The Xero Limited (ASX: XRO) share price opened weaker on Thursday after the company released its 2021 annual meeting chair and CEO address.

At the time of writing, shares in the account software company have pulled back 1.74% to $143.01.

Xero annual meeting highlights

Digitisation tailwinds

Xero chair David Thodey commented on the “significant shift in the way business is conducted, as digitisation accelerates across industries and small businesses adopt cloud technologies as part of their core business toolkit”.

Thodey pointed to a number of government measures driving business digitisation including:

• UK Government’s push to digitalise its tax system and digitally enable small businesses.
• The Australian Government’s $1.2 billion investment into its ‘digital economy’ to lift digital capability and adoption.
• US President Joe Biden’s executive order suggesting consumers should be allowed to access their banking data, likely a move towards open banking.

Xero believes it is strongly positioned for this accelerating global trend, with the opportunity to serve the global small business community.

Management reiterated the strong progress the company has made, with a record number of new subscribers in the second half of the year.

Focus areas

As Xero continues to expand as a global accounting platform for small businesses, Thodey shed light on some key areas.

One aspect was the continued use of mergers and acquisitions to add to the company’s capabilities.

The optimisation of Xero’s operational and financial structure was another factor. The company pointed to its convertible note refinancing as a “great example” which allowed it to deploy funds for three acquisitions made during the year.

The company also highlighted the importance of risk management, particularly around the area of cyber risk.

No update for FY22

Xero CEO Steve Vamos said there would be no update in today’s announcement. However, he reiterated a few elements from the company’s FY21 results.

He said FY22 total operating expenses as a percentage of operating revenue should in the range of 80% to 85%.

Additionally, the Planday acquisition is expected to contribute approximately three percentage points of additional operating revenue growth in FY22.

Xero share price snapshot

The Xero share price hasn’t really gone anywhere, edging 3.7% lower year-to-date.

The main driver of Xero’s recent underperformance could be the company’s full-year FY21 results on 13 May. These triggered a sharp 11% selloff on the day of the announcement.

The post Xero (ASX:XRO) share price edges lower after annual meeting appeared first on The Motley Fool Australia.

More reading

• 2 excellent ASX growth shares rated as buys
• 3 excellent ASX tech shares
• 3 great ASX tech shares that might be good buys
• It’s been a great week for the Xero (ASX:XRO) share price
• Why Objective, Pinnacle, Resolute, & Xero shares are pushing higher

Motley Fool contributor Kerry Sun 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 Xero. The Motley Fool Australia owns shares of and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3lXdCgX

The QBE Insurance Group Ltd (ASX: QBE) share price has jumped into the green from the market open, now exchanging hands at $12.39 apiece, a 7% climb.

QBE shares are on the move after the insurance giant upgraded its dividend schedule in its FY21 half year earnings report.

Let’s investigate further.

QBE’s dividend

Historically QBE has exhibited a rather flat level of annual growth in its dividend schedule.

For instance, from October 2015 – April 2020, QBE increased its dividend from 20 cents per share, to 27 cents per share, a compound annual growth rate (CAGR) of around 6%. Then, QBE gave its dividend a large haircut to 4 cents/share in September 2020.

In its FY21 half-year results, QBE confirmed its board had “declared an interim dividend of 11 cents per share, up from 4 Australian cents per share in the prior period”.

The insurance heavyweight scaled up its payout on the back of “strong first half growth”, that saw gross written premium (GWP) increase by around 27%, and net earned premium (NEP) rise roughly 9%.

Moreover, it recognised an underwriting result of US$642 million, which came through to an adjusted cash profit of $463 million, versus a loss of US$66 million. QBE recognised an 11.9% return on equity as a result.

What does this mean for investors?

The step-up in QBE’s dividend normalises the payout shareholders will receive back towards historical averages. In addition, restoration of a company’s dividend schedule is a sign of confidence from its management on the future trajectory of its earnings curve.

Furthermore, equally as assuring is when a company does so coming out of a period of economic uncertainty. It gives a clear impression of the company’s financial health, in terms of liquidity and assets. Moreover, it demonstrates a company is generating a high amount of free cash flow and cash from operations, on healthy margins through its profit and loss statement.

We see evidence of the same in QBE’s half-year results, particularly in cash flow metrics such as net profit after tax (NPAT), which grew from a loss of $712 million in June 2020 to a profit of $441 million this year.

Compounding this, QBE realised a more favourable expense ratio, down to 13.7% from 14.3% a year prior. In addition, QBE’s debt to equity ratio compressed to 31.1%, down from 34.8% a year ago.

Given these growth levers in the company’s growth engine, QBE undoubtedly believes the dividend is well covered as we walk through the coming periods.

Therefore, it stands to reason that investors have favoured the news coming out of QBE’s camp this morning. Shareholders can expect the 11 cents per share dividend to arrive in their bank accounts franked at 10%, as per the release.

QBE share price snapshot

The QBE share price has posted a year to date gain of 45%, extending the previous 12 month’s climb of 23%.

Both of these results have outpaced the S&P/ASX 200 Index (ASX: XJO)’s return of around 25% over the past year.

Over the past month alone, QBE shares have climbed 18% into the green.

The post QBE (ASX:QBE) share price up 7% after dividend boost appeared first on The Motley Fool Australia.

More reading

• Why GrainCorp, Myer, QBE, & Telstra shares are storming higher
• QBE (ASX:QBE) share price in focus after delivering strong first half growth
• How did the QBE (ASX:QBE) share price respond last earnings season?
• Here are the 10 top moving ASX shares on Monday
• Here’s why the QBE (ASX:QBE) share price is up 27% so far in 2021

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.

from The Motley Fool Australia https://ift.tt/3ADrMIb

The Telstra Corporation Ltd (ASX: TLS) share price is moving higher this morning, up 3%.

This comes following the release of the ASX telco’s full year results for the 2021 financial year (FY21).

We recap a few highlights below.

What dividend payment did Telstra announce?

Telstra shares could be getting a boost today after the company reported it will pay a final dividend of 8 cents per share, fully franked.

That brings Telstra’s full year dividend to 16 cents per share.

At the current price of $3.94 per share, that works out to a trailing dividend yield of 4.06%.

Bearing in mind that this comes with tax credits at the company’s corporate rate, and that term deposits in Australia are paying in the range of 1% without tax credits, income investors could be helping push the Telstra share price today.

What else did the results reveal?

For the Motley Fool’s detailed coverage of Telstra’s FY21 results, you can follow the link up towards the top.

We’ll just quickly recap 2 key takeaways here that also look to be boosting Telstra’s share price in early trade.

First, while underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 9.7% to $6.7 billion, this was right within the company’s guidance of $6.6–6.9 billion.

While falling earnings aren’t the most welcome of news, investors tend to reward companies that achieve guidance.

Second, Telstra announced a $1.35 billion on-market share buyback. When a company repurchases its shares, existing shareholders often benefit.

Telstra share price snapshot

Over the past 12 months, Telstra is up 16%, trailing the 24% gains posted by S&P/ASX 200 Index (ASX: XJO).

Year-to-date, Telstra’s share price has outperformed the benchmark, up 31% in 2021.

The post Telstra (ASX:TLS) share price lifts off after dividend announcement appeared first on The Motley Fool Australia.

More reading

• Everything to know about the Telstra (ASX:TLS) $1.35bn share buyback
• Why GrainCorp, Myer, QBE, & Telstra shares are storming higher
• Telstra (ASX:TLS) share price on watch after hitting guidance & $1.35bn buyback
• 5 things to watch on the ASX 200 on Thursday
• Telstra (ASX:TLS) FY 2021 results preview

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.

from The Motley Fool Australia https://ift.tt/2VMuoEu

The Telstra Corporation Ltd (ASX: TLS) share price is moving upwards in morning trade on Thursday following the release of its full-year results. At the same time, the company unveiled a juicy $1.35 billion share buyback for Telstra shareholders.

It appears the market is sufficiently pleased with the increase in earnings from the telco giant compared to the previous year. As a result, shares in one of Australia’s largest companies are currently fetching $3.95 apiece.

What is getting investors excited?

Despite total income falling 11.6% to $23.1 billion for the company, investors seem relatively pleased with today’s results. Cost reductions and increased revenue from its mobile business helped Telstra along to a slight increase in the bottom line.

Moreover, the commentary from CEO Andy Penn was rather positive. For instance, Penn noted that Telstra delivered on its guidance, marking a turning point in its financial trajectory.

An important one for long-term shareholders, the CEO suggested that Telstra’s underlying business would return to full-year growth in FY22.

The Telstra share buyback

Drawing much excitement for shareholders, Telstra also announced it would be undertaking a $1.35 billion share buyback as a means of returning capital from the InfraCo Towers transaction. The cash splash is undoubtedly lighting up dollar signs in investor’s eyes this morning.

Furthermore, the buyback will be conducted on-market during FY22. However, the exact dollar figure and timing is said to be dependent on market conditions.

Commenting on the capital return, Penn said:

When we launched T22, we committed to establishing a standalone infrastructure business unit for three reasons: to give transparency of those assets, to bring a harder commercial edge to how we operationalise them, and to create optionality with a view to maximising shareholder value.

This share buy-back is a clear demonstration of how we are creating additional long-term value for our shareholders.

The proposed start date was specified as 17 September 2021 in another document released to the ASX.

At the time of writing, the Telstra share price is trading at $3.95, representing an increase of 3.13%.

The post Everything to know about the Telstra (ASX:TLS) $1.35bn share buyback appeared first on The Motley Fool Australia.

More reading

• Telstra (ASX:TLS) share price lifts off after dividend announcement
• Why GrainCorp, Myer, QBE, & Telstra shares are storming higher
• Telstra (ASX:TLS) share price on watch after hitting guidance & $1.35bn buyback
• 5 things to watch on the ASX 200 on Thursday
• Telstra (ASX:TLS) FY 2021 results preview

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 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.

from The Motley Fool Australia https://ift.tt/3fVpwEw

In late morning trade, the S&P/ASX 200 Index (ASX: XJO) has given back most of its morning gains and is trading just a fraction higher. At the time of writing, the benchmark index is up slightly to 7,585.2 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are on fire:

GrainCorp Ltd (ASX: GNC)

The GrainCorp share price has jumped 13% to $6.20. Investors have been fighting to get hold of the integrated grain and edible oils company’s shares after it upgraded its guidance. According to the release, GrainCorp now expects its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to be in the range of $310 million to $330 million in FY 2021. This is up from its previous guidance of $255 million to $285 million. It is also a material increase on FY 2020’s underlying EBITDA of $108 million.

Myer Holdings Ltd (ASX: MYR)

The Myer share price has stormed 8.5% higher to 51 cents. The catalyst for this was the release of a solid trading update by the department store operator. According to the release, Myer expects to report a 5.5% increase in sales to $2,658.3 million for FY 2021. This follows a 38.3% jump in second half sales compared to the prior corresponding period. This is expected to underpin a full year net profit after tax of $47 million to $50 million. In FY 2020 Myer posted a loss of $11.3 million.

QBE Insurance Group Ltd (ASX: QBE)

The QBE share price has jumped 8% to $12.52. This follows the release of a first half result which revealed strong gross written premium (GWP) and profit growth. QBE revealed GWP growth of 26.9% to US$10,203 million and an adjusted cash profit after tax of US$463 million. The latter compares to a US$66 million loss in the prior corresponding period.

Telstra Corporation Ltd (ASX: TLS)

The Telstra share price is up 3.5% to $3.97. Investors have been buying the telco giant’s shares after it achieved its FY 2021 guidance, maintained its dividend, and announced a $1.35 billion on-market share buyback. Another big positive was management guiding to underlying EBITDA growth of 4.5% to 9% in FY 2022.

The post Why GrainCorp, Myer, QBE, & Telstra shares are storming higher appeared first on The Motley Fool Australia.

More reading

• Telstra (ASX:TLS) share price lifts off after dividend announcement
• Everything to know about the Telstra (ASX:TLS) $1.35bn share buyback
• Myer share price leaps 7% on positive trading update
• GrainCorp (ASX:GNC) share price jumps 12% on guidance upgrade
• QBE (ASX:QBE) share price in focus after delivering strong first half growth

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 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.

from The Motley Fool Australia https://ift.tt/3AAhed3

The Myer Holdings Ltd (ASX: MYR) share price is soaring this morning after the company announced it expects to report a profit for the second half of the 2021 financial year, a feat it hasn’t managed since 2017.

The positive news came in the form of a trading update from the retailer this morning. The update detailed some of the company’s unaudited results for the financial year just been.

The Myer share price has gained 8.51% on the back of the news. Shares in the company are currently swapping hands for 51 cents apiece.

Let’s take a closer look at today’s news from the formerly-embattled department store operator.

Its a good day for Myer

The Myer share price is being boosted by the company reporting a likely green balance sheet.

The last time Myer reported a profit for the second half of any financial year was 4 years ago.

The good news comes despite the company having been hit with COVID-19 travel restrictions and lockdowns over the fourth quarter.

Its unaudited results for the last 6 months of the financial year just been saw it with net profits after tax of between $4 million and $7 million.

Additionally, Myer has brought in around $2.65 billion in sales over the 53 weeks ended 31 July. That represents a 5.5% increase on the financial year prior.

It also plans to report earnings before interest, tax depreciation, and amortisation (EBITDA) of between $174 million and $179 million. For comparison, last financial year the company reported an EBITDA of $93.5 million.

That figure has seen the company with a net profit after tax of between $47 million and $50 million.

As of 31 July, Myer could boast a bank balance of around $112 million – $104 million more than it could at the same point of 2020.

It has also bargained for an extension of its finance facility, which is now due in November next year.

Commentary from management

Myer’s CEO John King commented on the results boosting the company’s share price:

Our Customer First Strategy continues to gain momentum, delivering a significantly improved full year profit result, despite the ongoing COVID impacts in FY21. We will provide further detailed commentary at our audited results announcement in September.

Myer share price snapshot

It’s been a good year so far for the Myer share price.

It has gained 68% since the start of 2021. It is also 152% higher than it was this time last year.

The company has a market capitalisation of around $386 million, with approximately 818 million shares outstanding.

The post Myer share price leaps 7% on positive trading update appeared first on The Motley Fool Australia.

More reading

• ASX 200 edges higher, Crown falls, Pointsbet rises
• Myer (ASX:MYR) share price rallies to 52-week high despite lockdowns

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

from The Motley Fool Australia https://ift.tt/3m1df5n

The Mirvac Group (ASX: MGR) share price is on the move in early trade after the Australian property group reported its FY21 earnings before the bell.

Let’s investigate further.

Mirvac share price hits 52-week high after reporting 61% statutory profit growth

The Mirvac Group share price opened at $3.07, a 52-week high for the development company.

However, the price quickly retreated, and by mid-morning, it was changing hands for $2.99, down 0.33%.

Some key investment highlights from the report include:

• Statutory profit of $901 million, up 61% year on year
• Operating profit of $550 million, down 9% from $602 million in June 2020
• Dividends per share of 9.9 cents, an increase of 9%, signifying total distributions of $390 million
• Gearing of 22.8%, and return on invested capital (ROIC) of 7.2%, up from 5.2% a year prior
• Reduction in the group’s carbon footprint by 80% across the portfolio
• Residential settlements of 2,526 lots exceeded guidance of 2,200 lots
• Highest number of residential sales since FY16 at 3,375 sales.

What happened in FY21 for Mirvac Group?

Positively for the Mirvac Group share price, a strong growth schedule in its core operations over the year underscored a healthy performance from the company.

Net operating income came in at $581 million, up 5% from June 2020, whereas operating cash flow was up 41% year on year at $635 million.

One particular takeout was a valuation gain of $121 million in its commercial and mixed-use segment. This was driven by “retained ownership interest in completed developments”, in addition to fair value gains on investment properties “under construction”.

Mirvac also gained about 200 basis points of gross development margin from the year prior. It maintained liquidity of $867 million from its balance sheet and “undrawn bank facilities”.

As a result, the company maintained its A-/A3 credit ratings with rating agencies Fitch Ratings and Moody’s Investors Service.

Finally, Mirvac revealed its property pipeline now extends to approximately $28 billion, after the group’s first build-to-rent project was launched to include another 1,860 apartments in the pipeline. The estimated end value of these projects is about $1.4 billion.

What did management say?

Speaking on the Group’s performance, Mirvac CEO Susan Lloyd-Hurwitz said:

We saw momentum accelerate right across the business in FY21, with our powerhouse asset creation capability continuing to generate significant value. We secured the highest number of residential sales since FY16, made key disposals well above book value, and our outperforming investment portfolio achieved significant property revaluation gains and strong cash collection rates.

Regarding capital management, Hurwitz added:

A continued focus on prudent capital management during FY21 has enabled the Group to manage the volatility caused by the global pandemic, providing us with flexibility and sufficient financial headroom to capitalise on improving market and business conditions.

What’s next for Mirvac?

Mirvac expects to settle “greater than” 2,500 lots in FY22, with strong margins supported by its portfolio of predominantly master-planned communities.

In addition, Mirvac also sees itself “benefiting from strong residential conditions” over the coming periods. As such, it foresees a “residential pre-sales balance of $1.2 billion”, with over “90% of FY22 EBIT now secured”.

The company also provided FY22 guidance on earnings and its dividend distribution schedule.

It estimates earnings per share (EPS) of “at least” 15 cents for FY22, calling for a 7.1% year on year increase.

Moreover, Mirvac also forecasts dividends per share of 10.2 cents, signifying a growth of 3%.

Mirvac’s full-year guidance is “based on the assumption that business conditions will normalise in the last quarter of CY21” when Covid vaccination numbers increase.

The Mirvac Group share price has climbed 12.8% this year to date, extending its 12-month gains to 40.3%.

This has outpaced S&P/ASX 200 Index (ASX: XJO) returns of about 23.8% over the past year.

The post Mirvac Group (ASX:MGR) share price opens 2.3% higher on FY21 results appeared first on The Motley Fool Australia.

More reading

• AMP (ASX:AMP) share price higher despite cancelling dividend
• Neometals (ASX:NMT) share price slips on battery recycling update
• New CEO announcement boosts Praemium (ASX:PPS) share price
• Why the Contact Energy (ASX:CEN) share price is taking off today
• Goodman Group (ASX:GMG) share price falls after FY21 results

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.

from The Motley Fool Australia https://ift.tt/3CQmbjY

The AMP Limited (ASX: AMP) share price is pushing higher on Thursday morning following the release of its first half results.

At the time of writing, the financial services company’s shares are up 2% to $1.10.

What happened in the first half?

For the six months ended 30 June, AMP reported an 8% increase in Australian wealth management assets under management to $121 billion.

Combined with a 6% reduction in controllable costs, excluding AMP Capital, this led to a 57% jump in net profit after tax to $181 million.

Taking some of the shine off the result, and potentially holding back the AMP share price a touch, was news that no interim dividend was declared.

Why is there no AMP dividend?

According to the release, AMP has decided against paying a dividend at this stage.

This is due to the Board wanting to maintain a conservative approach to capital management and its dividend until the requirements for the AMP Capital Private Markets demerger and future strategies are finalised.

Though, it has been returning funds to shareholders in other ways. This morning the company confirmed that its previously announced on-market share buy-back of up to A$200 million is now complete. It concluded on 30 June, with the deployment of $196 million of capital to repurchase and cancel 170.5 million shares.

When will its dividends return?

As mentioned above, AMP is holding back from paying a dividend until its strategies and demerger plans are finalised.

In respect to the latter, the demerger of the AMP Capital private Markets is progressing well. For example, the company notes that in June, internationally respected asset management executive, Shawn Johnson, joined as AMP Capital CEO to set its international growth strategy and lead its demerger.

Furthermore, a number of workstreams have been established to deliver internal operational separation in FY 2021. After which, a demerger and ASX listing is expected to occur in the first half of FY 2022, following shareholder approval.

Based on this, it is conceivable that there will be an AMP dividend in the second half. But time will tell if that is the case.

The post AMP (ASX:AMP) share price higher despite cancelling dividend appeared first on The Motley Fool Australia.

More reading

• AMP (ASX:AMP) share price on watch as net profit jumps 57%
• How did the AMP share price respond last earnings season?
• The AMP (ASX:AMP) share price is trading on a forecast 9.4% dividend yield
• If you invested $1000 in AMP (ASX:AMP) shares a decade ago, this is how much it would be worth now
• The AMP (ASX:AMP) share price is down 6% over the past month. Here’s why

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

from The Motley Fool Australia https://ift.tt/3yJmN8r

The Neometals Ltd (ASX: NMT) share price is in the red in early trade this morning, currently down 1.18% at 84 cents.

Today’s dip comes after Neometals confirmed it had commissioned the first stage of its battery recycling trial.

Let’s investigate further.

Quick recap on Neometals

Neometals is in the minerals exploration business, primarily in lithium, titanium and similar metals. The company has operations in Western Australia and Germany, with expertise in extracting valuable metals for a range of applications.

At the time of writing, the company has a market capitalisation of $466 million.

Battery recycling plant – stage 1 commissioned

In today’s release, Neometals advised it had successfully commissioned the front-end shredding and benefiction circuit (stage 1) of its lithium-ion recycling demonstration plant in Germany.

The plant is owned by Primobius GmbH, a 50:50 joint venture between Neometals and SMS Group GmbH.

According to Neometals, stage 1 involves the physical removal of metal electrodes, plastic separators and casings. It produces a combination of cathode materials which is known as “black mass”.

The front-end commissioning also processed “dummy and charged” electric vehicles to produce plastic, steel and foil alongside around 1.5 tonnes of black mass.

In addition to stage 1, the facility comprises a back-end hydrometallurgical refining circuit as stage 2, which is currently “progressing through mechanical and electrical installation”.

Neometals said the stage one commissioning was a “significant step” for Primobius. Investors can now expect the stage 2 refining circuit to be commissioned in September.

Commissioning of the hydrometallurgical refining circuit is expected in September 2021 with all trials due for completion by November 2021.

The hydrometallurgical refining circuit will produce, amongst other things, high-purity metal sulphate products for evaluation by potential customers, partners and offtakers.

Neometals share price snapshot

The Neometals share price has posted a year to date gain of 209%, extending the previous 12 month’s climb of 367%.

These results have outpaced the S&P/ASX 200 Index (ASX: XJO)’s return of around 25% over the past year.

The post Neometals (ASX:NMT) share price slips on battery recycling update appeared first on The Motley Fool Australia.

More reading

• Neometals (ASX:NMT) share price rockets 7% after pilot trial update
• The Neometals (ASX:NMT) share price has almost doubled in 2021

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.

from The Motley Fool Australia https://ift.tt/3iAbaLs

The Commonwealth Bank of Australia (ASX: CBA) share price has been boosted in the past by its investment in unlisted buy now, pay later giant Klarna.

CBA has recently taken account of the value of its investment, envisioning it to be worth $15 billion more than Square valued Afterpay.

In CBA’s full-year results, released to the market yesterday, the bank valued its approximate 5% stake in Klarna at around $2.7 billion. In June 2020, CBA valued the stake at just $506 million.

CBA’s new valuation means it interprets Klarna to be worth approximately $54 billion – a figure it believes to be conservative.

So, how has Klarna affected Commonwealth Bank’s share price over the years? Let’s take a look.

Klarna’s impact on CBA

In January 2020, CBA upped its stake in Klarna to around 5%. In return it received a 50% interest in Klarna Australia and New Zealand.

Klarna officially launched in Australia on 30 January 2021 and in New Zealand on 4 May 2021.

CBA had previously paid $100 million for 1.8% of the BNPL giant. The additional 3.7% cost the bank $200 million.

The CBA share price gained just 0.9% on the bank’s increased investment and 0.8% when it launched in New Zealand. Clearly, shareholders weren’t aware of its growth capabilities. Nowadays, Commonwealth Bank’s investment in Klarna is known to have been an absolute bargain.

The net return on CBA’s investment is currently around $2.4 billion – an 800% return on investment.

On the day the Commonwealth Bank upped its stake in Klarna, the CBA share price was $85.44. It has since gained nearly 26% to trade at $107.41 at the time of writing.

That means, using the number of outstanding shares available in the bank today, its market capitalisation has increased by $402 million in that time. That is a far greater increase than the growth of CBA’s investment in Klarna.

When estimating the value of the BNPL giant, the bank stated it took into account the value of similar listed companies, Square’s bid for Afterpay, and a recent capital raise conducted by Klarna in June.

At the time of the capital raise, Bloomberg reported it valued Klarna at US$45.6 billion ($61.8 billion using today’s exchange rate).

The CBA share price gained 0.7% the day news broke of Klarna’s capital raise.

How has Klarna impacted the CBA share price?

While CBA’s investment in Klarna has undoubtably boosted the value of CBA, it’s hard to specify how much it has contributed to the bank’s valuation.

However, the CBA share price has been growing strongly alongside Klarna’s value.

It’s gained 28% year to date and 45% since this time last year.

The post What impact has BNPL giant Klarna had on the CBA (ASX:CBA) share price? appeared first on The Motley Fool Australia.

More reading

• ASX 200 rises, CBA climbs after FY21 report, Iress jumps
• The ASX reporting wrap-up: CBA, Mineral Resources, IAG
• CBA (ASX:CBA) share buyback ahead of forecast: broker
• What you need to know about the CBA (ASX:CBA) dividend dates in 2021
• CBA, James Hardie and Challenger profit in the spotlight. Scott Phillips on Nine’s Late News

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. owns shares of and has recommended AFTERPAY T FPO and Square. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3s9sRog