Category: Stock Market

Yojee Ltd (ASX: YOJ) is an ASX tech share offering a cloud-based, software-as-a-service (SaaS) logistics platform. The platform manages, tracks and optimises freight movements and logistics supply chains from sender to end-customer across borders and between logistics providers.

Yojee’s customers include third-party logistics providers and logistics companies which benefit from powerful APIs (application programming interfaces) as well as enhanced visibility, accountability, and control. Following the company’s December quarterly update, Euroz Hartleys initiated coverage on the small-cap ASX tech share with a speculative buy rating. 

December quarter highlights 

At the end of the December quarter, Yojee had eight enterprise countries signed up to operate its platform. Of these, four were revenue-generating, boosted by three global, top-10 freight forwarding clients. The company continued to see strong growth in cash receipts with an 18% increase to $235,000 in the December quarter and revenues of $204,000. To add some perspective, Yojee has a market capitalisation of just $186 million. 

Yojee noted that volumes during the quarter were impacted by unprecedented weather events and COVID-19 related lockdowns during the period, especially within the Philippines. It highlighted that the business will offer promotions and aggressively market into early CY21 to make up for the lower than anticipated volumes.

The company’s balance sheet remains flexible, finishing the December quarter with $21.1 million cash, providing the company with a strong runway for growth. 

ASX tech share a speculative buy rating  

Hartley was broadly pleased with Yojee’s progress on rollouts during the quarter, in addition to receiving an Indonesia expansion order from an existing client. The broker noted that it would have liked to have seen more quarter-on-quarter growth in volumes and revenues, but the company’s dependency on the Philippines was impacted by unprecedented weather events and lockdowns.

Despite slightly missing expectations, the broker looks towards significant transaction volume growth in the coming quarters from recent and coming rollouts. In parallel, Yojee continues to provide commentary on a strong pipeline of additional opportunities to expand existing agreements and potentially sign new ones. 

The research note shed light on the global logistics sector and potential tailwinds for the ASX tech share. Hartleys cited that the global logistics industry is estimated to be worth around US$9 trillion annually, with the number of parcel movements alone forecast to surpass 100 billion this year and double to 200 billion by 2025. It pointed out that industry-wide changes are creating new demands and issues, driving rapid increases in digitisation, such that Yojee’s comprehensive cloud-based logistics SaaS platform could be well placed to solve these issues. 

Hartleys identified that recently secured agreements show growing demand for Yojee’s platform. These include agreements with three major global logistics companies which have $100 billion in combined revenues. The broker’s bullish investment case is predicated on the rollout of its logistics platform with logistics heavyweights including Geodis, Kuehne+Nagel, and Maersk’s in parallel to signing new SaaS agreements. Its speculative buy rating comes with a price target of 50 cents, almost triple its current share price of 17 cents.

More reading

• Spark Infrastructure (ASX:SKI) reveals 5-year distribution plan with FY20 result
• 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 Kerry Sun 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 Broker eyes rapid growth for this small cap ASX tech share appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2OYNRyt

The Mydeal.ComAu Pty Ltd (ASX: MYD) share price has come under pressure on Tuesday.

At the time of writing, the ecommerce company’s shares are down 4% to $1.21.

While this means the MyDeal share price is down materially from its 52-week high of $2.20, it is still up 21% from its October IPO price.

Why is the MyDeal share price under pressure?

There appears to be a couple of potential catalysts for today’s decline. One is the release of its half year results this morning and the other is general weakness in the tech sector.

Following a very poor night of trade on Wall Street’s tech-focused Nasdaq index, the S&P/ASX All Technology Index (ASX: XTX) is down a disappointing 3.6% this morning.

How did MyDeal perform in the first half?

MyDeal was a positive performer during the first half of FY 2021.

For the six months ended 31 December, it reported a 217% increase in gross sales to $126.7 million and a 248% jump in revenue to $21.2 million.

And while its gross margin softened slightly, gross profit still grew at the very strong rate of 210% to $18.9 million.

This strong growth was driven by a 205% increase in active customers to 813,764 and further increases in repeat use. Management notes that 52.7% of second quarter transactions came from returning customers. This is up from 38.5% a year earlier.

At the end of the period, MyDeal had a cash balance of $48.1 million. Management believes this leaves it with a significant runway for the execution of its growth strategy.

MyDeal’s Founder and CEO, Sean Senvirtne, commented: “We are pleased to have delivered a record half in gross sales, gross profit and revenue. The strongest results in MyDeal’s history are testament to the efforts of the team and confirms our growth strategy is on track to meet our targets.”

Outlook

MyDeal hasn’t provided any guidance for the full year. However, it has revealed that the second half has started strongly, with unaudited gross sales in January 2021 up 190% on the prior corresponding period.

The company is also on track to launch its iOS and Android apps in second half.

Looking ahead, management notes that online shopping in the furniture and homewares category remains significantly under-penetrated by global standards. It feels this leaves MyDeal well placed to benefit from rising penetration and to continue to capture market share in the future.

More reading

• 2 rapidly growing small cap ASX shares to buy
• 3 very exciting small cap ASX shares to watch
• 3 fast-growing small cap ASX shares to watch
• 3 growing small cap ASX shares to watch

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.

The post Why the MyDeal (ASX:MYD) share price is tumbling lower today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3btgrzC

The HUB24 Ltd (ASX: HUB) share price opened lower this morning following the release of the company’s half-year results for the period ended 31 December 2020.

The financial services provider reported a series of gains in its first-half FY21 earnings before the HUB24 share price opening 1.28% lower at $23.20.

Here are the report highlights and some insight from management.

HUB24 share price opens lower after posting record gains

HUB24 reported a group underlying net profit after tax (NPAT) of $7.5 million. This is 39% higher than what was earned during the first-half FY20.

The group earnings before interest, tax, depreciation and amortisation (EBITDA) also rallied for the period, gaining 41% compared to the 1H FY20, which came in at $16.4 million.

Gross profit was $36.4 million for 1H FY21. This is a boost from the pcp’s gross profit of $32.9 million.

The company’s total funds under administration (FUA) climbed to $31 billion at the end of 1H FY21.

Group operating revenue increased from $52.7 million reported in 1H FY20 to $62.1 million in 1HFY 21, an 18% gain.

Underlying earnings per share (EPS) was 11.7 cents compared to the prior corresponding period (pcp), which was 7.6 cents.

The directors determined a fully franked dividend of 4.5 cents per share for the period ended 31 December 2020. The pcp dividend was 3.5 cents per share unfranked.

Management commentary and outlook

HUB24 managing director Andrew Alcock welcomed the results, saying:

HUB24 continues to set new records with Platform FUA up 39% and underlying EBITDA up 41% on 1H FY20. Our continued investment in innovation and focus on customer service excellence has been recognised this week with the company being awarded Australia’s Best Platform Overall by Investment Trends.

Given the acceleration of our organic growth and the completion of our M&A transactions, HUB24’s growth targets have been upgraded significantly to a target Platform FUA range of $43-$49 billion from $28- $32 billion by the end of FY22.

Looking ahead, HUB24 expects strong net inflows to support the firm’s revised Platform FUA target of $43-49 billion.

The company advised that it believes it can meet this goal regardless of any implications caused by the coronavirus.

HUB24 at a glance

HUB24 is focussed on the delivery of the HUB24 Platform. The platform contains a suite of investment options with the aim of creating value for financial advisers and their clients.

The HUB24 share price has gained 111.9% over the past 12-month period.

More reading

• Why the Hub24 (ASX:HUB) share price will be on watch today
• What’s with the Hub24 (ASX:HUB) share price today?
• Why BHP, Estia Health, HUB24, & South32 shares are dropping lower

Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Hub24 Ltd. The Motley Fool Australia has recommended Hub24 Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post What’s with the HUB24 (ASX:HUB) share price today? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3uhxOvQ

The Openpay Group Ltd (ASX: OPY) share price is on the backfoot this morning despite announcing a lucrative partnership with a key automotive group. At the time of writing, the buy-now, pay-later (BNPL) provider’s shares are down 3.74% to $3.09.

What did Openpay announce?

The Openpay share price is coming under pressure today as investors seem unfazed by the company’s positive news.

According to this morning’s release, Openpay advised that it has entered a partnership agreement. The new agreement is with Ford Australia which is a subsidiary of its global parent group, Ford Motor Company.

In the deal, Openpay’s BNPL solution will be offered to Ford Australia customers. It will be available through its dealership network for car servicing needs. This will include repairs, parts, and accessories in which a customer may not be able to afford upfront.

The BNPL option will be rolled out across Ford Australia’s booking engines, including online and in-store platforms.

Openpay highlighted that its latest contract win is a major milestone achievement along with the Pentana deal which went live this month. The company noted that around 2500, or 60% of Australia’s new car franchise dealerships, use Pentana’s eraPower Dealer Management Software.

The signing of Ford Australia further strengthens Openpay’s business model to be a leading BNPL provider in the automotive sector. The company also operates in the healthcare, home improvement, education, and memberships markets.

Openpay revealed that it will continue to focus on building further partnerships with original equipment manufacturers, distributors, and importers within the automotive industry.

Management commentary

Openpay Managing director and CEO Michael Eidel welcomed the new partnership, saying:

We are proud to have signed with a brand as iconic as Ford Australia. Through this partnership we will be working together to help Ford’s customers ‘go further’ – making greater payment flexibility available for all their car servicing needs.

We have previously partnered with many dealership groups but partnering at the OEM level strongly cements our leadership position in the automotive vertical.

Openpay share price snapshot

During the last 12 months, the company’s shares have accelerated to achieve a gain of more than 160%. It’s worth noting that during the COVID-19 rout, the Openpay share price listed for as low as 32 cents. At today’s current price, this represents close to a 10-fold increase in less than a year.

More reading

• Why the Openpay (ASX:OPY) share price is surging higher today
• Why is the Splitit (ASX:SPT) share price underperforming Afterpay and Zip?
• Why the Openpay (ASX:OPY) share price is up 17% and could go higher
• Why IOOF, Kogan, Openpay, & Woodside shares are dropping lower
• Why the Openpay (ASX:OPY) share price is crashing 13% lower

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.

The post Openpay (ASX:OPY) share price erases gains despite positive update appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3dPIr3t

SEEK Limited (ASX: SEK) co-founder Andrew Bassat has stepped down as chief executive, with former Commonwealth Bank of Australia (ASX: CBA) boss Ian Narev to take over.

Bassat had led the job search website since he co-founded it in 1997 with his brother Paul.

Both are now revered figures in the Australian startup scene.

“We have built a company that I am very proud of,” said Andrew Bassat.

“But now is the right time for a new leader for the next stage. And Ian Narev is the right leader.”

Like Amazon.com Inc (NASDAQ: AMZN) founder Jeff Bezos’ move last month, Bassat will become the executive chair of Seek. He will also fill the new position of chief executive for Seek Investments.

The company is seeking to provide more independence for its venture capital arm, which puts money into young businesses “to support their aspirations and deliver strong long-term returns”. 

Seek emphasised that this part of the business needed to be able to “support further sustained periods of larger losses”.

“An independently managed Investments, accessing external capital, can undertake aggressive long-term investment to build large businesses,” said Seek’s current chair Graham Goldsmith.

Earlier this month, the Seek share price hit a record high as investors expected the jobs market to recover strongly from the COVID-19 downturn.

Seek shares are 2.37% down in early trade Tuesday morning.

Ian Narev goes from big bank to internet chief

Narev, who was chief of CBA from 2011 to 2017, was already Seek’s boss for the Asia-Pacific and Americas (AP&A) division.

“I am not going to try and fill Andrew’s shoes… He is a unique leader and a person,” he said.

The New Zealander had stepped down from the CBA in controversial circumstances. 

In 2016, the bank had been exposed by the media for alleged misconduct by its insurance arm in refusing to pay out claims for dying and terminally ill customers.

Then the next year, CBA was busted for repeatedly breaching anti-money laundering regulations. Current chief Matt Comyn took over in August 2017.

“Ian is the natural successor for Andrew,” said Goldsmith.

“He brings a strong track record in digital transformation, strategy, and public company leadership.”

Seek also revealed today that its first-half financial year 2021 result and outlook for the rest of the year was “materially better” than the forecasts at the November annual general meeting.

The company is also repaying $9.8 million in COVID-19 subsidies it received from the Australian and New Zealand Governments.

More reading

• SEEK (ASX:SEK) share price tumbles despite guidance upgrade
• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 next week
• Why the SEEK (ASX:SEK) share price just hit a new record high
• Why Alliance Aviation, REA Group, SEEK, & Vulcan shares are charging higher

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Tony Yoo owns shares of Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Amazon and SEEK Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Seek (ASX:SEK) shares sink as founder steps down appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3dDxRfF

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

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

Microsoft (NASDAQ: MSFT) announced on Monday that it’s teaming up with Europe’s four largest media-lobbying groups to help rework how news stories are shared and monetized on the continent. The move follows Australia’s introduction of a system that requires large tech companies to pay money to news sites that feature media on their platforms.

The recently formed coalition will push for similar stipulations to be included in the European Union’s upcoming legislation to put tighter regulations on Big Tech. If Microsoft and its allies are successful, and similar standards are implemented in the EU, this reworking would pose significant challenges for Alphabet and Facebook. 

Facebook responded to Australia’s new system by blocking users in the region from posting news stories on its namesake social media platform. However, the move has drawn criticism, and implementing this solution on a wider scale could create significant problems for the social media leader. It may be forced to adapt and agree to pay news outlets if more regions introduce systems similar to what’s being done in Australia. 

Alphabet’s Google division already has financial partnerships with hundreds of news outlets across Europe, but it looks like costs could soon rise for the tech giant. New copyright laws have already raised the specter that Google could be forced to pay publishers for text snippets featured at the top of search results on the platform.

While Microsoft has its own search engine in Bing, the search service is a small part of the company’s overall business and has a small fraction of Google’s market share. The Redmond-based software giant appears eager to promote the new standards because they could strengthen its overall position in tech by weakening its rivals. 

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

More reading

• Facebook vs Australia feud escalates as government pulls ads
• Facebook news ban to devastate ASX: expert
• What ‘Facebook vs. The Rest’ means for you
• Fortnite maker Epic Games files antitrust lawsuit against Apple in the EU
• Facebook bans Aussies from sharing, viewing news

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, 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 recommends Microsoft. 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.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Facebook, and Microsoft. The Motley Fool has a disclosure policy.

The post Microsoft’s partnership with European news publishers threatens Facebook and Alphabet appeared first on The Motley Fool Australia.

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

from The Motley Fool Australia https://ift.tt/2ZMmr0N

Monadelphous Group Ltd (ASX: MND) shares are shooting higher following the release of the engineering company’s half year results for the financial year ending 31 December (H1 FY21). At the time of writing, the Monadelphous share price is trading 3.46% higher at $12.26.

What did Monadelphous report?

The Monadelphous share price is getting a lift in morning trade after the company reported an 11.2% increase in revenue for the first half of the 2020 financial year, to $948 million.

The company pointed to the continuing recovery from COVID-19 impacts in the engineering and construction sectors as helping drive the boost in revenues. Revenue from its own engineering construction division increased 68% from the corresponding half year. It said work was picking back up on a “significant number” of resource construction projects which had been delayed due to the pandemic.

Meanwhile, revenue from Monadelphous’ maintenance and industrial services division declined by 15.9% year on year, impacted both by the virus and diminished demand from the oil and gas sector during the half year.

With activities reduced, particularly in the earlier months of the half year reported, earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 3.5% from H1 FY20 to $57.0 million.

Net profit after tax (NPAT) – which the company stated “includes reversal of one-off provision of $6.5 million made in the 2019 financial year relating to research and development tax incentives” – increased 11% to $31.6 million.

Earnings per share (EPS) came in at 33.4 cents.

As at 31 December, Monadelphous had a cash balance of $169 million and reported $18 million in cash flows used in operating activities for the half year.

Monadelphous will pay an interim dividend of 24 cents per share (cps), fully franked.

Looking ahead, Monadelphous Managing Director Rob Velletri said that with Monadelphous’ “reputation as a leader in its markets, and its longstanding commitment to the delivery of safe, reliable and cost competitive service solutions, the company is well placed to capitalise on opportunities and deal with the challenges ahead.”

Monadelphous share price snapshot

The Monadelphous share price has yet to fully recover from the blow it took during the wider virus-driven market rout last year. Over the past 12 months, Monadelphous shares are down nearly 25%. That compares to a 3% loss on the S&P/ASX 200 Index (ASX: XJO).

So far in 2021, the Monadelphous share price is down by around 11%.

More reading

• Spheria Asset Management names 3 ASX small cap cash flow kings
• NRW (ASX:NWH) share price jumps on acquisition update

Motley Fool contributor Bernd Struben 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 Why the Monadelphous (ASX:MND) share price is rising today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/37DNfF6

Fortescue Metals Group Limited (ASX: FMG) has had a blockbuster year thanks to surging iron ore prices. The Fortescue share price’s rapid appreciation ranks it as one of the best performing ASX 200 shares. Not only that, but its significant cash flow has also translated to a generous, market-leading dividend yield of 12.1%. 

Despite the standout performance and continuation of higher iron ore prices, analysts at Bell Potter have lowered their Fortescue share price targets with a hold rating. 

Record half-year performance 

Fortescue delivered a record-breaking result for the six months ended 31 December. The company had a 44% increase in revenue to US$9,335 million and a 66% lift in net profit after tax to US$4,084 million.

As the financial performance was largely in-line with Bell Potter’s expectations, the broker shifted focus to the progress update for Iron Bridge and the outlook for Fortescue Future Industries (FFI).

The broker noted that the resignations of COO Greg Lilleyman and other key personnel were triggered by a lapse in values, specifically communication. This related to a 15% CAPEX increase (from US$2.6 billion to US$3.0 billion) and scheduled production delay (from mid-CY22 to 2HCY22) at Iron Bridge. 

The resignations saw the Fortescue share price sink 3% lower last Tuesday. Bell Potter described the situation as a “dent in Fortescue’s excellent track record of project delivery” that added uncertainty to the project’s final costs and timing. However, it also believes the technical risks are well understood and shouldn’t pose a threat to the project’s completion. 

Fortescue Future Industries 

Fortescue Future Industries was established late last year with the hopes to deliver high-quality green hydrogen and green ammonia from projects across the globe.

In Fortescue’s HY21 results, guidance cited that up to 10% of NPAT could be made available for FFI to invest in renewable energy and green hydrogen projects. Previous updates had indicated that ~US$90 million would cover FFI’s assessment of project study and evaluation costs.

Based on Bell Potter’s FY21 NPAT forecast of US$7.8 billion, this implies ~A$1 billion in potential investments into these projects – a much larger commitment than previously envisaged by the market. However, it was emphasised that any investments would have to compete through the company’s capital allocation process and offer comparable returns.  

Fortescue share price target lowered with hold rating 

Fortescue’s record first-half FY21 financial performance clearly reflects excellent operational performance, cost control and the strong iron ore market.

Bell Potter lifted its earnings for FY21 by 6% and for FY22 by 2%. The increase to Fortescue’s assumed dividend payout ratio, combined with higher earnings, sees dividends lift 12% and 36% in FY21 and FY22, respectively, for yields of 12.1% and 6.7%. 

The broker lowered its NPV-based valuation by 3% to $20.05, down from $20.63. Despite the slight share price cut, it cited Fortescue as a clear leader on the ASX in terms of dividend yield, and its forecast 12.1% fully franked yield continues to support a hold rating.

More reading

• 4 ASX hydrogen shares powering forward in 2021
• ASX 200 Weekly Wrap: ASX lower despite bumper dividends
• 2 ASX dividend shares with very generous yields
• Will Fortescue (ASX:FMG) shares really pay an 18% dividend yield in FY21?
• ASX 200 mixed, CSL reports 44% profit growth, TWE soars

Motley Fool contributor Kerry Sun 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 Bell Potter tips the Fortescue (ASX: FMG) share price to go lower  appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3kfqQTB

The SEEK Limited (ASX: SEK) share price is under pressure on Tuesday following the release of its half year results.

At the time of writing, the job listings giant’s shares are down almost 3% to $29.57.

This is a big improvement from very early on when the SEEK share price sank 10% to $27.84.

This decline appears to be related to news that Founder and CEO, Andrew Bassat, will be stepping down from the role at the end of the financial year, rather than its performance during the first half. More on that development is coming up.

What happened in the first half?

For the six months ended 31 December, SEEK reported a 6% decline in total revenue to $819.1 million This was driven largely by weaker revenues from its international businesses due to COVID-19 headwinds.

But thanks largely to a strong performance by its SEEK Investments segment, the company’s earnings before interest, tax, depreciation and amortisation (EBITDA) was down just 1% on the prior corresponding period to $245.9 million. Positively, SEEK’s EBITDA was up 1% in constant currency.

Finally, on the bottom line, partly due to higher depreciation and amortisation, SEEK reported an 8% decline in net profit after tax to $69.7 million.

No interim dividend was declared by the SEEK Board. However, the Board intends to recommence payment of ordinary dividends with its full year results. This is subject to ongoing improvements in the macroeconomic conditions across its key markets.

Some shareholders may have been hoping for an interim dividend. So this news could also be weighing a touch on the SEEK share price today.

Management commentary

Outgoing CEO Andrew Bassat was pleased with the half year result given the tough trading conditions.

He commented: “We were pleased to deliver a H1 21 result that was broadly in line with H1 20, a period which was unaffected by COVID-19. This result demonstrates the strength of our key businesses and validates the decisions we made during the pandemic in regard to people, customers and re-investment. If the economies in which we operate continue their recovery, you should expect SEEK to perform well.”

Zhaopin sell down

Mr Bassat also revealed that the company is looking to sell down its stake in China-based Zhaopin. 

He advised that SEEK and other Zhaopin shareholders are in advanced discussions with a consortium looking to acquire an ownership interest in Zhaopin. The transaction will value Zhaopin at ~A$2.2 billion.

The company notes that if the proposed transaction completes, it expects to reduce its stake to ~23.5%. None of the investors will hold a controlling interest.

Management notes that the transaction will allow SEEK to realise a strong financial return, rebalance its portfolio exposure, and create capital management flexibility.

However, it has warned that there is no guarantee that these advanced discussions will result in a transaction. 

Outlook

Not even an upgrade to its guidance has been able to stop the SEEK share price from tumbling lower today.

The company advised that it now expects its revenue to be in the order of $1,700 million in FY 2021. It is also forecasting EBITDA of $460 million, up notably from its previous guidance of $404 million.

In fact, Goldman Sachs was tipping SEEK to increase its EBITDA guidance, but only expected an upgrade to $420 million. Had Andrew Bassat not announced his exit today, the SEEK share price would arguably be trading higher today on this upgrade.

Commenting on the remainder of the financial year, Mr Bassat said: “Overall, our H1 21 result and FY21 outlook is better than we expected. This reflects the strength of our key businesses and improving macro conditions in many of our markets. The combination of the momentum in these results, underlying economic recovery and today’s announcements bode well for SEEK’s long-term outlook.”

More reading

• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 next week
• Why the SEEK (ASX:SEK) share price just hit a new record high
• Why Alliance Aviation, REA Group, SEEK, & Vulcan shares are charging higher
• Leading broker tips 3 ASX shares to positively surprise during earnings season

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. 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.

The post SEEK (ASX:SEK) share price tumbles despite guidance upgrade appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2ZFvAZb

G8 Education Ltd (ASX: GEM) shares are on the slide during the opening minutes of trade after the company released its 2020 full-year results. At the time of writing, the G8 Education share price has slumped 4.27% to $1.12.

In its report, G8 advised it is still managing the effects of coronavirus with regard to occupancy rates at its early learning and childcare centres.

Let’s review how this impacted the company’s results and what the CEO had to say. 

G8 Education reports annual losses

Investors are driving down the G8 Education share price today after the company reported its annual revenue dropped to $788.1 million for the year ended 31 December 2020. This was down 14.4% from the $920.6 million revenue recorded for the year prior. 

Underlying earnings before interest and taxes (EBIT) fell 11.9% compared to the prior corresponding period (pcp) and totalled $105.2 million.

G8 also reported a net profit after taxes (NPAT) loss of 11.3%. NPAT was $60 million for 2020 compared to $67.7 million in the pcp.

Earnings per share (EPS) took a 38.1% hit, falling from 13 cents for the 2019 period to 8.1 cents at the end of 2020.

The company reported a statutory loss after taxes of $187 million.

CEO comments 

Commenting on the company’s annual performance, G8 Education CEO and Managing Director Gary Carroll said: 

This year the Group’s absolute priority has been to ensure the health, safety and wellbeing of our team members, children and families as we navigate the ongoing impact of COVID‐19. In addition, we have been firmly focused on safeguarding the business through prudent financial management and cash preservation and by drawing on the Commonwealth Government’s welcome support for the sector during the pandemic.

These efforts have been reflected in the Group’s 2020 full‐year results, which show a strong recovery in occupancy and attendance in a challenging COVID‐19 related environment. Throughout this period, the Group has not lost sight of its strategic priorities, with the optimisation of its portfolio continuing through the divestment of underperforming centres, the ongoing improvement program and the opening of greenfield sites. Our strong balance sheet, with net cash of $21.8 million, gives us the capacity to continue this momentum and to explore other sensible growth opportunities.

G8 education share price snapshot

Including today’s falls, the G8 Education share price has shed nearly 30% of its value over the past year. However, G8 Education shares have gained around 20% over the last six months.

Based on the current share price, G8 Education has a market capitalisation of around $990 million with 847.4 million shares outstanding.

More reading

• Here’s why the Jumbo Interactive (ASX:JIN) share price is pushing higher
• Why the MNF Group (ASX:MNF) share price is jumping 7% higher today
• Why the Adore Beauty (ASX:ABY) share price is rocketing higher today
• Why the Worley (ASX:WOR) share price will be on watch today
• APA (ASX:APA) share price on watch with HY21 report, upgrades distribution guidance

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.

The post G8 Education (ASX:GEM) share price tumbles as revenue dives appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3unksOC