Excitement has returned to the Ramsay Health Care Limited (ASX: RHC) share price amid a $20 billion takeover bid.

The news hitting the headlines yesterday was met with eagerness as investors snapped up shares in the healthcare giant. In turn, the $88 per share offer made by the KKR consortium reignited the Ramsay fuse — converting the share price from a dormant slow mover into a flaring firecracker.

As the two conduct their due diligence, a major Ramsay shareholder is said to have already thrown their support behind the deal. However, with ASX-listed Ramsay Health Care shares having been out of the limelight for a while, onlookers might be wondering: who are the major shareholders in Ramsay Health Care?

Let’s take a look.

Standing in the way of a $20 billion payday

There are plenty of hurdles to be cleared before the indicative proposal reaches Ramsay shareholders. Currently, the process is still in the first innings, with satisfactory due diligence yet to be finalised.

However, assuming the scheme arrangement ticks all the other boxes, including approval by the Foreign Investment Review Board, then shareholders of Ramsay Health Care will have the final say. So, what does the share registry look like?

The five largest shareholders in ASX-listed Ramsay Health Care hold roughly 30.5% of the total equity in the company. It stands to reason that these shareholders will play an important role in approving the bid.

Notably, the largest shareholder is Paul Ramsay Holdings Pty Ltd, with an 18.88% shareholding. The holding company contains the late founder’s shares. These shares, valued at more than $3 billion, are held as a bequest to the Paul Ramsay Foundation.

The other four largest shareholders are as follows:

• BlackRock Inc – 5.05%
• The Vanguard Group Inc – 3.73%
• Michael Siddle – 1.71%
• Norges Bank Investment Management – 1.15%

How many retail investors hold Ramsay Health Care on the ASX?

While it appears that the power of the decision lies in the hands of a few large investment banks and a foundation, there are still plenty of retail investors on board as well.

At the time of writing, the general public constituted 61.5% of ownership in Ramsay Health Care. That means as a cohort, retail investors will hold more say in the final decision than the top five largest shareholders.

As an ASX-listed investment, Ramsay Health Care shares have returned 24.5% over the past five years. This is beefed up from 12.6% thanks to the contribution made by dividends.

The post Who will have the final say on whether Ramsay Health Care leaves the ASX? 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 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 Bruce Jackson.

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With the federal election finally called for Saturday May 21, what does this mean for investing in ASX shares?

AMP Ltd (ASX: AMP) chief economist Shane Oliver analysed what patterns have been seen in the past, and what investors can expect this time.

Consumer and market sentiment around elections

There is a perception that elections cause the economy to slow down as consumers put away their wallets in the face of political uncertainty.

But this stereotype isn’t entirely backed up by hard data.

“There is no clear evidence that election uncertainty [affects] economic growth in election years,” Oliver wrote on the AMP blog.

“In fact, since 1980 economic growth through election years averaged 3.5%, which is greater than average growth of 3% over the whole period.”

But as for ASX shares, Oliver said there is some evidence that the political variability causes them to drift sideways for a while.

And there is certainly no pattern of stocks going in a particular direction after a change of government, regardless of which party wins.

“Based on history it’s not obvious that a victory by any one party is best for shares in the immediate aftermath,” said Oliver.

“Shares rose sharply after the 1983 Labor victory but fell sharply after their 2007 win, with global developments playing a role in both. After the 1996 and 2013 Coalition victories shares were flat to down.”

ASX shares do not perform better because of the choice of party

There is a stereotype that the Coalition is more “business friendly” and would therefore be better for ASX share prices.

And Oliver concedes, since World War II, ASX shares have returned 13% per annum under Coalition governments and 10% under Labor.

But context shows international events had more to do with that than the ruling party.

“It may be argued that the Labor governments led by Whitlam in the 1970s and Rudd and Gillard had the misfortune of severe global bear markets,” Oliver said.

“And the economic rationalist and reformist Hawke/Keating government defied conventional perceptions that conservative governments are better for shares. Over the Hawke/Keating period from 1983 to 1996 Australian shares returned 17.2% pa.”

Not much economic difference this election

Oliver reckons that the 2022 campaign, especially, shows very little difference between the economic policies of the major parties.

Labor was burned from its 2019 experience when a distinctive stance from the Coalition cost it a win.

“In the 2019 election, the ALP offered a radically different policy agenda focussed on a significant increase in the size of government (particularly via more spending on health and education) financed by a significant increase in taxation,” said Oliver.

“Following its defeat at that election, with the tax agenda taking much of the blame, the ALP has adopted a less left leaning agenda going into this election.”

Of course, the irony is that the COVID-19 pandemic then brought on a massive government under the Coalition anyway, with all the financial support handed out.

All this means that a change of government to Labor will not have any impact on where ASX shares would have headed anyway.

“Like the Coalition, the ALP is largely seeking to repair the budget through economic growth rather than austerity and its priority areas of energy, skills, the digital economy, childcare & manufacturing have a significant overlap with the Coalition,” said Oliver.

“So, while there may be a little more nervousness in investment markets about Labor, it’s hard to see a big impact on markets if there is a change in government.”

One huge risk

So it seems the stock market’s fate is not dependent on which party wins the May election.

But Oliver notes that there is one result that could trigger even more uncertainty on top of an already volatile investment environment.

“The main risk for investment markets may come if neither the Coalition or Labor win enough seats to govern, forcing a reliance on minor parties or independents,” he said.

“[This] could force a new government down a less business friendly path — such as the Greens demanding an ALP led minority government implement their proposed super profits taxes – although the Senate may act as a brake on this.”

The post How the federal election will impact ASX shares: top economist appeared first on The Motley Fool Australia.

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• ASX 200 midday update: AMP asset sale talks, Syrah rockets
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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 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 Challenger Ltd (ASX: CGF) are charging north today and are now trading 8.2% higher at $7.39 apiece.

The Challenger share price is on the move after the financial services company released its quarterly results for the third quarter of FY22.

Challenger grows sales by 10%, confirms guidance

Key takeouts from Challenger’s quarter include:

• Life sales of $2.7 billion, up 10% for the quarter
• Life book growth of $500 million, or 2.8%, for the quarter
• Funds under management (FUM) at $100 billion, down 3% for the quarter excluding the derecognition of Whitehelm Capital following its sale
• Group assets under management (AUM) of $106 billion
• Normalised net profit before tax expected to be towards the upper end of $430 million to $480 million FY22 guidance range

What else happened this quarter for Challenger?

Challenger said that Total Life net flows were $491 million for the quarter. This included annuity net inflows of $286 million and inflows of $205 million to its Other Life segment.

Further, sales to institutional clients grew by 10% to $2.1 billion during the period. Growth was underscored by “strong Challenger Index Plus sales of $1.1 billion (up 30%) and institutional term annuity sales of $1.0 billion”.

Excluding its sale of Whitehelm Capital, FUM reduced by 3% for the quarter, and included “negative investment market movements of $1.9 billion and net outflows of $1.7 billion,” Challenger says.

The group also left the quarter well capitalised with 1.65 times the minimum amount of ‘prescribed’ capital set by the Australian Prudential Regulation Authority (APRA).

Management commentary

Speaking on the announcement fuelling the Challenger share price today, managing director and chief executive officer Nick Hamilton said:

Challenger is a unique business with an exciting opportunity to meet the needs of more customers. This quarter, our business continued to perform well, highlighting the benefits of our diversification strategy.

The Life business maintained its impressive performance, with book growth of 2.8% for the quarter. Sales growth exceeded 10% across both institutional and retail, reinforcing the success of our strategy to extend our customer reach and broaden our distribution channels.

Product innovation remains a key priority and our market-linked annuity reflects our commitment to meeting the needs of more customers. The market-linked annuity has now been added to approved product lists of key financial advice businesses and initial feedback and engagement from financial advisers has been positive.

What’s next for Challenger?

Challenger reiterated its FY22 normalised net profit after tax (NPAT) guidance. It now expects NPAT to fall at the upper end of the $430 million to $480 million guidance range.

“Challenger remains on track to achieve full-year profit guidance and now expects to be towards
the upper end of the range,” Hamilton added.

“As we look to the future, we are well placed to continue our growth trajectory, meet the needs of
more customers, and deliver on our purpose to provide financial security for a better retirement.”

Challenger share price snapshot

In the last 12 months, the Challenger share price has climbed 31%. It is also up 12% this year to date, and 5% over the past month.

The post ‘Exciting opportunity’: Why the Challenger share price just leapt 8% appeared first on The Motley Fool Australia.

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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 recommended Challenger 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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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.

What happened

While Tesla (NASDAQ: TSLA) CEO Elon Musk has been making headlines for other reasons in recent days, the focus for investors turns back to his electric car company this afternoon. Tesla is set to report first-quarter earnings after the bell today, and investors seem pessimistic about what they’ll hear. Shares of the electric vehicle (EV) leader were trading down 4.2% as of 2:23 p.m. ET today. 

So what 

There have certainly been some positive highlights for the company so far this year. But Tesla investors seem to be concerned about what the impacts to production will be from COVID-19-related lockdowns in Shanghai. Tesla opened the Shanghai plant — its second production facility — in 2018, and it has been a large contributor to the company’s explosive growth. 

Now what

The Shanghai plant has been supplying the large market in China as well as its European customers. The suspension of production there won’t have nearly as much impact on the first quarter as it will on second-quarter production, since it only began near the end of the first quarter on March 28. But investors are likely thinking guidance for second quarter will be hit, and that might be what is concerning them ahead of the report. 

Tesla is expected to report a huge increase in earnings compared to the year-ago period, but the $2.2 billion in expected first-quarter profit would be slightly lower than the record $2.3 billion reported in the fourth quarter of 2021.

Tesla also has been battling increases in raw material costs. It raised prices on the vehicles produced in the Shanghai plant during the first quarter. Investors will want to hear more about how inflation may be impacting profit margins, and will be focused on what the overall impacts will be from the Shanghai plant production delays. Leading up to the report, investors seem to be expecting the worst. 

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

The post Why investors are selling Tesla stock ahead of today’s earnings appeared first on The Motley Fool Australia.

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Howard Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Tesla. 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. 

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

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The CSL Limited (ASX: CSL) share price is edging higher in early trading after the ASX healthcare share revealed details of its debt funding for its acquisition of Vifor Pharma Ltd.

At the time of writing, CSL shares are swapping hands for $265.66 apiece, a gain of 0.44%.

The biotechnology giant intends to use the cash proceeds from the offering to partially finance the proposed acquisition of Vifor, which the company announced in December 2021. Some of the money will also be used for general corporate purposes.

What did CSL announce?

The CSL share price is gaining after the company revealed it has priced US$4 billion of bonds in the US market. The notes were issued by CSL Finance and are guaranteed by the parent company.

There were six different tranches of notes:

• US$500 million of 5-year notes with an interest rate of 3.85%
• US$500 million of 7-year notes with an interest rate of 4.05%
• US$1 billion of 10-year notes with an interest rate of 4.25%
• US$500 million of 20-year notes with an interest rate of 4.625%
• US$1 billion of 30-year notes with an interest rate of 4.75%
• US$500 million of 40-year notes with an interest rate of 4.95%

Management commentary

CSL chief financial officer Joy Linton said:

We are pleased with the outcome of the bond issue from both a demand and pricing perspective. It also provides depth and flexibility for our long-term capital management program.

The strong support shown by investors towards our inaugural US dollar bond issue reflects positively on our track record of disciplined financial management, as well as confidence in our strategy to invest in our leading therapeutic capabilities and generate sustainable growth.

Vifor acquisition

CSL said the regulatory process for the Vifor Pharma acquisition is on track to be completed by June 2022.

The company has also completed a A$6.3 billion institutional placement to fund the deal.

CSL describes Vifor Pharma as a global specialty pharmaceutical company with leadership in renal disease and iron deficiency.

CSL also said it would enhance CSL’s patient focus and ability to protect the health of those facing a range of rare and serious medical conditions. It also expands CSL’s presence in the rapidly growing nephrology market.

In terms of the financial side, CSL said it would add to revenue and cash flow. It was expecting to be able to achieve US$75 million of pre-tax cost synergies over three years after the deal is completed.

Management expects the deal to add to underlying net profit after tax (NPAT) in the low-to-mid-teens in the first full year of CSL ownership, including the cost synergies. This could be helpful for the CSL share price.

One of the latest ratings comes from Citi. It rates CSL as a buy with a price target of $335. That implies a potential upside of around 26%.

The post CSL share price lifts amid US$4b debt raise appeared first on The Motley Fool Australia.

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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. owns and has recommended CSL Ltd. 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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Origin Energy Ltd (ASX: ORG) is one of the more notable dividend shares in the S&P/ASX 200 Index (ASX: XJO).

Origin has been handing its investors payouts since it was listed on the ASX following its demerger from Boral Limited (ASX: BLD) in 2000.

But what kind of dividend yield is the share boasting right now?

The Origin Energy share price is in the green today. It’s currently up 2.1%, trading at $6.82.

For context, the ASX 200 is also up on Thursday. It has gained 0.25% at the time of writing.

What is Origin Energy’s current dividend yield?

Have you owned Origin Energy shares for the last year? You’ve likely received 20 cents of dividends in that time.

The energy producer and retailer handed out a 7.5 cent final dividend for the financial year 2021 and a 12.5 cent interim dividend in March.

The former represented a free cash flow payout of 31% – just within the company’s target payout range of 30% to 50%. The latter, however, represented a free cash payout of 66%.

Both dividends were unfranked. Origin Energy hasn’t paid a franked dividend since early 2020.

No doubt, all eyes will be on the company’s next dividend when it drops its earnings for financial year 2022 on 18 August.

So, what is Origin Energy’s current dividend yield?

Based on its previous closing price of $6.68, the company has a 12-month trailing dividend yield of 2.99%.

That’s a relatively healthy dividend yield by many accounts. Though, it doesn’t compare to some of the company’s ASX 200 peers. As The Motley Fool Australia’s Sebastian Bowen reports, numerous ASX 200 shares were trading with dividend yields of more than 9% last month. But they were all ASX miners and financials.

Origin Energy share price snapshot

The Origin Energy share price has been on a roll in 2022 so far.

Right now, it’s 27% higher than it was at the start of the year. It has also gained 68% since this time last year.

The post Are Origin Energy shares really trading on a 3% dividend yield? appeared first on The Motley Fool Australia.

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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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Commodity markets are booming in 2022 amid a wave of catalysts. Turns out, that’s been equally as harsh for ESG and ethically focused share baskets.

As a sector – which is still poorly defined on Australian public markets, mind you – renewables have lagged other segments such as financials, utilities and materials this year.

How can we tell? Whilst there’s no specific ASX renewables index, EFTs tracking the segment have crept downwards this year, as is shown further below.

Evidently, as markets have endured volatility in 2022, that’s translated to a fairly strong headwind for ASX renewables shares, and at the end of the day, the sector is in the red in 2022.

Nonetheless, scaling back to the start of the year, some names have absorbed losses better than others. Let’s take a look at those.

‘Green’ shares aren’t in the green

Unfortunately, on an individual stock level, what we define as a ‘renewables’ share is quite narrow. Actually, there are no real winners per se, but some shares absorbed selling pressures better than others.

Let’s talk in terms of energy first and, with that, results aren’t good.

Renewables investor Infratil Ltd (ASX: IFT) is down 2.45% year to date but has whipsawed higher over the past three months. Although, its price chart looks like a 9.0 scale reading on the Richter scale.

Meanwhile, Genesis Energy Ltd (ASX: GNE), owner of a diverse portfolio of thermal and renewable generation assets located in different parts of New Zealand, has slipped 3.3%.

Trends are similar across the board and it appears any capital that’s left the sector has been shipped straight across to the adjacent resources, traditional energy, and wider commodities segments.

Alas, it’s no better for the exchange-traded funds (ETFs), with the Vanguard Ethically Conscious International Shares INDEX ETF (ASX: VESG) creeping down by 13%.

Meantime, the VanEck MSCI Australian Sustainable Equity ETF (ASX: GRNV) has fallen by more than 5% and is in a similar vein to the product above.

Finally, the Russell Investments Australian Responsible Investment ETF (ASX: RARI) has crept up hard in 2022 and is 4 basis points higher in that time.

It’s important to zoom out

Longer term – since last January to be specific – the picture’s a bit different. Three of the four securities have remained buoyant over that time, albeit Genesis Energy, which slipped more than 21% into the red.

The VESG ETF seems to have outperformed this bunch and was the star player until volatility crept in this year and it has since consolidated returns.

It has now levelled off and is rangebound alongside the fellow MSCI Australian Sustainability ETF from VanEck.

That’s something to think about.

The post Here are the best ASX renewables shares of the year so far appeared first on The Motley Fool Australia.

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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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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.

What happened

Shares of Netflix (NASDAQ: NFLX) were going down in flames on Wednesday, plunging by as much as 39% in morning trading. As of 11:50 a.m. ET, the stock was still down by 36.9%.

The catalyst that sent the streaming pioneer lower was news that its subscriber count actually declined last quarter, the first time that’s happened in more than a decade. 

So what

In the first quarter, Netflix generated revenue of $7.9 billion, up 9.8% year over year, while its earnings per share (EPS) declined by roughly 5.9% to $3.53. 

To put those numbers in context, analysts’ consensus estimates had called for revenue of $7.9 billion and EPS of $2.90. 

The big story, however, was that Netflix shed roughly 200,000 subscribers during the quarter and expects to lose another 2 million in Q2. Netflix cited a number of factors as contributing to the subscriber loss, including inflation, the war in Ukraine (which has slowed adoption of the service in Eastern Europe), growing competition, and password sharing.

Now what

The news certainly isn’t good, but it also isn’t as bad as it might appear at first glance. In the fine print of its investor letter, management provided details of the suspension of its operations in Russia, which played a pivotal role in the quarter’s subscriber decline (italics mine):

The suspension of our service in Russia and winding-down of all Russian paid memberships resulted in a -0.7 million impact on paid net adds; excluding this impact, paid net additions totaled +0.5 million. 

Netflix’s management acknowledged the ongoing challenges and is exploring various measures to reignite its subscriber growth. The primary focus will be on increasing the quality of its programming and recommendations, but the company is also investigating ways to combat password sharing and working to continue its expansion in international markets.

Given its dramatic slowdown in subscriber growth, investors are certainly justified in wondering whether Netflix’s growth story is winding down. Management said it expects to return to — and sustain — double-digit percentage revenue growth and remain free-cash-flow positive in 2022 and beyond.

I, for one, don’t think the sky is falling. The sell-off might represent a compelling opportunity for investors, because this isn’t fade to black for Netflix. 

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

The post Why Netflix stock crashed and burned Wednesday appeared first on The Motley Fool Australia.

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Daniel Vena owns Netflix. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Netflix. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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Shares in Megaport Ltd (ASX: MP1) are crashing this morning after the company released its quarterly key performance indicators for March.

At the time of writing, the Megaport share price is $10.75, down 15.75%. In the first 30 minutes of trading today, it hit a new 52-week low of $10.42 — an 18.3% drop.

Megaport grows revenue 6% this quarter

The company covered its monthly revenue statistics for 3Q FY22, including:

• Monthly recurring revenue (MRR) for the month of March was $9.5 million, an increase of $300,000 or 3% quarter-on-quarter (QoQ)
• Revenue for the quarter was $27.9 million, an increase of $1.4 million or 5% QoQ
• Customer numbers at the end of the quarter were 2,541, an increase of 86, or 4% QoQ
• Total ports at the end of the quarter were 9,012, an increase of 489, or 6% QoQ
• Total virtual cross connections (VXCs) at the end of the quarter were 14,706, an increase of 993, or 7% QoQ
• Total Megaport Cloud Router (MCRs) at the end of the quarter were 670, an increase of 67, or 11% QoQ
• Total Megaport Virtual Edge (MVEs) at the end of the quarter were 59, an increase of 19, or 48% QoQ.

What else happened this quarter for Megaport?

The company launched its full suite of products and services in Mexico. It says this is the “2nd largest IT spending market in Latin America and the 25th country enabled on Megaport’s global platform”.

It also launched the Megaport ONE platform in January 2022 and named Jim Brinksma as Chief Technology Officer last month.

Cash outflows were up for network operations, with a 21% increase from last quarter, whilst the company also realised an increase in gross profit of $1 million.

Cash receipts came in at $29 million versus revenue of $28 million. Megaport had a cash position of $88.8 million at the end of March.

Management commentary

Speaking on the results, Megaport’s CEO, Vincent English, said:

The momentum of our channel program, Megaport PartnerVantage, continues to accelerate since the launch of our partner portal in November, 2021. The team has been highly-focused on partner recruitment and enablement in the past two quarters. As our channel investments are yielding greater
results, we are strengthening our pipeline and increasingly converting more deals from partners across the board. Additionally, our larger strategic partnerships with Arrow Electronics and Cisco contributed to deals in the third quarter. Operationalising these larger partnerships requires commercial, marketing, and development investments to bring our combined capabilities to market and we are very excited to see the impact with these initial deals.

What’s next for Megaport?

Regarding the company’s outlook, English added some additional colour:

Coming into the close of Fiscal Year 2022, we will remain focused on our channel and innovation strategies. Our commercial team will continue to recruit and onboard partners within our PartnerVantage program to sell our Network as a Service offering as part of holistic IT solutions including bundles with cloud service offers. With our recent agreement with Arrow Electronics beginning to produce deals, we are also focusing on operationalising our most recent partnership with TD Synnex, announced in January.

The Megaport team is energized and focused on delivering a solid fourth quarter performance and setting our business up for great momentum heading into Fiscal year 2023.

Megaport share price snapshot

Over the past 12 months, the Megaport share price is down 7%. The new year has been rough with the shares collapsing in value by 43% year to date.

The post Megaport’s quarterly update sends its share price crashing 18% appeared first on The Motley Fool Australia.

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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. owns and has recommended MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. 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 Endeavour Group Ltd (ASX: EDV) share price is in the red after the company released a trading update for the quarter just been.

The drinks and hotels business saw its sales slip 2.1% over the 13 weeks between 3 January and 3 April, on those of the same period of last year, led by its retail division.

Though, the S&P/ASX 200 Index (ASX: XJO) company notes the dip was partly due to the timing of the Easter holidays, which fell in the third quarter of financial year 2021. Its performance was also impacted by COVID-19 and extreme weather events.

In fact, major flood events in NSW and Queensland cost the company approximately $9 million during the period.

At the time of writing, the Endeavour share price is $7.77, 1.27% lower than its previous close.

Let’s take a closer look at today’s update from the Woolworths Group Ltd (ASX: WOW) spin off.

Endeavour share price down as sales slip

The Endeavour share price is down after the company announced its group sales for the March quarter slumped to $2,728 million.

Most of that fall is attributed to the company’s retail business ­– the home of Dan Murphy’s and BWS. Its sales fell 3% to $2,323 million last quarter.

Though, adjusting for the Easter holidays, which fell in the fourth quarter of financial year 2022, the segment’s sales slipped 0.7%.

Also adjusting for Easter, the segment’s online sales rose 16.8% to $222 million last quarter. That saw it surpassing $1 billion of annual online sales.

The ASX 200 company believes the drop in retail sales was partly born from relaxing COVID-19 restrictions, as Australians returned to pubs and hotels.

Meanwhile, Endeavour’s hotels segment brought in $405 million of sales – a 3.8% improvement. Or, a 2.5% improvement if adjusting for Easter.

The improvement was also driven by easing COVID-19 restrictions in Victoria and NSW, where improving sales offset a decline in Western Australia. Restrictions tightened in the western state during the period.

Though, the spread of COVID-19 caused customer hesitancy and impacted staff availability early in the quarter.

Endeavour managing director and CEO, Steve Donohue said the company’s “sustained strength” was “encouraging”, particularly during a challenging quarter.

These results are once again delivered within the context of an uncertain operating environment with extreme weather events, ongoing supply chain disruptions, and growing inflationary pressures creating new challenges.

Flood events take their toll

Damages to the company’s stores and bottom line caused by major flooding in parts of NSW and Queensland might also be hampering the Endeavour share price this morning.

Dan Murphy’s Lismore store was submerged in floodwater in early March. 10 BWS stores were also impacted by the flood event.

Additionally, Endeavour’s Breakfast Creek Hotel – located in Brisbane – and its Westower Tavern – in Ballina – were affected.

Endeavour expects the event dinted its earnings before interest and tax (EBIT) by $9 million last quarter.

That figure includes the direct costs of the floods, such as clean-up costs and asset write offs. It also includes the estimated profits lost due to some stores and hotels being unable to open.

Endeavour is processing an insurance claim for the event. It hasn’t recognised an insurance recovery yet.

As of the end of the quarter, 5 stores and a hotel remained fully or partially closed.

Endeavour share price snapshot

This year so far has been good for the Endeavour share price.

Right now, it’s 14% higher year to date.

It has also gained 29% since it split from Woolworths in June 2021.

The post ‘Another period of volatility’: What’s going on with the Endeavour share price today? appeared first on The Motley Fool Australia.

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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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