Worley Ltd (ASX: WOR) shares can’t catch a break today despite announcing two new contract awards.

At the time of writing, the Worley share price is down 2.77% to $11.57.

Worley secures renewable fuels contract

According to its first release, Worley advised it has been awarded a services contract with engineering company, Koch Project Solutions.

The deal will see Worley provide front-end engineering and design (FEED) services for a new renewable fuels plant in California. Once completed, the plant will be owned and operated by NASDAQ-listed company, Aemetis Inc (NASDAQ: AMTX).

The renewable jet and diesel project will combine low-carbon feedstocks with renewable hydrogen from orchard and forest wood waste to produce low-carbon fuels. It is estimated that at capacity, the plant will make 170 million litres per year of renewable jet and diesel fuel. This fuel can be used in aeroplanes, trucks and ships without requiring any engine modifications.

The project will be managed by Worley’s United States West offices. Furthermore, ongoing support will come from the company’s Global Integrated Delivery team in India.

It is expected that the FEED phase will be completed towards the backend of the calendar year.

Commenting on the contract win, Worley CEO Chris Ashton said:

We are pleased that Koch Project Solutions and Aemetis have selected Worley to deliver this significant project. The Carbon Zero 1 project aligns with our focus to support our customers on their energy transition, while remaining committed to our purpose of delivering a more sustainable world.

Worley wins second contract for the day

Adding to the positive release, Worley further announced it has won a services contract with Canadian company, Parkland Refining BC.

Under the contract, Worley will provide consulting, engineering, procurement, construction management and commissioning services to support works at Burnaby refinery. Worley noted that this is on top of the existing relationship of undertaking capital work at the facility.

The Burnaby refinery converts crude and synthetic oil into gasoline, diesel, jet fuels, asphalts, heating fuels, heavy fuel oils, butanes, and propane.

The term of the contract will last for a period of 5 years.

The services will be led by Worley’s Calgary office with support from its global consulting business, Advisian, delivering technical expertise. Worley’s gas treating and sulphur technology business, Comprimo will provide the technology and design.

Mr Ashton went on to further comment:

We are pleased to continue supporting Parkland at its Burnaby refinery. We will combine our long-term presence at the refinery over the last two decades with our technical expertise to deliver efficient and reliable operations, while remaining committed to delivering a more sustainable world.

Worley share price summary

Regardless of today’s fall, Worley shares are still up more than 25% from this time last year.

The company is ranked 84th in terms of the largest market capitalisation on the ASX, with $6 billion.

The post Worley (ASX:WOR) share price edges lower despite contract wins appeared first on The Motley Fool Australia.

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

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It appears the investment management company’s investor day presentation hasn’t done the Challenger Ltd (ASX: CGF) share price any favours.

After closing yesterday at $5.65, the Challenger share price dipped by 5.31% to $5.35 in early morning trade. It has since rallied and, at the time of writing, shares are swapping hands at $5.49, down 2.9%.

Let’s take a look at what details were shared with investors this morning.

Why is the Challenger share price falling?

Investors have been selling out of the retirement-centric asset manager today following the release of its investor day presentation.

Challenger reaffirmed its FY21 guidance will be at the bottom end of its $390 million to $440 million range. This information had already been shared towards the end of April, sending the Challenger share price 20% lower in a week.

Management provided an update on its strategy and outlook following a period of disruption.

As a capital measure, Challenger has revised its targeted prescribed capital amount (PCA) from 1.45 times to 1.6 times. The increase in the risk setting will dampen the fund’s return on equity by roughly 2%.

As a result, the company also revised its pre-tax return on equity target to the Reserve Bank of Australia cash rate plus 12%, down from plus 14%.

Commenting on the change, Challenger CEO and managing director Richard Howes said:

Our strategy to grow sees us building further on our already strong retirement brand and customer franchise. It’s essential we protect this valuable asset to support our long-term growth and success. To this end, we are enhancing our risk settings, reflecting our commitment to maintain our strong capital position.

Fundamentally, this means the fund manager is reducing the risk exposure of its fund by keeping more cash up its sleeve. However, less risk means less potential reward for those retirees.

Looking to FY22

The company’s normalised net profit before tax guidance for FY22 has failed to put the Challenger share price in the green. An estimated range between $430 million to $480 million was provided by the fund manager.

Management believes the midpoint of $455 million represents their best estimate. The FY22 forecast represents a 17% increase compared to FY21.

Despite the positive estimate, Challenger’s share price is struggling to find its footing today. However, the company’s shares have rallied 11.68% in the past month.

Listed investment company, Wam Leaders Ltd (ASX: WLE) added the annuity business to its portfolio back in April.

The post Challenger (ASX:CGF) share price dips after revised capital measures appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia 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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Airtasker Ltd (ASX: ART) shares have had a good run over the past 30 days, with plenty of news to spur them on.

The Airtasker share price is currently sitting 7.41% higher than it was this time last month.

On 17 May, Airtasker shares closed at $1.08. At the time of writing, the company’s shares are trading at $1.16.

Let’s take a look at what the outsourcing platform has been up to lately.

The month that’s been for Airtasker

Over the past month, the ASX has been updated on news from Airtasker four times.

The first was on 21 May, when Airtasker shares entered a trading halt as the company announced it will acquire San Francisco-based local services marketplace Zaarly.

Airtasker’s first overseas expansion will cost it around $3.4 million. Additionally, it plans to continue expanding into the United Kingdom in the future.

To fund the acquisition and its future growth plans, Airtasker conducted a $20.7 million capital raising.

On 25 May, the company officially ended its trading halt, announcing it had successfully completed the capital raise.

That day, Airtasker shares closed 12% higher than their previous session.

Then, on 7 June, the Airtasker share price gained another 5% without the company uttering a word.

The gain was likely due to a broker note out of Morgans. The broker upgraded the company from a neutral rating and improved its price target to $1.29.

Finally, on 11 June, Airtasker was officially admitted to the S&P/ASX All Technology Index (ASX: XTX) – though, the news didn’t affect its share price.

Airtasker share price snapshot

The Airtasker share price had had a productive first few months on the ASX. The company completed its initial public offering (IPO) on 23 March.

Airtasker shares have gained almost 15% since first hitting the ASX boards and are more than 78% higher than their IPO price of 65 cents.

The company has a market capitalisation of around $480 million, with approximately 413 million shares outstanding.

The post The Airtasker (ASX:ART) share price has gained 7% in a month 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 recommended Airtasker Limited. 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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In early afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is out of form and trading lower. At the time of writing, the benchmark index is down 0.3% to 7,363.5 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are charging higher:

Bigtincan Holdings Ltd (ASX: BTH)

The Bigtincan share price has jumped 11% to $1.13. This morning the sales enablement platform provider announced a small acquisition and revealed that it is on track to surpass its annualised recurring revenue guidance in FY 2021. In respect to the former, Bigtincan is acquiring Vidinoti SA for ~$770,000. Vidinoti is a leader in augmented and virtual reality systems and has developed a comprehensive suite of tools to create, deploy, and manage augmented reality content.

Opthea Ltd (ASX: OPT)

The Opthea share price has surged 17% higher to $1.65. Investors have been buying this biotech company’s shares following an update from rival Clearside Biomedical. That update reveals that Clearside Biomedical’s Phase 1/2a trial of its wet age-related macular degeneration (wet AMD) candidate has been successful. This news appears to have brought Opthea onto the radar of investors because both companies are developing drugs that target wet AMD. However, Opthea is well ahead and undertaking a phase 3 trial at present.

Seven West Media Ltd (ASX: SWM)

The Seven West Media share price has rocketed 17% higher to 47.5 cents. This morning the media company revealed that trading conditions have been very strong during the fourth quarter of FY 2021. According to the release, management expects fourth quarter advertising revenue to increase by 45% over the prior corresponding period. Seven West Media also revealed that full year operating earnings are expected to come in ahead of analyst consensus estimates.

Telix Pharmaceuticals Ltd (ASX: TLX)

The Telix share price is up 3.5% to $5.82. This follows an update on its meeting with the U.S. Food and Drug Administration in relation to its new drug application review for its Illuccix product. Positively, the FDA indicated that there are no outstanding substantive review issues with Telix’s submission. As a result, management is preparing for a launch, pending final approval.

The post Why Bigtincan, Opthea, Seven West Media, & Telix shares are charging higher appeared first on The Motley Fool Australia.

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James Mickleboro owns shares of Telix. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended BIGTINCAN FPO. The Motley Fool Australia owns shares of and has recommended BIGTINCAN FPO. 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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Buy now, pay later (BNPL) player Zip Co Ltd (ASX: Z1P) has been on a wild rollercoaster ride this year.

Zip shares started 2021 in the mid $5s, then peaked as high as $13.92 in February. Since then the valuation has suffered like many of its growth cohorts. At the time of writing, the Zip share price is down 1.24%, trading at $7.16.

So is it an investment opportunity now? Is it effectively buying in at half-price?

Shaw and Partners analyst Jono Higgins reckons so.

“We’ve got a 12-month price target of $16 per share on the stock. So we think a potential catalyst on that would be good quarterlies, merchant announcements and the like,” he told the Direct From The Desk podcast.

“Particularly large and strategic merchant announcements, as well as just continued growth. The benefit of a business growing like this is that over time, as long as the growth dominates, the share price should look after itself.”

BNPL sector growth is ‘extraordinary’

While stiff competition is a risk for all buy now, pay later providers, the industry is still in a high-growth phase, according to Higgins.

“We think Zip will outperform on the back of a number of different dynamics, but the whole sector is performing very strongly and we’re seeing some exceptional growth rates,” he said.

“We’re seeing Zip adding 8,000 customers a day. We’re seeing Afterpay Ltd (ASX: APT) adding 15,000 customers a day. We’re seeing Klarna adding 20,000 customers a day. Sezzle Inc (ASX: SZL) adding 5,000. These growth rates are extraordinary and they seem to be increasing.”

Higgins reckons if a company can keep increasing its growth rate then the valuation will catch up very easily.

“Zip’s on something like 6 times forward sales into FY22. If they grow their sales at 100% the next year, then they’ll be on 3 times forward sales,” he said.

“If the market’s prepared [next year] to still pay 6 times forward sales, then the share price will effectively double over the next 12 months and that’s with no rewriting. That’s what’s attracting us to the sector.”

Excellent leadership

Higgins is a big fan of the people running Zip.

“I recall meeting management when they were doing a few hundred thousand dollars in sales and struggling to get finance out of venture capital firms in the US — and getting charged 15% to do it,” he said.

“I’m [now] looking at a management team that’s been dynamic and grown up to a $450, $500 million annualised sales run rate. [And they’ve] made an overseas acquisition, which has been incredibly successful and is now one of two major payment players that are worth in the billion dollars.”

The acquisition he refers to is the buyout of the American rival Quadpay.

“They still have Brad Lindenberg and Adam Ezra involved there who were the founders of [Quadpay],” Higgins said.

“They’ve got really strong management in the UK. They’ve been picking up people from PayPal Holdings Inc (NASDAQ: PYPL), Amazon.com Inc (NASDAQ: AMZN), Shopify Inc (NYSE: SHOP). I think they have really built the second tier of management to take this business to the wider stage.”

Watch out for buyouts and mergers

With so many different players in the industry, Higgins expects consolidation in the future.

“In the short term, I think you do want to be careful of the smaller players. Our view is to be careful with the smaller players because the larger players effectively have the capital to really go after them, and they can raise capital at very short notice and they can fight them in the checkout,” he said.

“So we think just keep to number one and two on the ASX. That’s Zip and Afterpay.”

The post Are Zip (ASX:Z1P) shares cheap enough to buy now? appeared first on The Motley Fool Australia.

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Tony Yoo holds shares in AFTERPAY T FPO, Amazon, and PayPal Holdings. 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 AFTERPAY T FPO, Amazon, PayPal Holdings, Shopify, and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Sezzle Inc and has recommended the following options: long January 2022 $1,920 calls on Amazon, long January 2022 $75 calls on PayPal Holdings, long January 2023 $1,140 calls on Shopify, short January 2022 $1,940 calls on Amazon, and short January 2023 $1,160 calls on Shopify. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Amazon, PayPal Holdings, and Sezzle Inc. 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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In 2021 so far, much of the discussion around the share market and investing in ASX shares have centred around inflation. Specifically, whether this economic scourge will rear its ugly head in the next year or two. February saw an intense reaction to this possibility, with many sectors that investors seemed to deem as highly exposed to future inflation, selling off sharply.

No sector was harder hit than ASX tech shares. Following a similar reaction over in the US, the S&P/ASX All Technology Index (ASX: XTX) fell a nasty 18% between 10 February and 9 March earlier this year. We can see this in action by looking at the Afterpay Ltd (ASX: APT) share price. Afterpay can be described as a ‘poster child’ of sorts when it comes to ASX tech shares. And boy, did it have a rough ride a few months ago. Between February and May, Afterpay shares fell almost 50% in value.

Inflation returns?

One of the factors that seem to be in play here was inflation fears. Financial markets typically respond to higher inflation expectations with an increase in the running yield government bonds are priced with.

In early 2021, a 10-Year US Treasury Note was priced with a yield of roughly 1%. By April, this had grown substantially to around 1.75% before sliding back over subsequent weeks to the ~1.45% we saw yesterday. But today, this yield has shot up again, back to 1.59% at the time of writing.

So what happened? The US Federal Reserve, that’s what.

According to a report in the Australian Financial Review (AFR) today, last night the Fed seemed to reign in its previous rhetoric surrounding inflation and its medium-term expectations on it. Previously, (as we’ve covered over the past few months), the Fed had strongly signalled that it expected that rates would not have to rise until 2023 or 2024, contingent on inflation running at 2% and the economy hitting something close to full employment.

But last night, the Fed seemed to change its tune somewhat. The AFR quotes US Fed chair Jerome Powell as stating the following:

Inflation has come in ahead of expectations in the last few months… Is there a risk that inflation could be higher than we think? Yes. There is a lot of uncertainty. We need to see how things evolve in coming months. This is an extraordinarily unusual time.

How have ASX shares reacted today?

This rather extraordinary statement came alongside some revised inflation expectations from the Fed. 3 months ago, the central bank was predicting US inflation of 2.4% for 2021. As of last night, the Fed now expects that number to hit 3.4%. That’s a pretty big revision over a 3 month period. The Fed has also revised its interest rate expectations, flagging the possibility of up to 2 rate hikes by 2023.

As you might expect, there has been a pretty substantial reaction to this update from financial markets. We’ve already covered the spike in US government bond yields. But we’ve also seen the US S&P 500 Index (INDEXSP: .INX) drop sharply last night in the news. It recovered slightly at the end of the day’s trading but still finished 0.54% lower.

The S&P/ASX 200 Index (ASX: XJO) is also dipping today and is down 0.47% to 7,351 points at the time of writing. The Aussie dollar has also been sold off. It was going for more than 77 US cents yesterday. Today, it has dropped to 76.24 US cents.

Markets tend to fear inflation mainly because of the higher interest rates that come with it. It might well have the potential to spoil the party the ASX 200 has been enjoying over June so far.

The post Did the US Federal Reserve just ring the inflation warning bell? 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. 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.

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At lunch on Thursday, the S&P/ASX 200 Index (ASX: XJO) has run out of steam and is trading lower. The benchmark index is currently down 0.3% to 7,363.7 points.

Here’s what is happening on the market today:

Coles Strategy Day

The Coles Group Ltd (ASX: COL) share price is under pressure today following the release of its strategy day update. Although the supermarket giant revealed solid progress against a number of key metrics, it has been losing market share due to COVID-19 shopping trends. In addition to this, Coles revealed that it expects its capital expenditure to increase to $1.4 billion in FY 2022. This is partly due to its investment in its distribution centres.

Challenger tumbles

The Challenger Ltd (ASX: CGF) share price is sinking today after releasing its investor day presentation. At the event, CEO and Managing Director, Richard Howes, reaffirmed that the annuities company is expecting normalised net profit before tax at the bottom end of its guidance range of between $390 million and $440 million this year. In FY 2022, its normalised net profit before tax is expected to grow to between $430 million and $480 million.

Gold miners sink

Gold miners such as Evolution Mining Ltd (ASX: EVN) and Resolute Mining Limited (ASX: RSG) are sinking lower after the gold price tumbled overnight. According to CNBC, the spot gold price fell 1.4% to US$1,830.60 an ounce after the US Federal Reserve brought forward its rate hike plans to 2023. The S&P/ASX All Ordinaries Gold index is down 3.5% at lunch.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Thursday has been the Netwealth Group Ltd (ASX: NWL) share price with a 6% gain on no news. The worst performer has been the Whitehaven Coal Ltd (ASX: WHC) share price with an 11% decline following a disappointing downgrade to its guidance.

The post ASX 200 down 0.3%: Coles and Challenger updates, gold miners sink appeared first on The Motley Fool Australia.

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James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Netwealth. The Motley Fool Australia owns shares of and has recommended COLESGROUP DEF SET, Challenger Limited, and Netwealth. 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 Sonic Healthcare Limited (ASX: SHL) share price has failed to fire up this morning after the company announced a new acquisition.

At the time of writing, the medical diagnostics company’s shares are see-sawing around yesterday closing price, down 0.02% to $36.68.

Let’s take a closer look at today’s news.

Sonic Healthcare to strengthen its imaging division

In its release, Sonic Healthcare advised it has signed a binding agreement to acquire 100% of Canberra Imaging Group (CIG).

The company described this move as a “significant and positive step” in developing its imaging division in Australia.

CIG is a leading practice in Canberra, with additional branches located in regional New South Wales. The practice employs 15 radiologists and along with ~200 other staff.

CIG generates annual revenues of ~A$60 million, which is expected to increase the revenue of Sonic Healthcare’s imaging division by about 10%.

Today’s statement did not specify the cost of the acquisition, but noted the settlement was expected to be complete in the first quarter of FY22. The acquisition will be funded from cash and/or available debt lines.

Sonic Healthcare said CIG would be immediately earnings per share accretive, with the return on capital invested expected to exceed the cost of capital in the first year.

What did management say?

Sonic Healthcare CEO Dr Colin Goldschmidt said:

Canberra Imaging Group is a high quality imaging practice, with outstanding radiologists, management and staff, and with a culture that is strongly aligned with Sonic’s Medical Leadership model.

CIG has a proven track record in the greater Canberra market, with a history of strong organic growth based on personalised and excellent customer service. I am delighted to welcome warmly all CIG staff to the Sonic Healthcare group.

Sonic Healthcare share price eyes record all-time highs

The Sonic Healthcare share price has had a solid performance so far this year. The company’s shares are up 11.32% to $36.60, not far off their August 2020 record all-time high of $38.00.

The bullish performance of Sonic Healthcare shares is underpinned by a solid financial performance. The company’s February half-year results revealed a 33% increase in revenue to $4.4 billion and 168% surge in net profit to $678 million.

The company said that its COVID-19 testing activities had made a significant contribution to its revenue and earnings growth.

The post What’s with the Sonic Healthcare (ASX:SHL) share price today? appeared first on The Motley Fool Australia.

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Kerry Sun 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 Sonic Healthcare 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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Whitehaven Coal Ltd (ASX: WHC) shares are tumbling this morning after the company downgraded its production guidance. At the time of writing, the Whitehaven share price is trading at $1.84 ­– 9.8% lower than yesterday’s close.

Today’s downgrade marks the fourth time Whitehaven has lowered its 2021 financial year production guidance.

Let’s look at the coal mining company’s latest announcement.

Downgraded production guidance

Whitehaven shares are well in the red today after the company downgraded its production guidance for the 2021 financial year to 20.4 million tonnes of coal.

Within its full-year results, released in August 2020, Whitehaven gave production guidance of between 21 and 22.8 million tonnes for the 2021 financial year.

Its guidance was first downgraded in January, then again in March, and once more in April.

According to Whitehaven, the latest downgrade has been led by less production at the company’s Narrabri underground mine.

Whitehaven states the Narrabri mine is undergoing engineering works and has experienced a geological event. The company is conducting geo-sensing drilling at the mine to provide confidence in the geological conditions.

Originally, Whitehaven claimed the Narrabri mine would produce between 6 and 6.7 million tonnes of coal this financial year. The company now expects the mine to produce 4.1 million tonnes in FY21.

In its full-year results, the company claimed it expected managed coal sales of between 18.5 and 20 million tonnes.

Today, Whitehaven announced its managed coal sales will likely be around 17.9 million tonnes.

However, Whitehaven’s Maules Creek and Gunnedah Open Cut mines are still as productive as previously expected.

The Maules Creek mine is now expected to produce 12.5 million tonnes of coal this financial year – 0.5 million tonnes more than its original guidance.

The Gunnedah Open Cut mine’s production is within the range of the previous guidance. Whitehaven expects it to produce 3.8 million tonnes of coal for FY21.

The company’s unit cost guidance has also continued as predicted – $74 per tonne.

Whitehaven share price snapshot

Whitehaven shares have had a good run on the ASX lately, spurred by the gaining price of coal.

Currently, the Whitehaven share price has gained around 12% year to date. It has also gained almost 13% since this time last year.

The company has a market capitalisation of around $1.9 billion, with approximately 1 billion shares outstanding.

The post Whitehaven (ASX:WHC) share price slides 10% on guidance downgrade 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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Seven West Media Ltd (ASX: SWM) shares are surging higher in morning trade. At the time of writing, the Seven West share price is up 10.63% to an intraday high of 44.25 cents.

The movement comes after the company announced a trading update for the backend of the current financial year.

Let’s take a look at how the media company has been performing.

What did Seven West Media announce?

Judging by today’s Seven West share price, investors are excited over the company’s latest statement to the ASX.

According to its release, Seven West Media reported favourable trading conditions during the fourth quarter of 2021.

Advertising revenue has rebounded strongly when compared to last year, projected to increase by 45% in the quarter. This includes Broadcast Video on Demand (BVOD), which is engaging with millions of viewers in Australia.

Since April, the company has been increasing its television audience share which has translated to a lift in revenue.

Management noted “the Seven Sales team delivered the number 1 linear TV revenue share. Seven West Media is highly confident in Seven’s schedule for the next six months, with proven and successful formats and Olympic Games Tokyo 2020 and the Ashes Test series.”

Digital earnings are performing strongly, with the company forecasting its digital segment to contribute more than $60 million to earnings before interest, tax, depreciation and amortisation (EBITDA). This represents a 130% year-on-year increase. FY22 is projected to double FY21’s digital earnings figures.

Pleasingly, Seven West Media has kept costs in line at the lower end of the range announced in its February half-year results.

Overall, the group expects EBITDA to be between $250 million and $255 million in FY21. This compares to analyst consensus of $235 million to $245 million for the period.

Seven West Media stated that significant work has been undertaken to strengthen up its balance sheet. Net debt is estimated to stand at around $240 million to $250 million at the end of June 2021.

The company anticipates the positive momentum to continue running into the September quarter.

Seven West Media share price summary

Despite being hit hard by COVID-19 in 2020, Seven West Media shares have been on the rebound. Over the last 12 months, the company’s share price has lifted by more than 270%, reaching 2019 levels.

Seven West Media presides a market capitalisation of roughly $669 million, with approximately 1.5 billion shares on issue.

The post Seven West (ASX:SWM) share price zooms 7% on trading update appeared first on The Motley Fool Australia.

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

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