Category: Stock Market

ASX reporting season is ramping up this week with several high profile ASX 200 shares, including Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P) and A2 Milk Company Ltd (ASX: A2M) due to deliver results.

As we near halfway, here’s what Citi thinks about the first-half FY21 earnings results so far. 

First-half results above expectations

Close to half of the ASX shares in the broker’s coverage have reported results to date. On balance, Citi says that earnings across the market are “above analyst expectations”. 

The banking sector has surprised the market with a sizable fall in bad debts.

Citi notes that:

In some cases, this reporting season witnessed the beginning of the collective provision write-backs, much earlier than expected. The revenue growth has also positively surprised with lower funding cost and higher deposit margins, even though volume growth has remained benign.

Big 4 banks have been doing the heavy lifting for the ASX 200, most now trading within 10% of pre-COVID levels. 

Resources cashed up

Citi’s mining team had foreshadowed that resources companies would report strong dividend yields from strong cash flow generation and low debt levels this reporting season.

The broker has witnessed significant dividend announcements for BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO). In addition, there were significant positive surprises for metals and electronics recycling Sims Ltd (ASX: SGM), gold and copper producer OZ Minerals Limited (ASX: OZL) and ASX gold heavyweight Newcrest Mining Ltd (ASX: NCM). 

Citi notes a number of companies outside of resources also reporting higher than expected dividends. Most notably, Suncorp Group Ltd (ASX: SUN), Tabcorp Holdings Limited (ASX: TAH), Domino’s Pizza Enterprises Ltd (ASX: DMP) and Perpetual Limited (ASX: PPT).  

Foolish takeaway

Citi’s FY21 earnings are forecast to grow by 24.4%, with expectations holding up well so far. Much of its market revisions have come from upgrades to resource companies, driven by higher iron ore prices. 

More reading

• ASX 200 flat: SEEK CEO exits, Afterpay sold off, BOQ surges higher
• 2 explosive ASX growth shares to buy today
• Why the IOUpay (ASX:IOU) share price crashed 13% lower today
• 3 ASX blue chip shares that just raised their dividends
• These ASX 200 shares are trading near 52-week highs 

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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 MoneyMe Ltd (ASX: MME) share price is edging higher in late morning trade. This comes after the company announced its warehouse facility has received increased funding commitments from a major Australian bank.

At the time of writing, the digital credit company’s share price is up 1.7% to $1.53.

Increased funding commitment

The MoneyMe share price is in the green today after reporting an update that has investors pleased.

According to its release, MoneyMe advised that one of the ‘big 4’ Australian banks has provided an increased senior warehouse commitment of $150 million. This is a 50% increase on the previous $100 million that was backed by the group’s major funder.

Under the new arrangement, it’s expected that the expanded commitment will drive future growth in loan originations. Altogether, MoneyMe’s warehouse structures stand close to $300 million.

More on MoneyMe’s warehouse facility

Created in September 2020, the company’s warehouse funding facility provides customers with lending products. Consequently, this allows MoneyMe to grow its business through loan originations. In short, the business profits from customers, as does the bank from financial technology.

Interestingly, it was a major Australian bank, Westpac Banking Corp (ASX: WBC) that helped established MoneyMe’s line of credit.

What did management say?

MoneyMe Managing Director and CEO Clayton Howes commented on the positive news:

The increased commitment in MoneyMe’s warehouse facility is outstanding news and stems from exceptional growth in high quality loan originations. We are delighted this successful partnership with an Australian “Big 4” bank has been extended. It gives us both funding and confidence to meet the increasing demand from Generation Now by creating innovative products that resonate with them.

MoneyMe share price performance

Over the last 12 months, the MoneyMe share price is down around 7% reflecting subtle gains for investors. Indeed, the company’s shares hit a low of 50 cents at the end of March. However, they have since been moving on a slow upward trajectory.

Finally, based on the current share price, MoneyMe commands a market capitalisation of roughly $265 million.

More reading

• Why the MoneyMe (ASX:MME) share price is climbing higher

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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The Vocus Group Ltd (ASX: VOC) share price has risen in reaction to the company’s update about the ongoing takeover process for the business.

There is currently a non-binding, indicative proposal from Macquarie Group Ltd’s (ASX: MQG) Infrastructure and Real Assets (MIRA) and its managed funds to acquire the entire Vocus business.

The offer price is $5.50 per share. That price represented a premium of around 25% compared to the previous closing price at the time. The current Vocus share price is still 10% lower than the offer price.

What’s the latest update about the takeover?

Vocus said it had been advised by MIRA that it has entered into a co-operation agreement with Aware Super to progress its proposal through a consortium.

The proposal remains indicative and non-binding. It is still on the same terms as the previous offer. The offer remains subject to the same conditions that Vocus had previously announced a few weeks ago. Some of those conditions included satisfactory completion of due diligence, MIRA securing debt financing, unanimous recommendation by the Vocus board and entry into a mutually acceptable scheme implementation agreement.

Vocus said that the consortium’s due diligence investigations are continuing. The Vocus board noted that there is no certainty that the proposal will result in a binding offer for Vocus. The company said it would update the market when there is something else material to tell the market.

Opinions on this deal

Credit Suisse has noted that MIRA has investments in telecommunications across many countries. It is also a large shareholder in Aussie mobile telecommunications infrastructure business Axicom. The broker thinks MIRA has a good understanding of the Australian telco sector and telecommunication assets.

Ord Minnett thinks that the takeover offer is credible because of its advantages relating to cost of capital and the ongoing growth plans. It thinks that another bid could emerge.

The Australian Financial Review reported that the deal is under scrutiny after prior bidders walked away after doing due diligence. The AFR went on to say:

Industry sources say Vocus is confident it can get this deal over the line, because its health is robust compared with 2019, when separate bids from AGL Energy Ltd (ASX: AGL) and private equity firm EQT died early during due diligence.

Analysts have said the main attraction for MIRA is Vocus’ vast fibre infrastucture network, and there is speculation that any new owner would look to spin-off the company’s retail business.

More reading

• ASX 200 drops 0.2%, Costa soars, BOQ is buying ME Bank
• ASX 200 up 0.1%: Macquarie upgrades guidance, Costa impresses, NIB surges higher
• Why the Macquarie (ASX:MQG) share price is charging 4% higher
• ASX 200 Weekly Wrap: ASX lower despite bumper dividends
• The latest ASX shares upgraded by brokers to “buy” during the reporting season

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Perenti Global Ltd (ASX: PRN) shares are falling lower today after the company released its half-year results for the period ending 31 December 2020 (1H21). At the time of writing, the Perenti share price has tumbled 11.89% to $1.26.

Let’s take a look at what the mining services business reported.

What did Perenti report?

The Perenti share price is taking a dive after the company reported it generated statutory revenue of $1 billion for the 1H21 period but posted a net loss after tax of $63.8 million.

Perenti advised that these results were materially impacted by “some one-off items recognised in 1H21”. It further stated that, because of these costs, it does not believe the statutory results reflect the underlying performance of the company.

Underlying results do not consider the financial implications of one-off items. As such, Perenti’s 1H21 group underlying net profit after tax (NPAT) was $44.6 million, a 26% dip compared to 1H20.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) totalled $200.9 million.

Perenti further noted that fluctuations of the US dollar and the brunt of coronavirus impacts also knocked its 1H21 performance around during the period.

The board declared an unfranked interim dividend of 3.5 cents per share.

CEO comments

Reflecting on Perenti’s half-year results, managing director and CEO Mark Norwell said: 

The financial and operational performance of the Group in the first half of FY21 was very encouraging as we continue to take steps to deliver on our 2025 Group Strategy while navigating the challenging and ever-evolving COVID-19 pandemic, which continues to impact our international operations…

Looking ahead, the resources sector continues to go from strength to strength. Exploration expenditure is forecast to increase during 2021 and the value of committed mining projects, in Australia alone, is the highest in a decade with many more feasibility stage projects in the pipeline. Perenti has a strong balance sheet, a highly experienced team with a track record of delivering excellence across our businesses. The significant investments we have made in our people, our business structure and our systems will ensure we continue to be well positioned to capitalise on the expected resources sector growth as we deliver against our 2025 strategy.

Perenti share price snapshot

The Perenti share price has fallen by nearly 9% over the past year but has gained 5% over the last six months.

Based on the current share price, Perenti has a market capitalisation of around $972 million. There are presently 704.3 million shares outstanding.

More reading

• Here’s why the Perenti (ASX:PRN) share price lifted today

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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The Starpharma Holdings Limited (ASX: SPL) share price has been a very strong performer on Tuesday.

At one stage today, the dendrimer products developer’s shares were up as much as 13% to $2.49.

When the Starpharma share price hit that level, it was within just 3 cents of its record high.

Why is the Starpharma share price racing higher today?

Investors have been fighting to get hold of Starpharma shares today following an update on its Viraleze antiviral nasal spray.

Viraleze is an easy to use antiviral nasal spray. It contains SPL7013, which has been shown in laboratory studies to inactivate a broad spectrum of respiratory viruses. Importantly, this includes up to 99.9% of coronavirus SARS-CoV-2, which is the virus that causes COVID-19.

Furthermore, it does this rapidly. SPL7013 has been shown to be virucidal, rapidly inactivating up to 99.9% of SARS-CoV-2 within just 60 seconds.

It has also been shown to have activity against other important respiratory viruses. These include influenza viruses, respiratory syncytial virus (RSV), and other cold-causing coronaviruses.

What was today’s update?

Today’s update reveals that Viraleze has been successfully registered for sale in Europe.

This registration allows for the marketing of the product across the European Economic Area (EEA). This includes the 27 countries of the European Union, the United Kingdom, and the European Free Trade Association (EFTA) countries. The combined population of this market is approximately 520 million.

The company is on track to launch Viraleze in Europe online directly to European and UK consumers from next month. Preparations for launch are well advanced, with the manufacture of launch batches underway.

After which, a roll-out to European pharmacies is planned. In addition, Starpharma is undertaking discussions with B2B customers and potential commercial partners.

Management commentary

Starpharma’s CEO, Dr Jackie Fairley, commented: “Starpharma is pleased to have successfully developed a product that has the potential to assist with the fight against the global COVID-19 pandemic. We are delighted to have completed registration of VIRALEZE in the UK and Europe ahead of our original schedule and acknowledge the support of local and international specialist laboratories who have assisted Starpharma with the development of VIRALEZE.”

“We know from consumer research conducted with the Boston Consulting Group, that VIRALEZE has strong appeal for European consumers across all age groups. The spray is easy to use and convenient – and works rapidly, without being absorbed into the bloodstream. If you are about to walk into the supermarket, you would use it. The same is true for public transport, elevators, planes, bars and restaurants,” added Dr Fairley.

More reading

• Why Bank of Queensland, MNF, Oil Search, & Starpharma are charging higher
• Why Advance NanoTek, Incitec Pivot, Starpharma, & Zoono are tumbling lower
• Why Novonix, Recce, Singular Health, & Starpharma shares are storming higher
• Here’s why the Starpharma (ASX:SPL) share price just stormed to a record high
• Why Douugh, Macquarie, Starpharma, & Suncorp shares are storming higher

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 Starpharma Holdings Limited. The Motley Fool Australia has recommended Starpharma Holdings 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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At lunch on Tuesday the S&P/ASX 200 Index (ASX: XJO) is trading largely flat at 6,778.1 points.

Here’s what is happening today:

SEEK founder and CEO to step down

The SEEK Limited (ASX: SEK) share price has tumbled lower today despite upgrading its full year earnings guidance. Weakness in the tech sector and news that its founder and CEO, Andrew Bassat, is stepping down appear to be weighing on its shares. Former Commonwealth Bank of Australia (ASX: CBA) boss, Ian Narev, will replace Mr Bassat on 1 July. Mr Narev is currently SEEK’s COO. SEEK also announced plans to sell down its stake in the China-based Zhaopin business.

Bank of Queensland shares return

The Bank of Queensland Limited (ASX: BOQ) share price is racing higher after returning from its trading halt. Investors have been buying the regional bank’s shares after it successfully completed the institutional component of its capital raising. The bank has raised a total of $673 million at $7.35 per share from institutional investors. This is part of a wider $1.35 billion capital raising, which is being used to fund the transformative acquisition of ME Bank.

Tech shares sold off

A number of ASX tech shares including Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) are sinking today after being caught up in a tech selloff. This follows a very poor night of trade on Wall Street’s technology-focused Nasdaq index. At the time of writing, the S&P/ASX All Technology Index (ASX: XTX) is down a disappointing 3.8%.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Tuesday has been the Corporate Travel Management Ltd (ASX: CTD) share price with an 8% gain on no news. Going the other way is the Austal Limited (ASX: ASB) share price with a 17% decline. This morning the shipbuilder revealed that investigations are being conducted by US regulatory authorities into historical matters concerning Austal’s Littoral Combat Ship (LCS) program.

More reading

• Why Bank of Queensland, MNF, Oil Search, & Starpharma are charging higher
• Seek (ASX:SEK) shares sink as founder steps down
• SEEK (ASX:SEK) share price tumbles despite guidance upgrade
• Goldman Sachs upgraded these ASX 200 shares after outstanding results 
• 5 things to watch on the ASX 200 on Tuesday

James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended 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 Superloop Ltd (ASX: SLC) share price is falling sharply today, down 8.2% in late morning trade. This comes after the release of the company’s half-yearly report.

We take a look at the company’s latest half-year financial results (H1 FY21) and the current share price.

What did Superloop report for H1 FY21?

This morning’s ASX release, reporting a 3.8% lift in total revenues to $53.3 million, failed to keep the Superloop share price from falling.

Superloop’s Connectivity Revenue increased 15% over the prior corresponding period (PCP) to $30.2 million. Additionally, its Broadband Revenue increased by 27% to $18.5 million. Home Broadband subscribers grew by 66% year-on-year to reach 39,000. The company reported a slowdown in its Student Accommodation and Hospitality revenue due to the impact of COVID-19.

The company highlighted the strong growth in earnings before interest, tax, depreciation, and amortisation (EBITDA), which grew 99% from the prior corresponding period to $8.2 million.

Superloop reported an overall loss from ordinary activities after income tax of $18.8 million, an 11.7% improvement on the $21.4 million loss in H1 FY20.

Capital expenditure declined year-on-year, to $8 million from $12 million in H1 FY20.

The company will not pay a dividend for the half-year period.

Comments from the CEO

Regarding the half-year results, Paul Tyle, Superloop CEO said:

With record results across all our major financial metrics H1 21 clearly demonstrated the strong momentum in each of our three customer segments, we remain confident that our strategy will see this progress continue into the future.

Looking ahead, Superloop re-affirmed its full 2021 financial year EBITDA guidance of $18– $20 million. It noted that with the continued COVID impact on the Education and Hospitality sectors, the lower end of that range is more likely.

Superloop share price snapshot

Despite today’s losses, Superloop shareholders are still sitting on a 16% gain over the past 12 months. That compares to a 0.3% loss on the All Ordinaries Index (ASX: XAO).

So far in 2021, the Superloop share price is down 9%.

More reading

• Why the Superloop (ASX:SLC) share price is accelerating 7% today
• Is HyperOne listed on the ASX?

Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of SUPERLOOP FPO. 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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Aquis Entertainment Ltd (ASX: AQS) shares are continuing to explode today. At the time of writing, the Aquis share price is up an extraordinary 84.62% to 48 cents after less than two hours of market trading.

Today’s moves mean Aquis shares have rocketed from the 4.6 cents per share that we saw last Thursday to the current price of 48 cents – a mind-boggling return of close to 1,000% in under a week.

Want another one? It was only 11 February when the Aquis share price was trading at 3 cents. That means for anyone who bought in back then, they would be enjoying a return of more than 1,400%.

But that’s not where it ends yet. Get ready for this one. Aquis’ 52-week range spans a low of 0.3 cents that was reached in March last year to 82 cents that we saw at one point last week. The difference in that range is a mind-blowing 27,233%. A gain like that would turn $1,000 into almost $300,000.

For some context, Aquis is a resort and gaming company that owns Casino Canberra in the Australian Capital Territory. So what on earth is going on with this company?

Aquis share price hits the moon

Well, the short answer is: no one knows. Or no one knows publically, I should say. There is no major news out of Aquis that might have triggered such an incredible re-valuation over the past week. In fact, the company’s last major piece of news released to the markets was back on 29 January. That was a quarterly update.

One could perhaps point to the woes currently being faced by fellow casino operator Crown Resorts Ltd (ASX: CWN) over the past couple of weeks as a potential catalyst. But that probably wouldn’t rationally explain the kind of moves the Aquis share price has undergone.

Today’s moves also come just days after Aquis was issued a ‘please explain’ speeding ticket by the ASX for its dramatic moves late last week. Aquis’ response was terse: “The Company is not aware of any information concerning it that has not been announced to market and which could be an explanation for the recent trading in the Company’s securities”.

Still, I’m sure the ASX will be even more interested in this company after today’s moves.

At the current Aquis share price, the company has a market capitalisation of $96.27 million.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Crown (ASX:CWN) share price on watch on VIC royal commission
• Aquis Entertainment (ASX:AQS) share price boosts 365% in second day of triple-digit gains
• Crown Resorts (ASX:CWN) share price rises despite earnings hit
• Why investors are watching the Crown (ASX: CWN) share price

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Crown Resorts 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to continue its losing streak. The benchmark index is currently down slightly at 6,773 points.

Four ASX shares that have not let that hold them back are listed below. Here’s why they are charging higher:

Bank of Queensland Limited (ASX: BOQ)

The Bank of Queensland share price has returned from its trading halt and charged 6% higher to $8.90. This morning the regional bank announced the successful completion of the institutional component of its capital raising. Bank of Queensland raised $673 million at $7.35 per share as part of its $1.35 billion capital raising. These funds are being used to acquire ME Bank.

MNF Group Ltd (ASX: MNF)

The MNF share price has surged 9% higher to $4.56 following the release of its half year results. The leading voice communications software provider reported a 15% increase in recurring revenue to $55.7 million and a 30% increase in underlying net profit after tax (before amortisation) to $8.4 million. This allowed the MNF board to increase its interim dividend by 32% to 3.3 cents. Management also revealed that it is on track to achieve its guidance and is looking to expand deeper into the Asia-Pacific market.

Oil Search Ltd (ASX: OSH)

The Oil Search share price is up 6% to $4.29. This appears to have been driven by a strong rise in oil prices overnight and the release of its full year results. In respect to the latter, Oil Search reported a 32% decline in revenue to $1,074.2 million and a 93% reduction in core net profit after tax to $22 million. This appears to have been better than the market feared.

Starpharma Holdings Limited (ASX: SPL)

The Starpharma share price is up 5.5% to $2.32. This morning the dendrimer products developer announced that its Viraleze antiviral nasal spray has been successfully registered for sale in Europe, including in the UK. Viraleze is an easy to use antiviral nasal spray. It contains SPL7013, which has been shown to inactivate a broad spectrum of respiratory viruses. This includes >99.9% of coronavirus SARS-CoV-2 – the virus that causes COVID-19.

More reading

• Why the MNF Group (ASX:MNF) share price is jumping 7% higher today
• ASX 200 drops 0.2%, Costa soars, BOQ is buying ME Bank
• Why the Superloop (ASX:SLC) share price is accelerating 7% today
• Bank of Queensland (ASX:BOQ) to raise $1.35bn to acquire ME Bank
• Bank of Queensland (ASX:BOQ) shares halted ahead of potential $1.3bn ME Bank acquisition

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 Starpharma Holdings Limited. The Motley Fool Australia owns shares of and has recommended MNF Group Limited. The Motley Fool Australia has recommended Starpharma Holdings 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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Energy infrastructure business Spark Infrastructure Group (ASX: SKI) has announced its FY20 result today, it also told investors about its 5-year plan for the distribution.

Spark Infrastructure FY20 result

Spark reported that its look-through earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 2.4% to $862.4 million. Cash distributions from investment businesses declined by 3.7% to $301 million.

It said that its standalone net operating cash flow fell by 24.9% to $192.5 million. However, the underlying standalone net operating cash flow only declined by 10.8% to $252.8 million. The decrease reflected the first full year of tax payments and retention of operational cash flow by TransGrid to fund the increase in the regulatory asset base.

The net capital expenditure increased by 10% to $573.7 million on an aggregated proportional basis. This number excludes the Bomen Solar Farm.

Spark said that its regulated and contracted asset base (RCAB) improved by 3.7% to $6.7 billion.

The energy infrastructure business said that during the year there were minimal COVID-19 impacts to its investment businesses with no deterioration to customer supply and no significant impacts on operations, maintenance or safety.

Bomen Solar Farm

The first renewables project, the Bomen Solar Farm, was delivered on time and significantly under budget according to Spark Infrastructure. Commercial operations commenced in late June 2020.

Management said that after this success, it has developed a pipeline of high quality opportunities in renewables including storage. It will pursue any opportunities in a prudent and disciplined manner.

Distribution and 5-year plan

The FY20 total distribution was 13.5 cents per share. The final distribution for the financial year is 6.5 cents per share.

Spark Infrastructure announced that its FY21 distribution guidance is being rebased to 12.5 cents per share, franked to approximately 25%.

It’s targeting growth in distributions at or around CPI over the next 5-year regulatory period (2025) maintaining franking at approximately 25%.

Outlook

Spark Infrastructure said that the new 5-year regulatory decisions for both SA Power Networks and Victoria Power Networks will be in force from 2021. It said that new regulatory decisions put downward pressure on revenues for these businesses largely due to sustained low interest rates affecting regulatory returns and the low inflationary environment. In response, Spark expects both businesses to closely review all operating and capital expenditure plans, with a view to minimising any non-essential or discretionary expenditure.

It’s expecting RCAB growth over the next five years approaching 4% per annum. While growth in the SA Power Networks and Victoria Power Networks will be funded from operational cashflows and debt as they have been previously. Any equity commitments to support TransGrid major projects or Spark Infrastructure value build growth can be met by continued operation of the distribution reinvestment plan. In other words, the distribution re-investment plan will be used to manage equity for growth ensuring sufficient cash exists at the corporate level to fund distributions for securityholders.

More reading

• Broker eyes rapid growth for this small cap ASX tech share
• Why the MyDeal (ASX:MYD) share price is tumbling lower today
• What’s with the HUB24 (ASX:HUB) share price today?
• Openpay (ASX:OPY) share price erases gains despite positive update
• Seek (ASX:SEK) shares sink as founder steps down

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.

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