It has been another busy week for Australia’s top brokers. This has led to the release of a large number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Coles Group Ltd (ASX: COL)

According to a note out of Citi, its analysts have retained their buy rating but trimmed their price target on this supermarket giant’s shares to $20.10. This follows the release of a full year result that fell a touch short of the broker’s expectations but ahead of consensus estimates. And while it notes that Coles’ Ocado and Witron costs are now expected to be higher, these should still be a big boost to earnings in the future once operational. Overall, the broker has seen enough to stay positive on the retailer. The Coles share price is trading at $17.65 today.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

A note out of Morgans reveals that its analysts have retained their add rating but trimmed their price target on this pizza chain operator’s shares slightly to $90.00. The broker believes that Domino’s is over the worst of its issues now and that it is onwards and upwards from here. So much so, it is forecasting double-digit earnings growth in both FY 2023 and FY 2024. Outside this, the broker highlights that the engine of Domino’s growth is the rollout of new stores and feels that its medium-term opportunity is undiminished. The Domino’s share price is fetching $66.04 on Friday.

Qantas Airways Limited (ASX: QAN)

Analysts at UBS have retained their buy rating and lifted their price target on this airline operator’s shares to $6.80. According to the note, UBS was impressed with Qantas’ performance in FY 2022, with its results coming in well ahead of its estimates. In addition, with Qantas announcing a $400 million buyback, it feels this is an indication that management is confident in its outlook. The Qantas share price is trading at $5.16 this afternoon.

The post Brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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More reading

• Why Bega Cheese, Jumbo, Pilbara Minerals, and Qantas shares are rising
• Is the Qantas share price a buy following the airline’s latest results?
• Here are the top 10 ASX 200 shares today
• Is the Coles share price a buy following the company’s latest results?
• Here are the 3 most heavily traded ASX 200 shares on Thursday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET. 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 Scott Phillips.

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When it comes to ASX-listed exchange-traded funds (ETFs), the Vanguard MSCI Index International Shares ETF (ASX: VGS) is a popular choice for international shares exposure. Along with the iShares S&P 500 ETF (ASX: IVV), VGS is consistently a top receiver of ETF inflows from ASX investors.

But how does this fund’s performance measure up to other ASX index funds?

The Vanguard International Shares ETF is an extremely broad and diverse fund. It holds almost 1,500 individual shares from more than 20 advanced economies around the world. These include countries like Canada, the United Kingdom, Japan, France, Germany, and Hong Kong.

But in practice, most of the VGS shares by weighting stem from the United States. The US accounts for 71% of VGS’s total portfolio weighting, on the latest numbers.

As such, one might recognise some of its top holdings. They include names like Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Amazon.com Inc (NASDAQ: AMZN), and Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL).

How has the VGS shares ETF performed?

So let’s check out the Vanguard International Shares ETF’s performance metrics.

As of 31 July, VGS had returned a loss of 4.16% over the preceding 12 months. Over the past three years, the ETF averaged an annual return of 9.51%, which stretched to 12.15% over the past five years.

So how does that compare with other ASX-listed index funds?

Well, VGS looks good against ASX shares, for starters. Let’s take the performance of the popular Vanguard Australian Shares Index ETF (ASX: VAS).

VAS has given its investors a negative return of 2.24% over the year to 31 July 2022. Over the past three years, it has averaged 4.48% per annum, and 8.12% per annum over the past five. So certainly behind VGS.

What about other international ETFs?

Well, VGS’s metrics don’t look quite as rosy when compared to the US-only iShares S&P 500 ETF.

IVV has delivered a positive return of 0.24% over the 12 months to 31 July. It has also averaged 12.58% per annum over the past three years, and 15.61% over the past five.

But neither VGS nor IVV can hold a candle to another US-based index fund, the BetaShares NASDAQ 100 ETF (ASX: NDQ). NDQ is more concentrated than IVV, holding 100 of the largest companies on the tech-heavy NASDAQ exchange.

NDQ has returned a loss of 8.68% over the year to 31 July. But it has still averaged 17.95% over the past three years, and an impressive 20.69% over the past five.

So all in all, VGS has been a solid ASX performer in recent years, beating out the ASX-only VAS ETF. But it has not delivered the kinds of returns that either the iShares S&P 500 ETF or the BetaShares NASDAQ 100 ETF have managed to give their investors. Food for thought.

The post How does VGS stack up against other ASX index funds? appeared first on The Motley Fool Australia.

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More reading

• 3 top ETFs for ASX investors to buy
• 2 wonderful ETFs to buy for portfolio diversification
• Why is the BetaShares NASDAQ 100 ETF having such an awful start to the week?
• 2 ETFs I think would make good additions to most portfolios
• Here’s how much the Vanguard Australian Shares Index ETF (VAS) has paid in dividends over the past 5 years

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Alphabet (A shares), Amazon, Apple, and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, BETANASDAQ ETF UNITS, Microsoft, and Vanguard MSCI Index International Shares ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Vanguard MSCI Index International Shares ETF, and iShares Trust – iShares Core S&P 500 ETF. 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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It’s been a big week in the August earnings season with scores of ASX businesses reporting their results. Today, these three ASX shares are taking off after their companies posted details of their FY22 profits.

Let’s take a look.

Slater & Gordon Limited (ASX: SGH)

The Slater & Gordon share price is up 9.57% to 63 cents today. This follows the law firm releasing its full-year FY22 results and a business update this morning.

The company said its results proved it had turned things around in the second half of FY22 after COVID-19 lockdowns caused problems in 1H FY22.

It reported a net profit after tax (NPAT) of $2.2 million for the full year. This was achieved from a net loss position of ($7.5 million) after 1H FY22. But the full-year result is well down on the $14.5 million of NPAT in the prior corresponding period (pcp).

The firm’s net asset position improved to $184 million, up from $180.5 million pcp.

Slater & Gordon CEO John Somerville said:

When we reported our half year results in February, we said we had started to see signs of improvement following the lifting of lockdowns and we are pleased that the second half saw the continuation of that trend with the business returning to deliver an overall profit for the year.

Our firm continues to make good progress on its improvement and growth plans, but we recognise we still have more work to do.

360 Capital Group Ltd (ASX: TGP)

The 360 Capital Group Ltd share price is soaring 10.12% today to 93 cents. This is also on the back of full-year FY22 results released today.

The company reported operating revenue of $53.9 million, up 157% pcp. Its operating profit was $30.9 million, up 240% pcp. Operating earnings per share (EPS) came in at 14.1 cents per share, up 236% pcp.

The group also announced a special dividend of eight cents per share payable on 7 October. Shareholders will receive this on top of the six cents per share in total ordinary dividends paid this year.

The company says its principal investing continues to drive profits. It has also simplified the business to focus on its core strengths of real estate investing and funds management.

Part of that simplification process was selling its 19.9% stake in Irongate Group to Charter Hall Group (ASC: CHC). It also bought certain assets as part of the transaction.

This improved the balance sheet. After settlement on 15 July, the company had more than $160 million in cash, no bank debt, and $49.4 million in liquid assets.

This provides “the opportunity to capitalise on market volatility and dislocation given the Group’s 16-year track record of real estate investing”.

Close The Loop Inc (ASX: CLG)

Close The Loop Inc is a relatively new entrant to the ASX. It began trading in December 2021.

As my colleague Sebastian reported at the time, the Close the Loop share price skyrocketed 55% on its first day of trading to a high of 31 cents. That’s well beyond its initial public offering (IPO) price of 20 cents.

The company describes itself as “an end-to-end solutions provider from design and manufacturing, through to collection and recycling of products”.

It released its full-year FY22 statutory accounts, a trading update, and an investor presentation today.

ASX investors appear to be very happy with what Close the Loop told them today, with the share price up 9.52% to 46 cents this afternoon.

It reported revenue of $89.2 million, which was 20.7% above the prospectus forecast and up 32.3% pcp. Its earnings before interest, tax, depreciation and amortisation (EBITDA) was $14.3 million, 16.3% above prospectus forecast and up 8.3% pcp.

The company said: “Strong organic revenue growth across all divisions contributed to significant earnings uplift.”

Close the Loop also made various acquisitions during the year. It increased its net tangible assets per share from 0.96 cents at 30 June 2021 to 7.31 cents at 30 June 2022.

Group CEO Joe Foster said:

Close the Loop Group’s strong performance in our first full year reporting period as an ASX-listed company has ensured we have achieved or exceeded key prospectus metrics and delivered on our strategic pillars.

We acquired complementary and earnings accretive businesses in Oceanic Agencies and Crasti & Co. and, in July, added Alliance Paper. These three acquisitions add to the cumulative power Close the Loop has in its ability as the only ASX-listed company operating in all parts in the circular economy – from product design, manufacturing, collection and recycling and then eventually recovering it as new packaging or secondary products, or simply packaging to packaging.

The post 3 ASX shares rocketing 10% on positive earnings updates appeared first on The Motley Fool Australia.

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More reading

• 2 small-cap ASX shares this fund manager is ‘confident’ about

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Wesfarmers Ltd (ASX: WES) share price is in focus after the release of its FY22 results. Shareholders will want to know about the Wesfarmers dividend.

Wesfarmers says that it’s developing platforms to support long-term shareholder returns.

In the 2022 financial year, it said that revenue rose by 8.5% to $36.8 billion. Net profit after tax (NPAT) fell 1.2% to $2.35 billion and earnings per share (EPS) dropped 1.2% to 207.8 cents. Second half net profit after tax rose 13.1%.

Wesfarmers dividend

The Wesfarmers board decided to declare a fully franked final ordinary dividend of $1 per share. This represented an increase of 11.1% which reflected the “strong” net profit after tax in the second half of FY22.

Wesfarmers said that the ex-dividend date for the final dividend is 31 August 2022. The dividend is expected to be paid on 6 October 2022.

That brought the full year dividend to $1.80 per share, which was an increase of 1.1%.

There will be a dividend re-investment plan (DRP), but it won’t be underwritten. The shares are expected to be purchased on market. The last day for application for the DRP is 2 September 2022.

How did Wesfarmers decide on this dividend payment?

The company said that dividend distributions are determined based on franking credit availability, current earnings, cash flows, future cash flow requirements and targeted credit metrics.

Wesfarmers said that it’s maintaining its focus on maximising the value of franking credits for shareholders.

Cash flow and balance sheet

Wesfarmers reported that operating cash flow reduced 32% to $2.3 billion and free cash flow reduced 59.5% to $1.11 billion.

It said that divisional operating cash flow declined 14.2% to $4.1 billion, with divisional cash generation of 78%. This was due to retail net working capital movements due to ‘normalisation’ in inventory after temporarily low balances in FY20 and FY21, and the timing of supplier payments. There was also significantly higher utilisation of leave provisions.

Free cash flow was partly lower because of cash paid for the acquisitions of Australian Pharmaceutical Industries and Beaumont Tiles.

It finished with a net financial debt position of $4.3 billion.

Wesfarmers share price snapshot

Over the past six months, Wesfarmers shares have fallen by around 3%.

The post Everything you need to know about the latest Wesfarmers dividend appeared first on The Motley Fool Australia.

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More reading

• Wesfarmers share price lifts as earnings beat brokers’ consensus
• Wesfarmers share price in focus as profit slips to $2.35b
• Earnings preview: Here are the ASX shares reporting today
• 5 things to watch on the ASX 200 on Friday
• Wesfarmers share price edges higher ahead of Thursday’s results

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Wesfarmers Limited. 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 Zip Co Ltd (ASX: ZIP) share price is in the red.

Again.

Zip shares are down 4.1% in afternoon trade to 91 cents per share.

This follows on a 2.1% loss yesterday, when the buy now, pay later (BNPL) stock released its full-year results for the 12 months ending 30 June (FY22).

And those results were, well, less than stellar.

Despite reporting a record year of revenue of $620 million, up 57% from FY21, the company reported a jaw-dropping $1.1 billion loss from ordinary activities after income. That’s 63% more than the sizeable losses it suffered the prior year.

Remarkably, the Zip share price was up for almost all of the day, with gains of 2.3% on the board just 30 minutes before the closing bell.

Then investors appeared to get cold feet. Or perhaps re-examined the number of zeros in the net loss column. Either way, Zip shares lost 4.7% in the final 30 minutes of trade.

Is the company still overvalued?

Which brings us to UBS analyst Tom Beadle.

Beadle believes that even at today’s 91 cents, the Zip share price may be double what it should be.

According to Beadle (courtesy of The Australian):

In FY23, managing cash burn and demonstrating a clear path to profitability will be crucial for Zip. Whilst Zip have announced a range of initiatives designed to reduce cash burn, quantifying their precise impact remains difficult; in our view material uncertainty remains.

Indeed, as The Motley Fool reported yesterday, Zip’s cost of sales grew by an unenviable 76% in FY22. The company aims to reduce costs in part by ceasing its operations in Singapore and the United Kingdom. Zip also said it will focus on reducing mounting credit losses.

Nonetheless, UBS’ Beadle retains a sell rating on the company, with a 45-cent target for the Zip share price.

Zip share price snapshot

It’s been a rocky year for shareholders of the BNPL company, with the Zip share price down a painful 79% since the opening bell on 4 January. For some context, the All Ordinaries Index (ASX: XAO) is down 7% year-to-date.

The post Here’s why UBS tips the Zip share price to halve appeared first on The Motley Fool Australia.

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More reading

• Zip’s FY22 loss is 165% of its market cap. So why did its shares go up?
• Zip share price lifts despite $1 billion loss for FY22
• Earnings preview: Here are the ASX shares reporting today
• How did the Zip share price respond last time the company reported?
• Looking to buy Zip shares? Here’s what to look for in tomorrow’s results

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ZIPCOLTD 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 Scott Phillips.

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By any metric, the Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price has had an awful year over 2022 thus far. As it stands today, the ANZ share price has lost a nasty 16.92% year to date.

That doesn’t look great against the broader S&P/ASX 200 Index (ASX: XJO), which is also in the red for the year, but by a far tamer 6.2%. So ANZ’s 2022 losses have almost tripled those of the ASX 200. Ouch.

But in one positive for newer investors, in particular, this fall in value has pushed up the ANZ dividend yield to the 6.19% it stands at today. That comes from ANZ’s last two dividend payments.

These were the interim dividend of 72 cents per share, fully franked, that investors were paid on 1 July, and the final dividend of 72 cents per share, also fully franked, that shareholders received last December.

So is this rather large dividend yield really the top offering of the big four ASX banks at present?

Does ANZ really top the ASX bank shares for dividends today?

Well, let’s go through them. ANZ’s dividend certainly looks good against the current offering from the ‘big dog’ of the ASX banks, Commonwealth Bank of Australia (ASX: CBA).

CBA shares are currently offering a trailing yield of 3.91% at the current share price. That’s including the bank’s final dividend hike that was delivered earlier this month to $2.10 per share. Nothing to turn a nose up against, but certainly not in ANZ’s ballpark.

Turning to Westpac Banking Corp (ASX: WBC), we can see that Westpac has a yield of 5.56% on the table today. That’s getting close to ANZ, but not quite a cigar.

Finally, National Australia Bank Ltd (ASX: NAB) has a dividend yield of 4.55% on offer today. Again, that’s solid, but no candle to ANZ.

So it is true that ANZ currently has the highest dividend yield of the big four ASX bank shares today.

As we discussed earlier, this is something of a byproduct of the poor performance of ANZ shares over recent months. But perhaps dividend income-minded investors won’t care too much about that.

The post Are ANZ shares really offering the highest dividend yield of the big four? appeared first on The Motley Fool Australia.

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More reading

• Here are 2 ASX dividend shares that analysts are tipping as buys
• NAB is the ASX 200 bank share I’d buy today
• The CBA share price is down 4% in August. What’s going on?
• Goldman Sachs names 4 reasons the Westpac share price is cheap
• Could this pose a risk to the ANZ share price in the future?

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. 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 Big River Industries Ltd (ASX: BRI) share price is rocketing today following the release of the company’s full-year results.

At the time of writing, the timber and building manufacturer’s shares are up 31.89% to $2.44.

Big River share price storms higher following record revenue

Big River delivered its FY2022 results for the 12 months ended 30 June 2022. Here are some of the key takeaways:

• Revenue up 45.4% to a record $409.3 million
• Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) up 113.3% to $48 million
• Underlying net profit after tax (NPAT) up 191% to $22.7 million
• Earnings per share (EPS) up 989.1% to 26.03 cents
• Final dividend of 10 cents per share, fully franked, bringing the full year dividend to 15.5 cents per share, up 176.8%

What happened in FY2022?

Big River reported a superb financial performance with robust growth recorded across the entire board.

The group achieved revenue of $409.3 million, an increase of 45% over the previous financial year. This was reflective of a solid construction sector, particularly the detached housing market, that was still benefiting from the homebuilder package introduced during FY2021.

EBITDA pre-significant items leapt by 113% to $48 million. Big River highlighted that growth was experienced in every division and geographic region in which the business operates.

Notably, a combination of strong organic growth, better operating cost leverage and contribution from its recent acquisitions drove the result.

EBITDA pre-significant items margin grew from 8% to 11.7%.

Net Profit after tax pre significant items stood at $22.7 million, an increase of 191% compared to the prior reporting period.

What did management say?

Big River CEO Jim Bindon touched on the outstanding results, saying:

FY22 was a period of substantial growth and success for our company, but one that also presented major challenges for our staff, customers and suppliers alike. Covid-19 related illness put pressure on all staff, while major product shortages needed close and expert management. Significant weather events affected several of our sites, and inflationary pressure impacted everyone in the supply chain.

Despite all these challenges, record revenue, profitability, earnings per share and free cash flow was achieved, which was a testament to all our employees, customers and suppliers.

What’s the outlook for FY2023?

Looking ahead, Big River advised that addressable market volumes are forecasted to grow modestly in FY2023.

The company has an extended pipeline due to project delays, and material and labour shortages. This continues to underpin the near-term outlook.

Like-for-like revenue growth in the first 8 trading weeks of FY2023 is 23.3% higher than the corresponding period.

In addition, freight and supply chain pressure is expected to continue easing throughout the year.

Big River share price snapshot

With today’s strong gains, the Big River share price is up 14% in 2022.

For context, the S&P/ASX 200 Materials (ASX: XMJ) sector is up 0.8% over the same time frame.

Big River commands a market capitalisation of approximately $200.64 million.

The post Guess which little-known ASX share is rocketing 30% on ‘outstanding growth’ appeared first on The Motley Fool Australia.

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• Here are the 3 most heavily traded ASX 200 shares on Friday
• Ramsay share price plunges 4% after suitor withdraws takeover offer
• Australian Finance Group shares rally 6% as company posts $55 million profit
• Polynovo share price plummets 15% despite surging full-year revenue
• TerraCom share price rockets on 900% dividend upgrade

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) looks like it is on track to end the trading week on a high note so far this Friday. At the time of writing, the ASX 200 is up a pleasing 1.05% at just over 7,120 points. The ASX 200 has now put on a pleasing 2.2% or so since Tuesday.

But let’s dive deeper into these share market gains and take a look at the shares currently topping the ASX 200’s share trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Friday

South32 Ltd (ASX: S32)

First up this Friday is ASX 200 diversified miner South32. So far today, a hefty 11.96 million South32 shares have changed owners. There’s been no news out of South32 today. Saying that, the miner did report its FY22 earnings yesterday, which were well-received by investors at the time.

Today, the company’s shares are down slightly by 0.23% at $4.26 a share. But the company did initially rise this morning. It’s probably a combination of these vents that has led to this elevated trading volume we see.

Tabcorp Holdings Ltd (ASX: TAH)

Next up today, we have ASX 200 gaming company Tabcorp. This Friday has seen a sizable 18.28 million Tabcorp shares change tables at present. Again, nothing out of this company today.

But Tabcorp did report its earnings on Wednesday this week. Like south32, these were welcomed by investors. Tabcorp shares have gained 0.99% so far today to $1.02 a share, putting the company up an impressive 9.9% since Monday. This is the likely cause of the high volumes we are witnessing.

Pilbara Minerals Ltd (ASX: PLS)

Our third, final and most traded ASX 200 share of the day so far goes to ASX lithium share Pilbara minerals. This Friday has seen a whopping 30.66 million Pilbara shares swap hands as it currently stands.

Pilbara shares are up an eye-catching 4.7% so far today to $3.57 a share. As my Fool colleague James touched on earlier, this is despite an absence of news out of the lithium producer.

So these gains, and volumes, might have something to do with a bullish broker note earlier this week.

The post Here are the 3 most heavily traded ASX 200 shares on Friday appeared first on The Motley Fool Australia.

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More reading

• Why Bega Cheese, Jumbo, Pilbara Minerals, and Qantas shares are rising
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• South32 share price gains ground on record FY22 earnings and special dividend
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Top brokers name 3 ASX shares to buy today

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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After copping a pretty ordinary financial report in the morning, Ramsay Health Care Limited (ASX: RHC) shareholders have more to worry about Friday afternoon.

The healthcare shares were put in a trading halt in the morning but were released at 1:32pm after the company updated the ASX on KKR & Co consortium’s takeover proposal.

The letter received overnight indicated the consortium is withdrawing from the $88 per share offer first floated in April.

At the time of writing, Ramsay shares have fallen 4% to $70.02.

How do you handle a problem like Ramsay Santé?

The cancellation of the takeover offer comes after the consortium ran into difficulties performing due diligence on Ramsay’s European subsidiary Ramsay Generale De Sante SA (EPA: GDS).

Ramsay Health owns about 53% of the shares in the listed company commonly known as Ramsay Santé. Ramsay chief Craig McNally is chair of the European arm.

The trouble is Ramsay Santé did not want to open up its books to KKR & Co, because it owns its French rival Elsan.

The stalemate had gone on for the last four months, but now it seems the consortium has run out of patience.

“The Consortium has advised Ramsay that it has elected to no longer seek due diligence access from Ramsay Santé and has advised the board of Ramsay Santé accordingly,” Ramsay stated to the ASX on Friday afternoon.

“Ramsay Santé due diligence was required to progress the indicative proposal and the Consortium has now informed Ramsay that it has withdrawn the indicative proposal.”

Could there be a third offer?

Due to the difficulties with Ramsay Santé, the consortium had already put up an alternative offer where the first 5,000 shares for each shareholder would receive $88. Then for each stock above that the investor would receive $78.20 plus 0.22 Ramsay Santé shares.

Perhaps anticipating the consortium’s rejection of the original $88 offer, on Thursday night the Ramsay board stated the alternative proposal was not acceptable.

“The Ramsay Board has considered the alternative proposal and is unanimously of the view that it is meaningfully inferior to the consortium’s indicative proposal of $88.00 cash per share,” the company stated.

“In forming this view, the Ramsay board had regard to both the lower implied value relative to the allcash proposal, as well as structural challenges, execution complexity and the low liquidity of Ramsay Santé shares.”

So the original proposal has been killed by the buyer and the alternative offer was ruled out by Ramsay.

This might not be the end of the story though.

The healthcare provider announced on Friday afternoon that it would still keep the door open for a different, third, offer.

“Ramsay is prepared to engage with the consortium to determine whether it can put forward an improved binding proposal that is capable of recommendation by the Ramsay board.”

The post Ramsay share price plunges 4% after suitor withdraws takeover offer appeared first on The Motley Fool Australia.

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More reading

• Ramsay shares halted after earnings slashed and takeover letter lands
• Earnings preview: Here are the ASX shares reporting today
• 5 things to watch on the ASX 200 on Friday
• What’s been impacting the Ramsay Health share price this week?
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited. 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 Australian Finance Group Ltd (ASX: AFG) share price is currently up 6.33% today after the company posted a bullish FY22 earnings card this morning.

Shares in the mortgage broking and lending group are currently trading at $2.02 each. They touched a high of $2.05 shortly after the market opened this morning.

Let’s go over the highlights of the ASX financial company‘s report.

What did the company report?

• Fully franked dividend of 9.6 cents per share
• Total revenue up 24.35% year-over-year (YoY) to $928.98 million
• Normalised underlying net profit after tax and amortisation (NPATA) up 12% YoY to $55.8 million
• Balance sheet of net cash and short-term investments of $217 million
• Trail book net assets up 223.52% YoY to $5.5 million.

Australian Finance Group CEO David Bailey attributed its earnings growth primarily to diversification into additional different business lines, including AFG Securities.

This is claimed to have led to a 20% group earnings increase from the corresponding reporting period and buoyed the final dividend amount by 30%. Settlements for AFG securities doubled in FY22, with especially strong performance observed in 2H FY22.

Its direct lending product line experienced the most growth in FY22, with settlements up 102% to $2.7 billion. Still, Bailey notes that aggregation remains the company’s most important business, with its loan book expanding to a record value of $182.2 billion and recording $59.4 billion worth of settlements throughout the year.

The fully franked dividend of 9.6 cents has a record date of 6 September and a payment date of 22 September. Total dividends for FY22 ended at 16.6 cents per share, representing a payout ratio of 80% and a dividend yield of roughly 9%.

What else happened in FY22?

Australian Finance Group mentioned the performance from its strategic investments into Thinktank, Fintelligence, and BrokerEngine, saying they contributed to its earnings and helped the company achieve its strategic priorities of expansion and diversification.

Thinktank contributed $6.1 to the company’s earnings, and Fintelligence contributed $3.6 million in FY22.

Some opportunities these investments allow the company to tap into include the reportedly under-served asset finance market. BrokerEngine’s financial technology will also synergize with its offering to brokers and customers.

The company notes that its efforts in expansion and diversification have been largely successful, with AFG securities contributing 26% of gross profit for FY22, behind its leading aggregation segment at 46%. By comparison, AFG Securities is claimed to have only contributed 4% in FY2015.

What did management say?

Bailey welcomed the FY22 results, saying:

AFG Securities settlements more than doubled in the year, significantly outperforming the strong 36% growth in both white label (distributed on behalf of ADIs) and aggregation settlements.

This outperformance was maintained throughout the year, with settlements in the second half exceeding the first half period.

What’s next?

In its outlook for FY23, Australian Finance Group noted that interest rates were in the process of moving to “more neutral levels” by the Reserve Bank of Australia (RBA).

However, the company added that the big picture was that these rate hikes remained at “historically low levels” and that the broader economy was still performing strongly, noting the low unemployment levels. The company estimates that demand for mortgage and broking services will likely remain high.

Alongside a more neutral backdrop, the company also said it had a solid pipeline of fixed-rate residential mortgages that were due for renewal over the next few years, valued at roughly $46 billion. The impact of these loans is that they will provide the company with future settlements as well as cross-selling opportunities to expand its loan book further.

Australian Finance Group share price snapshot

The Australian Finance Group share price is down 23.96% year to date. Comparatively, the S&P/ASX 200 Financials Index (ASX: XFJ) is doing better. It’s down 4.01% over the same period.

The company’s market capitalisation is around $540 million.

The post Australian Finance Group shares rally 6% as company posts $55 million profit appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Friday
• Ramsay share price plunges 4% after suitor withdraws takeover offer
• Polynovo share price plummets 15% despite surging full-year revenue
• TerraCom share price rockets on 900% dividend upgrade
• Why are Core Lithium shares seeing so much action in August?

Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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