One of the biggest pieces of news during this week of earnings season so far has been the results that ASX lithium share Pilbara Minerals Ltd (ASX: PLS) delivered yesterday. 

As we covered at the time, Pilbara delighted investors by reporting a whopping 577% surge in revenues to $1.2 billion for the full FY2022. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose to $814.5 million. That was up from $21.4 million in FY2021. 

But perhaps the biggest eye-catcher was the statutory net profit after tax (NPAT) of $561.8 million for FY2022 that Pilbara reported. That was up dramatically from a $51.4 million loss in FY2021. 

ASX lithium shares used to be infamous for a lack of profits on the bottom line.

But after such a strong showing from what is arguably the flagship ASX lithium share on the market, what could this mean for other ASX lithium shares?

What do Pilbara’s profits mean for ASX lithium shares?

Well, it’s certainly good news. Pilbara reported that it was both demand for lithium and spodumene concentrate that drove its impressive results. That was in addition to the strong pricing Pilbara was able to ask for its products.

As we reported yesterday, the average price per dry metric tonne the company was able to command came in at US$2,605.

That led to Pilbara enjoying a gross margin of $853.5 million. That was a massive increase on FY2021’s gross margin of $46.2 million.

These tailwinds Pilbara enjoyed over FY2022 are sector-wide, and thus, not just confined to Pilbara itself. So it does bode extremely well for other ASX lithium shares like Core Lithium Ltd (ASX: CXO) and Lake Resources N.L. (ASX: LKE).

But there is one caveat. Pilbara is certainly far more advanced with its lithium production than many other ASX lithium shares. For example, Core Lithium released a quarterly update back in late June. This revealed that the company’s flagship Finniss Project in the Northern Territory is “on track for first export of lithium by the end of the calendar year 2022″.

This means that Core Lithium is not really benefitting from the same tailwinds as Pilbara right now. Since its flagship project isn’t exporting lithium yet and all.

Similarly, lithium production at Lake Resources’ flagship Kachi Project was described in a July quarterly update as “targeted to commence in 2024“.

Pilbara’s record profit does bode well for all ASX lithium shares. But it’s not a guarantee that other lithium stocks are imminently profitable, especially when lithium product production hasn’t begun at scale just yet. 

The post Could Pilbara’s inaugural profit signal good times ahead for ASX lithium shares? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Why Altium, Ansell, Monadelphous, and Pilbara Minerals shares are charging higher
• Why is the Allkem share price acing it on Tuesday?
• Why is Lake Resources underperforming other ASX 200 lithium shares right now?

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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The HMC Capital Ltd (ASX: HMC) share price is galloping higher today. It appears expectations have been exceeded amid the release of the company’s full-year results for FY22.

In afternoon trading, shares in the alternative asset manager are relishing in excitement. At present, the share price has improved by 9.15%, trading at $5.13. This is an exceptional outperformance of the S&P/ASX 200 Index (ASX: XJO), which is 0.53% ahead on Wednesday.

Let’s take a closer look at the numbers.

HMC Capital share price leaps on beastly year

• Assets under management (AUM) up 321% year on year to $5.8 billion
• Pre-tax funds from operations (FFO) up 143% to $91 million
• Funds management revenue up 490% to $64.1 million
• $4.6 billion of gross transactions in FY22
• Dividends per share (DPS) flat compared to FY21 at 12 cents
• Net assets of $846 million as at 30 June, up from $711 million

What else happened in FY22?

It was a monumental year for HMC Capital and its share price by all accounts. Possibly the most significant event during FY22 entailed the rebranding from Home Consortium to HMC Capital.

This was carried out to better reflect the company’s ambitions of being an asset manager. As a result, the growing HomeCo brand is now a single facet of the company’s owned assets. Alongside it is HealthCo and the HMC Capital Partners funds.

Another major event for HMC Capital during the financial period involved the acquisition of Aventus Group. Strengthening the HomeCo portfolio, the HomeCo Daily Needs REIT (ASX: HDN) grew to encompass 2.5 million square metres of land under the deal. The scheme was officially implemented on 4 March 2022.

Finally, the company launched its first fund dedicated to investing in public and private companies across Australia and New Zealand. Importantly, the focus is on companies with ‘real asset backing’. Known as the HMC Capital Partners Fund I, the fund is targeting returns of greater than 15% per annum with a yield of 2% to 4%.

What did management say?

Commenting on the solid result, HMC managing director and CEO David Di Pilla stated:

As a manager we also demonstrated strong discipline and alignment through our proactive response to the rising interest rate environment and market volatility this year. We strengthened the capital position of our funds through opportunistic asset sales which took advantage of the disconnect between property and global capital markets.

Adding to this, Di Pilla highlighted the success of the partners’ fund thus far. As an example, an investment recently made in Sigma Healthcare Ltd (ASX: SIG) has appreciated by 22%.

What’s next?

Due to the unpredictability of transactional income, management was reserved with its forward guidance. However, the team did suggest that the 31 cents per share pre-tax FFO was repeatable. On top of that, DPS guidance was provided at 12 cents per share for FY23.

HMC Capital share price snapshot

There is a stark contrast between the HMC Capital share price and the figures posted today. Unlike the explosive increases in many operational metrics for FY22, the company’s share price has been trending lower.

In 2022, shares in HMC Capital have fallen by nearly 36%. This means the company now holds a market capitalisation of $1.53 billion.

The post HMC Capital share price jumps 9% on explosive results appeared first on The Motley Fool Australia.

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• Lottery Corporation share price drops despite $373 million profit
• WiseTech Global hikes full-year dividend by 71% as profits surge higher
• Netwealth share price rises 9% on strong revenue growth in FY22 results

Motley Fool contributor Mitchell Lawler 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 Ansell Limited (ASX: ANN) share price has clawed back some of the more than 5% losses posted earlier today.

After closing 8.6% higher yesterday, the Ansell share price is currently down 0.5% in early afternoon trading.

Yesterday, ASX investors were clearly pleased with the company’s full-year financial results.

Today, media reports have emerged that the health and safety products company has been accused in a United States court of “knowingly profiting” from slave labour.

First, a quick recap of the FY22 results.

Ansell share price leapt higher despite profit fall

Ansell’s full-year revenue of US$1.95 billion was down 3.7% from the prior year. Operating profits took an even bigger slide, down 35.7% to US$158.7 million.

The company said the declines were primarily driven by less demand from COVID-19 related safety products.

Earnings per share (EPS) for FY22 of US$1.25 per share were within guidance, with Ansell forecasting EPS in the range of US$1.15 to US$1.35 for FY23.

The Ansell share price gained, as the results exceeded market expectations, with analysts pointing to potential revenue growth in FY23.

Which brings us to…

Allegations of slave labour at Malaysian factory

The Ansell share price looks to be coming under pressure today following media reports workers at one of its third-party suppliers endured slave labour conditions in a factory owned by Malaysian-based Brightway.

As ABC News reported, the case was just lodged in a United States court by 13 people who worked in the factory.

The workers allege that Ansell and US surgical and medical instruments manufacturer Kimberly-Clark “knowingly profited” off their exploitation, as the companies had contracted the factory to make latex gloves.

Allegations include excessive recruitment fees, passport confiscation, abuse, excessive work, and abysmal living and working conditions.

ABC reported that Ansell had not responded to questions about whether it was still using Brightway as a supplier. Brightway products have already been banned in the US over prior labour violations.

Ansell stated it did engage in business with Brightway.

According to a company spokesperson:

Brightway is an independent third-party supplier who has manufactured and provided finished goods to Ansell and other purchasers.

Brightway products have never represented more than a very small percentage of total Ansell purchases from third parties, and it has been one of many direct suppliers to Ansell.

Ansell share price snapshot

Despite yesterday’s bounce, the Ansell share price is down 17% in 2022. That compares to a year-to-date loss of around 8% posted by the S&P/ASX 200 Index (ASX: XJO).

The post Why is the Ansell share price under pressure on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why Altium, Ansell, Monadelphous, and Pilbara Minerals shares are charging higher
• Ansell share price surges 10% as full-year revenue comes in at US$1.9b
• Ansell share price in focus as FY22 profit tumbles 36%

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ansell Ltd. 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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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.

About three months ago, Apple (NASDAQ: AAPL) made a small but notable change to its corporate structure. Its VP of advertising, Todd Teresi, started reporting directly to Eddy Cue, who oversees all of Apple’s Services business.

That’s apparently just the start of a big push for the advertising business. Since then, Apple’s made more moves to grow the business, and Teresi said his goal is to grow the business to more than $10 billion in annual revenue.

Two recent changes

Apple currently advertises in the App Store, News, and Stocks apps. But the success of its big-tech companions in advertising suggests it can build a much bigger ad business.

Apple’s advertising business is relatively small for a company with an installed base of over 1.8 billion devices. The company currently generates about $4 billion in annual revenue, which pales in comparison to advertising giants like Meta Platforms, Alphabet, or even Amazon. The smallest of that group, Amazon, has an advertising business nearly an order of magnitude larger than Apple.

That will start with Apple’s plans to expand advertising inventory within the App Store. Apple currently shows display ads when someone clicks the Search tab on the App Store, and it has promoted listings in the search results.

Soon, it’ll show display ads on the Today tab, which provides personalized suggestions for new apps to download. It’ll also start showing display ads within third-party app pages, which means apps will be able to advertise their product on their competitor’s product page.

The second big change in the app business is a new job listing spotted by Digiday. The company is looking to build a demand-side platform, also known as a DSP. A DSP would allow marketers to automate ad purchases across Apple’s inventory, which can lead to greater ad spending. It could also attract advertisers with smaller budgets, increasing competition for each ad spot, leading to higher average ad prices. Owning its own advertising technology can also lead to higher operating margins for the ad business.

Where does Apple go from here?

Apple has a lot of opportunities to insert more advertising into the apps and services iPhone users interact with most often.

It’s reportedly already explored the potential for advertisements within Maps. That could include sponsored search listings as well as highlighting locations along a route or an area of focus.

Other potential areas for advertising, as Bloomberg‘s Mark Gurman points out, include Podcasts and Books. Both have search and discovery features, which could lend themselves well to straightforward display and keyword advertisements.

Expanding the ad business could also lead to things like a podcast advertising network or video ads on Apple TV+. In fact, Apple’s already responsible for selling a small amount of commercials during its Friday night baseball broadcasts on Apple TV+. Apple could expand that to more ad-supported video content in the service in the future.

Another interesting long-term opportunity is building an internet search engine a la Google. While Apple has a lucrative contract with Google today, the search giant could face regulatory pressure in the future, ending such deals.

Teresi’s goal of reaching $10 billion in ad revenue shouldn’t be too difficult. And with the high margins of digital advertising, it could play a significant role in growing Apple’s bottom line over the next few years.

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

The post Apple sees this business reaching $10 billion soon appeared first on The Motley Fool Australia.

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Suzanne Frey, an executive at Alphabet, 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 Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Adam Levy has positions in Alphabet (C shares), Amazon, Apple, and Meta Platforms, Inc.  The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Apple, and Meta Platforms, Inc. 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 recommended Alphabet (A shares), Alphabet (C shares), Apple, and Meta Platforms, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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In afternoon trade on Wednesday, the S&P/ASX 200 Index (ASX: XJO) is on course to snap its losing streak. The benchmark index is currently up 0.5% to 6,998.8 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are storming higher:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The Domino’s share price is up 7% to $71.62. Investors have been buying this pizza chain operator’s shares following the release of its full year results. Domino’s reported a 4.6% increase in global sales to $3.92 billion but a 12.5% decline in net profit after tax to $165 million. While the latter was a touch lower than consensus estimates, this has been overlooked due to expansion news. Domino’s revealed that it is expanding into Malaysia, Singapore, and Cambodia through the acquisition of 287 stores for $214 million.

Iluka Resources Limited (ASX: ILU)

The Iluka share price is up over 8% to $10.25. This morning Iluka released its half year results and revealed a 70.5% increase in underlying EBITDA to $525.5 million. This allowed the company to more than double its interim dividend to 25 cents per share.

Netwealth Group Ltd (ASX: NWL)

The Netwealth share price is up 9% to $14.25. This morning the investment platform provider released its full year results and revealed a 19.6% increase in revenue to $173.9 million and a 2.7% lift in net profit after tax to $55.6 million. Netwealth’s profit was largely in line with consensus estimates.

WiseTech Global Ltd (ASX: WTC)

The WiseTech share price has jumped 11% to $59.02. This follows the release of the logistics solutions company’s full year results. WiseTech reported a 25% increase in revenue to $632.2 million and a 71% increase in underlying net profit after tax to $181.8 million. The latter was ahead of the consensus estimate of $175.7 million.

The post Why Domino’s, Iluka, Netwealth, and WiseTech shares are storming higher appeared first on The Motley Fool Australia.

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More reading

• WiseTech share price surges 11% on record profits
• Domino’s share price sizzles 10% higher following FY22 report, Asian expansion
• Netwealth lifts full-year dividend on record inflows
• WiseTech Global hikes full-year dividend by 71% as profits surge higher
• Netwealth share price rises 9% on strong revenue growth in FY22 results

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 positions in and has recommended Netwealth and WiseTech Global. The Motley Fool Australia has positions in and has recommended Netwealth and WiseTech Global. 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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The Telstra Corporation Ltd (ASX: TLS) share price is heading south during the early afternoon on Wednesday.

At the time of writing, the telco provider’s shares are down 2.06% to $4.05.

Why are Telstra shares slipping on Wednesday?

Following the release of the company’s full-year results, investors are eyeing Telstra shares as they go ex-dividend today.

The ex-dividend date is particularly important as it determines which shareholders will receive the company’s latest dividend.

If you held Telstra shares at yesterday’s market close, you will be eligible for the final dividend.

However, if you didn’t own them and bought them today, the dividend will go to the seller.

The reason why the shares are falling today is because investors tend to secure the dividend and then sell for a quick profit. Usually, the share drops by the same amount of the dividend that is to be paid out.

What does this mean for Telstra shareholders?

For those eligible for the Telstra dividend, you’ll receive a payment of 8.5 cents per share on 22 September. The dividend is fully-franked.

Notably, it’s the first time the board has increased the dividend since 2015 following the success of the T22 strategy.

This brings the full-year dividend to 16.5 cents apiece, which equates to a 115% earnings payout ratio. This follows Telstra’s updated capital management framework to “maximise fully franked dividend and seek to grow over time”.

Are Telstra shares a buy now?

Following the company’s financial scorecard, a couple of brokers weighed in on the Telstra share price.

According to ANZ Share Investing, the team at Morgans raised its price target by 0.9% to $4.60 per share. Based on today’s price, this implies an upside of 13.6% for investors.

On the other hand, Macquarie analysts had a different tone, cutting its price target by 7.3% to $3.80. This implies a downside of 6.2% from where Telstra shares trade today.

Telstra share price snapshot

Looking at the past 12 months, the Telstra share price has risen by almost 3% despite difficult trading conditions.

Telstra shares reached a multi-year high of $4.31 in January and are only 6.7% from breaking that feat again.

Telstra commands a market capitalisation of roughly $46.73 billion and has a dividend yield of 2.65%.

The post Why is the Telstra share price on the slide today? appeared first on The Motley Fool Australia.

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• 2 excellent ASX 200 dividend shares that brokers love
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• Hoping to ring in the latest Telstra dividend? Here’s what you need to do
• How have ASX dividend shares been performing this earnings season?

Motley Fool contributor Aaron Teboneras has positions in Telstra Corporation 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 positions in and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended Macquarie Group 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 FINEOS Corporation Holdings PLC (ASX: FCL) share price is heavily in the red today after the insurance software company released its earnings card for FY22.

Shares in the ASX tech company are trading down 6.14% at $1.53 apiece at the time of writing. They previously touched a high of $1.68 shortly after the market opened this morning.

Let’s go over what the company announced.

What did Fineos report?

• Total revenue up 17.5% year-over-year (YoY) to €$127.2 million (A$183.38 million)
• Gross profit up 15.3% YoY to €$83 million (A$119.62 million)
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) up 28.8% YoY to €$6.7 million (A$9.66 million)
• Annual recurring revenue (ARR) up 23.4% YoY to €$56.4 million (A$81.27 million)
• Statutory net loss after tax of €$26 million (A$37.47 million)

Fineos advised that it outperformed previous guidance for its subscription revenues, which grew by 34.3% to A$77.52 million and contributed significantly to its top and bottom lines. The organic growth of its services was stated to be 33.5%.

Fineos integrated several acquisitions into the business in FY22, including Spraoi’s suite of machine learning and artificial intelligence products. These integrations helped to expand revenues through cross-selling opportunities and inflated the company’s sales pipeline for FY23.

What else happened in FY22?

The company’s balance sheet strengthened through an influx of cash totalling A$63.84 million, before costs, from its share placement and purchase plans.

Fineos also said that its dominant North American operating segment grew to contribute more to the company’s top line, with total contribution growing from 73% to 79% of revenue.

Its headcount remained more or less the same, with 1,075 staff members and contractors. This is expected to stay the same in FY23.

What did management say?

Fineos founder and CEO Michael Kelly said:

FY22 has seen yet another year of strong growth across the key metrics we benchmark our business against, underpinned by our delivery on strategy.

Importantly, we achieved or exceeded the guidance we provided to the market even with the incredibly challenging operating environment faced by most businesses.

I would like to thank all our team for their continued dedication and support that enabled FINEOS to achieve several significant strategic milestones over the past year.

What’s next?

Fineos expects revenue for FY23 to fall within the guidance range of A$194.59 million and A$201.80 million, supported by a pipeline it built in FY22 through integrating its acquisitions into its operations.

More broadly, the company notes that it has a positive cash balance with no debt and that its trajectory means it is likely to achieve positive free cash flow in FY24.

Fineos share price snapshot

The Fineos share price is down 66.8% year to date. This is severely underperforming the S&P/ASX 200 Index (ASX: XJO), which is 7.67% lower over the same period.

The company’s market capitalisation is $488 million from today’s recent price action.

The post Fineos share price sinks 6% on $37.47 million loss appeared first on The Motley Fool Australia.

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More reading

• ‘On track’: Fineos share price climbs 6% on strong quarterly

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 recommended FINEOS Corporation Holdings plc. The Motley Fool Australia has recommended FINEOS Corporation Holdings plc. 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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In some much-needed relief for ASX investors, the S&P/ASX 200 Index (ASX: XJO) has finally rebounded today after the heavy losses we’ve seen this week. At the time of writing, the ASX 200 has gained a healthy 0.64% and is back over 7,000 points. But that’s nothing compared to the gains that the WiseTech Global Ltd (ASX: WTC) share price is seeing.

WiseTech shares are on fire today. The logistics technology company has gained an impressive 11.19% so far this Wednesday to $58.93 a share. That’s after closing at $53 yesterday and opening at $55.48 this morning.

Earlier in today’s session, the company rose as high as $59.32 a share, which is just a whisker below WiseTech’s 52-week high of $60.40.

WiseTech share price leaps 11% on bumper earnings report

This, of course, comes after WiseTech dropped its FY2022 earnings report before market open this morning.

As we went through at the time, this report saw WiseTech deliver some strong numbers. The company announced a 25% surge in revenues compared to FY2021 to $632.2 million.

Earnings before interest, taxation, depreciation and amortisation (EBITDA) also rose by 54% to $319 million. Meantime, statutory net profit after tax (NPAT) was up 80% to $194.6 million.

WiseTech also hiked its final dividend. Last year saw the company fork out 3.85 cents per share. But this year, WiseTech will be paying 6.4 cents per share, fully franked.

That’s the biggest dividend WiseTech shares have ever paid out, easily eclipsing the interim dividend of 4.75 cents that was doled out in April.

Once this dividend is paid out on 7 October, the company will have a dividend yield of 0.19% on today’s share price.

So it seems investors have given a full-throated endorsement of WiseTech’s earnings today, going off what is happening to the company’s shares.

Despite today’s massive share price gains, the WiseTech share price has just edged into the green in 2022 thus far, gaining 0.6% since the start of the year. However, investors have enjoyed a pleasing gain of 62.6% over the past 12 months.

At the current WiseTech share price, This ASX 200 tech company has a market capitalisation of $19.23 billion, with a trailing dividend yield of 0.15%

The post WiseTech share price surges 11% on record profits appeared first on The Motley Fool Australia.

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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 positions in and has recommended WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. 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) has returned to form on Wednesday after a difficult couple of days. In afternoon trade, the benchmark index is up 0.65% to 7,006.7 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Audio Pixels Holdings Ltd (ASX: AKP)

The Audio Pixels share price is down 10% to $15.20. This morning the digital speaker developer announced a $10 million placement to institutional and sophisticated investors. These funds were raised at a huge discount of $14.00 per new share. The proceeds will primarily go towards development, marketing and working capital, including repayment of outstanding debt. Maybe this means the company’s technology will finally be ready for commercialisation in the near future after years and years of development.

Coles Group Ltd (ASX: COL)

The Coles share price is down 3.5% to $18.06. This follows the release of the supermarket giant’s full year results for FY 2022. Although the company beat consensus estimates with its net profit after tax of $1,048 million, its outlook commentary appears to have spooked investors. Management warned that both its Liquor and Supermarket sales growth are expected to be impacted by the cycling of COVID-19 lockdowns in the first half of FY 2022 and price inflation in the second half.

EML Payments Ltd (ASX: EML)

The EML share price is down 14% to 85.7 cents. Things have gone from bad to worse for this payments company. This morning the embattled company revealed that it has identified fraudulent activity within its Sentenial business, with losses that could amount to $7.9 million. This is from fraudulent merchants within the debt processing business.

Nanosonics Ltd (ASX: NAN)

The Nanosonics share price is down 8% to $4.31. This appears to have been driven by a negative reaction to this infection control company’s full year results from brokers. One of those was Goldman Sachs. In response to its results, this morning the broker reiterated its sell rating with a price target of $3.50.

The post Why Audio Pixels, Coles, EML, and Nanosonics shares are sinking today appeared first on The Motley Fool Australia.

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More reading

• Why is the EML share price plummeting 15% on Wednesday?
• Coles shares trade on fully-franked yield of 3.5% after reporting higher profits
• Coles share price slides 5% as inflation hampers FY23 growth outlook
• 5 things to watch on the ASX 200 on Wednesday
• Why did the EML share price tumble 12% on Tuesday?

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 positions in and has recommended EML Payments and Nanosonics Limited. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET, EML Payments, and Nanosonics 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 Domino’s Pizza Enterprises Ltd. (ASX: DMP) share price is surging today after the fast food business announced its FY22 result and revealed Asian expansion plans.

At the time of writing, Domino’s shares are trading for $71.09 each, 6% higher, after reaching an intraday high of $73.94 a share this morning. That was a jump of more than 10%.

The 2022 financial year was a tricky one for Domino’s because it was trying to beat FY21’s numbers, which included boosted sales during COVID-19 lockdowns.

It was also tough for Domino’s to maintain its momentum in Japan after that country’s COVID-19 restrictions were lifted.

Domino’s profit drops

While Domino’s network sales increased by 4.6% to $3.92 billion, earnings before interest and tax (EBIT) dropped 10.5% to $262.9 million. Underlying net profit after tax (NPAT) also declined 12.5% to $165 million.

Australia and New Zealand EBIT grew $3.3 million, or 2.8% in percentage terms. At the same time, Asian EBIT sank 23.1%, or $25.6 million in dollar terms, due to a “rapid change in sales in Japan, following the lifting of a state of emergency”.

European EBIT fell 11%, or $9.7 million in dollar terms, with the largest driver being the increased investment in rebuilding the Danish business.

The company said it has reached a challenging but important milestone, as it transitions from ‘living with COVID’ to facing historic inflation.

Trading update

At the start of FY23, Domino’s revealed its network sales had fallen by 2.4% and same store sales had fallen 1.1%. But, it had added 13 new stores and noted that it was competing against very high sales in the prior comparable period. The Domino’s share price can be affected by how trading is going.

Management said that the business had a choice to be defensive or invest for growth at the start of COVID-19. It is continuing to choose to invest for growth.

Domino’s CEO and managing director Don Meij said a few things about the outlook, including the following about growth expectations for FY23:

With menu innovation in all markets and new, app-first technology to roll out this year – there is positive sales momentum, and we expect to be within our 3%-6% outlook for same store sales this year.

New store construction will rely on our ability to navigate inflation, and accordingly franchise profitability – our progress, combined with franchisee appetite, and investment in our people through our path to excellence, gives us confidence we will reach our store rollout target this year of 8%-10% new store openings.

Opening more stores, closer to customers, improves unit economics, builds customer satisfaction and loyalty, and will help us be the most efficient, sustainable delivery QSR.

We are a business focused on long-term growth, and we look forward to delivering.

According to reporting by The Australian, the UBS analyst Shaun Cousins said that the result missed earnings estimates due to weakness in Europe and that the organic store growth outlook was lowered, although long-term milestones were unchanged.

Same store sales growth was also below UBS estimates. But, the acquisitions in Asia were “positive”.

Asian expansion

Domino’s has entered into binding agreements to buy Domino’s Pizza businesses in Malaysia (240 stores), Singapore (38 stores), and Cambodia (nine stores).

The initial purchase price is A$214 million with an earnout payment to be determined over the next two to three years. The total consideration could be equivalent to A$142 million.  

The deal is priced at 10.1 times FY22’s normalised earnings before interest, tax, depreciation and amortisation (EBITDA).

As a result of the acquisition, Domino’s Pizza Enterprises is increasing its future store count outlook in Asia from 2,400 stores to 3,000 stores by 2033.

This deal adds around 5% to earnings per share (EPS) on a pro forma FY22 basis without synergies and excluding integration, reorganisation, and transaction costs.

Domino’s share price snapshot

Over the last month, Domino’s shares have risen by more than 3%.

The post Domino’s share price sizzles 10% higher following FY22 report, Asian expansion appeared first on The Motley Fool Australia.

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• Domino’s Pizza share price in focus as full-year sales near $4b
• 2 excellent ASX growth shares that analysts say are buys
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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 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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