The Sandfire Resources Ltd (ASX: SFR) share price has been among the best performers on the ASX 200 on Thursday.

In afternoon trade, the copper producer’s shares are up 12% to $5.84 following the release of its quarterly update.

Sandfire share price jumps on strong quarterly update

• Copper production of 28,774 tonnes
• Zinc production of 16,027 tonnes
• Gold production of 6,956 ounces
• C1 cost of US$1.17 per pound
• Quarterly sales revenue of US$343.1 million
• Quarterly earnings before interest, tax, depreciation and amortisation (EBITDA) of US$186.9 million

What happened during the quarter?

For the three months ended 31 March, Sandfire reported sales revenue of US$343.1 million and EBITDA of US$186.9 million. This was underpinned by a significant jump in copper production thanks to the transformational acquisition of MATSA, which it took control of on 1 February. This acquisition contributed operating EBITDA of US$98.6 million during the quarter.

This means the company is on track to achieve its production guidance of 92,000 to 95,000 tonnes of copper.

One slight negative, though not unexpected, was that Sandfire has increased its full year cost guidance. Driven by global inflationary cost pressures, the company has updated its full year C1 costs guidance to US$1.19 per pound. This compares to its previous guidance, which was also increased, of US$1.10 to US$1.20 per pound.

‘Transformational period

Sandfire’s Managing Director and CEO, Karl Simich, was very pleased with the quarter. He commented:

“The March Quarter was a transformational period for Sandfire. The completion of the MATSA acquisition, its successful and rapid integration into our business, and the excellent progress we are making with construction at Motheo, signal the start of an exciting new era of growth for our business.”

We are pleased to confirm the ongoing successful integration of the MATSA Operation, after receiving the keys on 1 February.

MATSA has made a strong initial contribution to the Group’s production, which is in-line with expectations and, combined with another robust performance at DeGrussa, puts us on track to achieve our updated Group production guidance for FY2022.”

And while Simich acknowledges that costs are rising, he highlights that prices are also been driven higher and offsetting this. He explained:

“The pressures of global cost inflation combined with the ongoing consequential impacts of COVID19 transmission, remain significant challenges for the resource sector globally. Sandfire is not immune from these challenges and, as a result, we have increased our C1 unit cost guidance for FY2022.

While cost inflation and rising energy costs in Europe are undeniable challenges, it’s important to remember that these same cost pressures are helping to drive up the prices for the metals we produce – many of which are at multi-year or all-time highs. This means that we are generating very healthy EBITDA cash-flow margins across the expanded business – as reflected in the strong sales revenue, EBITDA and operating cash-flows reported for the Quarter.”

The post Sandfire share price shoots 12% higher on ‘transformational’ quarter appeared first on The Motley Fool Australia.

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Shares in Melbana Energy Ltd (ASX: MAY) have crumbled today and now trade deep in the red. The company also released its quarterly update today as well.

At the time of writing, the Melbana Energy share price is fetching 9.7 cents apiece, 14% down from yesterday’s close.

Melbana advances oil programs last quarter

Key takeouts from the company’s release today include:

• Called total depth on its Alameda-1 well – the first of two exploration wells
• Three significant and highly energised oil intervals encountered, each containing moveable hydrocarbons
• AC/P70 permit in the Ashmore and Cartier Islands awarded to Melbana for an initial term of 6 years
• $15 million gross raised for Block 9 Cuba exploration well where Melbana is 30% operator
• $32.095 million in cash and equivalents at the end of the period

What else happend this period for Melbana?

During the three months, the Alameda-1 well encountered three independent intervals of energised moveable hydrocarbons.

The first interval is reported to have at least 48 metres of potential oil and gas pay, per the company.

“During the quarter, the company announced that an independent expert assessed the [interval] to have 2.5 billion barrels of oil in place and prospective resources,” Melbana noted.

Whereas the second interval was found to contain “a net hydrocarbon pay of approximately 100 metres measured depth (mMD)/88 metres total vertical depth (mTVD).”

Melbana was also awarded a petroleum exploration permit AC/P70 during the quarter. It is located on the Ashmore and Cartier Islands and was awarded for a period of 6 years.

Apparently, the AC/P70 permit contains the “undeveloped Vesta-1 oil discovery” previously drilled back in 2005. Whereas the ‘Vesta-2 appraisal well’ – drilled in 2007 – identified a gas cap at the site.

Management commentary

On a separate announcement also released today, regarding the Zapato-1 exploration well, Melbana Energy’s Executive Chairman, Andrew Purcell said:

Our Alameda-1 exploration well has delivered results considerably greater than our predrill expectations. Having found three significant and highly energised intervals of net hydrocarbon pay we were naturally keen to try and get some data on the oil’s composition and the likely performance of the reservoirs as soon as possible, but this will now have to wait for the formal testing program given that management of the high formation pressures made it complicated to repurpose our exploration well into a testing environment.

We’ll all have to be a little more patient, therefore, but gladly accept that the reasons for the challenges we faced in drilling Alameda-1 give us good reason to be optimistic about our future in Cuba. We are now revising our plans for testing in Alameda-1 whilst also preparing for the start of drilling at Zapato-1.

What’s next for Melbana?

The company noted it is updating the predrill resource assessment for two of its discovered intervals. It will release findings once they are received from the independent reserves certifier.

Furthermore, Zapato-1, the company’s second exploration well, is expected to commence drilling in the second half of May 2022.

Melabana Energy share price snapshot

In the last 12 months, the Melbana Energy share price has jumped almost 358% and has surged more than 331% higher this year to date.

Zooming in a bit closer, it has slipped 39% into the red during this past month and is down another 30% in the past week.

The post Here’s why the Melbana Energy share price just tanked 14% appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow has no positions 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 Bruce Jackson.

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The Paradigm Biopharmaceuticals Ltd (ASX: PAR) share price is racing higher during early afternoon trade on Thursday.

This comes after the biopharmaceutical company provided an update on its pivotal phase 3 clinical trial.

At the time of writing, the Paradigm share price is $1.29, up 4.88%.

What did Paradigm announce?

In today’s statement, Paradigm said the first subjects in the PARA_OA_002 clinical trial have been randomised and dosed in the United States.

The study’s objective is to evaluate the treatment of pentosan polysulfate sodium (PPS) on participants with knee osteoarthritis pain.

PPS, an injectable solution, aims to treat musculoskeletal disorders caused by injury, inflammation, aging, degenerative disease, infection, or genetic predisposition.

The semi-synthetic drug is packaged as Zilosul. It has been shown to reduce pain, improve joint function, and prevent cartilage damaging joints.

Paradigm noted that the first subject randomisation occurred at Northwestern University in Chicago. It was conducted by lead investigator Dr Thomas Schnitzer.

The PARA_OA_002 study is currently enrolling subjects at eight sites in Australia and 21 sites in the US. In addition, locations in the United Kingdom and Europe are expected to be initiated in 2022.

Paradigm will evaluate study participants using WOMAC pain and WOMAC function at multiple time points from day 56 to day 168.

WOMAC is a widely-used health tool that assesses physical function, pain, and stiffness in patients with osteoarthritis. The self-administered instrument gives a score range for each of the three subclasses to indicate the patient’s health status.

Management commentary

Paradigm chief medical officer and interim CEO Dr Donna Skerrett said:

To have our first subjects randomised in the US is an important milestone in the OA clinical program.

The Paradigm clinical team has been working tirelessly to initiate and activate sites throughout the US and we are seeing a large number of subjects entering the screening phase throughout the US.

We look forward to continuing the strong momentum in the phase 3 program and reporting important recruitment milestones to our shareholders.

Paradigm share price snapshot

From November 2021, the Paradigm share price has been on a trending decline.

Paradigm shares hit an all-time low of 92.5 cents last month and have since moved in a sideways channel.

While falling 44% over the past 12 months, the bulk of these losses have come in 2022 — down 32%.

Based on valuation grounds, Paradigm commands a market capitalisation of roughly $286.19 million.

The post Why is the Paradigm share price surging 5% today? appeared first on The Motley Fool Australia.

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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 Bruce Jackson.

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The Green Technology Metals Ltd (ASX: GT1) share price is in the green today amid a capital raise and details of a new investor.

Minutes after the market open this morning, the ASX lithium share surged to an all-time record high of $1.25. That’s a 7.75% bump on yesterday’s closing price of $1.16.

Let’s take a look at what this ASX lithium explorer announced to the share market today.

Lithium Americas invests in Green Technology Metals

Green Technology Metals is conducting a share placement in two stages to raise about $55 million.

The company said it has received firm commitments for a two-tranche placement of 52.4 million new shares at $1.05 each. This is a 9.1% discount on the stock’s last closing price before yesterday’s trading halt.

Lithium Americas Corp (NYSE: LAC) is investing US$10 million in Green Technology Metals as part of this placement. Lithium Americas is developing lithium in Argentina and Nevada, US. The company has a market capitalisation of about US$3.4 billion.

Commenting on the news, Green Technology Metals CEO Luke Cox said:

We are delighted to have secured such a strong spread of new and existing investors to this transformational equity raising.

The endorsement of leading lithium company, Lithium Americas, also reinforces our positive view on the prospectivity of our assets.

Green Technology Metals will use the funds from this capital raise for exploring and developing lithium assets in Ontario, Canada. This includes completing a feasibility study for the Seymour Lithium Mine project.

Recapping the growth of this ASX lithium share

The Green Technology Metals share price has surged 81% in the year to date and 205% in the past year. In comparison, S&P/ASX All Ordinaries Index (ASX: XAO) has fallen 3.8% in the year to date and gained 4% over the past 12 months.

Green Technology Metals has a market capitalisation of about $232.78 million.

The post Green Technology Metals share price lifts on Lithium Americas investment appeared first on The Motley Fool Australia.

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• Guess which ASX lithium share has leapt 30% in a month to trade at all-time highs?

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 Bruce Jackson.

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Shares in Newcrest Mining Ltd (ASX: NCM) are tracking lower today and now trade at $26.62 apiece, a 1.33% loss on the day. Meanwhile, spot gold is now fetching US$1,884 per ounce after trading down the past few sessions.

Newcrest also released its quarterly earnings update today, reporting a “stronger performance in the March 2022 quarter”.

Newcrest grows portfolio, updates guidance

Key takeouts from the company’s report today include:

• Gold production of 480 thousand ounces (koz) and copper production of 31kt
• All-In Sustaining Cost (AISC) of $1,008 per ounce, a 10% drop for the period
• AISC margin of $809/oz
• Cadia PC1-2, Red Chris Block Cave and Havieron Stage 1 Feasibility Studies on track
• Addition of a Tier 1 mine in a world class jurisdiction to Newcrest’s unrivalled asset portfolio
• Strong drilling results at Red Chris and Havieron continue to expand the higher grade footprint

What else happened this period for Newcrest?

For the quarter, gold production was 10% higher than the same time last year. Newcrest says this was driven by three main factors: higher mill throughput at Cadia; the addition of production from Brucejack; and improved gold head grade and recovery at Lihir.

Throughout the quarter Newcrest saw gold production of 480koz and copper production of 31kt. This was realised on a lower AISC compared to last year and an AISC margin of $809/oz.

“Newcrest’s AISC for the March 2022 quarter of $1,008/oz2 was 10% lower than the prior period, reflecting a higher realised copper price, higher gold and copper sales volumes, lower sustaining capital expenditure and the benefit of a weakening Australian dollar against the US dollar on Australian dollar denominated operating costs,” the company said.

Injury rates were also reported down which the company says is a reflection of its “Safe Hands” intervention program, prioritising the reduction of hand injuries.

Aside from that, Newcrest also advanced on feasibility studies and drilling programs at its Havieron and Red Chris Block Cave sites.

Management commentary

Speaking on the results, Newcrest Managing Director and Chief Executive Officer, Sandeep Biswas said:

Newcrest delivered an excellent operational and safety performance during the quarter, building momentum for a strong finish to the financial year and positioning us well to meet our updated Group FY22 guidance, which reflects the addition of Brucejack and our operating and financial performance to date.

With the Cadia SAG mill motor operating at full capacity and an improved performance at Lihir, gold and copper production increased for the third consecutive quarter, driving the continued decline in our All-In Sustaining Cost. It was also very pleasing to see further reductions in our injury rates and progress made against our sustainability commitments.

What’s next for Newcrest?

The gold giant also updated its projections for the remainder of FY22. This has come on the back of completing the Pretium transaction, it says.

“Higher gold production and a lower All-In Sustaining Cost is now anticipated, with production stripping and major capital expenditure expected to be lower due to COVID-19 related disruptions to projects and reduced activity at Lihir,” the company noted.

Lihir is expected to deliver around the bottom of its original production guidance range (approximately 700koz) for FY22 with a strong fourth quarter anticipated due to lower planned maintenance and improved pumping capacity in Phase 14 which is expected to increase delivery of higher grade ore to the mill.

Newcrest share price snapshot

In the last 12 months, the Newcrest share price has held gains and is less than 1% higher in that time. This year to date it has spiked 9%, although it has levelled off in recent weeks.

The post Newcrest share price slumps despite earnings guidance boost appeared first on The Motley Fool Australia.

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• How is the Newcrest share price tracking in 2022?

Motley Fool contributor Zach Bristow 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 Bruce Jackson.

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The SILK Laser Australia Ltd (ASX: SLA) share price is soaring today following the release of the company’s trading update.

The laser clinic company’s shares are whooshing 9.5% higher at the time of writing to $2.88 apiece. However, in earlier trading, the shares hit an intraday high of $2.95. That’s a 12% jump on yesterday’s closing price of $2.63.

What did SILK Laser announce?

According to its release, SILK Laser is on track to deliver its projected EBITDA target for FY22. Ahead of analysts’ consensus, this has led the SILK Laser share price to roar during today’s session.

For the nine months ending 31 March 2022, the company achieved network cash sales of $116.6 million. This reflected a 91% increase over the prior corresponding period (pcp). It included seven months of sales from its recent acquisitions, Australian Skin Clinics and The Cosmetic Clinic in New Zealand.

In addition, like-for-like cash sales, adjusted for lost trading days due to COVID-19 lockdowns, grew to $101.6 million, up 4%.

Management noted that despite the tough macroeconomic conditions impacting the industry, the business continued to perform strongly.

Notably, a substantial proportion of the above revenue comes from injectable services (45%). This category generates higher transaction values, higher margins, and repeat purchases for SILK Laser.

The company’s franchise partner network continues to expand with three new clinics opening in 2022. It plans to open between 6 to 10 clinics over the next twelve months.

With 121 clinics operating across Australia and New Zealand, SILK Laser is forecasting FY22 EBITDA of at least $20 million.

What did management say?

SILK Laser founder and managing director Martin Perelman commented:

The foundations of the SILK business are strong, especially as we continue to expand our service mix — growing the share of the Injectables category that is especially resilient, even in a tough operating environment.

About the SILK Laser share price

Over the past 12 months, SILK Laser shares have posted a loss of 36%. They are down 32% year to date.

The share price hit an all-time low of $2.62 yesterday.

Based on today’s improved price, SILK Laser presides a market capitalisation of roughly $139.41 million.

The post Here’s why the SILK Laser share price is zipping 12% higher today appeared first on The Motley Fool Australia.

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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 recommended SILK Laser Australia Limited. The Motley Fool Australia has recommended SILK Laser Australia Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Accent Group Ltd (ASX: AX1) share price is having a better day on Thursday.

At the time of writing, the footwear focused retailer’s shares are up 1.5% to $1.47.

Why is the Accent share price rising?

Investors have been bidding the Accent share price higher today after the retail conglomerate announced some major changes to its operations.

According to the release, the company has recently undertaken a review which examined the future investment requirements, ease of scalability, and return on investment (ROI) across all of its businesses and brands.

What are the changes?

The release advises that the company will continue to invest in new stores, with 140 stores expected to open in FY 2022. It will also close stores where sustainable renewal terms cannot be achieved.

Management intends to accelerate the growth plan for Glue Store, which it notes is continuing to perform strongly. This will include growing vertical apparel brands acquired with Glue Store.

The Stylerunner business will also continue its ambitious growth plan, with a strong focus on the Stylerunner The Label vertical apparel and further store rollouts.

Continuing with the theme, Accent will look to grow the Trybe business and pursue more buy backs of The Athlete’s Foot franchise.

It isn’t all good news for its brands, though. One brand that won’t be continuing its journey is Pivot. Management intends to transition 14 Pivot stores into other banners within the group. It made the decision after determining that it is still a long road to strong investment returns and that the resources utilised in this business can be better deployed by converting the stores into other high performing banners. This is expected to result in one-off, non-cash charges of approximately $5 million in FY 2022.

In addition, the company will not be renewing the Sperry distribution agreement which expires in December. It will also restructure the Reebok distribution agreement to move the distribution to a new Australian distributor. However, it will retain access to a full range of Reebok products at strong margins for the next 10 years.

To support these decisions, the company’s management structure has also been refocused and simplified. This will see its operations split into three divisions, each with its own CEO.

Management commentary

Accent’s CEO, Daniel Agostinelli, was disappointed with the Pivot situation but believes it is in the company’s best interests. He said:

“This review enabled us to have a clear view on those businesses which deliver, or which we believe will deliver, strong positive investment returns so that we may in turn continue to invest and drive growth in those businesses.

We are naturally disappointed to be transitioning the Pivot stores, but we have always taken a strict approach to value creation and if something isn’t meeting our return hurdles, then we look to redeploy our assets to other parts of the business or to new businesses that do so.

To that end, we are continuing our aggressive growth plan for Stylerunner and accelerating our growth plan for Glue Store.”

Trading update

Also potentially giving the Accent share price a lift today was an update on its current performance.

While its trading update was short on detail, it revealed that sales have improved from the 10% like for like sales decline reported for the first eight weeks of the second half. However, management concedes that sales are still subdued compared to expectations.

Nevertheless, thanks to its focus on a full price, full margin sales strategy, the company has seen an improved gross profit margin ahead of both expectations and last year. Furthermore, overall inventory levels are in line with plan, although it continues to experience some delays and cancelations from third party brand partners.

No guidance has been given for the remainder of the year due to ongoing uncertainty.

The post Accent share price lifts following key ROI decisions appeared first on The Motley Fool Australia.

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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 recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Many ASX investors will be rejoicing today after the market opened strongly higher this morning. The S&P/ASX 200 Index (ASX: XJO) is currently up by 0.99% at just over 7,330 points. This comes after the ASX 200 posted some big falls earlier this week. But one ASX 200 blue-chip share isn’t joining the party today. That would be the Woolworths Group Ltd (ASX: WOW) share price.

In stark contrast to the enthusiastic rise of the broader market, Woolworths shares are currently up by a rather paltry 0.21% so far today at $37.97 a share after spending most of the morning in the red.

So what’s going on with Woolies? Well, it’s nothing to do with anything Woolworths has put out itself. The company hasn’t made any ASX announcements for weeks now.

Why is the Woolworths share price being left out in the cold today?

But if we look at what’s happening across the market today, we can identify a trend that might explain this situation. Woolworths’ ASX sector – consumer staples – is one of the worst-performing sectors on the ASX today, and one of the few in the red. That’s why many of Woolworths’ peers, including Coles Group Ltd (ASX: COL), Metcash Limited (ASX: MTS) and Endeavour Group Ltd (ASX: EDV), are all underperforming the markets so far.

Consumer staples shares are companies that sell food, drinks and household essentials. They are often viewed as a ‘safe harbour’ of sorts when there is fear and selling pressure in the markets. That might explain why Woolworths shares, as well as some of the others listed above, were some of the ASX 200’s best performers when we were seeing those nasty market-wide falls earlier this week, as we covered at the time.

But this trend seems to be cutting both ways today. As the markets recover from the week’s earlier losses, consumer staples shares are being left behind. Perhaps a prescient reminder that safety doesn’t come free on the share market.

At the current Woolworths share price, this ASX 200 blue-chip share has a market capitalisation of $45.99 billion, with a dividend yield of 2.48%. 

The post Why is the Woolworths share price missing out on the ASX party today? 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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Adore Beauty Group Ltd (ASX: ABY) share price is charging full steam ahead on Thursday after the company posted its third-quarter update.

In the early hours of trading, shares in the online cosmetics retailer are getting a positive reception. ASX investors have pushed the Adore Beauty share price up 2.1% to $1.70. In earlier trading, it stretched higher to $1.74 — a gain of 4.8% on yesterday’s closing price.

For context, the S&P/ASX 200 Index (ASX: XJO) is enjoying a bounceback of 0.99% today.

Adore Beauty share price sparkles on glamorous quarter

• Revenue up 9% on prior corresponding period (pcp) to $42.7 million
• Active customers increased 7% to 880,000
• Returning customers up 47% compared to pcp
• On track for private label launch in fourth-quarter FY22
• Loyalty members contributed more than 60% of total revenue.

What else happened during the quarter?

Adore Beauty shareholders have endured a disastrous past month, with the share price down 20%. A shot of good news from the cosmetics company today is just what they needed, it seems.

Today, Adore revealed a relatively strong quarter as the economy continues to reopen. Booking $42.7 million during the three-month period, the online retailer has now taken its compound annual growth rate (CAGR) to 26%.

Notably, the company witnessed promising signs from its strategic initiatives during the quarter. For example, Adore Beauty’s native app accounted for more than 10% of revenue — strengthening engagement and conversion.

What did management say?

On the back of the solid result, Adore Beauty CEO Tennealle O’Shannessy said:

Adore Beauty has delivered a strong quarterly performance in a reopening environment, a very pleasing outcome given the 47% revenue growth recorded in the PCP, and having to navigate some supply chain pressures during the period. Importantly, our loyalty-focused strategic initiatives are enabling us to convert new customers to loyal, valuable returning customers.

What’s next?

For investors looking to get a clue on what the next quarter might look like, the update provided little insight. However, the company did note it plans to launch its first private label products in the upcoming quarter.

Adore Beauty share price snapshot

As investors have rotated out of consumer discretionary investments, the Adore Beauty share price has suffered. Since the beginning of the year, the shares have lost 59% in value. They hit new all-time lows along the way.

The poor performance has coincided with a reduction in earnings. At the end of 2021, Adore delivered $4.489 million in 12-month trailing profits. A year on and that same metric has reduced to $276,000.

The post Adore Beauty share price glows following ‘strong quarterly performance’ appeared first on The Motley Fool Australia.

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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 recommended Adore Beauty Group Limited. The Motley Fool Australia has recommended Adore Beauty Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The AMP Ltd (ASX: AMP) share price is taking off as the company confirmed it’s found a buyer for the last piece of its Collimate Capital business.

International digital infrastructure firm, DigitalBridge, has agreed to buy Collimate’s international infrastructure equity business. The transaction’s set to be worth up to $699 million.

At the time of writing, the AMP share price is $1.14, 10.73% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is back in the green today, gaining 0.97%. Meanwhile, AMP’s home sector – the S&P/ASX 200 Financials Index (ASX: XFJ) – is up 0.61%.

Let’s take a closer look at AMP’s latest sale agreement.

AMP share price rockets on final Collimate sale

The AMP share price is roaring higher as the company confirms the final sale of its multifaceted divestment of Collimate Capital – a business previously earmarked to be demerged.

The international infrastructure equity business boasts $9 million of assets under management.

And what a divestment it is. The final piece of the puzzle could see DigitalBridge forking out $699 million.

DigitalBridge will hand AMP an upfront cash payment of $462 million for the business.

It might also be liable to pay an estimated $57 million of retained future carry and performance fees and up to $180 million of fees contingent on future fundraisings.

The sale follows the $430 million sale of Collimate’s domestic infrastructure equity and real estate business – announced yesterday – and the $578 million sale of its infrastructure debt platform – completed in February.

The transactions suggest Collimate Capital has a value of $2.04 billion, including the value of retained assets. That figure jumps to $2.52 billion when including the maximum earnouts.

Though, AMP doesn’t expect to receive the full earnout for either of the sales announced this week.

AMP plans to give most of the funds raised through the sales to shareholders through a capital return. It will also use some of the cash to pay down some of its debt.

The sale of Collimate’s international infrastructure debt and equity platforms and its real estate and domestic infrastructure equity business is expected to bring AMP a combined net capital increase of approximately $1.1 billion.

The company expects that the incremental transaction and separation costs to sell the 2 Collimate Capital businesses will be approximately $20 million, post-tax.

What did management say?

AMP CEO, Alexis George commented on the news driving the company’s share price higher today, saying:

These sales realise significant value for shareholders and deliver certainty for clients and for our people.

In DigitalBridge and Dexus Property Group (ASX: DXS) we are confident we have found the right owners for both businesses … We expect both will add significant value through their scale, capability, and depth of talent, which our teams will complement.

Post completion of the two sales, AMP Limited will be a more focused entity, concentrated on driving our core banking and retail wealth businesses in Australia and New Zealand, with a core objective of accelerating our strategy and increasing our competitiveness.

AMP share price snapshot

Today’s gains have helped boost the AMP share price further into the long-term green.

Right now, the financial services company’s stock is trading 14% higher than it was at the start of 2022.

It has also gained 3% since this time last year.

The post AMP share price surges 11% as $699m Collimate deal confirmed appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Coles, Fortescue, and Pilbara Minerals release quarterly updates
• AMP share price sinks amid latest Collimate deal news
• AMP share price sinks amid asset sale complications 
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• How the federal election will impact ASX shares: top economist

Motley Fool contributor Brooke Cooper 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 Bruce Jackson.

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