Category: Stock Market

The Whispir Ltd (ASX: WSP) share price is on the move today following the release of its full year results.

At the time of writing the communications workflow platform provider’s shares are down 6.5% to $4.47.

How did Whispir perform in FY 2020?

Whispir was on form in FY 2020 and delivered a result ahead of its prospectus forecasts.

For the 12 months ended 30 June 2020, the company delivered a 25.5% increase in revenue to $39.1 million and annualised recurring revenue (ARR) growth of 34% to $42.2 million. This compares to its prospectus forecast of $37.8 million and $42 million, respectively.

This strong growth was driven by increased usage and a greater than forecast increase in net new customers during the 12 months. Whispir finished the period with 630 total customers, up 120 and ahead of its target of 621.

Also coming in better than its prospectus forecast was its churn levels. Gross revenue churn reduced to only 2.4%, while customer churn was lower than forecast at 7%.

Total operating expenditure was $31.7 million for the year, leading to an EBITDA loss of $7.3 million. This was also better than its prospectus forecast for an EBITDA loss of $9.4 million.

At the end of the period the company’s balance sheet was strong, with a net cash balance of $15.2 million.

What were the drivers of its growth?

Whispir’s CEO, Jeromy Wells, was rightfully very pleased to see the company exceed all its key prospectus metrics.

He commented: “Whispir’s strong performance in its first full year as a listed company has ensured we have achieved or exceeded all key Prospectus metrics. Increased platform usage from our existing customer base was the key revenue growth driver in FY20, delivering total annual revenue of $39.1m, up 25.5% YOY and 3.3% ahead of our Prospectus Forecast.”

The majority of its revenue continues to be generated in the local ANZ market, but is being supported by other regions.

“The more mature Australia and New Zealand (ANZ) business continues to perform ahead of expectations, currently accounting for around 79% of total group revenue. Meanwhile, our operations in Asia are rapidly growing with revenue increasing 44% YOY to $6.8m.”

And although the chief executive acknowledges that the pandemic gave its performance a boost in FY 2020, he appears confident that this isn’t a short-term thing.

Mr Wells explained: “While COVID-19 provided a tailwind for the business, it really just accelerated the macro trend for the adoption of easy-to-use yet sophisticated communications software.”

“As businesses respond to rapidly changing operating requirements, they need to be able to communicate with all their stakeholders; employees, suppliers and customers, more effectively and Whispir has satisfied that demand,” he added.

The chief executive also notes that the second half surge in demand has not yet been fully reflected in its results.

“Significant new customer growth in the second half is yet to have a material impact on revenue and ARR. Most new customers start by quickly deploying Whispir for one or two use cases that meet an immediate need. However, our experience shows that new customers quickly appreciate the significant benefits our cutting-edge communications workflow platform delivers, which inevitably leads to increased transactional volumes as customers deploy additional use cases,” he explained.

Outlook.

While the company acknowledges that there is a high level of uncertainty in the current economic and business environment, it remains positive on its prospects in FY 2021 and has provided guidance for the year ahead.

In FY 2021 Whispir expects to deliver ARR of $51.1 million to $55.3 million and revenue of $47.5 million to $51 million. The high end of these guidance ranges represent year on year growth of 31% and 30.4%, respectively.

The company is also forecasting the narrowing of its loss to an EBITDA loss of between $6.2 million to $4.8 million. The latter will be an improvement of 42% or $2.5 million.

More reading

• Here’s why I think the Whispir share price is a buy
• 4 exciting small cap ASX shares to watch closely
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• Are these small cap ASX shares future stars?

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Whispir Ltd. The Motley Fool Australia has recommended Whispir Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Every time there is a market-wide event, there are opportunities. We saw it during the coronavirus lockdown crash, during the recovery, and now we are seeing it during earnings season. Exploiting inefficiencies in the market is applicable across all types of companies. However, if your goal is to retire rich, then I believe you will need to consider investing a percentage of your portfolio in growth shares. 

While this is higher risk, it doesn’t have to be an absolute gamble. However, here are a few quick rules to remember. Growth companies often sell at high price-to-earnings (P/E) multiples. Also, very importantly, do not invest so much you cannot sleep at night. Risk is real, not just a figure, and not everything goes to plan.

Artificial intelligence is the future

The Brainchip Holdings Ltd (ASX: BRN) share price has risen by 91.17% over the past two weeks. It is the world’s largest listed pure play artificial intelligence (AI) company. The company is very close to finishing its first-of-a-kind neuromorphic chip.

This is a company already has an array of products, patents, and groundbreaking technological developments. For example, Brainchip has good market share in the casino industry where it is used in security applications. Another prominent vertical is facial recognition of terror suspects and wanted criminals in airports and subways. With a market capitalisation of $486.50 million, I think Brainchip is a good share to own if you want to retire rich.

Retire rich from fintechs

One of the companies I have been watching for a fair while is Ecofibre Ltd (ASX: EOF). I think the management of this company comprises some pretty astute individuals. It produces non-psychoactive hemp products for distribution in the United States and Australia. The company’s primary product is cannabidiol (CBD), used in nutraceutical products. The company reported a 42% increase in top line revenues, and an eye watering 119% increase in net profit after tax (NPAT). 

It has three main verticals. Food, nutraceuticals of where it has 51% of the USA pharmacy sales market, and clothing. The clothing vertical shows how astute and agile these managers are. After spending 2 years developing this technology at Thomas Jefferson University and filing patents, the management wisely pivoted from its planned yoga wear products to face masks and neck gaiters. Consequently, they were able to break even in three months.

I feel that management as agile and financially astute as this can easily help you to retire rich. Ecofibre has a market capitalisation of $926.98 million.

A necessary service

CML Group Ltd (ASX: CGR) is one of those companies I think is undervalued by the market. It has a market capitalisation of just $73.97 million. This company provides various forms of short term debtor finance for small businesses. These are short term credit services where assets other than security are used. For example, with invoice finance, the invoice is the security, 80-90% would then be provided in immediate funds, and the credit provider is paid back the principal plus the margin when the invoice is paid.

The company also acquired a software as a service (SaaS) company, Skippr. This platform allows CML to provide greater support to small business, one of its key verticals. It allows their clients to automatically qualify, apply for invoice credit. As well as monitoring payments and invoice tracking. This gives the company the potential to service smaller receivables accounts as the overheads are now far lower. 

Foolish Takeaway

These companies have three common traits. In my view these are essential parts of the search for growth shares that can help you retire rich.

First, they are all run by professional managers. Every one of them is a revenue generating company. The financial records show continual growth in sales, cash flow and revenue. 

Second, they all have very large addressable markets and have built significant barriers to entry. In the case of these three companies, they are protected either by one of a combination of being the first mover, technological patents, and company secrets. 

Third, all of them have a market capitalisation under $1 billion. The actual figure doesn’t matter. But when I am reviewing these companies I ask myself; can I see it doubling its share price? For example, Afterpay Ltd (ASX: APT) is now worth the same as Coles Group Ltd (ASX: COL), and more than Woodside Petroleum Limited (ASX: WPL). Personally, I cannot see it doubling again. But I think any of the companies above could do so over a 2 – 3 year timeframe.

More reading

• Brainchip share price up 1000% in 5 months. Is it the next big thing?
• Ecofibre share price on watch after doubling profits
• Brainchip share price rockets 30% in a week
• ASX shares to buy with $10,000 in August
• Brainchip share price surges 9% on new financing facility

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Worley Ltd (ASX: WOR) share price could be well supported this morning after it posted a big lift in profits and dividend.

But it isn’t only the earnings numbers that will necessarily please shareholders.

It’s more the fact that the wheels haven’t fallen off its controversial ECR acquisition it made last year.

Large profit surge

The profit jump and the acquisition are linked of course. On that note, management reported an 80% surge in underlying earnings before interest and tax before amortisation of acquired assets (EBITA) to $743 million.

It’s underlying net profit before amortisation of acquisitions jumped by two thirds to $432 million, while aggregate revenue increased 75% to $11.3 billion.

Dividend increase despite $4.6bn acquisition

What’s just as pleasing is the increase in underlying operating cash flow to $881 million from $239 million. There’s also the bigger 25 cents a share final dividend (up from 15 cents) despite the $4.6 billion ECR takeover.

The large acquisition contributed significantly to Worley’s top and bottom lines, as it should. But sceptics who doubt that the acquisition is working will be reassured by the boost in synergies.

Bedding down ECR going better than expected

“The integration of ECR was substantially completed during the year and we have delivered acquisition cost synergies of $177 million at 30 June 2020,” said Worley’s chief executive Chris Ashton.

“We have increased the target to $190 million, to be delivered by April 2021.”

The synergies are on top of another $275 million it hopes to save from current operations.

Re-rating opportunity for underperformer

The reassurance could spark a re-rating in the stock given that the Worley share price is a woeful underperformer. Shares in the engineering contractor plunged 40% since the start of calendar 2020 when the S&P/ASX 200 Index (Index:^AXJO) fell 8%.

In contrast, the Seven Group Holdings Ltd (ASX: SVW) share price lost 3% although the Downer EDI Limited (ASX: DOW) share price is faring worse with a close to 50% loss in value.    

Is Worley hunting for its next takeover?

As with most companies, Worley only provided a vague outlook amid the COVID-19 volatility. Management blamed the fast-changing environment for making FY21 more difficult to forecast than previous years.

However, it said the group is more resilient with the ECR business as it’s better diversified across countries and industries.

Management even hinted that it might be on the hunt for further acquisitions that are inline with its transformation strategy.

It might need to given its high exposure to fossil fuels. It generated more than $5 billion from servicing oil and gas companies.

More reading

• Seven Group share price on watch following FY 2020 earnings release
• 5 things to watch on the ASX 200 on Wednesday
• ANZ-Roy Morgan consumer confidence rises as COVID-19 case numbers fall
• ASX 200 rises, Bingo jumps after reporting
• Afterpay share price leaps 7% today after 3 broker upgrades

Motley Fool contributor Brendon Lau owns shares of Seven Group Holdings Limited and WorleyParsons Limited. Connect with him on Twitter @brenlau.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Afterpay Ltd (ASX: APT) is fast becoming the success story of 2020. The Afterpay share price has risen a staggering 1,000% since its March lows and is rocketing higher again this week.

Why the hype around the Afterpay share price?

The hype surrounding the Afterpay share price isn’t new. The company is arguably the most well known buy now, pay later (BNPL) brand in Australia, even though it’s only been operating for around three years. During that time, more and more retailers have been displaying the Afterpay logo on their doors and windows, so it’s a brand that is hard to ignore.

Earlier this year, Chinese fintech giant Tencent Holdings, acquired approximately 5% ownership, driving the Aftrepay share price higher. Tencent is a well known player in the tech world, so having it onboard as a major shareholder certainly made Afterpay investors happy.

Recently, Afterpay announced its intentions to expand into Europe through the $82 million acquisition of Pagantis, a Spanish fintech company in the BNPL space. Although based in Spain, Pagantis currently operates in Spain, France and Italy, providing multi-region access for Afterpay.

Justifying the acquisition, is Afterpay’s intention to use this brand to access the massive $500 billion eCommerce market in the European Union.

The Pagantis brand will ultimately be rebranded as Clearpay, with the existing technology being merged into the core tech provided by Afterpay. As a rough guide, Afterpay has earmarked the expansion plans to commence early next year.

As the BNPL giant already has operations in Australia, New Zealand, the United States and the United Kingdom, Europe is a logical next step.

Afterpay share price performance

The Afterpay share price is currently trading at $92.48, at the time of writing. This is almost crazy, considering the BNPL giant’s stock was selling for less than $10 in March this year!

The last six months of trading represents a return to investors in excess of 1,000% – a staggering run.

When Tencent Holdings announced its 5% stake in the company, the Afterpay share price jumped more than 20% in a single day. This latest announcement around a European Union venture has had a similar effect, sending the stock in excess of 10% higher in Tuesday’s trade.

Afterpay has returned an astronomical 3,300% to investors since its initial public offering (IPO), and doesn’t look to be slowing down any time soon.

Upcoming results

Afterpay issued an announcement to the ASX on 18 August stating it would be releasing its FY20 results on Thursday 27 August at 10am, Melbourne time. While the expansion plans are very exciting for the BNPL player, investor concerns will no doubt be circling the fact that Afterpay is still unprofitable, losing more than $40 million per year. With revenue increasing, however, a break even could be achieved in a few short years.

Main competition

Afterpay is by no means the only player in this space, but it is one of the biggest and has a massive market share. Some of Afterpay’s biggest competitors include Sezzle Inc (ASX: SZL), Splitit Ltd (ASX: SPT) and Zip Co Ltd (ASX: Z1P).

Foolish takeaway

The Afterpay share price has sustained a massive run for a company that isn’t making any profit. I believe this is largely due to investors piling into the stock and wanting to share in the success. However, just because there’s no profit yet, this doesn’t mean it won’t be there in the near future. Companies in this space need time to generate a profit and, at the end of the day, Afterpay is only three years old, so it’s still very early days. The results release on Thursday this week should be very interesting given all the company’s recent developments.

More reading

• Afterpay share price leaps 7% today after 3 broker upgrades
• Leading brokers name 3 ASX shares to sell today
• This rising sentiment is spurring the share market’s bull run
• Why Afterpay, BINGO, Scentre, & Westpac shares are charging higher
• Why the Xero share price can crack $100 per share in 2020

glennleese 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’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Last week blood product company CSL Limited (ASX: CSL) released a huge result for the 2020 financial year. The CSL share price soared on the news. But three things in particular caught me by surprise:

1. CSL was able to avoid major COVID-19 disruption

Collecting plasma from donors is an essential part of producing many of CSL Behring’s products. I was expecting the disruption from the COVID-19 pandemic might have a big impact on the company’s performance. However CSL was able to avoid major disruption and says plasma collections only dropped by around 5% compared to the prior financial year.

This was helped somewhat by the opening of 40 new plasma collection centers and a US Food and Drug Administration mandate that reduced plasma quarantine periods from 60 to 45 days. The reduction opened up inventories and improved the availability of essential blood components.

Still, CSL says that COVID-19 restrictions are expected to continue to restrain plasma collections in the 2021 financial year and it expects increased collection costs for plasma in the year ahead.

2. Cash flow from operations rocketed 51%!

Given revenue lifted by a solid 7.2% in the 2020 financial year I was not expecting a huge 51% jump in cash flow from operations. The increase helped to power CSL’s cash balance to US$1.2 billion, up almost 82% on the prior year.

Because CSL has changed to the ‘indirect’ method of reporting cash flows, it can be a little tricky to tell exactly what drove the increase. But essentially, the higher profit result, combined with less cash tied up in working capital and less cash paid out in taxes, helped to lift cash from operations higher.

3. CSL has one of the top CEOs in the world

Earlier this year, I wrote that I think CSL could be one of the best companies in the world. So I shouldn’t have been surprised to discover that CEO Paul Perreault had been named as one of the top 100 CEOs in the world by Harvard Business Review. In fact, he came in a few places ahead of fellow healthcare titan Colin Goldschmidt, CEO of Sonic Healthcare Limited (ASX: SHL).

Paul Perreault has been with CSL since July 2013. CSL’s reported revenues have almost doubled since then, climbing from US$5.1 billion to US$9.2 billion.

With the successful integration of flu vaccine business Seqirus, and continuing success in research and development, it’s no wonder Perreault is considered one of the best.

More reading

• The latest ASX stocks that brokers just upgraded to “buy”
• 3 ASX shares that could give investors a stock split in 2020
• Here’s why I would buy CSL and this ASX blue chip share
• Here are the highlights of this ASX reporting season
• This healthcare share could be a COVID-19 bargain

Regan Pearson has no position in any of the stocks mentioned. You can follow him on Twitter @Regan_Invests.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has recommended Sonic Healthcare Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Bravura Solutions Ltd (ASX: BVS) share price will be on watch on Wednesday following the release of its full year results.

How did Bravura perform in FY 2020?

Bravura was on form in FY 2020 and delivered another year of growth and further operating leverage expansion.

For the 12 months ended 30 June 2020, Bravura reported a 6% increase in revenue to $274.2 million. This comprised a 2% increase in Wealth Management revenue to $180.4 million and a 16% lift in Funds Administration revenue to $93.8 million.

Thanks to the aforementioned operating leverage expansion, the company earnings before interest, tax, depreciation and amortisation (EBITDA) margin increased from 18.8% to 21.1% in FY 2020. This led to Bravura reporting a 19% increase in EBITDA to $57.8 million.

This EBITDA growth was driven entirely by its Funds Administration business, which reported a 33% increase in EBITDA to $43 million. This offset a 2% decline in EBITDA for its Wealth Management segment to $52.9 million. Management advised that this decline was driven by lower licence fees during the year. Nevertheless, it notes that the business has a sales pipeline that is strong and growing, with significant opportunities across all key markets. Though, it warned that COVID-19 is lengthening the sales cycle.

On the bottom line, Bravura posted a 22% increase in net profit after tax to $40.1 million. Approximately $3 million of this came from acquisitions. On a per share basis, earnings came in at 16.5 cents.

In light of its positive form during the pandemic, the Bravura board declared a 5.5 cents per share unfranked final dividend.

Bravura’s Chief Executive Officer, Tony Klim, was pleased with the company’s performance in FY 2020.

He said: “We are pleased to report our FY20 results, with continued investment and the acquisitions of FinoComp and Midwinter positioning Bravura for long-term growth driven by market demands for microservices ecosystems, digital solutions and automation. Midwinter and FinoComp expand our product ecosystem, integrating adviser and microservices solutions with our core registry offerings. As expected, group margins continued to expand, reflecting the benefits of scale and operating leverage in the business.”

FY 2021 outlook.

Although the company has a strong sales pipeline across its key markets, management has warned that FY 2021 could be a challenging year because of the pandemic. As a result, its earnings could be flat year on year.

It explained: “While the new sales pipeline remains strong, due to the wider impact of COVID-19 there is greater uncertainty in the timing of deal closures when compared to prior years. It is therefore possible that FY21 NPAT will be similar to FY20.”

More reading

• 2 ASX growth shares to buy with $2,000
• 3 exciting mid cap ASX tech shares to buy for the long term
• 2 top ASX tech shares to buy and hold beyond 2026
• 2 ASX growth shares to buy with $2,000
• 3 exciting ASX growth shares to buy with $3,000

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 Bravura Solutions Ltd. The Motley Fool Australia has recommended Bravura Solutions Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Spark New Zealand Ltd (ASX: SPK) share price is on watch after the Kiwi telco’s full-year earnings result delivered to guidance.

What does Spark New Zealand do?

Spark New Zealand is a major New Zealand telecommunications company with operations as a fixed-line telephone, mobile networks, internet service and ICT service provider.

Prior to the market open, the Kiwi telco share was up 9.9% in 2020 with a market capitalisation of $8.3 billion.

Why is the Spark New Zealand share price on watch?

Spark reported 2.5% revenue growth for the year ended 30 June 2020 (FY20) to deliver $3,623 million in revenue.

A strong first half of the year established the momentum which saw mobile service revenue grow 3.9% and cloud, security and service management revenue climb 10.8%.

Spark noted a quick response to the coronavirus pandemic as a key factor. The group moved to maintain essential services and contain costs to help offset lost earnings.

Earnings before interest, tax, depreciation, amortisation and investment income (EBITDAI) grew 2.1% to $1,113 million. That delivers to the middle of Spark’s previously provided guidance for earnings.

Net profit after tax climbed 4.4% to $427 million thanks to that earnings growth and a lower tax expense.

Dividends

The Spark New Zealand share price is one to watch after reporting a final dividend of 12.5 cents per share (cps).

Combined with the 12.5 cps interim dividend announced in February, Spark’s total FY20 distribution will be 25 cps.

Based on yesterday’s closing Spark New Zealand share price of $4.54 per share, that represents an approximate 5.5% dividend yield.

FY21 guidance

After a strong yearly result, management did provide guidance for FY21 despite the current uncertainty.

EBITDAI is expected to fall between $1,090 million and $1,130 million compared to $1,113 in FY20.

Spark is targeting an FY21 dividend of 23 to 25 cps, 100% imputed. That represents a flat or marginal decline in distributions versus FY20 distributions.

The Spark New Zealand share price is one to watch as investors weigh up the FY21 forecast versus FY20 growth.

More reading

• 3 big surprises from the CSL full year results
• Bravura Solutions share price on watch after strong FY 2020 growth but cautious guidance
• Seven Group share price on watch following FY 2020 earnings release
• Betmakers share price on watch as revenues rocket 39%
• Steadfast share price on watch as dividends jump 13%

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Seven Group Holdings Ltd (ASX: SVW) share price is on close watch today following the release of the company’s full year financial results.  

Seven Group owns a portfolio of investments including industrial services, media and property.

Reasonably solid result in challenging market conditions

Investors will be watching the Seven Group share price today after the company reported total trading revenues of $4.6 billion for the 12 months ending June 30 2020. This was a strong increase of 12% on the prior financial year. The group achieved underlying earnings before interest and tax (UEBIT) of $740 million, a marginal increase of 2% on FY 2019. Underlying net profit after tax (NPAT) came in at $474 million. This was a 3% rise on the prior financial year.

Seven Group ended FY 2020 with a relatively strong balance sheet. Underlying operating cash flow for the company came in at $826 million, a 29% rise on the prior corresponding period.

The group declared a fully franked final dividend of 21 cents per share, the same level as in the previous year.

WesTrac outperforms other Seven Group segments

WesTrac was the standout segment in terms of profitability performance for Seven Group. The WesTrac segment delivered EBIT of $371.0 million, up a very strong 22% on the prior year. Revenue also grew strongly for WesTrac, up by 15%. Demand in the company’s Parts and Service segment remained resilient during the 12 month period. This was supplemented by a continued rise in product sales for the CAT equipment dealer.

Seven Group’s investment holdings in energy, however, saw a sharp decline in profitability (underlying EBIT) of 19% to $126.6 million for FY 2020. Beach Energy Ltd (ASX: BPT) was still able to achieve a robust production result for the 12 month period though, with pro-forma production levels up 2%.

In other segment results, underlying EBIT for Coats Hire declined by 1%. Meanwhile, media investments took a big hit, with EBIT down by 25% due to a particularly challenging fourth quarter from the impacts of COVID-19.

Ryan Stokes, Managing Director and Chief Executive Officer, commented: “Today’s result reflects a strong performance from our operating businesses and the robustness of our diversified model….In particular our Industrial Services portfolio has delivered solid growth with WesTrac executing a standout performance, reflecting the strong demand from customers who remain active in mining production and construction.”

Market outlook

Due to the continuing uncertainty surrounding the global coronavirus pandemic, Seven Group decided not to provide earnings guidance.

Over the medium to long term, the group will continue to focus on mining production and infrastructure investment. In particular, east coast gas demand is is viewed by the group as a key  growth opportunity.

The Seven Group share price closed yesterday at $19.18.

More reading

• The next ASX stocks to beat expectations during this reporting season

Motley Fool contributor Phil Harpur has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Betmakers Technology Group Ltd (ASX: BET) share price is on watch after the company posted a 39% jump in full-year revenue.

What does Betmakers do?

Betmakers is an Aussie racing data and analytics supplier  with a number of products and solutions. These include DynamicOdds, BettingHub, Global Tote and GBS. 

Betmakers is focused on providing innovative industry and bookmaker solutions to improve industry coverage and the consumer experience.

Why is the Betmakers share price worth watching?

Betmakers released its earnings for the year ended 30 June 2020 (FY20) headlined by a 39.1% increase in revenue to $8.58 million.

That included $2.25 million from Content and Integrity with a further $6.33 million generated from the Wholesale Wagering Products segment. 

However, that strong revenue didn’t flow to the bottom line with the Aussie wagering group posting a $2.1 million loss, down 40.6% from FY19.

It’s been a wild ride for investors with the Betmakers share price surging 468.8% higher since 23 March at the bottom of the bear market.

The coronavirus pandemic has impacted the racing industry and the Betmakers share price in 2020. However, the company reported growing demand for its digital products and services since the pandemic began.

New deals in global markets like the United States and United Kingdom underpinned strong revenue growth.

Pleasingly for shareholders, the Betmakers share price grew more than 800% in FY20 from 4.5 cents to 42.5 cents at 30 June.

The company raised $35 million in June 2020 thanks to several new institutional investors betting on further growth.

It was good news on the balance sheet side with net tangible assets climbing from -0.60 cents to 7.09 cents in FY20.

FY21 outlook

There was no specific guidance provided for FY21 but Betmakers does have a few key focus areas.

One of those is advancing its position in the US as the country’s wagering market continues to grow.

The strong demand reported in Managed Trading Services, Platforms and Global Racing Network are expected to continue this year.

The Betmakers share price was up 228.6% for the year prior to this morning’s open.

More reading

• Steadfast share price on watch as dividends jump 13%
• Jumbo Interactive share price on watch after signing Tabcorp deal
• 5 things to watch on the ASX 200 on Wednesday
• Beat ultra low interest rates with these top ASX dividend shares
• CBA and NAB may suggest to risky borrowers to sell their property

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Steadfast Group Ltd (ASX: SDF) share price is on watch after the Aussie insurer reported a strong underlying result last night.

What does Steadfast do?

Steadfast is Australia’s largest general insurance broker with growing operations in Asia and Europe.

The insurer boasts a network of more than 458 general insurance brokerages in Australasia.

Why is the Steadfast share price on watch?

The statutory numbers were soft as Steadfast reported a $55.2 million net profit after tax (NPAT) loss due to acquisition and impairment costs.

However, on an underlying basis, Steadfast enjoyed a healthy period of growth in the year ended 30 June 2020 (FY20).

The insurer reported a 15.5% increase in earnings before interest, tax and adjustments (EBITA) to $193.3 million. That was on the back of a 21.4% jump in underlying revenue to $688.3 million with underlying NPAT rocketing 19.0% to $89.2 million.

The Steadfast share price is on watch this morning after yesterday’s result which was underpinned by 36% growth in network gross written premiums (GWP) to $8.3 billion. That included 6.3% of organic growth before including Authorised Representatives and IBNA contributions.

The insurer reported record organic GWP growth in its Steadfast Underwriting Agencies business. Segment GWP jumped 13.1% to $1.33 billion with underlying EBITA up 14.7% to $105.8 million.

Steadfast’s insurTech segment also posted strong growth figures. GWO transacted through the Steadfast Client Trading Platform (SCTP) jumped 45% to $638 million in FY20.

Free cash flow jumped 27.2% to $70.6 million driven by strong operating cash flow figures.

Steadfast remains conservatively geared at 21.5%, well below its 30% maximum gearing ratio, with $323 million of borrowings.

Dividends

Steadfast reported a 13.2% increase in its final dividend to 6.0 cents per share (cps), fully franked.

Combined with its 3.6 cps interim dividend, the group’s final dividend is 9.6 cps up 12.9% on its FY19 payout.

Based on yesterday’s closing Steadfast share price that translates to a 2.7% dividend yield per annum.

FY21 outlook

The Steadfast share price will be one to watch as investors process the insurer’s FY21 guidance.

Steadfast is projecting underlying EBITA of $235 million to $245 million, compared to $193.3 million in FY20.

Underlying NPAT is forecast to increase from $89.2 million to between $115 million and $122 million this financial year.

The coronavirus pandemic has created ‘significant uncertainty’ but Steadfast sees trading conditions similar to those seen in Q4 2020.

More reading

• Betmakers share price on watch as revenues rocket 39%
• Jumbo Interactive share price on watch after signing Tabcorp deal
• 5 things to watch on the ASX 200 on Wednesday
• Beat ultra low interest rates with these top ASX dividend shares
• CBA and NAB may suggest to risky borrowers to sell their property

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Steadfast Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Steadfast share price on watch as dividends jump 13% appeared first on Motley Fool Australia.

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