear Ltd., ResMed Inc., and SEEK 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 Lefroy Exploration Ltd (ASX: LEX) share price went gangbusters today as the company released outstanding mining results. Shares in the small-cap miner are currently trading a whopping 236.59% higher on the news.

This means the Leroy share price is currently sitting at a price of 69 cents. However, it did break its record high as it touched 90 cents earlier in the day.

What does Lefroy do?

Lefroy is a Perth based miner that is focused on greenfields exploration in Western Australia. Greenfields exploration simply means that the company relies on the predictive power of models to find deposits in previously unexplored areas.

The company’s flagship product is the Lefroy gold project near Kalgoorlie. It is aiming to target “multi-million-ounce gold discoveries”.

What happened?

Today, shares in Lefroy are soaring as the company announced high-grade copper and gold mineralisation results at Burns.

Results were received for an initial ten holes in the program totalling 4026m at the Burns Au-Cu prospect. A single traverse, containing two holes intersected particularly remarkable results. Consequently, the results contained:

• 60m at 5.22g/t Au and 0.38% Cu from 112m down-hole to end of the hole, including:
  • 20m at 12.2g/t Au, 0.87% Cu and 1.7g/t Ag from 144m

Management comments

Chairman, Gordon Galt, welcomed the news saying:

The intersection in LEFR260 is outstanding by any measure and is quite exciting. LEX will follow up as soon as possible. We will need to look north, south, east and deeper from this discovery hole to establish the structure/s which have delivered this intersection. The next phase of drilling is being scheduled now and will include immediate diamond drilling to extend and support the mineralisation discovered in LEFR260.

About the Lefroy share price

More reading

• Why the Atomo Diagnostics (ASX:AT1) share price closed 7% down today
• Why did Qantas (ASX:QAN) shares soar 4% on Tuesday?
• Why the Apollo Tourism & Leisure (ASX:ATL) share price crashed 18% lower today
• Why the Adriatic Metals (ASX:ADT) share price lifted 8% today
• Why the Rumble Resources (ASX:RTR) share price fell today

Motley Fool contributor Daniel Ewing 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 Atomo Diagnostics Ltd (ASX: AT1) share price closed 7.27% lower this afternoon after the company posted its half-year results earlier today.

The medical device business posted gains in many of its key financial metrics, however, the benefits did not carry over to the Atomo Diagnostics share price during trading.

Here’s a rundown of the company’s half-yearly results for the period ending 31 December 2020.

Atomo Diagnostics posts gains across key metrics

The company reported a revenue increase of 389% to $4.58 million for the first half of FY21. 

Gross profit was also up, jumping 278% over the prior corresponding period (pcp) to $2.52 million.

Atomo reported a negative net operating cash flow of $193,300 for the period, which is a 91% improvement on the pcp.

The business increased the number of devices it produces monthly. During the first half of FY21, it progressed from producing 750k devices a month to 1.6 million.

Cash and cash equivalents amounted to $24.7 million at 31 December 2020, which is a dip down from the $27.1 million reported at 30 June 2020.

Atomo noted that it invested a total of $2.29 million in R&D activities over the 1H FY21 period.

Outlook

As 2021 progresses, the company has outlined a variety of priorities. Some of these include pursuing relevant FDA approvals, driving growth in the US and Australian markets, and continuing to develop digital enhancements that support the use of Atomo products.

The company is also anticipating increased demand for its HIV self-test device.

Atomo will continue to invest in R&D activities that support the development of new products and help reveal future market opportunities.

Finally, Atomo noted that the coronavirus pandemic had limited impact on the business outside of causing a few minor delays.

About the Atomo Diagnostics share price

The Atomo Diagnostics share price has dropped 31.25% in the past 6 months.

The company’s market capitalisation is $114.2 million, with 407.9 million shares outstanding.

More reading

• If only Ellume was an ASX share! Why it’s making big news today
• Atomo Diagnostics (ASX:AT1) posts 709% boost in quarterly cash receipts

Motley Fool contributor Gretchen Kennedy 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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Qantas Airways Limited (ASX: QAN)’s share price shot up 4.36% on Tuesday, as the market awaited its financial results to be revealed on Thursday.

The airline itself didn’t make any announcements to the ASX on Tuesday. 

But investors could have been reacting to rival Regional Express Holdings Ltd (ASX: REX)’s revelation 12 hours earlier. In this release, Rex announced that it was withdrawing from 5 routes that it previously held a monopoly on.

Ever since Rex announced its intentions to compete in the golden Sydney-Melbourne-Brisbane triangle this year, Qantas started flying to regional airports. Previously, these were Rex’s sole domain.

Rex complained to the Australian Competition and Consumer Commission (ACCC) in December, claiming Qantas was indulging in anti-competitive practices.

The smaller airline stated then that the regional routes that Qantas was stamping in to did not have sufficient demand for 2 carriers.

It accused Qantas of “choosing to incur huge losses” on rural routes to “destroy incumbent regional operators”.

On Monday, the cash-bleed became too much to bear. Consequently, Rex announced it would stop flying the following routes, leaving Qantas as the sole provider:

• Sydney-Bathurst
• Sydney-Cooma
• Sydney-Lismore
• Sydney-Grafton
• Adelaide-Kangaroo Island

Rex’s share price was down 2.65% on Tuesday, to close at $1.66. It was $1.13 one year ago, just before the coronavirus market crash. 

Another reason why Qantas share price might be spiking

Revenues for the entire aviation industry obviously depends on people being willing to travel again.

Therefore, the rollout of the COVID-19 vaccines in Australia this week could be providing confidence to stock investors that Thursday’s outlook could be very positive.

Earlier this month, The Motley Fool reported that Goldman Sachs had put a $7.05 price target on Qantas. This compares to $5.03 even after Tuesday’s 4.36% jump.

Other ASX-listed companies involved in the travel sector also climbed Tuesday. Corporate Travel Management Ltd (ASX: CTD) was up a whopping 9.82% and Webjet Limited (ASX: WEB) gained 2.79%.

More reading

• ASX 200 flat: SEEK CEO exits, Afterpay sold off, BOQ surges higher
• Can ASX travel shares stage a comeback?
• These are the 10 most shorted shares on the ASX
• Brokers name 3 ASX shares to buy right now
• ASX 200 dips, EML soars after reporting, Appen sinks

Motley Fool contributor Tony Yoo owns shares of Corporate Travel Management Limited, Qantas Airways Limited, and Webjet Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet 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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One of the worst performers on the Australian share market on Tuesday was the Apollo Tourism & Leisure Ltd (ASX: ATL) share price.

The shares of the vertically integrated manufacturer, rental fleet operator, wholesaler and retailer of recreational vehicles (RVs) sank 18% to 30 cents.

This means the Apollo Tourism & Leisure share price has now wiped out all its 2021 gains.

Why did the Apollo Tourism & Leisure share price sink lower?

Investors were heading to the exits in their droves on Tuesday following the release of a disappointing half year result.

According to the release, for the six months ended 31 December, the company reported an 18.8% decline in revenue to $160.2 million.

Management advised that COVID-19 materially impacted its rental operations during the half, with Government-imposed lockdowns and travel restrictions occurring in each region.

Furthermore, although the company’s focus on domestic markets has resulted in a notable increase in domestic guest revenue, ongoing lockdowns and snap border closures continue to disrupt domestic consumer confidence.

In respect to earnings, Apollo Tourism & Leisure reported a loss before interest and tax of $4.9 million and a net loss after tax of $7.5 million. This compares to $24.9 million and $11.3 million, respectively, a year earlier.

Management commentary

Apollo’s CEO and Managing Director, Luke Trouchet, commented: “The global tourism industry continues to be impacted by COVID-19 and its associated government-imposed travel restrictions. While we have seen some recovery through increased domestic activity, the ongoing closure of international borders and snap lockdown or border closure decisions domestically, have created a challenging landscape for the business.”

Nevertheless, Mr Trouchet appears cautiously optimistic on the future.

He explained: “However, we recognise that while the timing of the journey to recovery may be uncertain, the global vaccine roll-out and gradual decline in global COVID-19 cases is extremely positive. We have continued to implement our COVID-response plan initiatives, including reducing our operating cost base and investing in technology to adapt to the ever-changing environment in which we operate. I believe Apollo is in a strong position to thrive when tourism activity recovers.”

Unsurprisingly, due to the ongoing uncertainty of the current trading environment, Apollo was not in a position to provide earnings guidance for FY 2021.

More reading

• Why the Adriatic Metals (ASX:ADT) share price lifted 8% today
• Why the Rumble Resources (ASX:RTR) share price fell today
• Leading brokers name 3 ASX shares to sell today
• Facebook ban on Australian news ends
• TechnologyOne (ASX:TNE) share price rises on promising AGM update

Motley Fool contributor James Mickleboro 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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Adriatic Metals plc (ASX: ADT) shares lifted during today’s session following the company’s update on its RAS Metals acquisition. By the market’s close, the Adriatic Metals share price was up 8.26% to $2.36.

Let’s take a closer look and see what the precious and base metals miner announced.

Completion of RAS Metals takeover

The Adriatic Metals share price was firmly in positive territory as investors digested the company’s latest news.

According to its release, Adriatic Metals has completed the acquisition of the entire issued share capital of RAS Metals. This agreement was executed by Tethyan Resource Corp, a wholly-owned subsidiary of Adriatic Metals.

Under the deal, the remaining 90% of RAS Metals shares were picked up for a total cash consideration of 1.365 million euros. In addition, 166,000 ordinary shares from Adriatic Metals will be issued to the vendors of RAS Metals.

Adriatic Metals will also take up a deferred option that will see another 500,000 euros paid on 14 May 2022. A further 498,000 ordinary shares listed from the London Stock Exchange will also be handed to RAS Metals. This will be allotted in three separate but equal tranches over the current year and 2022.

The company stated that an application has been lodged to the Financial Conduct Authority and the London Stock Exchange for the shares to be admitted.

In addition to the announcement, Adriatic Metals went on to discuss its drilling program. It said that through its subsidiary, Tethyan, it has completed 11,000 meters of diamond core (DC) drilling on the Raska exploration licences. A further 25,000 meters of DC drilling is planned across the Raska Project this year.

What did management say?

Adriatic Managing Director and CEO Paul Cronin commented on the takeover:

From the work done following the completion of the Tethyan acquisition, exercising the option to acquire the remaining 90% of RAS Metals was a simple decision to make. We see significant exploration potential across the Raska Project and consolidating the region makes it easier to implement our strategy for Raska.

About the Adriatic Metals share price

The Adriatic share price has been a relatively solid performed over the past 12 months, rising by more than 40%. Adriatic shares have gradually increased since hitting a 52-week low of 78 cents in March 2020.

Based on the current share price, Adriatic Metals has a market capitalisation of roughly $394 million.

More reading

• What’s with the Adriatic (ASX:ADT) share price today?
• Why ASX silver shares like Silver Mines (ASX:SVL) are falling today
• Why these ASX silver shares are surging today
• Silver squeeze next on the list for WallStreetBets, or is it?

Motley Fool contributor Aaron Teboneras 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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