The Accent Group Ltd (ASX: AX1) share price is pushing higher today. This comes after the company released its half-year results for the 2022 financial year late yesterday afternoon.

At the time of writing, Accent shares are up 6.25% to $2.04.

Below, we take a closer look to see how the footwear retailer performed for the period.

Accent delivers softened result for the first half of FY22

The Accent share price is on the move following the company’s results for the six months ending 26 December 2021. Here are some of the key highlights:

• Total sales increased to $594 million, up 9.7% on the prior year (H1 FY21 $541.3 million);
• Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) fell to $99.5 million, down 27.9% (H1 FY21 $138.1 million);
• Net profit after tax (NPAT) plummeted to $14.8 million, down 72% (H1 FY21 $52.7 million);
• Earnings Per Share (EPS) dropped to 2.73 cents, down 72% (H1 FY21 9.74 cents per share); and
• Fully-franked interim dividend declined to 2.5 cents per share, down from 8 cents per share declared in H1 FY21.

What happened in H1 FY22 for Accent?

Trading for the half-year was materially impacted by the continuing COVID-related disruptions and lockdowns across Australia and New Zealand. From the months of July to October, more than 55% of the Group’s stores (representing 400 of the 700 stores) were required to close due to government-mandated lockdowns.

Despite these challenges, the group delivered total sales of $594 million, up 9.7% on the prior year. Net profit after tax stood at $14.8 million, delivered through its omnichannel operating model, coupled with the ongoing focus on VIP, Vertical, and Virtual.

Online sales soared by 47.9% on H1 FY21’s result to $159.8 million, accounting for 31.2% of the group’s total retail sales. This was underpinned by the group’s investment in new websites, loyalty programs, and customer data.

Owned retail sales took up the bulk of earnings, rising by 7.7% on the prior comparable year to $443.3 million. Management estimated the impact of COVID lockdowns and disruption on owned retail sales to be at least $95 million.

In addition, Accent opened up 104 new stores during the year and closed 4 stores when rent could not be paid. In total, there are 738 stores operating across Australia and New Zealand.

What did management say?

Accent group CEO, Daniel Agostinelli touched on the result, saying:

Trade in the first half of the year was severely impacted by the COVID related disruption and lockdowns that occurred across Australia and New Zealand…

In this context I am pleased with the results that have been achieved along with the continued progress the group has delivered against its growth plan objectives.

The continued focus on VIP (our loyalty customers), Vertical and Virtual, along with our integrated digital and store operating model, has enabled the group to grow online sales, continue to grow its customer database and loyalty programs and successfully trade through our inventory.

Key achievements for the half include opening 104 new stores, growing our customer database by a further 600,000 customers, signing a 10-year distribution agreement for Reebok and continuing to drive our key growth business.

What’s next for Accent?

In the first eight weeks of H2 FY22, Accent stated that trade has been significantly impacted by reduced customer traffic due to COVID-19.

Like for Like (LFL) sales over the last two months were down 10% when compared to the prior year.

When looking at the first four weeks of 2022 (until 23 January), LFL sales plunged 19.1% over H1 FY21.

On a positive note, LFL sales for the four weeks from 24 January to 20 February improved considerably. This brings them in line with last year’s performance.

Following the post-Christmas sales period, Accent has driven price, margin sales, and gross margin over the first eight weeks. For now, this is in line with expectations and ahead of the prior year.

Whilst the uncertain trading environment relating to COVID-19 is unknown, the company remains cautious on the near-term outlook. As such, it did not provide sales or profit guidance for both the second half and the FY22 full-year.

The post Accent (ASX:AX1) share price lifts 6% despite ‘severely impacted’ first half results appeared first on The Motley Fool Australia.

More reading

• Analysts name 2 ASX dividend shares to buy with attractive yields
• 2 underrated ASX dividend shares expected to unleash big payouts in FY23
• Potential buys: 2 compelling ASX shares
• Analysts rate these ASX dividend shares as buys
• ASX retail shares have slumped in 2022. Could there be more pain to come?

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

from The Motley Fool Australia https://ift.tt/GKnpLHt

The Stockland Corporation Ltd (ASX: SGP) share price has been a positive performer on Wednesday.

In morning trade, the property company’s shares are up 5% to $4.21 following the release of its half year results.

Stockland share price higher following strong half

• Statutory profit up 150% over the prior corresponding period to $850 million
• Funds from operations (FFO) down 9.3% to $350 million
• FFO per share down 9.3% to 14.7 cents
• Commercial Property rent collection of 97.5%
• Distribution of 12 cents per share declared in December
• FY 2022 FFO per share guidance range tightened

What happened during the first half?

Stockland had a positive first half to FY 2022 thanks to strong rent collections and commercial property revaluations. For the six months, the company reported a 150% increase in statutory profit to $850 million. This includes $543 million of net commercial property revaluation gains, which equates to a 5.5% uplift versus June 2021 book values.

Management advised that the latter reflects improved investor demand for high quality, essentials-based retail assets, strong transactional evidence for high quality logistics assets, and a broadly stable asset pricing environment for workplace assets.

In respect to its FFO, it came in 9.3% lower than the prior corresponding period at $350 million or 14.7 cents per share. Stockland is expecting its FFO to be more heavily skewed to the second half due partly to the timing of residential settlements and COVID-related tenant assistance.

In other news, the company has signed an agreement with EQT Infrastructure for the sale of its Retirement Living business for $987 million.

Management notes that this is broadly in line with its book value and delivers on Stockland’s strategy to release capital for redeployment into higher growth opportunities and refocus the Communities business.

Management commentary

Stockland’s Managing Director and Chief Executive Officer, Tarun Gupta, said: “We delivered a solid operational and financial result in 1H22, and have tightened our full year FFO per security guidance range. While maintaining our focus on operational excellence across our core business, we have also made significant progress toward implementing the strategy that we outlined in November of last year.”

“The formation of two new capital partnerships, divestment of the Retirement Living business and further sale of non-core assets in our town centres portfolio over the half concentrates our focus on the core of our business. It enables us to redeploy capital toward opportunities in the residential, logistics and workplace sectors that we believe will generate superior returns on a sustainable basis,” he added.

Outlook

Mr Gupta appears confident on the company’s outlook following its solid first half.

He said: “The solid operational performance delivered in 1H22 provides us with good earnings visibility for the remainder of the financial year, notwithstanding the broader market uncertainty brought about by the ongoing COVID19 pandemic, elevated input cost inflation, and interest rate volatility. Accordingly, we are tightening our FFO per security guidance range.”

“The strategic transactions that we have announced post-balance date provide us with an extremely strong balance sheet position and are also expected to be accretive to earnings in FY23.”

Stockland’s FY 2022 FFO per share is now expected to be in the range of 35.1 cents to 35.6 cents. This compares with previous guidance of 34.6 cents to 35.6 cents per share.

As for distributions, the company’s distribution per share is expected to be within Stockland’s targeted range of 75% to 85%.

The post Stockland (ASX:SGP) share price up 5% on solid half, guidance update, and asset sale appeared first on The Motley Fool Australia.

More reading

• How are ASX Real Estate Investment Trusts (REITs) performing in 2022?

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.

from The Motley Fool Australia https://ift.tt/iJHI976

The Woolworths Group Ltd (ASX: WOW) share price is advancing on Wednesday morning. This comes after the retail conglomerate announced its first-half results for the 2022 financial year.

At market open, Woolworths shares were swapping hands for $36.63, up 4.06%.

Woolworths delivers results for H1 FY22

The Woolworths share price is heading north today despite a softened performance by the company. Here are Woolworths’ key financials for the 27 weeks ending 2 January 2022:

• Groups sales of $31,894 million, up 8% on the prior corresponding period (H1 FY21 $20,535 million)
• Group earnings before interest and tax (EBIT) of $1,382 million, down 11% (H1 FY21 $1,554 million)
• Group net profit after tax (NPAT) of $795 million, down 6.5% (H1 FY21 $850 million)
• Earnings per share (EPS) of 64.3 cents, down 5.1% (H1 FY21 67.8 cents per share)
• Fully-franked interim dividend of 39 cents per share, down 26.4% (H1 FY21 53 cents per share)

How did Woolworths perform in H1 FY22?

The financial performance of the group was materially impacted by the COVID-19 pandemic.

While strong sales growth experienced an 8% lift from continuing operations, this was offset by $239 million of COVID costs. Compared to the second half of FY21, COVID costs increased due to the outbreak at Woolworths’ stores and distribution centres.

In addition, group EBIT from continuing operations declined to $1,237 million for the period. This reflected a challenging operating environment in the Australian food segment, which led to increased COVID-related costs and Big W store closures.

The company’s biggest business, Australian food, grew by 3.4% in sales but moderated over the half as lockdowns eased, before rebounding again in December.

Nonetheless, EBIT declined to $1,217 million, reflecting the higher operating costs caused by COVID and a delay in implementing productivity initiatives.

What did management say?

Woolworths Group CEO Brad Banducci touched on the results:

While the far-reaching impacts of COVID resulted in one of the most challenging halves we have experienced, we ended H1 strongly with positive trading momentum and helped our customers enjoy a much-needed Christmas celebration and festive holiday season.

Omicron created new challenges in early January with a record number of team members isolating and material supply chain and stock flow issues. However, having learned from the Delta outbreak, we responded with agility and are gradually moving into a more consistent operating rhythm.

What’s the outlook for Woolworths?

For the current second half, the Omicron outbreak has led to strong sales growth for the first seven weeks in Australian food. However, this has negatively impacted Big W’s sales.

In New Zealand, sales growth has benefitted from higher inflation, with Omicron not yet having a material impact on customer shopping behaviour.

Group COVID costs in the first seven weeks were approximately $34 million or 0.4% of sales. Indirect COVID costs have also remained high, mainly due to continued end-to-end supply chain disruption.

Furthermore, Woolworths expects inflationary pressures to continue to intensify due to industry-wide cost increases.

Assuming a continued normalisation in the operating environment during Q3, management is forecasting an improved financial performance in the second half.

In New Zealand, the company is preparing to lessen the impact of Omicron in minimising disruption to customers and staff.

For Big W, the group predicts a challenging half but anticipates the business to report a profit in the second half.

The post Profit drop: Woolworths (ASX:WOW) share price pushes higher despite ‘challenging’ first-half results appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Own Woolworths (ASX:WOW) shares? Here’s what to expect when the company reports this week
• Top brokers name 3 ASX shares to sell next week
• Is the Woolworths (ASX:WOW) share price a buy or sell right now?
• Is it a buy in 2022? Why this top broker tips 15% upside in Woolworths (ASX:WOW) shares

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.

from The Motley Fool Australia https://ift.tt/MafcFBi

When an ASX 200 share goes ex-dividend, it can be quite the event. As new investors in a company going ex-dividend won’t receive the dividend payment, its value typically leaves the share price. This can spark some wild share price moves as investors adjust.

Here are five such S&P/ASX 200 Index (ASX: XJO) shares that are going ex-dividend today. So let’s see how their new dividend payments measure up.

5 ASX 200 shares going ex-dividend today

JB Hi-Fi Ltd (ASX: JBH)

Entertainment retailer JB Hi-Fi is our first ASX 200 share going ex-dividend today. JB is set to pay out its interim dividend of $1.63 per share, fully franked, on 11 March. JB’s last interim dividend was worth $1.80 so this payout is a little lower than its last. At the latest JB Hi-Fi share price of $50.27, the company has a dividend yield of 5.37%.

Domain Holdings Australia Ltd (ASX: DHG)

ASX 200 property company Domain is next up. This classifieds business will be paying out its own interim dividend on 15 March next month. This dividend will be worth 2 cents per share, fully franked. That’s flat with last year’s interim payment. At the latest Domain share price of $4.02, this company has a dividend yield of 1.49%.

Netwealth Group Ltd (ASX: NWL)

The next cab off the rank is ASX 200 wealth manager Netweath. Netwealth will be forking out its interim dividend of 10 cents per share, fully franked, on 24 March. That’s a slight increase on this company’s last interim dividend, which came in at 9.06 cents per share. At the latest Netwealth share price of $14.10, the company has a dividend yield of 1.38%.

Magellan Financial Group Ltd (ASX: MFG)

Magellan pleasantly surprised investors last week with its interim dividend of $1.101 per share, partially franked at 75%. This ASX 200 fund manager will be paying out this dividend, which is its highest interim payment ever, on 8 March. Its previous interim dividend was worth 97.11 cents per share. At the latest Magellan share price of $20.38, this company has a rather meaty dividend yield of 11%.

AGL Energy Ltd (ASX: AGL)

AGL made headlines early this week when it received a takeover offer. But that won’t stop AGL from paying out its interim dividend of 16 cents per share, unfranked, on 30 March. Unfortunately for investors in this ASX 200 energy generator and retailer, that’s a significant reduction from the company’s previous interim dividend of 31 cents per share. At the latest AGL share price of $7.68, the company has a dividend yield of 6.51%.

The post These 5 ASX 200 shares are trading ex-dividend today appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX shares today
• ASX 200 tech shares take a hammering as Ukraine fears escalate
• Here’s why the Northern Star (ASX:NST) share price had such a stellar day
• Opportunity? 5 ASX 200 shares that traded at 52-week lows today

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

from The Motley Fool Australia https://ift.tt/y8N7fCW

The Steadfast Group Ltd (ASX: SDF) share price is triumphantly trekking to the upside on Wednesday.

This follows the release of the company’s first-half results for FY22 after markets had closed yesterday afternoon.

Steadfast share price jumps following upgraded earnings

• Underlying revenue up 19% over the prior corresponding period to $520.9 million
• EBITA up 22.7% to $153.9 million
• Statutory net profit after tax (NPAT) up 42.9% to $104.9 million
• Diluted earnings per shares (EPS) up 20.5% to 8.41 cents per share
• Interim fully franked dividend of 5.2 cents per share, up 18.2%
• Gross written premium (GWP) of $5.2 billion during the half, up 15.6%

What else happened during the first half?

The six months ended 31 December 2021 was a cracking display from ASX-listed Steadfast Group, delivering both organic and acquisition growth.

During the six-month period, the broker network segment of the business added another acquisition to its name. In August last year, Steadfast swept up Australian insurance broker Coverforce for an enterprise value of $411.5 million.

The deal means the ASX-listed company has now captured 18 completed acquisitions as part of its ‘Trapped Capital Project’. This acquisition success has been a key component in the growing Steadfast share price.

Furthermore, Steadfast’s broker network is now 434 brokers strong. This includes 361 in Australia, 54 in New Zealand, and 19 across Singapore. Through these brokers, GWP was grown by 15.6% to $5.2 billion during the half. For reference, the company delivered outside of acquisitions, achieving 8.3% organic growth in GWP.

Meanwhile, the underwriting agencies part of the business also performed strongly with a 16.3% increase in GWP to $852 million. Additionally, the majority of this growth was organic, with 14.5% organic growth compared to 1.8% acquisition growth.

Steadfast’s tech platform offering experienced strong uptake during the first half. The Steadfast client trading platform (SCTP) reached 19,201 active users, with $458 million in GWP transacted via the platform — an increase of 31.6%.

Notably, the majority of Australian and New Zealand brokers are now using SCTP.

What did management say?

Steadfast managing director and CEO, Robert Kelly commented:

Steadfast’s business has grown strongly since listing on the ASX in 2013, and I am pleased to report Steadfast has again delivered a record financial and operating result for the six months to 31 December 2021. Our underlying earnings growth for the period was again driven by sustained organic growth in the Group’s insurance broking and underwriting agencies and our prudent acquisition strategy.

Regarding the Coverforce acquisition, Kelly stated:

The Coverforce acquisition in late August and other network broker acquisitions, including those from our Trapped Capital Project, are performing in line with expectations. The cash conversion of earnings continues to be strong, with more than 100% of underlying NPATA converting into cash during the period.

What’s next?

For the Steadfast share price, the good times are expected to keep on rolling, with its FY22 guidance being upgraded. As a result, underlying NPAT is now expected to be between $163 million and $170 million. Previously, Steadfast had guided between $159 million and $166 million.

However, the upgrade did come with a number of assumptions, including:

• Moderate premium price increases
• Organic growth exceeding original guidance
• No impacts from COVID-19

Finally, shareholders can expect to receive their Steadfast dividend on 23 March 2022.

Steadfast share price snapshot

Over the past year, the Steadfast share price has been a worthwhile investment. The broker network has managed to outperform the S&P/ASX 200 Index (ASX: XJO) with a return of 15% in the 12-month window. Although, the performance has been rockier so far in 2022, slipping 12.9%.

The post Trifecta: Steadfast (ASX:SDF) share price jumps 5% amid record results appeared first on The Motley Fool Australia.

More reading

• These 5 ASX 200 shares are trading ex-dividend today
• Is inflation a threat for pharma stocks?
• Bubs (ASX:BUB) share price jumps 10% amid 73% revenue growth
• Up 18% in a month, is it too late to buy Flight Centre (ASX:FLT) shares?
• Pilbara Mineral (ASX:PLS) share price sinks 7% amid half year results and CEO exit

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

from The Motley Fool Australia https://ift.tt/6m85ljU

The Bubs Australia Ltd (ASX: BUB) share price has been a strong performer on Wednesday.

At the time of writing, the infant formula company’s shares are up 10% to 47.5 cents following the release of its half year results.

Bubs share price jumps on strong first half growth

• Gross revenue up 73% over the prior corresponding period to a record of $38.5 million
• Gross margin improved to 38%
• Underlying EBITDA of $1.2 million
• Loss before tax of $0.6 million
• Cash balance of $30.6 million
• Outlook: Modest half on half growth expected in the second half

What happened during the first half?

For the six months ended 31 December, Bubs reported a 73% increase in gross revenue to a record of $38.5 million.

This top line growth was underpinned by the doubling of its infant formula revenue during the period thanks largely to record revenue from the Corporate Daigou channel. Gross revenue in the channel grew 276% and now exceeds pre-COVID levels. This is being driven by early success from its Daigou 2.0 strategy.

Bubs Australia also notes that it continues to be the fastest growing infant formula manufacturer in Chemist Warehouse and Australia’s big two supermarket chains. Though, it is worth remembering that it the company is growing from a much smaller base than its main rivals. So, these statistics are encouraging, but may be best taken with a pinch of salt. It now has a 3.9% market share.

Management commentary

Bubs Founder and CEO, Kristy Carr, was pleased with the half.

She said: “Bubs is pleased to report its first half year to realise an underlying EBITDA profit. This was a product of management’s uncompromising focus and ability to execute on strategic initiatives with precision, notwithstanding challenging macro-economic conditions.”

“The fact we have been able to return to a growth trajectory speaks to our corporate DNA and our ability to navigate ways forward in a volatile environment. We see potential upside in Australia’s borders reopening with the return of Chinese students, although continuing challenging market conditions are expected to remain for some time.”

Outlook

One thing that could be holding back the Bubs share price from charging even higher is its outlook.

Bubs Executive Chair, Dennis Lin, revealed that the company’s growth is expected to moderate in the second half, with only modest half on half growth.

He said: “Management expects 2H22 to deliver modest Half on Half growth in Revenue, and underlying EBITDA with revenue realisation from earlier new business development coming through in Q4 and after taking into account the seasonally quieter Q3.”

“While our forward plans aren’t contingent on COVID dislocations resolving quickly, we continue to exercise caution as pandemic related effects and macro-economic uncertainties remain that could result in transitory variability,” Mr Lin concluded.

The post Bubs (ASX:BUB) share price jumps 10% amid 73% revenue growth appeared first on The Motley Fool Australia.

More reading

• Potential buys: 2 compelling ASX shares
• Broker names 3 speculative ASX shares to buy
• What are brokers saying about the Bubs (ASX:BUB) share price?
• 2 fast-growth ASX shares with major plans
• Why Airtasker, ARB, Bubs, and Sezzle shares are pushing higher

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

from The Motley Fool Australia https://ift.tt/BuI4xSb

The Flight Centre Travel Group Ltd (ASX: FLT) share price has roared higher over the last 30 days, likely leaving the travel agent’s investors excited for its future.

But the stock’s surge may have left market watchers wondering if it’s too late to jump on the bandwagon.

At market open on Wednesday, the Flight Centre share price is $19.53 – 17.9% higher than it was this time last month. That’s despite the stock taking a 5.4% tumble yesterday.

So, with its half-year earnings set to be released tomorrow, could the travel stock take off again? Let’s take a look.

Will Flight Centre shares continue their up-and-up trajectory?

After a turbulent January, the Flight Centre share price has rebounded to serve investors an 18% gain.

The boost came amid the complete reopening of Australia’s international border this week, as well as news Western Australia’s hard border is set to lift on 3 March.

Though, while the grass is certainly looking greener, it might not be blue skies ahead for Flight Centre.

As The Motley Fool’s Bernd Struben reported earlier this week, it could be years before the travel industry fully returns to its pre-pandemic self.

Additionally, the travel agent’s stock remains the most shorted on the ASX.

Flight Centres shares had a short interest of 15.45% in The Motley Fool’s most recent weekly short-selling breakdown.

Of course, that suggests there’s significantly bearish sentiment regarding the Flight Centre share price among short-sellers.

Such sentiment might be explained by the company’s valuation.

As Airlie Funds Management portfolio manager Matt Williams told the Australian Financial Review, the company’s enterprise value is already higher than it was prior to the pandemic.

That means its recovery looks to be already priced into its shares.

Not to mention, the company underwent a $700 million capital raise in April 2020, handing out 97.2 million new shares. That represents a 96.1% increase on the number of outstanding shares in the company.

It later issued $400 million of convertible notes, due in 2027.

That also helped boost its market capitalisation to higher than it was pre-pandemic.

All in all, Williams warned investors to be wary of buying into the company at its current price. Particularly, as there could be a way to go before the Australian travel industry returns to its pre-pandemic self.

The post Up 18% in a month, is it too late to buy Flight Centre (ASX:FLT) shares? appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• Borders just reopened so why is the Flight Centre (ASX:FLT) share price falling today?
• The Flight Centre (ASX:FLT) share price just surged to a 3-month high. Here’s why
• Why are ASX travel shares taking flight today?
• These are the 10 most shorted ASX shares

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

from The Motley Fool Australia https://ift.tt/ZiMKz1h

The Pilbara Minerals Ltd (ASX: PLS) share price has taken a tumble on Wednesday morning. This follows the release of the lithium miner’s half year results.

At the time of writing, the Pilbara Minerals share price is down 7.5% to $2.58.

Pilbara Minerals share price lower on results and shock announcement

• Shipments up 49% to 170,228 dry metric tonnes (dmt) of spodumene concentrate
• Half year sales revenue up 394% to a record of $291.7 million
• EBITDA of $151.1 million, up from $3.2 million a year earlier
• Cash balance of $191.2 million
• Underlying profit after tax of $84.2 million
• CEO Ken Brinsden to step down by the end of 2022

What happened during the first half?

For the six months ended 31 December, the lithium giant reported a 394% increase in revenue to a record of $291.7 million. Management advised that this result reflects continued improvement in lithium market conditions over the period, which has continued its strong momentum into the current half.

During the half, Pilbara Minerals achieved an average selling price of ~US$1,250/dmt (~A$1,700/dmt). However, since the end of the half, the company notes that reporting agencies are currently indicating spot spodumene concentrate prices in the range of ~US$3,750-US$4,500/dmt.

This bodes well for its performance in the second half, particularly given its unit operating costs. While these costs have increased due to higher royalties and sea freight costs, lower spodumene rates, and the tight labour market, at US$486/dmt (A$666dmt) Pilbara Minerals is operating with huge profit margins.

CEO exit

Taking some of the shine off the strong result is news that Pilbara Minerals’ CEO, Ken Brinsden, plans to step down by the end of 2022.

Mr Brinsden revealed that he believed it was the right time for him to step back after what will be approximately seven years in the role. The decision is motivated by his desire to be able to spend more time with his family and to pursue personal interests after a lengthy career at senior executive levels.

Pilbara Minerals has commenced an executive search process for its next CEO.

Management commentary

The outgoing CEO was pleased with the company’s performance during the half.

Mr Brinsden said: “We are very pleased to announce an outstanding inaugural profit for the half-year to 31 December, which marks a significant milestone for Pilbara Minerals in our journey to become one of the world’s leading suppliers of lithium raw materials.”

“Our financial performance for the period is a direct reflection of the incredible turnaround which has been experienced in the lithium raw materials supply chain over the past year or so. The combination of strong underlying demand growth and Pilbara Mineral’s ability to create a transparent spot price outcome via the Battery Material Exchange has driven very strong increases in prices for our product,” he added.

Outlook

Mr Brinsden is confident on the company’s outlook despite the widespread labour shortage issues and cost inflation being experienced in the Western Australian resource sector.

He commented: “Despite these challenges, the outlook for Pilbara Minerals in the second half of FY2022 and beyond remains extremely bright. The current momentum in lithium markets continues to demonstrate higher price outcomes and we are very well placed to participate in this as production and sales volumes from the combined Pilgangoora Operation continue to increase. I am confident that a combination of hard work, innovation and focus on production growth will continue to drive our success.”

The post Pilbara Mineral (ASX:PLS) share price sinks 7% amid half year results and CEO exit appeared first on The Motley Fool Australia.

More reading

• What is a supercycle and are ASX 200 mining shares at the start of one?
• ASX lithium shares or EV makers, what’s been the better bet?
• These 3 ASX 200 shares are topping the volume charts this Tuesday
• These 3 ASX 200 shares are topping the volume charts on Monday
• Why Audinate, Pilbara Minerals, Praemium, and SKYCITY shares are falling

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.

from The Motley Fool Australia https://ift.tt/Ebwtrzh

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.

Unless you’ve been living under a rock, you’ve already heard that, per the latest economic data hot off the presses, U.S. inflation rose by 7.5% in the past year. As intimidating as that figure may be, I have some good news for you. It just might be possible to protect your hard-earned cash from the detrimental impact of inflation by parking it in the right pharmaceutical stock.

Of course, many other types of stocks could also be a better move than holding your wealth in cash. But I’m of the opinion that pharmas have at least one edge against inflation that makes them a decent choice, at least in some cases. Let’s investigate why inflation isn’t likely to cause too much damage to the companies responsible for developing and commercializing new medicines. 

Input costs aren’t exactly a problem

The biggest thing to realize about pharma stocks is that the prices of the materials they need to manufacture and sell drugs aren’t necessarily tightly linked to inflation. Consider the two pharma giants, Eli Lilly (NYSE: LLY) and Merck (NYSE: MRK). Flying in the face of inflationary pressure, the quarterly cost of goods sold (COGS) as a percentage of revenue actually dropped for both companies over the past year.

LLY Cost of Goods Sold (% of Quarterly Revenues) data by YCharts

As a result, their profit margins and net income actually both increased by a bit in the same period. If inflation were a serious threat to their bottom line, the costs of their inputs would have risen and forced their margin down accordingly. There’s no guarantee that further increases in the pace of inflation won’t start to make life more difficult for these companies, but they also have a powerful trick up their sleeve: pricing. 

If you’re skeptical that pricing is the ultimate solution to inflationary cost increases in pharma, consider the following: 

Eli Lilly makes an insulin analog called Humalog, which helps patients to control diabetes. Most people who need the drug require consistent infusions of it, and they can’t go without it, as doing so is a risk to their health. Furthermore, most patients are somewhat insulated from the cost of their prescriptions for the medicine via their insurance or public healthcare scheme. 

Thus, if inflation causes Eli Lilly’s costs to produce Humalog to increase, it can count on being able to hike the price per dose without losing many customers. And that’s one more reason why inflation is unlikely to cause much of a dent in its profits. 

Keep an eye on the total return

The other issue with inflation is that it can erode the effective return that investors get from their holdings — unless the value of your shares can grow by as much as inflation. Take Eli Lilly, for example. Over the past year, it had a total return of 18.4%, which is derived from its share price appreciation and dividend yield of around 1.4%. Happily, the stock appreciated in value more than the inflation rate, which is a good sign. But that’s not the whole story.

Assuming inflation remains at 7.5% year over year, Eli Lilly’s dividend payment needs to increase by at least the same rate in order for its contribution to the total return to remain constant in terms of its real value. Luckily, the company’s dividend grew by 15.3% in the past 12 months. So it rose by significantly more than the rate of inflation, meaning that investors did actually get a positive return from holding their shares on the basis of the dividend as well as the total return. 

The same set of facts won’t necessarily be true for every pharma stock. Over the past year, the total return of Merck’s shares was roughly 7.5%, and its dividend increased by only 6.2%. That means the payout lost ground against inflation, and the total return barely broke even. In other words, inflation was indeed a threat to the value of investors’ shares of Merck because it killed their real returns. 

In short, inflation may not be a threat to the actual operations of pharmaceutical companies, but it can be a significant concern for investors because the returns of slower-growing pharmas might not keep pace. So it may be wise to invest at least a portion of your investment portfolio in smaller and faster-growing companies, which are more likely to be able to outgrow inflation’s detrimental impact on returns. 

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

The post Is inflation a threat for pharma stocks? appeared first on The Motley Fool Australia.

More reading

• Domino’s Pizza (ASX:DMP) profit nosedives: how will market digest result?
• 3 reasons to treat a market correction like a cup of burnt coffee
• Why is the Appen (ASX:APX) share price having such a dire start to 2022?
• Here’s everything you need to know about the latest Altium (ASX:ALU) dividend
• WiseTech (ASX:WTC) share price on watch after strong half and FY22 earnings guidance upgrade

Alex Carchidi 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.

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

from The Motley Fool Australia https://ift.tt/qUJYCr3

Domino’s Pizza Enterprises Ltd (ASX: DMP) has reported lower profit but higher sales for the half ending December, as it looks to open 500 new stores this financial year.

What did the company report?

• Underlying net profit after tax (NPAT) is $91.3 million, which is down 5.3% compared to first-half 2021
• Earnings before interest and tax (EBIT) also dipped 5.7% to $144.7 million
• Network sales increased 11.1% and online sales up 11.5%
• An interim dividend of 88.4 cents per share, 70% franked, will be paid next month

What else happened in the first half?

Domino’s also reported that it had opened more than 285 new stores during the first half, with 129 coming organically and 156 landing by acquisition in Taiwan.

The pizza franchisor is on track to expand by about 500 stores over the current financial year.

Despite the impact of successive waves of COVID-19, Domino’s is sticking by its long-term annual growth goals of 9% to 12% new store openings and 3% to 6% same-store sales. 

The company admitted same-store sales growth this financial year would fall below this target range.

What did Domino’s management say?

Domino’s chief executive Don Meij stated that his team would deliver “another strong year of profit” after accelerating its long-term investments during the pandemic.

“While there may be uncertainty about what it means for society to be ‘living with COVID’, we are certain we have the essential ingredients for long-term future success, and plan to deliver significant continued growth,” he said.

“COVID-19 has brought unanticipated challenges, including the closure of a market, temporary store closures, and staff shortages as they self-isolate as patients or close contacts.”

Meij added that Domino’s “avoided the temptation” to bunker down and get defensive when the coronavirus pandemic hit.

“As a result we have built a materially stronger and more resilient business in all markets – in partnership with our people – and we will continue to do so.” 

What’s next?

Meij admitted forecasting same-store sales growth for the second half was “challenging”, especially because the prior first half had very strong sales.

Supply chain issues, like in most industries, have struck Domino’s.

“Our teams in each region are working with our supply chain partners to ensure our customers continue to enjoy their favourite meals,” he said. 

“It is worth noting their efforts so far have avoided any menu unavailability, which reflects positively on our team and our partners.” 

Domino’s Pizza share price snapshot

The Domino’s share price has fallen brutally the past few months.

The stock has plummeted more than 39% since its September high, or almost 30% since its November peak.

Domino’s started Wednesday at $100.18, while it was flying high in the mid-$160s less than six months ago.

Goldman Sachs this week rated Dominos shares as a buy with a target of $136.20, which is a 36% upside from the current level.

The post Domino’s Pizza (ASX:DMP) profit nosedives: how will market digest result? appeared first on The Motley Fool Australia.

More reading

• 2 ASX growth shares with huge upside potential
• Leading brokers name 3 ASX shares to sell today
• 3 ASX growth shares to buy after recent market weakness
• Top brokers say there are still ASX 200 growth shares with massive upside in 2022
• 3 buy-rated ASX growth shares to make you smile

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/y8haKTB