The Prophecy International Holdings Limited (ASX: PRO) share price is soaring today, up 32% to $1.61 in early afternoon trade.

This comes after the computer software applications and services company reported significant growth across its 2 product lines, Snare and eMite.

Snare is Prophecy’s cybersecurity software product line. It offers security monitoring, threat detection, security information and event management, and centralised log management. eMite is a SaaS (software as a service)-based customer experience and call centre analytics platform.

What growth figures were reported?

The Prophecy share price is surging after the company reported continued operational progress across its business units.

Prophecy said its subscription-based annualised recurring revenue (ARR) is up more than $1.8 million in November to date. Its total ARR now exceeds $15.4 million.

Breaking that down, ARR from its eMite segment stands at $10.5 million, with $4.1 million in ARR from its Snare business and another $600,000 from Legacy subscription revenue.

The company cited a number of new recurring customers for eMite, such as agricultural (Farmlands), finance (BPER Banca), and health (Providence St Joseph’s). It said there are more deals on the table it still expects to close in November.

To date for FY22 eMite sales growth has come in at 800% compared to the same period in FY21.

According to Prophecy:

In cloud migration, eMite is riding a significant growth trend. We expect that COVID-19 will accelerate cloud migration for the next several years as enterprise customers seek to enable working from home… We will add vendor partnerships similar to Genesys and Amazon for eMite.

As for Snare, FY22 sales growth to date is up 46% from the same period in FY22. The company said its new subscription sales model for Snare “enhances flexibility for customers and supports continued growth” in its base of ARR.

The Prophecy share price could also be getting a lift from the company’s outlook for the full 2022 financial year. It stated, “eMite and Snare’s strong performance is expected to continue in FY22”. Prophecy forecasts approximately $13 million in sales for eMite and $20 million for Snare.

Prophecy share price snapshot

The Prophecy share price has been red hot this year. Over the past 6 months alone, its shares have surged by around 210%. For comparison, the All Ordinaries Index (ASX: XAO) gained around 4.5% in that same period.

Over the past month, Prophecy’s shares are up by more than 50%.

The post Prophecy (ASX:PRO) share price rockets 32% on surging growth appeared first on The Motley Fool Australia.

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• Brokers name 3 ASX shares to buy today
• What is the NAB (ASX:NAB) fully franked dividend worth in November?

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 Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is seemingly unaffected by the ASIC lawsuit that has been announced.

At the moment, ANZ shares are up whilst the S&P/ASX 200 Index (ASX: XJO) is down around 1%.

ASIC lawsuit against ANZ

ANZ acknowledged that the Australian Securities and Investment Commission (ASIC) has commenced a civil penalty proceeding relating to three unlicensed third parties providing home loan application documents to ANZ lenders, including in connection with ANZ’s home loan introducer program.

ASIC is alleging that ANZ contravened the National Consumer Credit Protection Act in relation to 74 home loan applications made between 2016 and 2018, and contraventions of general conduct obligations owed by credit licensees under the Credit Act.

The big four ASX bank said that it has co-operated with ASIC during its investigation and has established a customer remediation program as well as continuously improving its home loan processes and controls.

ANZ is considering the matters raised in the ‘Concise Statement’ and won’t be providing further comment because the matter is now before the courts.

What is ASIC alleging that ANZ did?

The regulator says that ANZ’s program involved home loan referrals to ANZ from third party “introducers” from various professions, such as cleaners and real estate representatives.

ASIC noted that introducer programs received considerable criticism in the Financial Services Royal Commission.

It’s alleged that ANZ breached consumer protection credit laws by accepting customer information and documents from introducers and other unlicensed individuals when this was not allowed. ASIC also alleges that some of the documents provided were fraudulent.

ASIC is also saying ANZ breached its general conduct obligations by failing to take reasonable steps to ensure its representatives did not conduct business with unlicensed third parties and therefore failed to engage in credit activities “efficiently, honestly and fairly”.

Comments on the case

ASIC Deputy Chair Sarah Court said:

ASIC is concerned that as a result of this conduct some loans may have been granted by ANZ based on false information and some consumers may have entered into home loans that were beyond their ability to pay.

If banks are going to accept referrals of consumers seeking a home loan from unlicensed individuals, who receive commission payments for the referrals, they need to make sure they have the right systems in place to properly process those referrals.

How much could the penalty be?

Time will tell. ASIC said that “between 2015 to June 2020, more than 50,000 loans were referred to ANZ through the introducer program, resulting in lending of more than $18.5 billion. In September 2018, the introducer program contributed to approximately 10% of all home loans sold by ANZ’s branch network in Australia.”

Though ASIC is referring to 74 home loan applications made between 2016 and 2018 with one of the allegations.

Last year a penalty of $15m was imposed on National Australia Bank Ltd (ASX: NAB) for contravening National Consumer Credit Protection laws relating to its introducer program.

ANZ share price snapshot

ANZ shares are up 0.3% and it has gone up by 17.6% over the last year.

The post ANZ (ASX:ANZ) share price shrugs off ASIC lawsuit appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Damstra Holdings Ltd (ASX: DTC) share price is falling today and is now down 10.68% at 46 cents.

Shares in the enterprise protection software business took a hit from the open following the release of Damstra’s AGM presentation this morning.

Language at the AGM acknowledged “the market appears to have lost short-term confidence in the company” and that Damstra is focused on sharing “the disappointment in [its] share price performance with other investors”.

Not only that, the company reduced its forecasts for FY22 after a series of challenges across the year.

Here are the key takeouts.

What’s happening with the Damstra share price?

It’s been a difficult year for Damstra shareholders. Since this time in 2020, the Damstra share price has wobbled down from a high of $1.71 and is now at 52-week lows.

Alas, management acknowledged Damstra has faced challenges in 2020/21 that have contributed to the current investor sentiment.

The first major issue related to a contractual dispute with a client acquired through the Vault Intelligence Ltd acquisition. The second came down to “descoping and reduction of service from a global mining client as they internalised their hardware and site access requirements”.

Both were “extremely disappointing and adversely impacted [the company’s] near-term organic growth outlook”. This resulted in adjustments to FY22 guidance.

Damstra downgraded its FY22 revenue guidance and now has its sights on $30 million to $34 million, down from $35.9–$38.9 million.

It also sees an earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin of 15%–20% after downgrading from 22.5%–25%.

As noted by the company, these changes reflect the minimal contribution from its Newmont business and the UK business for the remainder of FY22. At the lower end of the guidance range, it assumes minimal new client acquisition for the remainder of the financial year.

Damstra also notes that even with its new guidance, FY22 revenue is still expected to grow by 10%–24% and, if Newmont was excluded entirely, underlying revenue growth rate would be expected at 21%–37%.

Despite these headwinds, Damstra reiterated its FY21 results, where it increased sales by 40% to $27.4 million, with 87% of total revenues now annually recurring (ARR). The Damstra share price also fell on the release of these results in August.

As for Q1 FY22, unaudited revenue was $6.2 million, with 87.3% of that ARR. Cash receipts were unaudited $7.7 million and the number of paying users grew to 746,000.

What did management say?

The company also appointed a new CFO today. Andrew Ford will take over as Damstra’s chief of finance. He has more than 20 years of experience in similar roles.

Speaking on the announcement, Damstra’s executive chairman Johannes Risseeuw said:

Today we have also announced the appointment of Andrew Ford as chief financial officer, commencing in February 2022 based in Melbourne. Andrew has spent the majority of his 20-year career in CFO and senior finance roles, most recently as CFO/finance director for Infrabuild Ltd/GFG Alliance. Prior to this, he was the CFO of ASX-listed Godfreys Group Ltd. Andrew has also held finance positions with Cleanaway Ltd, Skilled Group Ltd, BlueScope Ltd, and professional services firm Deloitte. Andrew graduated with a commerce degree from the University of Melbourne.

The Damstra share price has performed well under the market’s expectations these past 12 months, posting a loss of 72% in that time. That’s been spurred on by a 71% loss this year to date. Shares are also down 51% in the past month.

The post Damstra (ASX:DTC) share price tumbles 11% as guidance downgraded appeared first on The Motley Fool Australia.

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The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Damstra Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Damstra 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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Shares in lithium-ion battery manufacturer Magnis Energy Technologies Ltd (ASX: MNS) are losing charge today, currently trading down 1.8% at 55 cents apiece.

It’s been a rollercoaster ride for the company the last few weeks, with the Magnis share price closing as high as 73 cents and trading as low as 44 cents – a 64% spread – before smoothing off again to its current levels.

Towards the end of trade yesterday, Magnis advised it had been in talks with the ASX and had subsequently removed material from the corporate presentation of its annual general meeting (AGM).

What did Magnis announce?

Magnis Energy released its 2021 AGM presentation on 22 November, which included details of several investment highlights of its lithium-ion battery plant in New York, Imperium3 (IM3NY). Slide 18 of the presentation contained information about “the potential future value of the company”, as Magnis put it.

Magnis concluded it was potentially worth $10 billion by conducting a “sum of the parts comparable valuation”, suggesting its battery manufacturing business was worth $4 billion alone. Meanwhile, it slapped an easy $4 billion potential value for its anode materials business.

Using comparable names such as Novonix Limited (ASX: NVX), Magnis sized up its “equivalent” divisions to the heavyweights and even weighed IM3NY up against the $300 billion market capitalisation CATL Co Ltd.

Following consultation with the ASX, the company retracted the material on page 18 yesterday and informed investors that they “should not rely on that information as the basis for any investment decision”.

In the news again

This isn’t the first time the battery manufacturer has had to clear the air for shareholders. It was only last month that Magnis responded to a ‘please explain’ letter from the ASX.

The company was asked to clarify updates made in May and September, that listed Indian utility company Sukh Energy as a key stakeholder. The ASX asked Magnis to front up about Sukh’s operations as a going concern.

Magnis Energy replied it was well aware of Sukh Energy’s business operations, its key customers, and its financial health.

The company has also had to clarify statements made on its Imperium3 business and was also warned by the ASX back in July about the use of “exuberant language” in its announcements to investors.

Separately, the regulator also uncovered a potential pump and dump scheme on Magnis’ share price in a Telegram group. As a result, 400 traders from the group were subsequently warned by ASIC.

The announcement follows a disputed report that Magnis chair Frank Poullas was being investigated by the Australian Securities and Investments Commission (ASIC).

As reported by The Motley Fool, Magnis noted its 9.65% owned Charge CCCV had been chosen to participate in the United States government-funded USCAR program.

Despite the turbulence lately, the Magnis share price is still up 44.7% in the past month and has soared more than 206% in the last year.

The post Magnis (ASX:MNS) share price slips after retracting $10b ‘potential’ valuation appeared first on The Motley Fool Australia.

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

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It has been another busy week for Australia’s top brokers. This has led to the release of a large number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

EML Payments Ltd (ASX: EML)

According to a note out of UBS, its analysts have retained their buy rating and $4.40 price target on this payments company’s shares. This follows an update on the company’s dealings with the Central Bank of Ireland. UBS believes the update is a major de-risking event and suspects that its shares could re-rate to higher multiples in the future if its performance in Europe picks up because of the development. The EML Payments share price is trading at $3.60 on Friday.

Universal Store Holdings Ltd (ASX: UNI)

A note out of Morgans reveals that its analysts have retained their add rating and lifted their price target on this retailer’s shares to $8.90 following its trading update. Morgans was pleased with the company’s performance during the first 20 weeks of FY 2022 and feels it has managed the external challenges of the past few months very well. The broker notes that its sales are ahead of its estimates and its store expansion is also outperforming expectations. The Universal Store share price is fetching $7.69 today.

Webjet Limited (ASX: WEB)

Another note out of Morgans reveals that its analysts have upgraded this online travel agent’s shares to an add rating with a $6.60 price target. This follows the release of the company’s half year results earlier this week. Morgans was pleased to see that trading has been strong in the third quarter and that two of Webjet’s three businesses are now profitable. Looking ahead, the broker believes that Webjet has the potential to be materially more profitable post-COVID. The Webjet share price is trading at $5.41 on Friday afternoon.

The post Brokers name 3 ASX shares to buy today 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. owns shares of and has recommended EML Payments. The Motley Fool Australia owns shares of and has recommended EML Payments. The Motley Fool Australia has recommended Webjet 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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When it comes to ASX banking shares, most investors come for the dividend and stay for the dividend (and maybe the franking credits). It’s arguably no different for National Australia Bank Ltd (ASX: NAB) shares.

Like the other major ASX banks, NAB hasn’t exactly reclaimed its former glory in the dividend space. Sure, it seems to be well on the road to recovery after the devastation of last year’s COVID crash (and dividend wipeout). But this was a bank that, only a few years ago, was paying out $1.98 in fully franked dividends per share every year. Contrast that figure with the grand total of 60 cents per share that investors received last year and you get the picture.

But NAB has recently released its full-year results for FY2021, which of course included information on its upcoming final dividend. So has the game changed for shareholders?

Well, it was arguably good news. Yes, NAB reported a 76.8% rise in cash earnings to $6.56 billion, as well as a return on equity metric of 10.7%. That was despite revenues falling 2.4% to $16.73 billion.

What are NAB’s dividends in 2021 looking like?

But the real news for income-focused investors was the announcement of a final and fully franked dividend of 67 cents per share (in itself more than NAB’s entire 2020 payouts). This 67 cents per share dividend comes after NAB’s July interim payment of 60 cents per share (also fully franked) and will hit investors’ bank accounts on 15 December.

The 67 cents per share dividend is a 123% increase from last year’s final dividend of 30 cents per share. The total of $1.27 per share in dividends that investors will receive from NAB in 2021 is likewise a 112% rise on 2020’s 60 cents per share in total dividend payments.

It also gives NAB shares a dividend yield of 4.51% (or 6.44% grossed-up with full franking) at the current share price (at the time of writing) of $28.11.

By comparison, Commonwealth Bank of Australia (ASX: CBA) shares are currently offering a dividend yield of 3.65%. Westpac Banking Corp (ASX: WBC) has 5.51% on the table. And Australia and New Zealand Banking Group Ltd (ASX: ANZ) is putting up 5.2%.

At the current NAB share price, this ASX bank has a market capitalisation of $92.07 billion, with a price-to-earnings (P/E) ratio of 14.95.

The post What is the NAB (ASX:NAB) fully franked dividend worth in November? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank 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 Westpac Banking Corporation. 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 Digital X Ltd (ASX: DCC) share price is on the move on Friday morning. The blockchain and asset management services company announced its participation to deliver ideas for the growth of digital finance.

At the time of writing, DigitalX shares are fetching for 12.5 cents, up 8.70%. It’s worth noting that its shares are a whisker away from breaking its multi-year high of 15.8 cents reached in mid-November.

What did DigitalX announce?

Investors are fighting to get hold of DigitalX shares following the company’s latest update.

In today’s release, DigitalX advised that it has entered into a partner agreement with the Digital Finance Cooperative Research Centre (Digital Finance CRC).

Established in 2018, the Digital Finance CRC brings together companies to undertake research and commercial activities to exploit the digital finance revolution. The group consists of organisations in the finance industry, the Reserve Bank, as well as academics from numerous Australian universities.

Importantly, this allows DigitalX to collaborate with other leading companies around Australia focused on financial and blockchain technologies. This relates to innovations in digital finance, including asset tokenisation, central bank digital currency and regulatory technology.

On 30 June 2021, the Australian federal government provided $60 million to the Digital Finance CRC for digital finance research.

What does this mean for DigitalX?

Under the agreement, DigitalX will commit up to $2.5 million in cash contributions over its 10-year tenure. Around $100,000 will be handed in the current financial year, with $150,000 following in the next financial year.

The company is already looking into research projects relating to digital organisational models such as Decentralised Autonomous Organisations (DAOs). Developing this tool can provide crucial insights for real-world investment decisions, and risk and investment management strategies.

The work of the Digital Finance CRC is expected to commence in 2022.

DigitalX chief product officer, David Beros commented:

We are excited to have now partnered with the Digital Finance CRC and to join a multi-disciplined group of companies and research universities undertaking important research and commercial development of new ideas for the growth of digital finance.

Importantly for DigitalX, this provides us with the opportunity to be part of a broader group and to work with research teams to investigate and commercialise ideas that are relevant to our business that may be beyond what we could do on our own.

We look forward to bringing our own skill set to the Digital Finance CRC and making a meaningful contribution to Australian financial technology innovation over the next 10 years.

About the DigitalX share price

The DigitalX share price has gained close to 30% in the past 12 months. Its shares reached a 52-week high of 15.8 cents in mid-November, before being sold off in the following weeks.

DigitalX commands a market capitalisation of about $92.81 million, with 742.44 million shares on issue.

The post Here’s why the DigitalX (ASX:DCC) share price is leaping 9% today appeared first on The Motley Fool Australia.

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

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The Appen Ltd (ASX: APX) share price has been among the worst performers on the ASX 200 on Friday.

In morning trade, the artificial intelligence data services company’s shares are down a very disappointing 14% to $9.98.

Why is the Appen share price being crushed today?

Investors have been selling down the Appen share price on Friday following the release of a particularly bearish broker note out of the Macquarie Group Ltd (ASX: MQG) equities desk.

According to the note, the broker has downgraded Appen’s shares to an underperform rating and cut the price target on them to $9.50.

Why did Macquarie downgrade Appen?

As mentioned above, Appen is a leading provider of artificial intelligence data services. Through its team of over one million contractors, the company provides high quality data to many of the largest tech companies in the world to help them build and improve their AI and machine learning models.

High quality data is extremely important, as without it these models will never reach their full potential.

Macquarie, however, has been speaking to industry participants and notes that there is an emerging trend which has seen some big tech companies look to bypass Appen and directly crowdsource for data annotation services.

It notes that this has been driven by tighter privacy and data retention standards, which has resulted in companies revising their strategies and developing their own crowd-sourcing solutions.

Macquarie believes this will reduce demand for Appen’s services and has downgraded its earnings and sales estimates to reflect this change, which has ultimately led to a sizeable cut in its target for the Appen share price.

Following today’s sizeable decline, the Appen share price is now down over 61% since the start of the year.

The post Appen (ASX:APX) share price smashed after broker downgrade 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. owns shares of and has recommended Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen Ltd. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Caspin Resources Ltd (ASX: CPN) share price is off to the races in morning trade today. It is currently up 8.66% to $1.25. However, it earlier reached as high as $1.53 — a gain of 32% on its previous closing price.

Below we take a look at the latest drilling results that look to be driving investor interest in the ASX resource explorer.

What drilling results were reported?

The Caspin Resources share price is surging after the company reported promising drill results at its Yarawindah Brook PGE-Ni-Cu Project in Western Australia.

(For the uninitiated, PGE = platinum-group elements; Ni = nickel; Cu = copper.)

Caspin also updated the market on its ongoing reverse circulation (RC) and diamond drilling operations at its Yarabrook Hill prospect.

According to the release, significant nickel and copper sulphide mineralisation was intersected at XC-22, a previously identified airborne electromagnetic (AEM) anomaly. Intersections at 1 hole included a 2-metre zone of up to 20% sulphides from 46 metres downhole.

Caspin’s CEO Greg Miles cautioned that, while it was early days, the company wanted to share the exciting visual observations at XC-22.

Commenting on the findings fuelling the Caspin Resources share price today, Miles continued:

The large size of the XC-22 anomaly suggests that if it is coincident with mineralisation throughout its entire extent then this could represent a significant body of mineralisation. Many more drill holes are required before this can be confirmed as a significant discovery and laboratory assays are required to confirm the tenor of any PGE mineralisation that may be present.

Following the promising early results, the company plans to review similar AEM anomalies in the region. According to Miles: “In light of this new information [these anomalies] are potentially significant. In addition, the remainder of the project area is about to be surveyed by AEM, commencing early in December.”

Caspin Resources share price snapshot

The Caspin Resources share price has rocketed 180% over the past 12 months. That compares to a full-year gain of 12% posted by the All Ordinaries Index (ASX: XAO).

Over the past month, Caspin shares have leapt 52% higher.

The post Here’s why the Caspin Resources (ASX:CPN) share price surged 32% today 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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There is a question worth offering – does the AGL Energy Ltd (ASX: AGL) share price really offer a 14% yield?

If that’s the case, it would be a yield that’s quite a bit higher than other blue chips like Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC) or Telstra Corporation Ltd (ASX: TLS).

When looking at the last 12 months of dividends and the current AGL share price, the yield does come to around 14%.

As readers may have noticed, AGL shares have declined significantly over the last year. It’s actually down by 62%. So, that has significantly increased the trailing AGL dividend yield.

But the key question is, what is the next 12 months of dividends going to be?

AGL dividend estimates

The trouble is, many analysts don’t think the dividend isn’t going to stay as high as it has been.

In-fact, they are expecting the dividend to be more than halved.

For example, Morgan Stanley thinks the AGL dividend is going to sink to $0.35 per share in FY22. That would mean a forward dividend yield of 6.5%.

It’s the same thing from UBS, the analysts there are expecting an even lower dividend in FY22 of just $0.31 per share. This annual dividend would be a yield of just 5.75% at the current AGL Energy share price.

What’s going on with the AGL dividend?

AGL Energy’s dividend policy has been to target a dividend payout ratio of 75% of underlying profit after tax.

The business has been experiencing a decline of profit, so the dividend has been dropping as well.

In FY21, AGL Energy’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 18% to $1.67 billion. The underlying profit after tax dropped by 34% to $537 million which included around $90 million of insurance receipts relating to the Loy Yang Unit 2 outage in 2019.

The company experienced several headwinds in FY21 such as lower wholesale electricity prices, reduced electricity generation output at peak periods, and the roll-off of legacy supply contracts in wholesale gas.

But AGL is expecting more profit declines in FY22. Management is expecting underlying EBITDA to come in a range of between $1.2 billion to $1.4 billion. That would be a decline of 16% to 28%.

Meanwhile, FY22 underlying profit after tax is expected to be in a range of between $220 million to $340 million. This would lead to a decline of between 37% to 59%. Keeping the same dividend payout ratio, that’s the level of dividend cut that shareholders may need to expect.

Profit expectations can have an important impact on the AGL share price when it comes to investor thoughts on the valuation.

Demerger

AGL continues with its demerger. The company says that it’s progressing well with its plan to implement the proposed demerger in the fourth quarter of FY22, subject to various approvals.

The two businesses (Accel Energy and AGL Australia) continue to progress towards finalisation and structure of funding requirements and will adopt financial policies consistent with the maintenance of an investment grade credit rating.

The post Does the AGL share price really offer a 14% dividend yield? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation 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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