The team at Morgans has released a note this morning highlighting three ASX shares that it thinks are among the best options for investors to buy today.

They are as follows:

Alliance Aviation Services Ltd (ASX: AQZ)

This airline and aviation services company has been given an add rating and $5.05 price target. This is materially higher than where the Alliance Aviation Services share price currently trades.

The broker believes that investors should look beyond the short term turbulence that the company is facing and feels that an inflection point is coming.

It commented: “AQZ’s interim result and FY22 guidance was weaker than expected. However, significant progress on its E190 deployment has been achieved over the past ~18 months and cash generation in the underlying Fokker business remained robust. Our positive investment case on AQZ has been predicated on the step-change in FY23 earnings growth as its material fleet expansion is deployed and we continue to think the company is nearing this inflection point.”

Dexus Industria REIT (ASX: DXI)

Another ASX share that Morgans is a fan of is Dexus Industria (formerly known as APN Industria). It has put an add rating and $3.65 price target on the industrial property company’s shares.

Morgans believes that the significant work it has done during the first half has positioned it for growth in the coming years. This includes $584 million in new acquisitions that were funded via a capital raising. It also highlights its attractive dividend yield.

The broker commented: “We retain an Add rating on a revised price target of $3.65. DXI is trading at a discount to NTA, offers a +5% distribution yield with solid underlying portfolio metrics and near/medium term growth opportunities via the development pipeline.”

PeopleIn Ltd (ASX: PPE)

Finally, this workforce management company is one of the broker’s top picks. It has put an add rating and $5.15 price target on its shares.

The broker is pleased with the way the company has been balancing its portfolio through acquisitions, sees scope for more, and believes it is well-placed for growth as COVID headwinds ease.

Morgans said: “We expect a solid interim result on 18 February and organic growth to accelerate over the 2H22 as COVID challenges normalise. Current international candidate sourcing initiatives should deliver benefits in FY23. With a solid organic growth outlook, potential for further accretive M&A and an undemanding valuation (FY23F PE of ~11.5x), we maintain an Add rating.“

The post Morgans names 3 of the best ASX shares to buy today appeared first on The Motley Fool Australia.

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• Cimic (ASX:CIM) share price edges lower following 25% drop in statutory NPAT
• Why this ASX All Ordinaries share has quietly gained 35% in 6 months
• Record dividend: Northern Star Resources (ASX:NST) share price climbs on half-year results
• No dividend? No worries. AMP (ASX:AMP) share price up 4% on results

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Alliance Aviation Services Ltd. and People Infrastructure Ltd. The Motley Fool Australia owns and has recommended Alliance Aviation Services Ltd. The Motley Fool Australia has recommended People Infrastructure 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 AGL Energy Limited (ASX: AGL) share price is centre stage on Thursday after the company handed down its FY22 first-half results.

In morning trade, shares in the Australian energy giant are trading 2.7% higher at $7.73 apiece.

AGL share price gets a bump despite earnings slump

The highlights of the report are:

• Revenue up 6% from prior corresponding period to $5,713 million
• Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) down 21% to $723 million
• Total customer numbers relatively flat at 4.205 million
• Net cash from operating activities increased 9% to $661 million
• Underlying net profit after tax down 41% to $194 million
• Statutory net profit after tax swung from a loss to a $555 million profit
• Interim dividend slashed from 41 cents to 16 cents per share

What else happened during the first half?

For the six months ended 31 December 2021, AGL pushed through yet another challenging period. So, why are investors bidding up the AGL share price on Thursday? Here’s a closer look at the details.

In general, the disappointing half from an underlying perspective was driven by a decrease in contracted electricity prices. In addition, lower electricity demand — due to further increases in rooftop solar — and thinner margins on gas supply were all contributing factors.

Furthermore, this time around AGL lacked the one-off insurance proceeds from the damage at Loy Yang. At the same time, the company was selling off its hedging mechanisms at higher wholesale electricity prices.

Fortunately, the electricity gentailer partly offset the woeful result with $57 million in operational cost savings. This puts the company on track to achieve its $150 million in operating cost savings by the end of this financial year.

Other notable items potentially helping the AGL share price today include information on the company’s climate commitments and the financial structure of its demerger.

Firstly, AGL Australia is planning to be a net-zero operator by 2040. The company is aiming to reduce its emissions by 50% by 2030. Meanwhile, AGL offshoot Accel Energy has a bit more leeway — targeting a 55% to 60% reduction in annual emissions some time between FY35 and FY46.

What did management say?

AGL Energy managing director and CEO, Graeme Hunt, stated:

Our 1H22 result reflects a solid first-half performance by the business with continued resilience of operations and portfolio against the backdrop of another period of disruption from the pandemic.

As anticipated, our 1H22 result reflects a reduction in earnings largely driven by the non-recurrence of $105 million in insurance proceeds received in 1H21. After adjusting for the non-recurrence of the insurance proceeds in 1H21, Underlying Profit after Tax was down 23 percent, reflecting the impact of lower wholesale prices over the past two years as we have progressively re-contracted our hedging positions from previously higher prices.

Regarding the demerger of AGL Australia and Accel Energy, Hunt said:

We are well-progressed with our proposed demerger with completion on track for 30 June 2022. The proposed demerger will create a strong future for both parts of our business and through this enable a responsible and orderly transition towards a decarbonised energy future.

What’s next?

Amid the latest half-year figures, AGL is now able to provide more concise guidance for FY22 earnings. The company now anticipates underlying EBITDA to be between $1,275 million and $1,400 million. This is compared to the prior guidance of $1,200 million to $1,400 million.

Likewise, the underlying net profit after tax has been revised to $260 million to $340 million. This represents a $40 million increase to the bottom of the previous range. This might explain some of the optimism for the AGL share price today.

The proposed demerger is slated to be implemented by 30 June 2022, assuming regulatory and/or court approvals. Guidance for the costs of the demerger is between $220 million and $260 million.

Once commencing their separate corporate lives, the two companies will hold different dividend policies. According to today’s release, AGL Australia will pay out 60% to 75% of its underlying NPAT. Meanwhile, Accel will provide 80% to 100% of its free cash flows after servicing financing costs in the form of a dividend.

AGL share price snapshot

The AGL share price has been a solid performer so far this year. Unlike many other companies in the S&P/ASX 200 Index (ASX: XJO), the energy company avoided January selling pressures. As a result, the company’s shares are up 19.3% since the beginning of 2022.

However, on a longer timeline, the AGL share price remains in the negative. For example, if we look at the past 12 months, shares in AGL are 32% in the red.

The post AGL (ASX:AGL) takes a knife to dividends in its first-half earnings appeared first on The Motley Fool Australia.

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• Own AGL (ASX:AGL) shares? Here’s what to look for when the company reports next week
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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 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 CIMIC Group Ltd (ASX: CIM) share price is in negative territory during late morning trade. This comes after the engineering company dropped its full-year results for the 2021 financial year.

At the time of writing, Cimic shares are travelling 1.93% lower to $16.78 apiece.

Let’s take a look at how the company performed for the period.

Cimic share price backtracks following mixed results

The Cimic share price is travelling lower following the release of the company’s results. Here are some of the key operational highlights:

• Group total revenue of $14.7 billion, up 8.3% on the prior corresponding period (FY20 $13.57 billion)
• Earnings before interest, tax, depreciation and amortisation (EBITDA) of $913.9 million, up 11.5% (FY20: $820 million)
• Operating profit of $630.2 million, up 8.7% (FY20: $579.5 million)
• Statutory net profit after tax (NPAT) of $402.1 million, down 35.2% (FY20: $620.1 million)
• Final unfranked dividend of 36 cents per share declared, down 40% from 60 cents in FY20

What happened in FY21 for Cimic?

The company reported $20.4 billion of major contracts that were won during the period, however this wasn’t enough to keep its share price afloat.

Cimic revealed that its statutory NPAT fell by 35.2% on the back of discontinuing its use of factoring arrangements. The completion of the strategic initiative led to a reduced balance from roughly $2 billion at December 2019 to $434 million at December 2021.

In addition, the company progressed the withdrawal from the Middle East, with the transfer to the acquirer of the Qatar business completed.

Management is hoping to resolve legacy items, including completing the exit from the Middle East and progressing CCPP and NRAH arbitration hearings.

What did management say?

Cimic group executive chair and CEO, Juan Santamaria touched on the result, saying:

Cimic achieved solid 2021 financial results, with NPAT within our guidance range, total dividends of 78c per share, increased work in hand, and significantly improved EBITDA cash conversion.

We diversified our funding sources, completed our strategic unwind of factoring, and repaid and discontinued the supply chain finance program.

Other significant achievements included the IPO of Ventia, commercial settlement on the West Gate Tunnel project, and financial close for North East Link.

FY22 outlook for Cimic

Looking ahead, Cimic is forecasting FY22 NPAT to be in the range of $425 million to $460 million. This represents a potential increase of 4.8% to 13.5% on FY21 underlying NPAT of $405.4 million.

The FY22 guidance is being supported by the group’s numerous projects along with a positive outlook across core markets.

Cimic has an extensive pipeline with over $480 billion of tenders to be bid and/or awarded in 2022 and beyond.

The post Cimic (ASX:CIM) share price edges lower following 25% drop in statutory NPAT appeared first on The Motley Fool Australia.

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

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The OM Holdings Limited (ASX: OMH) share price has seen some major gains over the last few months.

During that time, the OM Holdings share price has increased by 34.72%. Yesterday alone it gained almost 16%. However, it is currently down 4.88% on Wednesday’s closing price to 98 cents.

So what’s been happening internally to make this particular ASX All Ordinaries share soar?

Let’s take a closer look…

What’s been going on with OM Holdings?

OM Holdings is a miner that primarily focuses on the production of manganese (Mn) and silicon — the two ingredients used to create steel. In addition, it is involved in the production, smelting, and distribution of processed ferroalloys (iron containing a high proportion of one or more other elements).

The company, which operates out of a number of locations including China, Japan, Malaysia, Singapore, South Africa, and Australia, last month released its latest corporate snapshot. Highlights included:

• Cash and equivalents (as of 1H FY21) of $61.5 million
• Debt (total borrowings as of 1H FY21) $398.6 million
• Enterprise value of $1 billion
• Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) (trailing 12 months) of $91.7 million

OM Holdings activities highlights

The company also gave an activities update for the quarter ending 31 December 2021, accounting for its numerous projects.

Overall, the miner transacted 555,904 tonnes of ores and alloys from its sites within the December quarter. This compares to 492,954 tonnes in the previous quarter (1 July to 30 September 2021) — an increase of 13%.

OM Holdings said this was “partially due to recovery in trading volumes and partially due to unshipped material carried forward from the prior quarter’s production”.

Further, it achieved increased production at its most recent site, Sarawak in Malaysia, with ferrosilicon (FeSi) and manganese alloys up 8% and 5% respectively (against the previous quarter).

The company said 12 out of 16 furnaces at the site were in operation throughout the quarter. As a result, “production in FY 2021 has exceeded production guidance”.

However, OM Holdings also said global crude steel production saw an 8.9% decrease against the 2020 prior corresponding period. It said this was due to “a significant reduction in Chinese steel production”.

The price of 44% manganese (Mn) increased in the December quarter (against the September quarter), and the FeSi (iron and silicon) price decreased.

OM Holdings employees in China and Malaysia continued to endure COVID-19 restrictions, which the company predicts will lead to a decrease in production. However, it is hoping to experience a rebound later this year.

OM Holdings share price snapshot

During the last 6 months, the OM Holdings share price hit a low of 70 cents in late September and a high of $1.25 in early October.

While no company announcements directly coincided with these movements, the ASX All Ordinaries miner did commence manganese drilling at its joint venture project in Western Australia earlier in September. It also reported a 116% increase in international ferrosilicon prices and gave an investor presentation around these dates.

The OM Holdings share price is also up almost 34% over the past 12 months and almost 8% this year to date.

The company has a market capitalisation of $653.68 million based on its current share price and a price-to-earnings ratio (P/E) of 79.52.

The post Why this ASX All Ordinaries share has quietly gained 35% in 6 months appeared first on The Motley Fool Australia.

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Motley Fool contributor Alice de Bruin 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 Downer EDI Limited (ASX: DOW) are struggling today following the release of the company’s half year results.

At the time of writing, the Downer share price is trading down hard from the open today, now 7% in the red at $5.22. Let’s take a closer look.

Downer share price falls on mixed earnings

The company outlined several investment highlights for the half, including:

• Total revenue of $6 billion, down 2.3%
• Statutory earnings before interest and tax (EBIT) of $172 million, up 5.9% from $162.4 million
• Core Urban Services business earnings before interest and tax and amortisation (EBITA) of $238 million, up 4.4%
• Statutory EBITA of $186.2 million, down 4.9% from $195.8 million
• EBITA margin of 3.1% down from 3.2% at 31 December 2020
• Statutory net profit after tax and before amortisation of acquired intangible assets (NPATA) stable at $99
  million
• Statutory net profit after tax (NPAT) of $89 million, up 17.7% from $75.6 million

What else happened this half for Downer?

The company’s earnings were marked by a decrease in total revenue and EBITA from the same period last year.

Downer specifically notes the loss was driven by “the loss of contribution from the Mining and Laundries divestments made in the current and prior periods, in addition to the COVID-19 impact on operations, particularly in non-core Hospitality”.

Revenue of $6 billion was down over 2% year on year, whereas statutory reported EBITA came in 5% behind the same period to $195.8 million.

Although, when removing the amortisation component of Downer’s earnings, statutory EBIT actually expanded by 6% to $172 million – up from $162.4 million the year prior.

The company has also decreased gearing from 19% to 16.5% since 30 June 2021, reflecting the “strong
operating cash flows and proceeds from the divestment program partially offset by the impact of the share buy-back program”.

Cash conversion also gained this period from 84% to up over 85%. Downer notes that this figure is adjusted to 92.1% once $21.1 million in cash outflows relating to ‘Individually Significant Items’ is recognised from FY20.

On the cash flow statement, Downer realised a $10 million decrease in net financing costs after a lower average debt drawdown and lower interest expense.

Management commentary

Speaking on the announcement, Chief Executive Officer of Downer, Grant Fenn said:

With the arrival of Omicron it has been a tough six months to navigate. Despite the challenges, our core business has delivered solid earnings and strong cash conversion for the first half of 2022.

Our market positions and diversity give us strength that others do not have and confidence through to the other side of COVID-19. Our brand and our relationships are very strong. The divestments of non-core Mining and Laundries businesses has allowed us to reduce our gearing to 16.5% and focus on growth in our Urban Services portfolio. Our liquidity and balance sheet are strong, with Net Debt to EBITDA of 1.5x comfortably below the Group’s target range of 2-2.5x

What’s next for Downer?

The company notes that it gave guidance on group earnings back in August 2021. Back then it predicted that core Urban Services revenue and earnings “would grow in FY22”.

In 1HFY22, core revenue had gained 13.3% on the previous period and earnings were up 4.4%. Downer reckons that the “impact of Omicron on the supply chain, work volumes and revenue mix is difficult to predict and presents risk for the second half”.

“We will do our best to manage that risk with our customers and we will provide an update at our Investor
Day in April”, the company concluded.

Downer share price snapshot

In the last 12 months, the Downer share price has climbed almost 5%. However this year to date it has pared gains and is now more than 6% in the red.

In the past week, investors have thrown support behind the company and shares have now climbed almost 2% in the green during that time.

The post Revenue, EBITA slide in 1HFY22 as Downer (ASX:DOW) share price plunges 7% 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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The Northern Star Resources Ltd (ASX: NST) share price is in the green today following the release of the company’s half-year (H1FY22) results.

The gold miner’s shares opened strongly, lifting 3.2% above yesterday’s close to $8.96 shortly after the open. They are now trading at $8.74, an 0.69% gain.

Let’s take a look at what the company reported today.

Northern Star share price up on half-year results

The highlights of Northern Star’s half-year (H1FY22) results include:

• Revenue of $1,807 million, a 63% gain on the previous corresponding period (PCP) of H1FY21
• Net profit after tax (NPAT) surged 43% on PCP to $261 million
• $699 million underlying EBITDA, a 47% gain on PCP
• Cash earnings of $430 million, a 69% increase on PCP

Record dividend declared

Northern Star declared a fully franked interim dividend of 10 cents per share. This is a record for the company and represents a return to shareholders of 27% of its earnings.

The revenue boost was driven by 62% more gold sold compared to the H1FY21. The amount of gold increased from 480 thousand ounces (koz) to 779 koz.

The company sold 477 koz of gold from the Kalgoorlie mine, 212 koz from Yandal, and 90 koz from Pogo at an all-in sustaining cost (AISC) of $1,613 per ounce.

During the half, Northern Star repaid $361 million of corporate bank debt and acquired Newmont’s power business for $130 million.

In July, the company confirmed it will aim for net zero emissions by 2050.

Management comment

Northern Star managing director Stuart Tonkin commented:

We remain on track to meet our FY22 production guidance, which incorporates current WA border restrictions and the associated labour and cost impacts.

During this period of continued market volatility, we are focused on operational delivery and proactively protecting the health, safety and wellbeing of our people and those in the communities in which we operate.

What’s next for Northern Star?

Northern Star is on track to meet its FY22 full-year guidance. Gold production at the Pogo and Yandal mines is increasing. However, Kalgoorlie production has been impacted by open pit material movement.

On 15 February, the company will release a sustainability report highlighting its emission reduction targets for 2030.

Northern Star share price recap

The Northern Star share price has dived 27% over the past year. For perspective, the S&P/ASX 200 Index (ASX: XJO) has returned nearly 7% over the past year.

Northern Star has a market capitalisation of about $10 billion based on the current share price.

The post Record dividend: Northern Star Resources (ASX:NST) share price climbs on half-year results appeared first on The Motley Fool Australia.

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• What are you really getting when you buy Northern Star (ASX:NST) shares?

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 AMP Ltd (ASX: AMP) share price is marching higher in early trade, opening up 4%.

AMP shares closed yesterday at $1.01 and are currently trading for $1.05.

Below we look at the highlights from the ASX 200 financial services company’s full year financial results for 2021 (FY21).

AMP share price lifts off on profit leap

• Underlying net profits after tax (NPAT) of $356 million, up 53% from $233 million in FY20
• Statutory NPAT loss of $252 million, compared to a profit of $177 million in FY20
• Surplus capital as at 31 December $383 million above target requirements to support demerger and transformation
• No final dividend declared

What else happened during the financial year?

AMP said that conditions were challenging in 2021, but an earnings increase by AMP Bank and a lift in AMP Capital performance fees from closed-end infrastructure funds helped deliver solid underlying performance for the year.

The company said its statutory NPAT loss for FY21 was mainly due to previously announced impairment charges, which were mainly non-cash write-downs.

Management opted not to declare a final dividend, taking a conservative approach to support the AMP’s business transformation. AMP last paid a final dividend in March 2019.

Other highlights included an 8% increase in total assets under management (AUM) at Australian Wealth Management. AUM stood at $134 million as at 31 December.

Addressing its remediation program, AMP reported that its advice file reviews are complete and remediation payments to customers with AMP products have been made. The payments still due to customers with external products are being finalised.

What did management say?

Commenting on the results, AMP’s CEO, Alexis George said:

We have set a clear strategy to drive two simpler and more efficient businesses, well placed to compete, grow and deliver value in a highly dynamic market.

We’ve achieved a solid underlying profit result, which shows the strength of our Bank, growth of the North platform with increased inflows from external financial advisers, and the significant cost savings achieved from across the business, in line with our targets.

What’s next?

AMP reported that its demerger of Private Markets from AMP remains on track to be completed in the first half of 2022.

Looking ahead, George said the operational separation of the 2 businesses is now complete, “including the transfer of the multi-asset group investment team into Australian Wealth Management, and the appointment of Chairman and Deputy Chairman designates to establish an independent board”.

“We have also entered into a binding agreement for the sale of the Infrastructure Debt platform,” he added. “Private Markets has today announced its new brand – Collimate Capital – which will be rolled out globally in the first half of 2022.”

AMP share price snapshot

The AMP share price has struggled over the past 12 months, down 32%. By comparison the S&P/ASX 200 Index (ASX: XJO) is up 6% over that same time.

So far in 2022, AMP shares have gained 5%.

The post No dividend? No worries. AMP (ASX:AMP) share price up 4% on results appeared first on The Motley Fool Australia.

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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 PlaySide Studios Ltd (ASX: PLY) share price has continued its remarkable run on Thursday morning.

At the time of writing, the video game developer’s shares are up 18% to a record high of $1.42.

This means the PlaySide share price is now up over 250% since this time last year.

Why is the PlaySide share price rocketing higher?

Investors have been bidding the PlaySide share price higher today after it announced a deal with one of the world’s largest video game developers.

According to the release, the company has signed a 10-month fixed price work for hire agreement with Activision Blizzard, that will see PlaySide provide production, engineering and user interface development services to the video game giant.

Activision Blizzard is the company behind popular franchises such as Candy Crush, World of Warcraft, and Overwatch. It is in the process of being acquired by Microsoft for US$68.7 billion.

Management notes that this deal reflects its strategy of targeting larger contracts with AAA studios and important partners that have strategic significance.

It believes that developing a strong relationship with a major global brand such as Activision Blizzard through quality delivery and partnering will be a long term strategic benefit and reinforces its credentials as a global premier service provider in the industry. No financial terms have been disclosed.

PlaySide’s CEO, Gerry Sakkas, commented: “The Company is delighted to secure this contract with Activision Blizzard, one of the world’s largest game Developers and Publishers. Their portfolio of titles is a collection of some of the most prominent titles in the industry. PlaySide is very excited to be working with Activision Blizzard showcasing our AAA game development capabilities and this agreement is further recognition of the progress the Company has made on the global stage”

The post Why is the PlaySide (ASX:PLY) share price rocketing 18% to a new record high? 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 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 Mirvac Group (ASX: MGR) share price is on the move on Thursday morning following the release of its half year results.

At the time of writing, the property company’s shares are up 1% to $2.64.

Mirvac share price rises following solid first half growth

• Statutory profit up 44% to $565 million
• Earnings before interest and tax (EBIT) up 8% to $391 million
• Operating profit after tax up 9% over the prior corresponding period to $297 million
• Earnings per share up 9% to 7.5 cents
• Operating cash flow down 6.8% to $413 million
• Half year distribution up 6% to 5.1 cents per share
• Full year guidance reaffirmed

What happened during the first half?

For the six months ended 31 December, Mirvac delivered a 44% increase in statutory profit to $565 million and an 8% lift in EBIT to $391 million.

The latter was driven by a 248% increase in Commercial & Mixed Use Development EBIT to $73 million and a 17% lift in Residential EBIT to $89 million, which was partially offset by weakness in the key Integrated Investment Portfolio (IIP) business. Due largely to the impact of lockdowns, IIP posted a 5% decline in EBIT to $270 million.

This ultimately led to an operating profit after tax of $297 million, which was up 9% over the prior corresponding period. This compares favourably to the market consensus estimate of $250 million.

Management commentary

Mirvac’s CEO & Managing Director, Susan Lloyd-Hurwitz, was pleased with the company’s performance given the difficult operating environment.

She said: “Today’s result reflects our continued focus on carefully navigating the ongoing disruption caused by the global pandemic, while highlighting the strength of our diversified and integrated business model.”

“As we expected, the extended lockdowns in the first half of the financial year impacted the performance of our Integrated Investment Portfolio, concentrated in Retail. However, this was offset by a strong performance in our development businesses.”

“In Residential, for example, we continued to see strong sales momentum despite the roll-off of government stimulus, with 95 per cent of forecast EBIT for FY22 already secured. Successful pre-leasing and execution in Commercial & Mixed Use also supported earnings and asset revaluations, as we continue to focus on creating and curating high-quality assets that will deliver future income to the Group,” Lloyd-Hurwitz concluded.

Outlook

Management acknowledges that the Omicron variant is presenting a number of challenges, such as supply chain constraints and labour shortages. It also notes that the extension of the Commercial Code of Conduct for retail tenants is likely to put pressure on cash collection rates in the short term.

However, management remains positive on the company’s prospects and has reaffirmed its guidance for FY 2022.

Susan Lloyd-Hurwitz commented: “Our strong balance sheet, the secure income stream from our high-quality Investment portfolio, our robust commercial development pipeline, and a high level of residential pre-sales ensures our business remains resilient. As a result, we have retained guidance of at least 15.0 cents per stapled security in FY22, noting that we will continue to closely monitor our operating environment.”

The post Mirvac (ASX:MGR) share price higher after overcoming Omicron to deliver solid earnings growth 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 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 Commonwealth Bank of Australia (ASX: CBA) share price is pushing higher again on Thursday morning.

In morning trade, the banking giant’s shares are up 0.5% to $100.00.

This means the CBA share price is now up almost 7% this week.

Can the CBA share price keep rising?

One leading broker that believes the CBA share price still has room to climb higher from its current level is Bell Potter.

According to a note released this morning, its analysts have upgraded the bank’s shares to a buy rating with a $108.00 price target.

Based on the current CBA share price, this implies potential upside of 8% for investors over the next 12 months.

In addition to this, the broker is forecasting CBA to pay a $3.87 per share fully franked dividend in FY 2022. If we add this into the equation, the total potential return on offer with its shares stretches to 12%.

What did the broker say?

Bell Potter was pleased with CBA’s performance during the first half and notes that its cash earnings came in well-ahead of its estimates.

It commented: “CBA’s $4.75bn cash NPAT was 8% higher than our forecast. […] Cash NPAT was nearly on par with 2H21, a great outcome. There was also investment in operational execution (in line with the bank’s strategic priorities) coupled with a return of excess capital to shareholders of $2bn (on-market share buyback; surplus capital post buy-back would be around $4bn).”

This stronger than expected performance has led to Bell Potter increasing its cash earnings estimates for FY 2022 and FY 2023 by 11% and 8%, respectively. It is now forecasting cash earnings of $9,704 million and $9,842 million for the two financial years.

All in all, it appears to believe this makes the CBA share price great value at the current level.

The post Broker upgrades CBA (ASX:CBA) shares to buy rating following ‘great’ half 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 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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