The Nuix Ltd (ASX: NXL) share price is slipping this morning after the embattled company released its earnings for financial year 2021 (FY21).

On opening, the Nuix share price jumped 6.97% higher than its previous close. However, the rise has been short-lived. Right now, Nuix shares are trading down 2.09% for $2.81.

Nuix share price falters on $176 million of revenue

Here’s how the controversial provider of investigative analytics and intelligence software performed through FY21:

• $176 million of revenue, just 0.1% more than that of FY20
• An after-tax loss of $1.64 million, down 107% on FY20’s $23.5 million profit
• $30.15 million in earnings before interest, tax, depreciation, and amortisation (EBITDA), 51% less than that of FY20
• Gross profit $157.2 million

Nuix reported its annualised contract value increased during FY21. It grew by 4.1% in constant currency. Its subscription annualised contract value grew by 10.3% on that of FY20, while its consumption annualised contract value grew by 22%.

Come the end of FY21, Nuix’s total software-as-a-service (SaaS) customers had grown to 112, up from 71 at the end of the previous financial year.  

Additionally, the company stated that contracts beginning in FY22 suggest those figures will continue to increase.

Nuix’s customer churn was lower in FY21 at just 3.7%.  

Nuix spent $44.3 million on research and development in the past financial year. It expects its research and development spending to increase in FY22.

Nuix ended the period with $70.8 million of cash and no borrowings.

What happened in FY21 for Nuix?

For those who haven’t kept an eye on the company previously touted as a future market darling, here’s what you missed.

The Nuix share price has been hit hard over FY21 by a number of dramatic happenings.

Nuix conducted its Initial Public Offering (IPO) in December 2020. The unicorn’s prospectus’ offer price of $5.31 per share gave the company a market capitalisation of around $1.7 billion on listing.

At the time, we reported the tech company’s debut could have brought its major investor and backer of its float, Macquarie Group Ltd (ASX: MQG) a $1 billion pay day.

Nuix’s first day on the ASX saw its share price finishing at a massive $8.01, representing a 50.8% gain on its offer price.

Within its prospectus, Nuix forecasted it would reap revenue of $193.5 million, $166.7 million of gross profit, and EBITDA of $63.6 million in FY21.

Nuix’s forecasts were downgraded in April and again in May. The first downgrade saw Nuix’s forecasted revenue lowered to between $180 million and $185 million. In May, Nuix’s guidance was dropped to between $173 million and $183 million.

Then came the real trouble. Nuix was the subject of an intense media campaign that began in May. Over the course of the campaign, Nuix was accused of poor governance, questionable financial reporting, and a controversial options package given to the company’s founder.

Since then, Nuix has been the subject of an Australian Federal Police investigation, watched its CEO and CFO walk out, and, now, it’s being investigated by the Australian Securities and Investments Commission (ASIC).

Despite the bad press, Nuix welcomed 100 new customers over FY21. Its average new order value rose to $240,000. Additionally, its customers were generally willing to enter into multi-year contracts, which accounted for 36.3% of Nuix’s revenue for FY21.

What did management say?

Nuix’s CEO Rod Vawdrey commented on the news driving the company’s share price today, saying:

This last year has been challenging for Nuix and our stakeholders. Despite this, the Nuix team has delivered significant customer wins, important technology developments and strategic expansion. We are optimistic and remain confident in Nuix’s future. Our employee base continues to grow, and our technology is best in class, and critical for our customers and partners. Further investment in our technology will enhance and consolidate Nuix’s market position.

Nuix’s chair Jeff Bleich added:

The board and senior management are focussed on strengthening all aspects of the company and addressing the issues that surfaced during our first eight months as a publicly listed company. Progress on our agenda continues apace with expansion of our board through the pending appointment of two additional independent non-executive directors and a strong field of candidates for the CEO position…

We recognise there are areas for improvement and necessary change. We must learn from recent challenges and ensure we address any underlying problems.

What’s next for Nuix?

Here’s what those interested in the Nuix share price might want to keep an eye out for in FY21:

Nuix plans to continue investing in its growth. Particularly, into its journey to the cloud beyond its Discover SaaS offering.

It will also work towards accelerating its product development pipeline, its strong product base, and additional value-added solutions.

It says it will also be building and enhancing its sales and distribution capacity.

As noted by Nuix’s chair, the company will be looking towards board expansion and senior leadership renewal in FY22.

Nuix hasn’t yet provided guidance for FY22.

Nuix share price snapshot

Since its debut on the ASX, the Nuix share price has slipped a whopping 61%. It is also 64% lower than it was at the start of 2021.

The company now has a market capitalisation of around $910 million, with approximately 317 million shares outstanding.

The post Nuix (ASX: NXL) share price down on realised FY21 guidance appeared first on The Motley Fool Australia.

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• Nuix (ASX:NXL) share price slides as Macquarie CEO acknowledges disappointment

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 recommended Nuix Pty Ltd. The Motley Fool Australia owns shares of and 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 InvoCare Limited (ASX: IVC) share price has been a strong performer on Monday morning following the release of its half year results.

At the time of writing, the funerals company’s shares are up 9.5% to $12.25.

InvoCare share price jumps after profit rebound

• Statutory Revenue up 13% to $260.9 million
• Operating Revenue increased 13% to $257.3 million
• Operating earnings before interest, tax, depreciation and amortisation (EBITDA) up 31% to $63.6 million
• Operating EBIT up 46% to $39.4 million
• Reported Profit After Tax of $44 million, compared to a loss after tax of $18 million
• Operating earnings per share up 57% to 14.4 cents
• Interim fully franked dividend of 9.5 cents per share

What happened in FY 2021 for Invocare?

For the six months ended 30 June, InvoCare returned to form thanks to a continued recovery in the value of its funeral case average, continued growth in memorialisation sales in the Cemeteries & Crematoria business, and a strong contribution from acquisitions in the Pet Cremations business.

This resulted in a 13% increase in operating revenue to $257.3 million during the half and an even better 46% lift in operating EBIT. Management notes that cost control was a particular feature in the half and underpinned a return to positive operating leverage.

Another positive boosting the InvoCare share price could be its strong cash balance. Thanks to actions taken at the height of COVID, the company ended the period with a sizeable cash balance of $131.2 million. It also reported a strong operating cash flow result, translating to a cash conversion ratio of 102%.

What did management say?

InvoCare’s CEO, Olivier Chretien, said: “While the operating conditions have not fully returned to pre-COVID levels, it is pleasing to see how resilient the business and our people continue to be, and the operational performance they can deliver when conditions allow.”

“We shared our strategy with investors in May, and we have hit the ground running, with a number of key achievements during the period. Our initial focus has been on further strengthening our business foundations, and we are pleased with the momentum that our teams have established in the half.”

What’s next for InvoCare in the second half?

Management notes that the emergence of the COVID Delta strain in June and the associated government response in Australia is expected to lead to a softening of the funeral services sector in the second half of 2021,

Given that the extent of restrictions remain uncertain, the company is unable to provide earnings guidance for the full year. Nevertheless, management remains confident about the long-term potential of the business, with future growth supported by population and ageing trends in its markets.

Mr Chretien said: “The persistent and sudden impacts of COVID restrictions on consumer confidence and our operating model, as evidenced in the past two months, will continue to restrict our businesses and people in realising the Group’s full potential, but our first half results demonstrate the strength of this organisation when conditions permit.”

“Our focus will be on what we can control, and we remain extremely confident in our team’s capability and the Group’s potential in maintaining the momentum on this phase of our strategy of Raising the bar,” he concluded.

The InvoCare share price is now up 5% in 2021.

The post InvoCare (ASX:IVC) share price jumps 9% after reporting strong first half 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 recommended InvoCare 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 Sayona Mining Ltd (ASX: SYA) share price has shot up 10.71% at the opening of trade on Monday. At the time of writing, Sayona shares are trading at 15.5 cents apiece.

Shares in the lithium development company are on the move after it updated the market on a key acquisition in North America.

Let’s investigate further.

What did Sayona announce?

In a potential positive for the Sayona share price, the company advised it had completed the acquisition of North American Lithium via its subsidiary Sayona Quebec.

Sayona Quebec is a venture between Sayona and its “strategic partner” Piedmont Lithium Inc (ASX: PLL). In fact, Piedmont has a 75% share. The remaining 25% belongs to Sayona itself.

Sayona previously announced that the Superior Court of Quebec had approved the acquisition on 30 June.

The court approved the transaction via a share purchase agreement. The total bid value at the time was CA$196.2 million, with a cash consideration of CA$94 million.

As a result of the acquisition, Sayona will seek to integrate its Authier and Tansim lithium projects with this site.

This will create the “Abitibi Lithium hub”. The hub has the potential to “become Quebec’s leading lithium producer” as per the release.

This is due to the “abundant mineral resources, sustainable hydroelectric power and proximity to the US and European markets”.

As a result of the acquisition, technical studies are now advancing at the North American site for the “future restart” of its spodumene concentrate operations.

A scoping study for the “profitable production of spodumene concentrate” is also expected at the site in the second half of this year.

What did management say?

Speaking on the release, Sayona managing director Brett Lynch said:

We are extremely pleased to have taken control of NAL with our joint venture partner, Piedmont. Our local team in Québec is fully engaged in executing our turnaround plan at NAL, including the refurbishment of its facilities and its integration with our flagship Authier Lithium Project.

Touching on the sustainability aspect, Lynch added:

We are committed to swiftly developing a profitable and sustainable business at NAL, delivering new jobs and investment and maximising the benefits of its existing facilities to make it the centre of our Abitibi lithium hub.

Sayona Mining share price snapshot

The Sayona Mining share price has gained a whopping 1,500% this year to date. This return has well outpaced the S&P/ASX 200 Index (ASX: XJO) climb of about 14% since 1 January.

In the last month, Sayona shares have climbed a further 77% in the green. At the time of writing, Sayona Mining has a market capitalisation of $850 million.

The post Sayona (ASX:SYA) share price rockets 10% after acquisition update appeared first on The Motley Fool Australia.

More reading

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• Up 1000% in 2021, the Sayona Mining (ASX:SYA) share price lifts again

The author Zach Bristow 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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The Healius Ltd (ASX: HLS) share price is under pressure on Monday following the release of its full year results.

At the time of writing, the healthcare company’s shares are down 8% to $4.53.

Healius share price sinks despite more than doubling its profits in FY 2021

• Revenue increased 21.7% to $1,913.1 million
• Underlying earnings before interest and tax (EBIT) jumped 106% to $266.5 million
• Net profit after tax up 179% to $148.4 million
• Operating cash flow tripled to $912.8 million
• Full year dividend of 13.25 cents, up from 2.6 cents in FY 2020

What happened in FY 2021 for Healius?

For the 12 months ended 30 June, Healius reported a 22% increase in revenue to $1,913.1 million and the doubling of its underlying EBIT to $266.5 million. As strong as this was, it was 3% short of the analyst consensus estimate of $276 million. This goes some way to explaining the weakness in the Healius share price today.

Healius’ result was driven by growth across all divisions and the success of its Sustainable Improvement Program. However, the standout performer during the year was its key Pathology business, which reported revenue growth of 25% to $1,452.1 million and EBIT growth of 103% to $252.8 million. This reflects strong demand for community and commercial COVID-19 testing, undertaking 5.75 million tests to-date.

Non-COVID revenues also grew, which management believes demonstrates the resilience of its core healthcare services. For example, Imaging revenue grew in all channels and Day hospitals revenue grew thanks to on-going growth in its multi-specialist Westside Private Hospital in Brisbane. At its peak, the latter undertook ~1,000 procedures per month and successfully trialled short-stay surgery for hip and knee replacements.

What did management say?

Healius’ Managing Director and Chief Executive Officer, Dr Malcolm Parmenter, said: “Our overriding aim throughout the COVID-19 pandemic has been ensuring we play an instrumental role in Australia’s public health response. This has extended the team well beyond our normal capacities and capabilities, including reconfiguring our laboratories to accommodate new equipment, protecting the health and safety of our own people, rolling-out drive-through testing clinics in numerous locations for safe and easy public access, and operating our pathology facilities for significantly extended hours, often 24 hours a day / 7 days a week.”

“What’s more, we have delivered our non-COVID healthcare services efficiently and effectively within the restrictions of various state lockdown requirements, helping maintain the health of the nation through frontline diagnosis and day surgery.”

“While it would have been acceptable to defer our portfolio, capital and other strategic initiatives due to the immediate demands of COVID-19 testing, our people have also delivered on these initiatives resulting in a significant year of growth in shareholder returns,” he added.

What’s next for Healius?

While no guidance was given for the year ahead, management notes that demand has been strong for its services so far in FY 2022. This is particularly the case for COVID-19 testing following the emergence of the Delta strain.

Dr Parmenter commented: “There has been a further surge in COVID-19 testing in July and August with the emergence of the delta strain in this country and our testing has grown to over 40,000 test per working day in July and August on average. At times these levels have stretched our systems to their limit and we are currently investing in more machines to increase our capacity and technology to speed the process.”

“What’s more with the revenue we are receiving from COVID testing, we have a real opportunity to invest in the future health of the nation, implementing systems, digital interfaces and a raft of leading-edge applications which should permanently change for the better how consumers access diagnostic healthcare in Australia,” he concluded.

The Healius share price was up 33% year to date prior to today.

The post Healius (ASX:HLS) share price sinks 10% despite 179% profit surge in FY21 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 Fortescue Metals Group Ltd (ASX: FMG) share price will be in the spotlight on Monday morning. This comes as the iron ore miner released its full-year results for the FY21 financial year.

After the end of last week’s market close, Fortescue shares finished Friday at $20.00 apiece.

Fortescue share price on watch on record result

The Fortescue share price could be on the move after the company delivered another robust result for the 12 months ending 30 June 2021. Here are some of the key highlights:

• Total revenue of US$22.3 billion, up 74% (FY20 US$12.8 billion);
• Underlying earnings Before Interest and Tax (EBIT) of US$16.4 billion, up 96% (FY20 US$8.4 billion);
• Net profit after tax (NPAT) of US$10.3 billion, up 117% (FY20 US$4.7 billion);
• Earnings Per Share (EPS) of US$3.35, up 117% (FY20 US$1.54 per share); and
• Final fully-franked dividend lifted to $2.11 per share, bringing the total dividend for FY21 to $3.58 per share, up 103% (FY20 $1.76 per share).

What happened in FY21 for Fortescue?

Fortescue recorded its highest-ever annual shipments of 182.2 million tonnes of iron ore, exceeding the prior guidance and underpinning the overall result. Earnings and operating cash flow also surpassed previous targets, reflecting an outstanding performance across the supply chain and strong customer demand.

In addition, disciplined cost management led to the company achieving industry-leading C1 costs of US$13.93 per wet metric tonne. Coupled with the average revenue of US$135 per dry metric tonne, up 72% on FY20, Fortescue collected bumper profits.

The delivery of its newest mining operation at Eliwana saw first ore through the processing facility in December 2020. Since then, operations have significantly ramped up to produce an annualised rate of 30 million tonnes of ore.

The company signalled its intention to become a worldwide leader in the battle against global warming, establishing Fortescue Future Industries (FFI). It aims to advance a global green hydrogen and renewable energy portfolio to achieve carbon neutrality by 2030.

What did management say?

Fortescue CEO Elizabeth Gaines commented on the milestone accomplishment, saying:

Guided by our unique culture and values, the Fortescue family has delivered a second consecutive year of record performance, with shipments, earnings and operating cashflow surpassing any year in Fortescue’s history.

Through the Iron Bridge Magnetite project and Fortescue Future Industries, we are investing in the growth of our iron ore operations, as well as pursuing ambitious global opportunities in renewable energy and green industries.

What’s the outlook for Fortescue?

Looking ahead, Fortescue provided guidance for FY22, stating the following:

• Iron ore shipments in the range of 180 million tonnes to 185 million tonnes;
• C1 costs between US$15.00 to US$15.50 per wet metric tonne (based on assumed average exchange rate of AUD: USD 0.75); and
• Capital expenditure (excluding FFI) of US$2.8 billion to US$3.2 billion.

Ms Gaines briefly touched on Fortescue outlook, adding:

We have seen a strong start to FY22 and through operational excellence, sustained focus on productivity and disciplined approach to capital allocation, we will continue to deliver benefits to all our stakeholders.

The post Fortescue (ASX:FMG) share price on watch following 117% NPAT increase appeared first on The Motley Fool Australia.

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• The Fortescue (ASX:FMG) share price fell 11.5% last time the company reported
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• August hasn’t been a great month for the Fortescue (ASX:FMG) share price

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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A number of ASX shares were on form last week and pushed higher. Some even pushed high enough to reach 52-week highs or better.

Among the companies hitting new highs last week are the two listed below. Here’s what drove their shares higher over the period:

Blackmores Limited (ASX: BKL)

The Blackmores share price climbed to a 52-week high of $98.92 on Friday. Investors were buying the health supplements company’s shares following the release of its full year results last week. For the 12 months ended 30 June, Blackmores reported a 1.3% increase in revenue to $575.9 million and a 51.7% jump in underlying net profit after tax to $25.4 million. And while no guidance was given for the year ahead, management revealed that the outlook for its international and China segments remains positive with strong sales momentum early in FY 2022.

Can the Blackmores share price climb higher from here? One broker that sees modest upside is Credit Suisse. In response to its results, the broker upgraded Blackmores’ shares to a buy rating with a $100.00 price target.

Life360 Inc (ASX 360)

The Life360 share price hit a record high of $9.50 last week. This was driven by the release of a half year result that revealed a 36% increase in annualised monthly revenue (AMR) to US$105.9 million. This was driven by a 28% lift in its global monthly active user (MAU) base to 32.3 million and a 19% jump in global paying circles to 1 million. Management also confirmed that it expects its AMR to hit US$120 million to US$125 million by December 2021.

Can the Life360 share price go even higher? Last week Bell Potter retained its buy rating and put a $10.75 price target on its shares. This price target implies further potential upside of ~15% over the next 12 months.

The post Why these ASX shares just hit 52-week highs or better appeared first on The Motley Fool Australia.

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• ASX 200 Weekly Wrap: A mixed bag of earnings dominates ASX
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• Why Ardent Leisure, Blackmores, Clinuvel, & Qube shares are surging 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. owns shares of and has recommended Life360, Inc. The Motley Fool Australia owns shares of and has recommended Blackmores Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Domino’s Pizza Enterprises Ltd. (ASX: DMP) share price has been on fire in August. Shares in the pizza franchise are surging 27.3% higher this month to $148.50 per share at Friday’s close.

Here’s what’s boosting the company’s value higher in the last month.

Why the Domino’s share price is up 27% in August

The only price-sensitive ASX announcement from Domino’s this month was the release of its full-year results.

If you missed it, some of the key highlights from the 18 August Domino’s results are below:

• Network sales increased 15% on the prior corresponding period (pcp) to $3.7 billion
• Online sales up 21.5% on pcp to $2.9 billion
• Net profit after tax up 29% on pcp to $188.2 million
• Earnings per share (EPS) up 29% on pcp to 217.6 cents
• Final dividend of 85.1 cents, translating to a 173.5 cent full-year dividend

The Domino’s share price jumped higher following the release of their results earlier this month. It’s been good news for shareholders in the weeks since, with the pizza franchise’s shares now up 27% in August.

Those strong gains have come despite broad lockdowns across Australia, particularly Sydney and Melbourne. However, this is not a new phenomenon for Domino’s.

When the COVID-19 restrictions were first introduced in March 2020 and the S&P/ASX 200 Index (ASX: XJO) slumped lower, the Domino’s share price bucked the trend.

While the pizza company’s shares did fall 25% lower, that pales in comparison to the losses amongst some of its ASX 200 peers.

One key factor was Domino’s ability to shift to an online strategy and maintain some sales momentum while much of the economy was put into hibernation.

In fact, Domino’s value has surged 214% higher since 20 March last year to its current $12.9 billion market capitalisation.

It looks like investors are expecting more of the same amid the current restrictions given the recent gains.

The post Why the Domino’s (ASX:DMP) share price is up 27% in August appeared first on The Motley Fool Australia.

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Motley Fool contributor Ken Hall 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.

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The Suncorp Group Ltd (ASX: SUN) share price will be on watch this morning after the financial group’s latest capital raising announcement.

Suncorp share price in focus after unveiling $350 million capital raising

Suncorp this morning launched an offer of Capital Notes 4 as it seeks to raise $350 million. The Notes will trade on the Australian Securities Exchange (ASX) under the ticker SUNPI from 24 September 2021.

The Capital Notes 4 will have a face value of $100 with a minimum investment of $5,000 and in multiples of 10 (i.e. $1,000) after that. The Suncorp share price will be one to watch in early trade after the company unveiled its latest capital raising plans to the market.

Capital Notes such as these are a more flexible way for companies like Suncorp to raise funds.

They represent more of a hybrid instrument with a mix of bond and equity-like features. Capital Notes can help lower the cost of capital and provide flexibility in the financial group’s capital structure.

The Capital Notes 4 will have fully franked distributions paid quarterly, similar to a dividend, at a rate of the 3-month Bank Bill Rate (BBSW) plus a 2.90% to 3.10% per annum margin (more like a bond coupon).

The Suncorp share price will be on the radar today after a solid month in August. Shares in the Aussie financial group are up 7.5% in the past month ahead of Monday’s open.

What else is moving Suncorp right now?

Much of those gains came on Monday 9 August following Suncorp’s latest full-year result. The Suncorp share price jumped 7.8% higher after the company unveiled strong profit growth and a $250 million share buyback scheme.

Some of the key takeaways from the result included:

• Revenue down 4% on the prior corresponding period (pcp) to $14.2 billion.
• Cash earnings up 42% on the pcp to $1.1 billion.
• Net profit after tax up 13% on the pcp to $1.0 billion.
• Final dividend per share of 40 cents and special dividend of 8 cents.

The Suncorp share price charged higher following the announcement as the company announced a focus on sustainable return on equity.

The post Suncorp (ASX:SUN) share price on watch amid $350m capital raising appeared first on The Motley Fool Australia.

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Motley Fool contributor Ken Hall 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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During a COVID-ravaged 2021 financial year, Wilson Asset Management portfolio managers reckon the secret to buying ASX shares was picking the stayers.

“Investing in companies that could push through temporary pain to drive top-line growth was key for the WAM Microcap Ltd (ASX: WMI) team,” said Oscar Oberg, Catriona Burns and Matthew Haupt in a memo to clients.

“While the equity market has rallied significantly since the lows of mid-2020, we continue to focus on companies we believe will benefit from a reopening of borders and lockdowns lifting in the medium to long term.”

The WAM Microcap shares themselves have gained more than 32% in the past 12 months, affirming this investment strategy. 

The other secret is to remember there are more than 2,000 companies listed on the ASX. 

This means there are plenty outside the usual large-cap suspects that don’t receive much publicity.

According to the Wilson trio, a cornucopia of initial public offerings meant that they found plenty of those gems.

“Many companies were overlooked or under-researched by investors, creating mispricing opportunities,” said the fund managers.

“These conditions were favourable for our investment process of finding undervalued growth companies with strong fundamentals and a catalyst for a share price re-rating.”

Oberg, Burns and Haupt named 2 ASX shares that WAM Microcap holds that fit the bill:

Plenty of hairy legs after lockdown

Hair removal salon network Silk Laser Australia Ltd (ASX: SLA) only listed on the ASX in December. The Wilson team was impressed with its first full year result.

“Silk Laser Australia beat its FY2021 forecast and upgraded its guidance,” the memo read.

“The company recorded year-on-year revenue growth of 82% and a 129% increase in online sales as digital expansion drove sales growth.”

In June, Silk Laser raised $20 million via new shares to acquire businesses both in Australia and New Zealand to grow its network.

“The deal is set to close in September and we expect it will give Silk Laser Australia a stronger market share on the Australian east coast market with a scaled entry into Victoria and New Zealand.”

Silk Laser shares are up more than 8.3% this year, although its current price of $3.90 is well down on its high of $5.30.

ASX shares for the ‘global video boom’

Video hardware and software maker Atomos Ltd (ASX: AMS) is seeing “rapid adoption” of its ProRes RAW video compression protocol.

“Atomos announced record revenue of $78.6 million for FY2021,” said the Wilson portfolio managers.

“The company also launched several new products during the financial year, including hardware devices and software applications which supported the company’s revenue growth.”

The Wilson team were not the only ones to like what they saw. Atomos shares have rocketed almost 34% since the results a fortnight ago.

Oberg, Burns and Haupt reckon the pandemic has triggered “a global video boom”.

“We remain positive on Atomos as the company continues to find a solid market base for growth, with new products and services already in the making.”

The post 2 small-cap ASX shares pushing through lockdown pain appeared first on The Motley Fool Australia.

More reading

• Why Bigtincan, Lovisa, SILK, & WiseTech shares are charging higher
• SILK Laser (ASX:SLA) share price rockets 20% after beating FY21 guidance
• Atomos (ASX:AMS) share price soars 16% on FY21 earnings
• Wilson Asset Management believes these 2 leading small cap ASX shares are a buy

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. owns shares of and has recommended Atomos Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended SILK Laser Australia Limited. The Motley Fool Australia has recommended Atomos Ltd and SILK Laser Australia 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 Altium Limited (ASX: ALU) share price will be on watch today.

This follows the release of the electronic design software company’s full year results.

Altium share price on watch after strong second half

• Revenue (including TASKING) up 1% to US$191.1 million compared to guidance of US$190 million to US$195 million
• Revenue from continuing operations up 6% to US$180.2 million
• Operating expenses rose 12% to US$120.2 million
• Earnings before interest, tax, depreciation and amortisation (EBITDA) from continuing operations down 3% to US$60 million
• Profit before tax down 7% to US$47.7 million
• Profit after tax up 79% to US$35.3 million on lower tax rate
• Full year dividend of 40 Australian cents, up 3% year on year
• Cash balance of US$191.5 million

What happened in FY 2021 for Altium?

For the 12 months ended 30 June, Altium delivered a 1% increase in revenue to US$191.1 million or a 6% lift to US$180.2 million excluding the divested TASKING business. The latter reflects a 2% increase in its Board and Systems revenue to US$150.9 million, a 42% jump in Octopart revenue to US$27 million, and a 7% decline in Manufacturing revenue to US$2.4 million.

The majority of its growth was achieved in the second half, with continuing business revenue increasing 16% during the half compared to the prior corresponding period. Management believes this bodes well for FY 2022, which itself could bode well for the Altium share price today.

Another positive from the result is that Altium’s recurring revenue continues to increase as a percentage of its overall revenue. At the end of FY 2021, its recurring revenue was 65% of total revenue, up from 59% a year earlier. Management notes that this reflects strong Altium 365 adoption, with almost 13,000 monthly active users and over 6,000 monthly active accounts.

On the bottom line, the company reported a 7% decline in profit before tax to US$47.7 million. This was the result of its operating costs growing quicker than its sales. It profit after tax jumped 79% to US$35.3 million thanks to a lower tax rate.

What did management say?

Altium’s CEO, Aram Mirkazemi, was pleased with the year and particularly the company’s second half performance.

He said: “Altium delivered a strong second half performance to meet its full year revenue guidance. Our Octopart and China businesses both delivered very strong growth and momentum is rebuilding in our core PCB business. The accelerating adoption of our cloud platform Altium 365 is further strengthening our market position.”

“The rapid adoption of Altium 365 is delivering benefits to the Company and our customers on two fronts. First, Altium 365 enhances the value of our maintenance subscription to our customers and delivers SaaS-like subscription benefits to the Company, thereby reducing subscription churn for dominance. Second, the rapid adoption of Altium 365 is catching the attention of the industry and attracting strategic partners that could help us to accelerate our transformative vision to digitally connect electronic design to the broader engineering ecosystem,” added Mr Mirkazemi.

What’s next for Altium?

Possibly giving the Altium share price a lift today is management’s guidance for FY 2022.

Following its strong second half of FY 2021, management has lifted its revenue guidance for FY 2022 to growth of 16% to 20%. This represents revenue of US$209 million to US$217 million.

This is expected to be underpinned by ARR growth of 23% to 27% and achieved with an underlying EBITDA margin of 34% to 36%. The latter compares to FY 2021’s underlying EBITDA margin from continuing operations of 34.1%.

Mr Mirkazemi commented: “Our strong second half performance and our robust ARR growth support a positive outlook. As a result, we are upgrading our revenue expectations to 16-20% growth for fiscal 2022. We are returning back to our strong pre-COVID growth, which is even more significant when considering our business model transition and our move to the cloud.”

The Chief Executive also reiterated its longer term targets and remains confident in achieving it.

He said: “Our focus in fiscal 2022 will be to continue with our cloud adoption and to scale our high-end professional sales through strategic partnerships for significant TAM expansion within the PCB market. With growth coming back earlier than expected, and the rising popularity of Altium 365 driving strategic interest in Altium, our confidence in our US$500 million revenue target is high.”

Altium share price underperformance

The Altium share price has been underperforming in 2021. Since the start of the year, the company’s shares are up just 1%. This compares to a 12% gain by the ASX 200.

Shareholders will be hoping this result is the catalyst to getting the Altium share price heading in the right direction again.

The post Altium (ASX:ALU) share price on watch after hitting guidance and upgrading outlook appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• 3 fantastic ASX shares to buy in September
• 3 exciting ASX growth shares for smart investors
• 3 top ASX growth shares that could be buys
• The Altium (ASX:ALU) share price is up 20% over the past 6 months

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 Altium. The Motley Fool Australia owns shares of and has recommended Altium. 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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