The S&P/ASX 200 Index (ASX: XJO) is having a pretty ho-hum kind of day this Friday. The ASX 200 is currently down, but only just, falling 0.049% to 7,414 points at the time of writing. But one of its major constituents – the BHP Group Ltd (ASX: BHP) share price – is doing a bit better today.

BHP shares have just hit a new all-time high. The ‘Big Australian’ is currently up a healthy 1.65% to $54.21 a share, after hitting $54.55 earlier today. That’s a new record high for the miner. But it’s not the first time BHP has climbed to new heights in recent times.

BHP shares have spent 2021 so far on fire. This ASX 200 blue chip is now up 26% year to date in 2021 so far, and a very impressive 43.5% over the past 12 months. It’s also up 171% over the past 5 years. These numbers don’t reflect BHP’s substantial dividend payments either.

So what is pushing BHP up once again this Friday?

Why the BHP share price is hitting new record highs today

Well, there’s no major news or announcements out of the miner today, so we can rule that out straight away. However, several factors have been ‘coming up Milhouse’ for BHP in recent months.

The first is the stubbornly high iron ore price. Iron ore is currently going for US$193 a tonne. That’s not quite as high as the US$200 a tonne-plus levels we have seen for most of 2021 so far. But it is still extremely elevated by historical levels, meaning that iron ore miners are still gushing cash flows.

These high iron prices are also being supplemented by the Aussie dollar, which has spent the last few months or so falling in value against the US dollar. Back in early May, one Aussie dollar was buying around 79 US cents. Today, that same dollar will only get you around 74 US cents.

Since BHP sends most of its iron ore overseas (where buyers purchase it in US dollars), this means BHP is getting more Australian dollars than it did a few months ago for every tonne it sells.

All of this adds up to investors smelling money. BHP’s rival Rio Tinto Limited (ASX: RIO) announced a record US$9.1 billion upcoming dividend on Wednesday, worth US$5.61 ($7.59) a share. There is probably a reasonable expectation that BHP will be pulling something similar out of its hat, given both companies are sitting in similar tailwinds.

It’s likely a combination of these factors that are pushing up BHP shares today to new record highs. At the current BHP share price, the company has a market capitalisation of $157.1 billion, a price-to-earnings (P/E) ratio of 29.07, and a trailing dividend yield of 3.81%.

The post Why the BHP (ASX:BHP) share price just hit a new all-time high this Friday appeared first on The Motley Fool Australia.

More reading

• The ASX 200’s new record high is flimsier than you might think. Here’s why
• Has the record breaking Rio Tinto (ASX:RIO) share price hit its peak?
• Woodside (ASX:WPL) share price rises as rumours swirl over BHP deal
• BHP (ASX:BHP) share price on watch amid news all petroleum assets to go
• BHP (ASX:BHP) share price slides as $9b class action resurfaces

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. 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 BARD1 Life Sciences Ltd (ASX: BD1) share price is slipping after the company released its latest quarterly report.

BARD1’s quarterly activities report for the 3 months ended 30 June details a seemingly good period for the company.

However, the market isn’t responding positively to BARD1’s news. Right now, the BARD1 share price is $1.35 – 7.51% lower than its previous closing price.

Let’s take a closer look at today’s news from BARD1.

The news driving the BARD1 share price today

Financials

The BARD1 share price is slipping on the back of its quarterly performance.

Over the quarter ended 30 June, BARD1 used $964,000 in its operating activities. The company spent $63,000 on patent fees, $288,000 on staffing, and $587,000 on admin and corporate costs.

It also spent $867,000 on research and development. However, BARD1 claims it received a $644,000 research and development tax incentive refund.

It also received $184,000 from sales of its hTERT product.

BARD1 ended the financial year with around $4.99 million in the bank. That’s enough to fund its operations for another 5 quarters.

Activities

Over the quarter, BARD1 advanced its sales and commercial activities for its 3 major products. Unfortunately, the productive quarter isn’t reflected in the BARD1 share price movements today.

BARD1’s product hTERT performed well over the period, with sales increasing by 30% over the 2021 financial year. An Australian patent was granted for hTERT in March.

The company launched its EXO-NET product in May. BARD1 plans to embed the EXO-NET’s technology into the discovery, research and development phases for multiple diagnostic and therapeutic applications.

BARD1 is also working on its SubBSM product, with a manuscript having been submitted to a peer reviewed journal in June.  

Additionally, positive results from a study using BARD1’s autoantibody test to detect early ovarian cancer were published by a peer reviewed journal in late June.

Finally, in April BARD1 announced an options agreement with the University of Liverpool to licence 2 novel protein markers for development and commercialisation of the novel type 3c diabetes (T3cDM) blood test.

BARD1 share price snapshot

Despite today’s dip, the BARD1 share price has been performing well lately. It has gained 108% since the start of 2021. It is also 48% higher than it was this time last year.

The company has a market capitalisation of around $131 million, with approximately 80 million shares outstanding.  

The post Here’s why the BARD1 (ASX:BD1) share price is falling 7% today appeared first on The Motley Fool Australia.

More reading

• Why BARD1, Imugene, Northern Star, & Silver Lake shares are sinking
• BARD1 (ASX:BD1) share price falls 6% on placement update
• Here’s why the BARD1 (ASX:BD1) share price is frozen today

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 Marley Spoon AG (ASX: MMM) share price has tanked 22% in afternoon trade.

Shares in the food company have been on the receiving end of some brutal selling.

The bearish price action follows Marley Spoon’s recent trading update.

Let’s take a look at what Marley Spoon announced and why investors are jumping ship.  

Marley Spoon reports mixed quarterly update.

Marley Spoon released its update for the second quarter of FY21 following the market’s close yesterday.

Judging by today’s price action, the company’s performance was below market consensus.

Overall, for the quarter ending 30th June 2021, Marley Spoon reported further growth, albeit at a slower rate.

The company’s report was highlighted by revenue of EUR80.6 million, a 10% improvement on the prior corresponding period.

Marley Spoon’s management noted that revenue growth was driven by all regions, in particular Europe.

Overall, Marley Spoon reported a first half revenue growth of 36% year on year.

The company also cited a 37% year on year increase in active users. Marley Spoon reported revenue from customers ordering 6 or more times increased to 71% for the first half.

What is weighing down the Marley Spoon share price?

As noted in a colleague’s previous article, Marley Spoon’s operating result could be weighing down the Marley Spoon share price.

In its update, the company cited an operating loss of EUR9 million. For the first half, Marley Spoon reported an operating loss of EUR15 million.

However, Marley Spoon has re-affirmed its 2021 net revenue guidance. The company expects net revenue growth between 30% to 35% year on year for 2021.

Marley Spoon also noted operational headwinds in the first half of 2021. As a result, the company revised its Contribution Margin (CM) to be approximately 29% in 2021, in line with CY 2020.

Snapshot of the Marley Spoon share price

Marley Spoon is the second largest subscription-based meal-kit provider in Australia. The company delivers fresh ingredients to customers in Australia, the United States and Europe.

Thanks to today’s brutal selling, the Marley Spoon share price is more than 18% lower since the start of 2021.  

At the time of writing, shares in Marley Spoon are down 22%, trading at $2.17.

The post Why the Marley Spoon (ASX:MMM) share price is sinking 22% today appeared first on The Motley Fool Australia.

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• Why the Marley Spoon (ASX:MMM) share price is up 33% in a month

Motley Fool contributor Nikhil Gangaram 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 Marley Spoon AG. The Motley Fool Australia owns shares of and has recommended Marley Spoon AG. 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 afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a subdued note. At the time of writing, the benchmark index is down 0.1% to 7,408.1 points.

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

Janus Henderson Group CDI (ASX: JHG)

The Janus Henderson share price has jumped 7% to $57.50. The catalyst for this was the release of the fund manager’s second quarter update after the market close yesterday. Janus Henderson was on form during the quarter and almost doubled its operating profit. It also announced a US$200 million share buyback.

Mineral Resources Limited (ASX: MIN)

The Mineral Resources share price is up 2.5% to $64.93. Investors have been buying the mining and mining services company’s shares following its fourth quarter update. That update revealed a record 5.2 million wet metric tonnes (wmt) of iron ore shipments during the June quarter. This represents a quarter-on-quarter increase of 27%. This led to Mineral Resources delivering a 23% increase in full year iron ore shipments to a record 17.3 million wmt.

Telix Pharmaceuticals Ltd (ASX: TLX)

The Telix share price has climbed 4.5% to $5.58. This follows news that Telix has received authorisation from the Belgian Agence Fédérale de Contrôle Nucléaire to begin the build-out of a state-of-the art radiopharmaceutical production facility that will ultimately serve as its primary EU manufacturing site. Management believes the authorisation represents a significant milestone for Telix.

Western Areas Ltd (ASX: WSA)

The Western Areas share price is up 4% to $2.62. Investors have been buying the nickel producer’s shares following the release of its guidance for FY 2022 and its 10-year production outlook. The latter reveals how Western Areas plans to grow its production over the next decade despite the Forrestania operation coming to the end of its life during FY 2025.

The post Why Janus Henderson, Mineral Resources, Telix, & Western Areas are rising appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: NAB’s $2.5bn buyback, Origin shares sink
• Here’s why the Western Areas (ASX:WSA) share price is storming higher
• Mineral Resources (ASX:MIN) share price hits another record high after quarterly update
• Janus Henderson (ASX:JHG) share price jumps 9% to multi-year high
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor James Mickleboro owns shares of TELIXPHARM DEF SET. 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 AGL Energy Limited (ASX: AGL) share price has underperformed the broad index over the past 5 years.

Whereas the S&P/ASX 200 Index (ASX: XJO) has posted a 5-year return of approximately 35%, AGL shares are 65% in the red over this time.

However, the AGL dividend might provide some reprieve to the situation here.

Dividend payouts can provide some ‘downside coverage’ on shares exhibiting less than favourable performances on the charts.

Here, we examine if this has been the case with the AGL share price over the past 5 years.

Exhibit 1. AGL Energy Share Price vs. S&P/ASX 200 Index: 5-year Return Comparison

Source: Google Finance

A bit of history on the AGL dividend

AGL has an extensive history of returning cash to its shareholders since September 2003.

The AGL dividend was suspended from March 2005 to September 2013. It then resumed, and the company has since continued to deliver two payments each year to date.

AGL paid its most recent dividend on 26 March at 41 cents, a small down-step from previous payments.

From March 2020 to March 2021, AGL paid total dividends of $1.39 per share. From March 2015 to March 2021, AGL dividends totalled $5.98 per share.

Just taking the periods from 2003 to 2021, without factoring in any fluctuations, AGL has expanded its dividend by a compound annual growth rate (CAGR) of only 1.94%.

Excluding the down-step in 2021, AGL dividend growth was at a CAGR of 7.2% to August 2020.

Exhibit 2. AGL Dividend History 2003 – 2021 (current).

Source: The Motley Fool Australia

Have the AGL dividends paid off for shareholders over the past 5 years?

To answer this question, we will exclude assumptions and calculations around AGL’s dividend yield, for purposes of simplicity.

So, even when factoring in the AGL dividend, the share price has delivered a total loss of 35% over the past 5 years.

We can see the dividend has dampened the overall loss, but has not meaningfully changed the situation for AGL shareholders.

That means a $1,000 investment in AGL shares on 1 March 2015 would now be worth a paltry $650, given this 35% loss.

Here’s another way to look at it. If we purchased 1,000 AGL shares on 1 March 2015 – what would our position be worth today?

Purchasing 1,000 shares on 1 March 2015 would have cost $15,050 on a closing share price of $15.05. Over this time, we would have received a total of $5,980 in dividends.

Including AGL’s dividends, if we sell those same 1,000 shares today (at $7.20 per share), we incur a loss of ‘only’ 12.4%. But taking dividend payouts out of the equation, the loss balloons to 52%.

Let’s tweak things a bit to examine further

Interestingly, some fascinating changes occur if we make some basic assumptions.

Let’s assume we reinvested each of the dividend payouts (per share) we received into more AGL shares over this 5-year time frame. This is a common choice for many long term investors.

Adjusting for this dividend reinvestment plan (DRP), our loss actually expands to 28% in the red!

Logically, this makes sense, as we are purchasing more shares exhibiting a loss, thereby compounding our own losses. A vicious cycle of sorts.

Hence, this begs the question – have the dividends paid off for AGL shareholders?

Given the calculus displayed above, it stands to reason that AGL shareholders have benefitted somewhat from its dividend program.

We see that the AGL dividend has indeed provided some downside coverage, although it has not completely changed the narrative in terms of investors’ total return characteristics.

Regardless, AGL shareholders have still endured a loss on their initial investment, if they bought the shares 5 years ago and held them until today.

Foolish takeaway

The AGL dividend program has not been enough to overcome its share price underperformance.

However, it has provided investors with some balance by dampening the overall capital losses and contributing to the return profile.

This is one benefit dividends provide to investors, aside from the obvious cash payment into one’s bank account.

However, one must also consider the different scenarios that might occur, depending on decisions regarding the dividends received.

As in any investment case, due diligence is paramount.

The post The AGL (ASX:AGL) share price is down 60% in 5 years. But have the dividends paid off? appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: NAB’s $2.5bn buyback, Origin shares sink
• What’s going on with the Pilbara Minerals (ASX:PLS) share price today?
• 5 things to watch on the ASX 200 on Friday
• Here are 3 of the most heavily traded ASX 200 shares this Thursday
• ASX 200 rises, Fortescue up, Airtasker climbs

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 Macquarie Group Ltd (ASX: MQG) share price is backtracking today following the company’s virtual Annual General Meeting (AGM) on Thursday.

At the time of writing, the investment bank’s shares are fetching for $157.02, down 0.70%.

Macquarie sets path to reinvest within the business

Investors have reacted to the news with the change in Macquarie’s strategy to reinvest its profits into the business.

According to an article published by the Australian Financial Review, Macquarie CEO, Shemara Wikramanayake gave a reason for the group’s dividend payout reduction.

The investment bank will cut its dividend payout policy range from 60% to 80% of earnings to 50% to 70% in 2022. While this may reflect a minor change, in reality, this equates to hundreds of millions of dollars.

Over the past 9 months, Macquarie has invested $3.8 billion in capital across its four operating groups. The company noted that roughly $600 million was put into Macquarie Capital to fuel growth. The other groups, Banking and Financial Services, Commodities and Global Markets, and Macquarie Asset Management also received their lion’s share.

Management revealed their reasoning noting that the dividend payout ratio has been about 56% in the past 2 years. Only once has the company paid out a dividend of more than 70% of its profit over the last decade. That was 2013 where Macquarie decided to reward shareholders with a payout ratio of 79%.

The additional leeway is expected to give the company the financial flexibility to pursue investment opportunities. Recent acquisitions such as United States funds management business, Waddell & Reed and AMP Capital’s Global Equity and Fixed Income business provides opportunities for growth.

Most notably, Ms Wikramanayake mentioned that mispriced assets in the current environment along with Macquarie’s working model is a proven formula. The company has been using this strategy, drawing on past experiences over the decades.

About the Macquarie share price

Emulating the economic rebound, Macquarie shares have continued their ascent over the past year, up 25%. In comparison, the S&P/ASX 200 Index (ASX: XJO) has similarly increased by 22%.

Macquarie commands a market capitalisation of around $57.6 billion, making it the 9th largest company on the ASX. The company has approximately 368.7 million shares outstanding

The post Macquarie (ASX:MQG) share price edges lower after signalling dividend cut appeared first on The Motley Fool Australia.

More reading

• ASX 200 rises, Fortescue up, Airtasker climbs
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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 owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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ASX lithium shares are surging across the board on Friday.

Heavyweights including Galaxy Resources Ltd (ASX: GXY) and Orocobre Ltd (ASX: ORE) are both rallying into record territory, up 6.44% and 6.27% respectively.

Unfortunately for Pilbara Minerals Ltd (ASX: PLS), its shares have been suspended, pending the outcome of a court hearing after the company failed to disclose the issuance of new shares.

Elsewhere, emerging lithium players and explorers including Piedmont Lithium Ltd (ASX: PLL) and Liontown Resources Ltd (ASX: LTR) are also trading higher, up 1.36% and 8.88% respectively.

What’s driving ASX lithium shares to new highs?

There has been a lot of hype around the lithium sector, driven by the rising popularity of electric vehicles and the global focus on decarbonisation.

On Friday, Reuters reported that the “White House has told US automakers it wants them to back a voluntary pledge of at least 40% of new vehicles sales being electric by 2030 as it works to reduce greenhouse gas pollution”. Yet another possible tailwind for ASX lithium shares.

According to the International Energy Agency (IEA), a record 3 million new electric cars were registered in 2020, a 41% increase from the previous year.

Encouragingly, the IEA cited that electric car sales in the first quarter of 2021 have lifted “nearly two and a half times their level in the same period a year earlier”.

Looking ahead, the IEA believes the electric vehicle industry is poised for significant growth over the coming decade.

“Based on current trends and policies, it projects the number of electric cars, vans, heavy trucks and buses on the road worldwide to reach 145 million by 2030. But the global fleet could reach 230 million if governments accelerate efforts to reach international climate and energy goals”.

Lithium prices rally to 2-year highs

Both ASX lithium shares and lithium prices are making a comeback after a two-year bear market between 2018 to 2020 where prices tumbled more than 70%.

Orocobre released its June quarterly results on 22 July, where it highlighted that lithium prices have increased by nearly 170% over the last nine months.

The company was receiving an average realised price of US$8,376/tonnes, up 45% quarter-on-quarter.

A recent update from Fastmarkets said that “lithium prices in China domestic market rise amid consumer restocking activity” and “European and US prices remain largely stable, with technical-grade lithium hydroxide narrowing upward slightly”.

The post ASX lithium shares are surging this Friday. Here’s why. appeared first on The Motley Fool Australia.

More reading

• What’s going on with the Pilbara Minerals (ASX:PLS) share price today?
• Pilbara Minerals (ASX:PLS) share price on watch following record Q4 update
• 5 ASX 200 shares hitting record highs. What do they have in common?
• CBA and Zip were among the most traded ASX shares last week
• Here’s why the Pilbara Minerals (ASX:PLS) share price is frozen

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 Piedmont Lithium Inc. 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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With earnings season on the horizon, analysts at Goldman Sachs have been looking to see which ASX 200 shares might surprise with their results.

Two ASX 200 shares that have been tipped to positively surprise next month are listed below. Here’s what the broker is expecting:

Bapcor Ltd (ASX: BAP)

Goldman Sachs believes there is upside risk to consensus estimates for this auto parts retailer in FY 2021. It notes that trading conditions remain robust and are being underpinned by continued strength in consumer spending and increased vehicle ownership.

Goldman highlights that key competitor, GPC, recently released its quarterly update and revealed same store sales growth in the mid to high teens for the June quarter. As a result, its analysts are forecasting a net profit after tax of $131 million in FY 2021, compared to the consensus estimate of $125 million. The broker’s estimate implies a 47% increase on FY 2020’s net profit after tax of $89.1 million.

Goldman Sachs has a buy rating and $9.25 price target on its shares. This compares to the latest Bapcor share price of $8.19.

Coles Group Ltd (ASX: COL)

Another ASX 200 share that Goldman Sachs believes could surprise to the upside is Coles. It notes that the supermarket giant has gone through a period of strong underlying sales growth driven by at-home consumption.

The broker’s earnings forecast remains ahead of the consensus by ~1.3%, with the positive surprise expected to be driven by the Liquor and Coles express divisions. In addition, the broker expects to see improvements in key metrics, such as ecommerce and market share, and a positive update on its Smarter Selling program.

Goldman highlights that the Coles share price trades at a significant discount to its rival Woolworths Group Ltd (ASX: WOW). It expects this to narrow as its margins improve.

Its analysts currently have a buy rating and $19.40 price target on Coles shares. This compares to the latest Coles share price of $17.57.

The post 2 ASX 200 shares tipped to positively surprise during reporting season appeared first on The Motley Fool Australia.

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• How much is the Coles (ASX:COL) dividend worth today?
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• 2 excellent ASX 200 blue chip shares named as buys

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 Bapcor and COLESGROUP DEF SET. 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 Ecograf Ltd (ASX: EGR) share price is falling today after the company released its report for the quarter ended 30 June.

Ecograf’s quarterly activities and cash flow report details the performance of its battery anode material business, lithium-ion battery materials recycling business, and graphite mining business.

The Ecograf share price is currently 72 cents, 3.38% lower than its previous close.

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

What’s driving the Ecograf share price today?

Cash flow report

The Ecograf share price is down on the back of the company’s final quarter of the 2021 financial year report.

Over the quarter ended 30 June, Ecograf used $553,000 in operating activities.

It spent $79,000 on exploration, $195,000 on staffing, and $242,000 on administration and corporate costs.

The company received $374,000 worth of government grants and tax incentives.

That brings its total spend on operating activities over the 2021 financial year to $2.33 million.

Ecograf finished the quarter with $52.6 million cash in the bank, mostly left over from its February capital raise.

That’s enough to fund it for another 88 quarters, or 22 years, if its outflows stay the same.

Activities report

The Ecograf share price is slipping despite the company’s productive quarter.

Over the quarter, the company’s Battery Anode Material Facility, located near Perth, was awarded Major Project Status.

It also completed locked cycle testing for the facility’s pre-construction program.

The company is also in discussions with European countries about developing a Battery Anode Material Facility in Europe.

Ecograf’s Tanzanian graphite mining business is going well, having received the approval of the Tanzanian government.

Finally, Ecograf listed on the OTCQX market over the quarter.

Ecograf share price snapshot

Despite today’s fall, Ecograf has been performing well this year.

So far, Ecograf shares have gained 320% since the start of 2021. They are also 921% higher than they were this time last year.

The company has a market capitalisation of around $321 million, with approximately 449 million shares outstanding.

The post Ecograf (ASX:EGR) share price falls on the back of its Q4 results appeared first on The Motley Fool Australia.

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• EcoGraf (ASX:EGR) share price lifts 5% on lithium update
• Why the Ecograf (ASX:EGR) share price is soaring 16% today
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• Why the Novonix (ASX:NVX) share price rocketed 16% today

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 EML Payments Ltd (ASX: EML) share price is moving south on Friday on its latest regulatory news.

At the time of writing, shares in the financial services company are trading down 2.48% to $3.54.

The EML share price is now 30% lower than it was prior to the Central Bank of Ireland voicing its concerns over anti-money laundering/counter-terrorism financing compliance.

Cough up the cash

Investors have been blindsided once again by issues stemming from the company’s acquisition of Prepaid Financial Services (PFS).

According to the release, EML has identified historical deficiencies in cash for dormant and expired e-money accounts. Typically, these funds would be held in safeguarding accounts for six years after account expiration.

Additionally, the company explained these deficiencies pre-date the acquisition of PFS UK – which took place on 31 March 2020 and saw the EML share price soar by 70%. As a result, EML has reported the issue to the Financial Conduct Authority. The company expects to provide further details to the regulator over the coming weeks.

At this point in time, EML does not expect the event to have an impact on its profit and loss account. However, it does expect it will be required to inject £14.1 million ($26.6 million) into safeguarded accounts. At the end of June EML reported having $140 million in cash.

The safeguarded funds might be released back to the company if the accounts are not revived from a dormant state over an extended period.

EML share price damage

This latest development is in addition to the ongoing inspection by the Central Bank of Ireland. At this stage, shareholders are none the wiser regarding this matter.

Additionally, these matters come at an inconvenient time as EML tries to acquire Sentenial Limited and Nuapay. This acquisition remains subject to a nod from the Autorité de Contrôle Prudentiel et de Résolution (ACPR). Last we heard, the company expects the acquisition to be completed in the first quarter of FY22.

Finally, the regulatory matters have put a dent in the EML share price. Investors are down 14.9% since the start of 2021.

The post The EML Payments (ASX:EML) share price is falling today. Here’s why appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler owns shares of EML Payments. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended EML Payments. The Motley Fool Australia owns shares of and has recommended EML Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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