At lunch on Wednesday, the S&P/ASX 200 Index (ASX: XJO) has overcome a soft start and is charging higher. The benchmark index is currently up 0.55% to 7,302 points.

Here’s what is happening on the market today:

Challenger shares jump on investment news

The Challenger Ltd (ASX: CGF) share price is racing higher today after announcing a new major shareholder. According to the release, leading US-based retirement services company Athene has agreed to acquire a 15% minority interest in Challenger from Caledonia (Private) Investments. Athene paid $6.00 per share, which represents a premium of 9.7% to Challenger’s last close price. It sees attractive long-term opportunities in partnering with and supporting Challenger’s continued growth.

Nanosonics shares sink on broker downgrade

The Nanosonics Ltd (ASX: NAN) share price is sinking on Wednesday after being the subject of a bearish broker note out of Goldman Sachs. According to the note, the broker has downgraded the infection prevention company’s shares to a sell rating and cut the price target on them to $4.93. Goldman made the move after reducing its earnings estimates on the belief that the growth recovery may be shallower than its previous expectations. It also warned that there could be competitive risks from new technologies.

Tech shares storm higher

A number of tech shares are recording strong gains on Wednesday following a positive night of trade on the tech-focused Nasdaq index. The likes of Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) are trading notably higher, helping to drive the S&P/ASX All Technology Index (ASX: XTX) up a sizeable 2.3% at lunch.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Wednesday has been the Challenger share price with a 10% gain. This follows news that Athene has acquired a 15% stake in the annuities company. The worst performer has been the Nanosonics share price with a 6% decline following its broker downgrade. After which, the next worst performer is the Oil Search Ltd (ASX: OSH) share price with a decline of over 3%. This follows a sharp pullback in oil prices overnight.

The post ASX 200 up 0.55%: Challenger jumps, Nanosonics sinks appeared first on The Motley Fool Australia.

More reading

• Challenger (ASX:CGF) share price jumps 14% on Athene/Apollo news
• Nanosonics (ASX:NAN) share price sinks 7% on broker downgrade
• Why Zip (ASX:Z1P) and this ASX growth share could be buys
• 5 things to watch on the ASX 200 on Wednesday
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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 AFTERPAY T FPO, Nanosonics Limited, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, Challenger Limited, and Nanosonics 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 Cimic Group Ltd (ASX: CIM) share price is climbing during late morning trade.

This follows the engineering company’s announcement that its 50%-owned subsidiary Ventia has been awarded a government contract.

At the time of writing, Cimic shares are fetching $19.88, up 0.51%.

Details of the contract

In today’s statement, Cimic advised that the South Australian government has selected Ventia for a facilities management contract.

The Across Government Facilities Management Arrangement (AGFMA) is focused on the maintenance, management and improvement of government-owned facilities. This includes building assets that underpin essential community services such as schools, hospitals, and police stations.

Ventia is expecting to receive roughly $300 million annual revenue from the deal. The AGFMA will run over an initial period of 5 years and 7 months, with potentially three 2-year extensions.

Transition activities for the contract are scheduled to begin in July with operations commencing in December this year.

Ventia group CEO Dean Banks touched on the award, saying:

South Australians rely on the essential services delivered at more than 3,500 Government locations across the state and Ventia is pleased to support the government of South Australia with the delivery of facility management services to the community, 7 days a week, 365 days a year.

Ventia’s group executive of defence and social infrastructure Derek Osborn added:

Ventia is looking forward to partnering with local small to medium businesses to help us deliver these services, keeping investment and employment in South Australia.

Ventia is also passionate about providing apprenticeships in various trades, as well as ensuring our employment opportunities focus on delivering a diverse and inclusive workforce.

More on Ventia and the Cimic share price

Ventia is a 50/50 investment partnership between Cimic and funds managed by affiliates of Apollo Global Management.

Ventia is a leading essential and infrastructure services provider in Australia and New Zealand, operating across 400 locations.

The subsidiary operates in a variety of sectors including transport, telecommunications, utilities, defence, water, energy, resources, and social infrastructure.

The Cimic share price has lost more than 15% over the last 12 months and is down 18% in 2021.

The post Why the Cimic (ASX:CIM) share price is in positive territory today appeared first on The Motley Fool Australia.

More reading

• Why the Cimic (ASX:CIM) share price is edging higher today

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 S&P/ASX 200 Index (ASX: XJO) is having a pretty decent start to this Wednesday’s trading session. At the time of writing, the ASX 200 is up 0.33% so far today to 7,285 points. But there’s one ASX company out there doing far better than that today. The Xero Limited (ASX: XRO) share price has had its Weetbix this morning, and is currently up 2.70% to $135.75 a share.

Investors will no doubt be pleased with this initial move today. After a couple of years of neck-turning growth, Xero has been somewhat stuck in the mud in 2021 so far. Remember, this is a company that was up roughly 80% in 2020, and before that, around 90% over 2019. But in 2021 so far, Xero shares are down a touch over 8% year to date. Not exactly what investors have come to expect from this cloud accounting software provider.

But enough dwelling on the past. So what’s going on with the Xero share price today?

Xero share price on the move

Unfortunately, it’s not exactly clear. There are no official news or announcements out of Xero today. Well, apart from some paperwork outlining how some of Xero’s restricted stock units have lapsed. But that’s hardly market moving stuff by conventional wisdom.

Another factor at play here could be broker bullishness on Xero. As my Fool colleague James reported on Monday, investment bank broker Goldman Sachs is currently rating Xero shares as a ‘buy’, with a 12-month price target of $151 a share for Xero. That implies a potential future upside of 11.6%, even after today’s gains. It’s possible that this optimism is feeding into the Xero share price gains today.

Finally, it’s worth noting that ASX tech shares across the board are enjoying healthy rises today. The S&P/ASX All Technology Index (ASX: XTX) is currently up a robust 2.26%, with major ASX tech shares like Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P) and WiseTech Global Ltd (ASX: WTC) all enjoying gains of more than 2% today so far.

At the current Xero share price, the company has a market capitalisation of $20.18 billion and a price-to-earnings (P/E) ratio of 1,059.6.

The post The Xero (ASX:XRO) share price is up 3% today. What’s going on? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, WiseTech Global, Xero, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, WiseTech Global, and Xero. 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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Lark Distilling Co Ltd (ASX: LRK) shares have started this morning’s session with a bang after the company released its investor presentation to the market late yesterday. At the time of writing, the Lark share price is soaring 21.91% higher to $3.95.

At one point during early morning trade, Lark shares had jumped by almost 26% to a new all-time high of $4.08 before partially retreating.

Let’s take a closer look at what’s behind the company’s share price movement today.

Investor presentation shows fuel in the growth engine

Investors are driving up the Lark share price this morning after the company released its 10-page investor summary. The update briefly outlined sales performance for the quarter, but also provided guidance on the value of Lark Distilling’s whisky which is still maturing.

Quoting from the numbers, Lark had a total of 1,093,073 litres of whisky “under maturation”, which constitutes a 54% growth year on year.

Further, the company also achieved an average net sales value of $216/litre, 55% more than the $139/litre earned at the same time last year.

Consequently, the company stated the value of its whisky under maturation for the end of FY21 was over $236 million, up 139% from the year previous.

Lark provided FY22 guidance that called for a 55% year-on-year growth schedule, assuming a value of whisky under maturation of $388.8 million at the end of FY22.

The market seems to have welcomed these results from the company, with the Lark share price shooting to new all-time highs.

Lark shares have jumped on positive financial reports in the past, with the share price hitting a 52-week high back in March following the release of the company’s half-year accounts.

Lark share price snapshot

Today’s gains extend an impressive run for Lark shares this year to date. Since 1 January, the Lark share price has returned more than 160%, outpacing the almost 11% returns of the S&P/ASX 200 Index (ASX: XJO) over this time.

Lark shares have a 12-month return of almost 300%, again outpacing the broad index’s return of ~21% for this time period.

Over the previous 1 month, the Lark share price has remained in the green by ~33%, and has climbed by around 22% in the previous 5 trading sessions.

At the current market price, Lark Distilling has a market capitalisation of around $245 million. Its shares have a 52-week range of 96.5 cents to $4.08, hitting their 52-week high this morning.

The post Why the Lark (ASX:LRK) share price just jumped 26% to a new all-time high appeared first on The Motley Fool Australia.

More reading

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• CBA (ASX:CBA) economists expect inflation sooner than RBA
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• Why eBay gained 15% in June
• Why the CleanSpace (ASX:CSX) share price is freefalling 23% today

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 Butn Limited (ASX: BTN) share price has had a reasonably subdued start to life as a listed company.

The business-to-business transactional funder’s shares landed on the ASX boards on Tuesday at an offer price of 50 cents per new share.

This morning the Butn share price is trading at 50.5 cents, up a modest 1% from its offer price.

The Butn IPO

Butn’s IPO raised $20 million at 50 cents per share. Management notes that the IPO was oversubscribed and received strong support from institutions, high net worth individuals, and retail investors. It also was supported by accounting platform provider MYOB Australia, which has increased its strategic investment in Butn to 19.9%.

Based on the current Butn share price, this gives the company a market capitalisation of ~$81 million.

According to the release, the IPO funds will be used to invest in Butn’s core business model, including receivables book growth, accessing new markets, and expanding its Platform Partnerships

What is Butn?

Butn was founded by joint CEOs and Executive Directors Rael Ross and Walter Rapoport. It helps small and medium enterprises (SMEs) through their working capital constraints, providing them with business transactional funding. To date, Butn has financed more than $500 million of business transactions since 2015.

In 2020, the company launched its fintech solution which digitises and automates the process. This includes customer on-boarding, credit and risk assessment, funding and collections, providing business funding at the click of a button.

The company highlights that the Butn fintech solution is built to integrate with strategic Platform Partners, such as MYOB Australia, allowing for rapid scalable distribution of its funding products.

Joint CEO Rael Ross said: “Australian SME funding is a $300 billion market opportunity which is under- serviced by traditional financiers. Our proprietary Butn fintech solution, our proven track record and the successful IPO all position us strongly for future growth alongside our Platform Partners and shareholders.”

Butn share price performance

While today has been subdued, day one was a little more eventful for the Butn share price.

It was up as much as 10% yesterday before fading back down to its offer price. Shareholders will be hoping the early gain on Tuesday is a sign of things to come.

The post Butn (ASX:BTN) share price edges higher following IPO appeared first on The Motley Fool Australia.

More reading

• Why the Lark (ASX:LRK) share price just jumped 26% to a new all-time high
• CBA (ASX:CBA) economists expect inflation sooner than RBA
• Challenger (ASX:CGF) share price jumps 14% on Athene/Apollo news
• Why eBay gained 15% in June
• Why the CleanSpace (ASX:CSX) share price is freefalling 23% today

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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Senior economists from the Commonwealth Bank of Australia (ASX: CBA) expect inflationary conditions in the Australian economy to be met earlier than the RBA’s initial forecasts, a new report from Commsec details.

In the release, economists Craig James and Ryan Felsman spell out the Commonwealth Bank’s views on the cash rate, the jobless rate numbers moving forward, interest rates decisions, and inflationary expectations for the coming periods.

Let’s take a look at what the report captures in closer detail.

Inflation sooner than RBA expectations

Commentary within the report alludes to the RBA’s expectations of holding the cash rate at 0.10% all the way until 2024:

The Reserve Bank (RBA) doesn’t expect to start lifting the cash rate until 2024 at the earliest.

But James and Felsman retort the RBA’s posture on the cash rate, stating:

However we believe that the risks are tilted to unemployment surprising on the downside and wage and price inflation surprising on the upside.

The research also indicates the RBA ideally wants to observe the jobless rate fall towards 4% (considered full-employment of the economy by RBA standards). Only when this occurs, the RBA views wage growth of ~3%.

In fact, according to the report, CommSec analysts view the following three “pre-conditions” necessary to occur before an early hike to the cash rate:

• Annual inflation sustained between 2-3%
• Growth in annual wages lifted to 3%
• Full employment as measured by the jobless rate ~4%.

“And when these [three] conditions hold, the RBA expects inflation to sustainably hold between 2-3%,” the duo state in the report, pointing out the RBA also doesn’t expect this to occur until 2024.

However, CBA economists anticipate these circumstances to align earlier, estimating the RBA will begin normalising the cash rate from the back end of 2022 if, and only if, the three conditions outlined above are met.

Should these conditions align before 2024, the CBA economists are confident the Australian economy will absorb inflationary pressures as early as 2022, ahead of the RBA’s schedule.

Additional commentary

The report also outlines additional CBA expectations regarding the outlook of the Australian economy.

The economists view the jobless rate to finish this year at 4.5%, before declining to 4% at the end of 2022.

Consequently, the analysts believe annual wage growth will expand from 1.5% to 2.9% by the end of 2022, reaching 2.4% by the end of 2021.

The bank also expects the Australian economy to grow by 3.9% in 2021-22, but notes several risks factors:

Risks to the forecasts include virus outbreaks; slow vaccine take up or vaccine shortages; policy mistakes on the removal of support measures; Chinese political tensions and extended delays in the re-opening of foreign borders.

Finally, the economists “conservatively forecast” the S&P/ASX 200 Index to hover within the ranges of 7,400 to 7,700 by the first half of 2022.

The post CBA (ASX:CBA) economists expect inflation sooner than RBA appeared first on The Motley Fool Australia.

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• Forget CBA! Here are the 5 best performing ASX bank shares of FY21
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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 Challenger Ltd (ASX: CGF) share price has been a very strong performer on Wednesday.

In early trade, the annuities company’s shares are up 14% to $6.22.

Why is the Challenger share price racing higher?

Investors have been fighting to get hold of Challenger shares on Wednesday after it revealed a major new shareholder.

According to the release, leading US-based retirement services company Athene, together with its strategic partner Apollo Global Management, has agreed to acquire a 15% minority interest in Challenger from Caledonia (Private) Investments.

When combined with other Challenger shares acquired by Athene and Apollo, the acquisition of the 15% equity interest will result in a total expected minority economic interest of 18% for approximately A$720 million (or US$540 million).

A separate announcement shows that Athene paid $6.00 per share, which represents a premium of 9.7% to Challenger’s last close price.

Why is Athene investing in Challenger?

The release explains that Athene and Apollo, which are in the process of merging, see attractive long-term opportunities in partnering with and supporting Challenger’s continued growth as minority shareholders.

Athene notes that both it and Challenger share the same mission – to provide customers with financial security for retirement.

Athene’s CEO, Jim Belardi, commented: “Investing in Challenger represents an exciting opportunity for us to support a well-established platform within the Australian market, a geography we have been studying given the current economic conditions and compelling demographic fundamentals.”

“In many ways, Challenger is the perfect partner for us – the company is led by an experienced management team, has a strong market position, attractive growth prospects, and shares our deep commitment to retirees. Together, we believe we can help Challenger continue to build long-term value, similar to what we’ve been able to achieve in building Athene’s business in the U.S. and supporting the growth of our sister company Athora in Europe, where we are also minority shareholders,” he added.

Challenger’s Managing Director and Chief Executive Officer, Richard Howes, welcomed the investment.

He said: “Today’s announcement by Athene is a strong endorsement of Challenger’s market position and long-term growth prospects from a leading international retirement services provider. We look forward to working with Athene and Apollo as we continue to pursue our shared purpose of providing customers financial security for a better retirement.”

The post Challenger (ASX:CGF) share price jumps 14% on Athene/Apollo news 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 owns shares of and has recommended Challenger 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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

What happened

Shares of eBay (NASDAQ: EBAY) gained 15.3% last month, according to data provided by S&P Global Market Intelligence. The rally, which was spurred by a series of developments, not only unwound a couple of sizable pullbacks the stock suffered earlier in the year, but carried it well into record-high territory.

So what

Don’t look for any single catalyst. Rather, a series of bullish headlines all contributed to eBay’s strong June performance.

That series began with the official announcement that eBay would offer guaranteed authentication of luxury handbags sold via its e-commerce platform. While that’s an encouraging development in and of itself, it’s also reflective of a more sweeping overhaul at the company that is allowing it to do something that bigger rival Amazon (NASDAQ: AMZN) still struggles to do: offer some guarantees about the quality of products sold by third parties on its platform.

Now, ebay.com offers certified refurbished electronics as well as certified refurbished home goods, among others — and the latter category also launched less than a month ago.

Perhaps the biggest driver of eBay’s share price boost in June was the ongoing streamlining of the entire company. There was news that regulators will not seek to prevent the sale of eBay’s classified ads business to Norway’s Adevinta (OB: ADE). Further, the company is selling most of its South Korean business to Shinsegae Group’s E-Mart and search engine operator Naver. As is the case with the introduction of authenticated handbags, these planned divestitures reflect a bigger philosophical shift — in this case, toward a tighter focus on its e-commerce and online auction platform.

Finally, though it was announced in May, eBay’s foray into the non-fungible token (NFT) market likely contributed to last month’s big gain, by virtue of putting the company closer to the center of new sorts of digital consumerism and speculation.

Now what

These moves (and others) are steps in the right direction for the company, which arguably hasn’t made the most of how it differs from powerhouse Amazon — its focus on the sale of one-of-a-kind goods that require custom-crafted listings. But eBay is starting to do a better job of that, and at the same time is shedding business lines and units that aren’t adding enough long-term value to the company to justify holding on to them. Considering that context, this e-commerce company is a quality growth stock worth owning.

Would-be investors would be wise to exercise patience, however. With June’s gains in the books, eBay shares are now up by 165% from last March’s low and up by 50% from November’s low… and they are showing some profit-taking pressure. Notable pullbacks from rallies have been the norm for a year now, and this rally isn’t likely to yield a different result.

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

The post Why eBay gained 15% in June appeared first on The Motley Fool Australia.

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James Brumley has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended eBay and has recommended the following options: long January 2022 $1,920 calls on Amazon, short January 2022 $1,940 calls on Amazon, and short June 2021 $65 calls on eBay. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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Sydney Airport Holdings Pty Ltd (ASX: SYD) shares have had a monumental week so far on the back of a proposed acquisition by a consortium of infrastructure investors and a super fund.

The Sydney Airport share price soared 33.9% on Monday after the indicative takeover proposal was released to the market. After finishing Friday’s previous session at $5.80, it reached $8.04 in intraday trade on Monday before closing at $7.78.

The airport’s share price dropped slightly, finishing Tuesday’s trade at $7.71. That’s still 32.9% higher than Friday’s close.

But does the $8.25 per share – roughly $22 billion in total – offered to Sydney Airport’s shareholders take the true value of the airport into consideration? Let’s take a look.

Are shareholders being ripped off?

Sydney Airport is one of only a handful of listed airports in the world. It sits 8 kilometres from the Sydney CBD, owns 7 hectares of land, and has what is effectively a 99-year lease which was signed in 2018, on the other 900 hectares it occupies.

It also has an approved commercial development plan that could see 2 hectares of business facilities built alongside its international terminal.

Right now, the Sydney Airport has a market capitalisation of around $21 billion.

However, in December 2019, while reports of a virus that would go on to be dubbed COVID-19 were beginning to swirl, the Sydney Airport share price hit an all-time high of $9.20.

If its share price was to reach that price again, the Sydney Airport’s market capitalisation would be roughly $24.8 billion.

According to reporting by the Financial Review, numerous experts agree that the offered amount is taking advantage of the pandemic’s effects and fails to account for the airport’s underlying worth.

The publication also claims the consortium might have to up its offer to convince one of Sydney Airport’s major shareholders, UniSuper. UniSuper owns roughly 15% of the company’s shares. The consortium’s offer is conditional upon it continuing to hold that level of investment in the airport.

Sydney Airport has yet to respond to the buyout offer. The question of whether its board believes the offer undervalues the airport will be answered in due time.

Sydney Airport share price snapshot

2021 hasn’t been a great year for ASX travel shares. Luckily, the Sydney Airport share price’s recent bump has herded it back into the green.

Currently, shares in Sydney Airport are 20% higher than they were at the beginning of this year. They have also gained 44% since this time last year.

The post Could Sydney Airport’s (ASX:SYD) buyout offer be selling investors short? appeared first on The Motley Fool Australia.

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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.

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The CleanSpace Holdings Ltd (ASX: CSX) share price is plummeting during early morning trade. This comes after the respiratory protection equipment company announced its unaudited results for the second-half of the 2021 financial year.

At the time of writing, CleanSpace shares are down 21.37% to $1.49.

How did CleanSpace perform in the second-half of FY21?

Investors are heading for the hills, selling CleanSpace shares following its latest performance update to the ASX.

For the 6 months ending 30 June 2021, CleanSpace reported revenue to fall at $10.2 million. This is a significant drop from the $39.7 million recorded in the first-half of the 2021 financial year. CleanSpace stated that United States vaccination rollout programs, oversupply of disposable masks, and extended lockdown restrictions impacted its result.

The company maintained a gross margin of 72% for H2 FY21, broadly in line with the prior period of 78%. This is encouraging despite the shift in sales mix from higher margin healthcare to industrial sales.

Statutory earnings before interest, tax, depreciation and amortisation (EBITDA) are estimated to come at a loss. The business is forecasting negative $2.1 million to negative $1.9 million after accounting adjustments are made. The disappointing result will drag down overall EBITDA between $17 million to $17.2 million for the entire FY21.

CleanSpace declared a cash balance of $38.2 million at the end of June, after paying a $5.2 million tax liability. Complementing the healthy balance sheet, the business minimised cash outflows whilst investing in the sales capability and other growth initiatives.

During the second-half, CleanSpace continued to increase unit sales from an improved customer base across its Healthcare and Industrial segment. It added over 50 new hospitals in the United States, more than 20 in Europe, and above 200 in Asia. In the Industrial sector, the business saw 8 new United States mining customers included in the mix.

Pleasingly, the United States government is seeking to protect COVID-19 frontline healthcare workers with powered air-purifying respirators or elastomeric respirators. This is expected to benefit CleanSpace, as it holds clinically designed best-in-class powered air-purifying respirators.

What did the CEO say?

CleanSpace CEO, Dr Alex Birrell noted that the operating environment has been challenging. However, the business is advancing its programs to support growth in the current climate. He said:

The business is committed to accelerated growth for market adoption by expanding our pipeline through aggressive sales and marketing activity, stakeholder engagement and our R&D roadmap.

CleanSpace is pleased to see countries with high vaccination rates that underpin the path to economic recovery; with customers and policy makers (as seen by the new OSHA Standard) now far more educated about respiratory protection, our technology is well positioned both in health and industry to meet their needs.

The company did not provide a guidance for the 2022 financial year, given the uncertain trading conditions.

About the CleanSpace share price

Over the last 12 months, CleanSpace shares have underperformed the broader ASX market, down almost 80%. Most of these losses have come this year after its massive fall in late March following a trading update.

On valuation grounds, CleanSpace presides a market capitalisation of roughly $145 million, with approximately 77 million shares outstanding.

The post Why the CleanSpace (ASX:CSX) share price is freefalling 23% 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 recommended CleanSpace Holdings 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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