BHP Group Ltd (ASX: BHP) has long been a staple blue-chip share of the S&P/ASX 200 Index (ASX: XJO). Not too surprising when you consider that ‘The Big Australian’ was founded way back in 1851. And it has kept itself in the forefront of the minds of many an ASX investor in recent years, thanks to some strong share price gains and record dividend payments. 

But BHP has certainly moved from ‘The Big Australian’ to ‘The Bigger Australian’ on the ASX boards in recent months. And it has massive ramifications for almost all Australians. Let’s dig into why. 

So BHP has always had a significant presence on the Australian share market, reflected in its weighting on both the S&P/ASX 200 Index (ASX: XJO) and the S&P/ASX 300 Index (ASX: XKO). For example, back in December, BHP had a weighting of 5.57% in the portfolio of the Vanguard Australian Shares Index ETF (ASX: VAS), the most popular index fund on the market.

But something has changed for BHP since then. The mining giant sensationally ended its decades-long dual listing structure last month. This saw its primary London Stock Exchange listing dissolved, meaning that BHP is now only primarily listed on its spiritual home, the ASX.

BHP shares now dominate the ASX 200, what does this mean?

This saw more than $100 billion worth of BHP shares make its way back from London to the ASX boards. Its ASX-listed market capitalisation is now roughly $243.5 billion. That’s around $80 billion more than Commonwealth Bank of Australia (ASX: CBA), which was the ASX’s largest share by market cap before BHP’s ‘unification’. 

And this is what has such a profound impact on ASX investors. Remember BHP’s 5.57% weighting in the ASX 300 index fund? As of today, BHP now takes up a far higher 10.88% of VAS’s portfolio (as of 31 January). For a pure ASX 200 index fund like the iShares Core S&P/ASX 200 ETF (ASX: IOZ), it’s currently even higher at 11.23%. That means that more than one dollar in ten invested in an ASX 200 index fund goes to BHP shares. That might not be the kind of diversification investors might expect from an index fund.

So this has a big impact on investors that have their money tied up with an ASX 200 or ASX 300 index fund. Those investors now have far more exposure to BHP than only a few months ago. But it goes beyond just index fund investors. A huge swathe of Australian superannuation funds invest in index-tracking investments too. So that means a huge proportion of Aussies with super funds now have a far higher exposure to BHP shares. 

So our collective financial fortunes are now tied up with the Big Australian more than they perhaps ever have been. Americans used to say in times of yore that what was good for General Motors was good for the country. Perhaps we now have to say the same for Australia and the BHP share price. 

The post How BHP (ASX:BHP) has become ‘The Bigger Australian’ and why this might not be good news for the ASX 200 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 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a very sharp decline. At the time of writing, the benchmark index is down 3.1% to 6,983 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are charging higher:

Cimic Group Ltd (ASX: CIM)

The Cimic share price is up a massive 33% to $22.00. Investors have been buying the engineering company’s shares after it revealed the receipt of a takeover approach. According to the release, Cimic’s majority shareholder, HOCHTIEF, has announced that it intends to make an off-market takeover offer of $22 cash per share.

Lovisa Holdings Ltd (ASX: LOV)

The Lovisa share price is up 14% to $18.82. This follows the release of the fashion jewellery retailer’s half year results. For the six months ended 26 December, Lovisa reported a 48.3% increase in revenue to $217.8 million and a 70.3% jump in net profit after tax to $36.1 million. Lovisa opened 42 new stores during the period, bringing its total to 589 stores.

NextDC Ltd (ASX: NXT)

The NextDC share price is up 3.5% to $10.55. Investors have been buying NextDC’s shares after it reported a 19% increase in half year data centre services revenue to $144.5 million and a 29% lift in EBITDA to $85 million. This was underpinned by a 10% boost in customers to 1,569 and a 14% lift in interconnections to 15,879.

Nine Entertainment Co Holdings Ltd (ASX: NEC)

The Nine share price is up 3% to $2.79. This morning the entertainment and media company delivered a half year result ahead of guidance. Revenue was up 15% to $1.3 billion and net profit after tax rose 20% to $225.2 million. This allowed Nine to increase its interim dividend by 40% to 7 cents per share.

The post Why Cimic, Lovisa, NextDC, and Nine shares are charging higher appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Appen and Life360 crushed, Flight Centre posts $188m loss
• NextDC (ASX:NXT) share price climbs 5% on record results
• Cimic (ASX:CIM) share price explodes 33% higher following takeover approach
• All that glitters: Lovisa (ASX:LOV) share price skyrockets 20% on high-profit earnings
• Nine (ASX:NEC) share price lifts 6% on first-half profit jump

Motley Fool contributor James Mickleboro owns NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Lovisa Holdings Ltd. 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 Blackmores Ltd (ASX: BKL) share price is failing to attract buyers following the release of its first-half results for FY22.

At the time of writing, shares in the health supplement company are swapping hands for $86.93 apiece, down 6.2%.

Blackmores share price uninspired by positive performance

• Group revenue up 14.3% on prior corresponding period to $346 million
• Gross profit up 19.4% to $187.6 million with a margin improvement of 2.3 points
• Underlying EBIT of $38.3 million, reflecting an increase of 21.2%
• Underlying net profit after tax (NPAT) of $20.8 million, up 9.6% year on year
• Fully franked interim dividend of 63 cents per share, up 117% year on year

What else happened during the first half?

The Blackmores share price is firmly in the red on Thursday despite its improving figures for the six-month period. During the first half of FY22, the company achieved revenue growth when viewed at a group level. However, the results were more mixed when looking at the granular details.

For example, the international segment of the business — including Indonesia, Thailand, and India — delivered a 49.8% increase in revenue, hitting $116.2 million. In contrast, revenue across the Australia and New Zealand (ANZ) segment suffered a 1.2% fall to $145.9 million.

Although, the company’s China operations experienced an 8.5% lift in revenue. This was driven by growth in Blackmore’s direct cross-border e-commerce channel, which now accounts for 70% of sales in the China segment.

Inflation worries could also be playing into the Blackmores share price. During the half, the company managed to implement price increases across its various segments.

In China, an average increase of 3% was applied, while the international segment experienced greater increases. Meanwhile, only a 0.5% increase was successfully implemented for ANZ, reflecting the more competitive market.

What did management say?

Discussing how the company is positioning for the next half, Blackmores chief executive officer, Alastair Symington said:

While the first half results are pleasing, we continue to face significant challenges linked to global supply chain disruption and uncertainty due to COVID-19 outbreaks which has affected traditional retail channels and impacted consumer behaviour across all our markets.

Adding:

For the remainder of the financial year, we continue to be focused on delivering against our strategic game plan while maintaining a disciplined risk and capital management approach. In doing so, we are positioned to navigate through the challenges and capitalise on the opportunities that will arise.

What’s next?

Conveying a cloudy outlook, ASX-listed Blackmores did not provide any earnings guidance for the second half. Though, it does expect operations to continue slowly recovering in Australia. Accompanying this slow growth will be a ‘step up’ in brand advertising across the region.

Nonetheless, the company cites ‘ungoing uncertainty’ caused by COVID-19 as the reason for its inability to provide guidance.

On a positive note, shareholders can expect to receive a dividend payment on 12 April 2022.

Blackmores share price snapshot

The past year has had its ups and downs for the Blackmores share price — swaying from as low as $63 to as high as $104. But for those investors willing to hold on through it all, they have been rewarded with a return of 12.3%. For context, the S&P/ASX 200 Index (ASX: XJO) is only up 3.5% during this time.

The post ‘Ongoing uncertainty’: Blackmores (ASX:BKL) share price falls 6% on cloudy future appeared first on The Motley Fool Australia.

More reading

• Expert names 3 commodities set to boom from a Russian invasion
• Coventry Group (ASX:CYG) share price surges 6% as profits double
• ASX 200 gold shares shining bright amid market selloff
• Woolworths (ASX:WOW) share price defies selloff and pushes higher on broker upgrade
• These are some of the only ASX shares in the green today. Here’s why

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 Blackmores 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 Russian/Ukrainian crisis dominating world headlines, particularly over the past week, investors have been spooked, to say the least.

In response, the S&P/ASX 200 Index (ASX: XJO) has shed 3.73% since last Thursday to currently trade at 7,024 points.

Tensions have been heating up between the West and Russia, with a number of countries imposing sanctions on the Kremlin. This follows Russia’s latest move in sending “peacekeeping” soldiers into the Ukrainian regions of Donetsk and Luhansk. This occurred after Russian President Vladimir Putin recognised them as independent republics.

It’s worth noting that this is a similar Russian ‘playbook’ move that occurred in 2008 when forces moved into Georgia. The Kremlin had previously recognised the Russian-backed self-proclaimed republics of South Ossetia and Abkhazia.

Georgia fought back, sending its military into the hotly-contested provinces. The outcome? Russia invaded Georgia in the days following, sending global stock markets into panic mode.

Fast forward to today, and we look at one expert’s theory on which commodities will boom if an invasion occurs.

How important is Russia in terms of commodities?

To say that Russia is an important energy supplier is an understatement. The country provides much-needed gas and oil to Europe and in particular, the bloc’s largest economy, Germany. The latter depends on Russia for 49% of its natural gas needs, while Italy receives about 46%. France, on the other hand, collects just over 24%.

Based on a Eurostat report in 2019, Europe depends on Russia for 27% of crude oil and 47% of solid fossil fuel imports.

As a whole, Russia exports roughly 10% of its oil, 20% of its gas, and 20% of its thermal coal around the world.

Which commodities could receive further tailwinds? 

According to Blue Line Futures’ chief market strategist, Phil Streible, investing in the above commodities could yield profits amid the heightened geopolitical tensions.

Commenting on possible sanctions targeting Russian energy by the United States and United Kingdom, Streible said:

What [the Russians] would do is they would divert their oil. Instead of selling it into the current export structure that they have, they could easily make agreements with other countries to buy that oil, like China. Also, they can take off some of that oil, they can hold back. There’s no reason for them necessarily to sell, they have too many other key commodities that prices can drive up on.

With the supply of oil and gas crunched, crude oil prices could spike to north of $100 a barrel, up to $120.

In addition, Streible talked about other strategic metals which might rise in price if the situation escalates. They include palladium, copper, and cobalt.

He added:

[Russia] is the number two producer of platinum, number one producer of palladium, they are the number three wheat producer.

Look at a chart of wheat. It has broken out to the upside, it is up about 4.85% year-to-date as of this reporting right now, and it is blowing away all the other grains that are out there.

They produce 3.5% of the word’s copper. With EV demand increasing, copper is one of the main components out there…and they produce 4% of the world’s cobalt, which are used in those batteries for EVs.

So, Russia is a very strategic country when it comes to commodity production, commodity exports, and the direction of the global economy.

The post Expert names 3 commodities set to boom from a Russian invasion appeared first on The Motley Fool Australia.

More reading

• These are some of the only ASX shares in the green today. Here’s why
• ASX 200 (ASX:XJO) midday update: Appen and Life360 crushed, Flight Centre posts $188m loss
• Will 2022 be the year of the cash or the crash for ASX shares?
• Which new investments are predicted to help the AFIC (ASX:AFI) share price and dividends?
• 5 things to watch on the ASX 200 on Thursday

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 Coventry Group Ltd (ASX: CYG) share price is surging on the back of the company’s earnings for the first half of financial year 2022.

At the time of writing, the Coventry Group share price is $1.72, 6.17% higher than its previous close.

Coventry Group share price soars alongside profits

• Revenue of $156.9 million – 13.9% more than the first half of financial year 2021
• Net profit after tax (NPAT) of $2.4 million – a 116% increase
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) of $7.3 million ­– up 4%
• New Zealand COVID-19 lockdown estimated to have cost EBITDA of $750,000 and $3 million of sales
• No interim dividend declared

Over the first half of financial year 2022, the distributor of industrial products’ trade distribution sales increased 13.9%. Meanwhile, its fluid systems sales grew by 15%.

The trade distribution leg’s EBITDA came to $7.6 million – up from $5.7 million in the prior comparable period.

The company’s fluid system segment, however, saw its EBTIDA fall to $6.3 million, down from $6.7 million.

As of the end of the half, Coventry Group had net debt of $26.9 million. For context, its debts came to $16.3 million at the end of financial year 2021.

Its increased debt was mostly down to the company boosting its inventory by $11.3 million due to inflation and increases in stock levels in an effort to dodge supply chain issues.

Capital expenditure for the period came to $2.3 million.

Finally, the company isn’t paying an interim dividend. It stated that, in the context of current capital needs, a final dividend will suffice.

What else happened in the half?

The only time the market heard price-sensitive information from the company last half – aside from news of its annual general meeting and full-year results – was in October.

Then, it released a trading update on the first quarter of financial year 2022.

The Coventry Group share price jumped 5% after the company announced its sales and earnings were strong in the September quarter.

What did management say?

Commenting on the result fuelling the Coventry Group share price, CEO and managing director Robert Bulluss said:

The group delivered pleasing sales and profit growth in [the first half of financial year 2022].

This was despite the negative impact of the enforced New Zealand Government Alert 4 lockdown in Auckland which we estimate negatively impacted sales in the order of $3 million and EBITDA in the order of $750,000.

What’s next?

Unfortunately for eager investors, the company has declined to provide guidance for the rest of financial year 2022.

It said the markets in which its fluid systems and trade distribution businesses operate are performing well.

However, continuing uncertainty due to COVID-19 has spurred its decision to eliminate guidance.

Though, it did say it plans to provide a dividend for financial year 2022 after it resumed handing investors a portion of profits last financial year.

Additionally, the company noted that its priority has been to continue providing the same level of service to customers during the recent uncertainty.

Now, during financial year 2022, it will be taking action to “prudently manage” its inventory levels, collections, and operating costs to boost its cash position.

Coventry Group share price snapshot

Today’s gains have boosted the Coventry Group share price into the year-to-date green.

It’s now 2% higher than it was at the start of this year. It has also gained 67% since this time last year.

The post Coventry Group (ASX:CYG) share price surges 6% as profits double appeared first on The Motley Fool Australia.

More reading

• ASX 200 gold shares shining bright amid market selloff
• Woolworths (ASX:WOW) share price defies selloff and pushes higher on broker upgrade
• These are some of the only ASX shares in the green today. Here’s why
• Link (ASX:LNK) share price outperforms today as guidance boosted
• Nitro (ASX:NTO) share price sinks 14% despite record result

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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The S&P/ASX 200 Index (ASX: XJO) is having a tough time of it today.

At time of writing, the ASX 200 is down 2.7%, having earlier posted losses of more than 2.9%.

You need only open a newspaper or any news website to gather why.

The simmering tensions between Russia and Ukraine have heated up. Russia claims that 2 separatist enclaves within Ukraine have asked Vladimir Putin for military help. Political analysts in the West are warning that an invasion is increasingly likely.

Tech shares have been particularly hard hit, with the S&P/ASX All Technology Index (ASX: XTX) down 3.9% today.

But not all shares are joining in the ASX 200 selloff.

ASX 200 gold shares shining bright amid haven demand

Gold is again living up to its historic role as a haven asset in times of turmoil.

The yellow metal gained another 0.2% overnight and is currently trading for US$1,913 per troy ounce. That’s up almost 7% from the US$1,791 per ounce gold was fetching on 28 January, according to data from Bloomberg.

And this is seeing ASX 200 gold shares buck today’s losing trend.

Here’s what we mean…

The Newcrest Mining Ltd (ASX: NCM) share price is up 1.1% today, to $24.84 per share. Newcrest shares are now up 1.3% in 2022.

The Evolution Mining Ltd (ASX:EVN) share price is leaping higher too, up 1.6%. Evolution shares have gained 4.2% year-to-date.

And Northern Star Resources Ltd (ASX: NST) shares are leading the charge, currently up 3.4% to $10.34 per share. The Northern Star share price is now up 9.3% this year.

Junior gold miners gaining too

But it’s not just the ASX 200 listed gold share that are broadly gaining today.

At time of writing, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) is up 1.8%.

While not every ASX gold miner is in the green, the sector is certainly shining brightly today.

The post ASX 200 gold shares shining bright amid market selloff appeared first on The Motley Fool Australia.

More reading

• These are some of the only ASX shares in the green today. Here’s why
• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX shares today
• Here’s why the Northern Star (ASX:NST) share price had such a stellar day

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 Woolworths Group Ltd (ASX: WOW) share price is avoiding the market selloff on Thursday.

In afternoon trade, the retail giant’s shares are up 0.5% to $35.88.

This means the Woolworths share price is now up over 5% since the start of the week.

Why is the Woolworths share price rising today?

Investors have been bidding the Woolworths share price higher today following a largely positive response to the retailer’s half year results from brokers.

In case you missed its results, on Wednesday the company reported an 8% increase in group sales to $31,894 million and a 6.5% decline in net profit to $795 million.

While a profit decline is not often celebrated, it is worth noting that this profit was ahead of the market’s expectations. Furthermore, it includes $239 million of COVID-related costs.

Management also revealed that the second half has started very positively for its supermarkets, with sales up strongly during the first seven weeks. While the same cannot be said for the Big W business, investors appear more focused on the core business.

What was the response?

Overall, Woolworths’ half year results went down well with the market. In fact, the result even managed to coax a couple of fence-sitting brokers into more positive ratings.

One of those is Citi. This morning the broker upgraded the company’s shares to a buy rating from neutral and lifted the price target on them by 3.3% to $40.30.

Citi was pleased with its first half performance and believes underlying momentum in the key Australian Foods business has improved since its mid-December trading update.

Combined with food inflation, easing restrictions, falling COVID rates (and therefore likely COVID costs), and margin benefits from customers returning to stores instead of online, Citi feels Woolworths’ outlook is improving.

Based on the current Woolworths share price, Citi’s price target implies potential upside of 12% over the next 12 months. It is also forecasting a fully franked full year dividend yield of 2.6%, bringing the total potential return on offer to almost 15%.

The post Woolworths (ASX:WOW) share price defies selloff and pushes higher on broker upgrade appeared first on The Motley Fool Australia.

More reading

• These are some of the only ASX shares in the green today. Here’s why
• Woolworths (ASX:WOW) faces fresh probe as wage scandal balloons to $500m
• ASX 200 (ASX:XJO) midday update: Woolworths impresses but Domino’s crashes after earnings miss
• Profit drop: Woolworths (ASX:WOW) share price pushes higher despite ‘challenging’ first-half results
• 5 things to watch on the ASX 200 on Wednesday

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 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 S&P/ASX 200 Index (ASX: XJO) is having a pretty dreadful day so far this Thursday, no two ways about it. At the time of writing, the ASX 200 has lost a nasty 2.7% and is sitting at 7,008 points.

With a fall of this magnitude, you would reasonably expect falls across the board for most ASX shares. And that is mostly true. All ASX sectors are deep in the red as it presently stands. With one glaring exception.

Despite the market’s woes today, the S&P/ASX All Ordinaries Gold (ASX: XGD) is firming, rising by 1.7% at the time of writing. Consumer Staples shares are also faring arguably well, all things considered. This sector is down by 0.78%, far better than any other ASX sectors in the red today. In earlier trade, the consumer staples sector was in the green.

Gold often shines when there is fear or panic in the market. Not to mention global geopolitical tensions. So that one isn’t too much of a mystery. But consumer staples?

Consumer staples companies are the businesses that manufacture and sell life’s essentials. Think food, drinks, hygiene products, and household necessities. Vices like tobacco and alcohol are also classed as consumer staples.

Looking at individual ASX shares, we can see many in the green today.

Why are ASX gold and consumer staples shares defying the bloodbath?

Take the Woolworths Group Ltd (ASX: WOW) share price. It’s currently up 0.43%. Coles Group Ltd (ASX: COL) is only slightly down by 0.5%. Newcrest Mining Ltd (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) are in the green so far today. So what’s going on?

Well, it’s not entirely clear. Perhaps investors are just looking for safety on a day like today. Because of their needs-based nature, consumer staples are often viewed as something of a safe harbour. We all need to eat and drink, after all. And that doesn’t change in times of economic hardship, or in the event of a Russian invasion in Ukraine. Thus, consumer staples, together with gold, look like safer ASX shares when there is fear in the market.

The fact that both Coles and Woolworths, the poster children of ASX consumer staples, reported what appear to be well-received half-year earnings this week might also be helping.

The Woolworths share price edged 1.3% higher yesterday despite the company revealing weaker results. Coles went 3% higher on Tuesday after beating some analysts’ expectations with their results.

Whatever the reasons for the comparative strength in gold and consumer staples ASX shares, it’s likely providing at least some comfort to those shareholders today.

The post These are some of the only ASX shares in the green today. Here’s why appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Appen and Life360 crushed, Flight Centre posts $188m loss
• Will 2022 be the year of the cash or the crash for ASX shares?
• Which new investments are predicted to help the AFIC (ASX:AFI) share price and dividends?
• 5 things to watch on the ASX 200 on Thursday
• Woolworths (ASX:WOW) faces fresh probe as wage scandal balloons to $500m

Motley Fool contributor Sebastian Bowen owns Newcrest Mining 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 owns 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 Link Administration Holdings Ltd (ASX: LNK) share price is down 0.2% in afternoon trading.

Link shares closed yesterday trading at $5.30 and are currently trading for $5.29.

While that’s dipped into the red, the Link share price is handily beating the 2.8% loss posted by S&P/ASX 200 Index (ASX: XJO) at this same time.

The technology focused company provides outsourced administration services for superannuation fund administration and corporate markets, among others.

Below we look Link’s financial results for the half year ending 31 December (1H FY22).

Link share price outperforms on guidance lift

• Revenue of $593.6 million, down 0.6% year-on-year
• Operating earnings before interest and tax (EBIT) slipped 11% from 1H FY22 to $70.2 million
• Statutory net profit after tax (NPAT) came in at a loss of $81.7 million compared to a profit of $29.4 million in the prior corresponding period
• Dividend of 3 cents declared, fully franked, down from 4.5 cents in 1H FY21

What else happened during the half year?

The company reported that its Global Transformation Program (GTP) delivered $63 million of gross annual cost savings. It now expects gross annualised benefits to reach $75 million by the end of the 2022 financial year.

The first half also saw Link enter into exclusive talks with LC Financial Holding in relation to its Banking & Credit Management business.

Another big event for Link shareholders during the half was Link’s $101.7 million on-market share buyback.

Overall, the company reported a “strong level of client retention” across all of its business units, along with “healthy levels of uptake of new solutions” as it managed to boost its cross sell to clients.

As at 31 December, Link had a net debt of $656 million. The company’s leverage ratio stood at 2.6 times. That’s within the guidance range of 2 to 3 times.

What did management say?

Commenting on the results, Link’s CEO Vivek Bhatia said:

Link Group continues to deliver in a challenging operating environment. 1H FY22 Operating EBIT of $70.2 million was ahead of our guidance and net operating cash flow conversion continues to remain very healthy at 106%. Our RSS and CM businesses have delivered good underlying revenue growth and our global business remains in sound shape…

Our strong balance sheet and cash flow conversion has allowed us to invest further in technology and our people to cement our leadership positions in RSS and CM, and drive revenue and profit growth in FY23 and beyond.

What’s next?

The Link share price could be getting some extra support today after the company reaffirmed its revenue growth guidance of low single digit growth in FY22.

With year-to-date trading exceeding management’s expectations, Link lifted its FY22 EBIT guidance, saying it now expects this to come “at least” 5% higher than the prior year.

“Underpinned by the strength of our scale, expertise of our people and proprietary technology platforms we are confident that all the factors are in place for a stronger medium-term outlook,” Bhatia said.

Link share price snapshot

The Link share price is down 5.1% so far in 2022. That compares to a year-to-date loss of 7.7% posted by the ASX 200.

The post Link (ASX:LNK) share price outperforms today as guidance boosted appeared first on The Motley Fool Australia.

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• Bega Cheese (ASX:BGA) share price sinks 7% despite high half-year revenues
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The Nitro Software Ltd (ASX: NTO) share price has been a poor performer on Thursday.

In afternoon trade, the document productivity software company’s shares are down 14% to $1.47 following the release of its full year results.

Nitro share price sinks despite record results

• Annual recurring revenue (ARR) excluding Connective up 41% to US$40.1 million
• ARR including the Connective acquisition up 62% to US$46.2 million
• Revenue up 26% to US$50.7 million
• Operating earnings before interest, tax, depreciation and amortisation (EBITDA) loss of US$7.6 million
• Cash and cash equivalents of US$48.2 million

What happened in FY 2021?

For the 12 months ended 31 December, Nitro delivered further strong ARR growth and reported a result in line with its guidance. Its ARR for the period, before the Connective acquisition, came in at US$40.1 million. This compares to its guidance of US$39 million to US$42 million and means that 66% of its revenue is now subscription-based.

Key drivers of its growth during the 12 months were the doubling of Nitro Sign eSignature requests to 2.2 million, and a substantial increase to 22 million eSignatures in total including Connective.

Furthermore, over 3 billion documents were opened in Nitro PDF Pro in FY 2021, and Nitro surpassed the milestone of 1 million PDF subscription licences, ending the year at 1.1 million.

Also coming in line with its revised guidance was its EBITDA loss of US$7.4 million excluding Connective. This was a big improvement on its original guidance of a loss of US$11 million to US$13 million.

Management commentary

Nitro’s Co-Founder and Chief Executive Officer, Sam Chandler, was pleased with the company’s performance in FY 2021.

He said: “FY2021 was the most dynamic year in Nitro’s history, with the achievement of a number of major strategic milestones, including a successful capital raising and our biggest and most important acquisition to date – Connective. The addition of Connective’s market-leading capabilities and the earlier acquisition of PDFpen – delivering native Mac and iOS capabilities – means Nitro can now serve virtually any customer need in PDF productivity and eSigning. With these acquisitions, Nitro has cemented its status as a global document productivity and eSign SaaS platform.”

“FY2021 was the year in which we exceeded US$50 million of revenue, with a strong sales trajectory in the final quarter and the momentum continuing into the new year. Nitro’s mission for the coming year is to continue this momentum and to build on the strategic milestones and successes of FY2021 by scaling the Nitro Productivity Platform.”

“This will involve fully integrating Connective’s best-of-breed technologies – a process now well underway – and using Nitro’s proven go-to-market network to upsell and cross-sell Nitro and Connective products to a combined 13,000+ Business Customer base. We will remain focused on customer acquisition, retention and expansion, as well as responding to competition at a time when customers are signaling their dissatisfaction with legacy providers and increasingly demanding one vendor who, like Nitro today, can offer multiple solutions.”

Outlook

Management appears confident that it will continue to grow into its US$28 billion total addressable market in FY 2022. Though, it expects this to come at a cost and is forecasting a much larger loss.

It has provided the following guidance:

• FY 2022 ARR between US$64 million and US$68 million (38.5% to 47.2% growth)
• Revenue between US$65 million and US$69 million
• Operating EBITDA loss between US$18 million and US$21 million.

Management concluded: “Given the scale of the market opportunity and the Company’s multiple growth levers, Nitro will continue to make strategic investments in FY2022, primarily focused on the scaling and integration of Connective into Nitro’s business, developing features relevant to its customers and scaling its go-to-market engine. Nitro will also continue to explore other targeted investments, including potential acquisitions, to build capability and scale, and further cement its position as a global leader in eSigning and document productivity.”

The post Nitro (ASX:NTO) share price sinks 14% despite record result 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 Nitro Software 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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