AMP Ltd (ASX: AMP) shares have had a tough year. The Aussie wealth manager’s value has slumped 31.7% in 2021 to a market capitalisation of $3.5 billion. With the August reporting season kicking off next week, here are a few things to watch as an AMP investor.

What to watch in August if you own AMP shares

AMP is currently undergoing a significant period of change. The 2018 Financial Services Royal Commission, a number of scandals, and significant structural change have meant there’s a lot happening for the Aussie financial services group right now.

One of the first things investors will be watching is AMP’s own half-year results update on 12 August. Earnings have been mixed in recent years and this August could provide some insight into AMP’s future strategy. AMP Capital has long been AMP’s most consistently profitable entity and a mooted private markets business spin-off means investors will be keeping an eye on performance.

AMP shares are under the pump right now, but could a change of leader mean a change in fortunes? Former Australia and New Zealand Banking Group Ltd (ASX: ANZ) deputy CEO Alexis George is set to join AMP as CEO on Monday. George will take over the reins with a big task ahead to turn around AMP’s profitability and share price.

Shareholders will also likely be watching AMP’s FY2022 outlook for any insightful commentary. There has been a flurry of rumoured and actual portfolio sales in recent months. That means with so much happening at AMP and its re-shaping of the business for the future, the August reporting season is worth watching.

Aside from AMP’s own results, it might also pay to keep an eye on what others in the market are doing. Investors will likely be watching out for other Aussie wealth managers like IOOF Holdings Limited (ASX: IFL) and even Macquarie Group Ltd (ASX: MQG). Following what AMP’s peers and rivals are doing can provide useful industry context in evaluating how much AMP shares are worth.

Foolish takeaway

AMP shares remain under the pump heading into the August reporting season. These are just a few things shareholders might be watching as they hope the new CEO can right the ship in 2021 and beyond.

The post Own AMP shares? Here’s what to look for during reporting season appeared first on The Motley Fool Australia.

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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia 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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A2 Milk Company Ltd (ASX: A2M) shares will be on watch next month when it releases one of the most highly anticipated results of reporting season.

Ahead of the release, I thought I would look to see what the market is expecting from the embattled fresh milk and infant formula company.

What is the market expecting?

The last 12 months have been very tough for a2 Milk, leading to countless earnings guidance downgrades. In light of this, expectations are very low for its result in August and this has been reflected in the performance of a2 Milk shares over the period. Since this time last year, the a2 Milk share price has lost a whopping 70% of its value.

According to a note out of Goldman Sachs, its analysts are forecasting revenue of NZ$1,221.1 million in FY 2021. This represents a 29.5% year on year decline and is at the low end of the company’s last revised guidance of NZ$1.2 billion to NZ$1.25 billion.

Goldman explained: “We forecast the key decline to come from the ANZ division driven by continued impact on the Daigou channel with sales at NZ$573.1mn (-40.7% yoy). We expect direct sales into China/other Asia to also be down -18.2% to NZ$572.0mn.”

In respect to earnings, Goldman expects the company to achieve its revised EBITDA guidance of NZ$132million to NZ$150 million. It is forecasting EBITDA of NZ$140.7 million, down 74.5% year on year.

Finally, on the bottom line, the broker expects a2 Milk to reported a 74.7% decline in underlying net profit after tax to NZ$98.1 million.

Will it pay a dividend?

While the company has suggested that it could consider capital returns, Goldman Sachs isn’t expecting this to be the case in FY 2021.

It commented: “While we forecast operating cash flow to be down -87.5% to NZ$53.5mn, we expect capital expenditure for FY21 to increase significantly to NZ$50mn vs. NZ$5.8mn in the prior year. We do not expect the group to pay final dividends and expect it to maintain a net cash position of NZ$806mn at the end of June 2021.”

Are a2 Milk shares in the buy zone?

The note reveals that Goldman Sachs continues to sit on the fence with a2 Milk. It has retained its neutral rating and $6.96 price target on a2 Milk shares. Based on the current a2 Milk share price, this implies potential upside of 13% over the next 12 months.

As attractive as that potential return may be, Goldman doesn’t appear to believe the risk/reward on offer with a2 Milk shares is compelling enough to upgrade its shares to a buy rating.

The post Own A2 Milk (ASX:A2M) shares? Here is its FY 2021 result preview appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Fortescue Metals Group Limited (ASX: FMG) share price is going to be under scrutiny between now and its FY21 report release with investors wondering how large the final dividend is going to be.

Fortescue released its FY21 fourth quarter update to the market yesterday.

Fourth quarter update

Fortescue said that for the three months to 30 June 2021, it saw record iron ore shipments of 49.3 mt. Fortescue also shipped 182.2 mt for FY21. The annual shipment total beat the company’s guidance of 182 mt.

The iron ore miner saw record revenue of US$168 per dry metric tonne (dmt) for the quarter and US$135 per dmt for FY21.

Its C1 cost for the fourth quarter was US$15.23 per wet metric tonne (wmt). That was up 2% on the previous quarter. The C1 cost for FY21 was US$13.93 per wmt. That was in line with guidance.

Fortescue said that strong free cashflow generation contributed to the business ending with net cash of US$2.7 billion at 30 June 2021. This compares to net debt of US$1 billion at 31 March 2021.

The Fortescue Metals share price rose around 2% yesterday.

Fortescue Future Industries (FFI) also got a sizeable mention. FFI is the division that’s looking to looking to take a leading role in green energy and green products to produce green electricity, green hydrogen, green ammonia and other green industrial products.

FFI said its vision is to make renewable green hydrogen the most globally traded seaborne energy commodity in the world. It has made progress in a number of areas. For example, it said it has achieved successful combustion of ammonia in locomotive fuel, with a pathway to achieve completely renewable green fuel.

Dividend expectations

There was no specific mention about the company’s dividend in the quarterly update.

However, Fortescue has previously said that it’s going to pay out around 80% of its net profit to shareholders, whilst investing 10% of profit into FFI and another 10% in other areas of the business for growth. Fortescue did mention in the update that it achieved “strong free cashflow”.

Other businesses in the iron ore world are seeing strong profits and rewarding shareholders with big dividends.

Rio Tinto Limited (ASX: RIO) recently announced its half-year result which showed operating cashflow growth of 143%, underlying earnings growth of 156%, ordinary dividend growth of 143% to US$3.76 per share and the Rio board declared a special dividend of US$1.85 per share.

According to numbers on Commsec, Fortescue is expected to pay a dividend of $3.66 per share in FY21. That translates to a grossed-up dividend yield of almost 20% at the current Fortescue Metals share price. Commsec numbers then suggest an annual dividend of $3.49 per share in FY22 – that would be a grossed-up dividend yield of almost 19%.

FY22 guidance

Looking at the next 12 months, Fortescue said that iron ore shipments are expected to be between 180mt to 185mt. The mid-point of that guidance suggests a slight increase on FY21.

The C1 cost is expected to be between US$15 per wmt to US$15.50 per wmt. That compares to a FY21 C1 cost of US$13.93.

Capital expenditure, excluding FFI, is expected to be between US$2.8 billion to US$3.2 billion. That includes US$1.1 billion on sustaining capital, $200 million on hub development, at least US$250 million on operational development, $180 million on exploration and studies and between US$1.1 billion to $1.4 billion on the major projects of Iron Bridge and PEC.

Fortescue Metals CEO Elizabeth Gaines said about FY22:

Building on a second consecutive year of record performance, our guidance for FY22 reflects our ongoing commitment to optimising returns from integrated operations and marketing strategy, with shipments in the range of 180 to 185 million tonnes. Together with our focus on investing in growth through the Iron Bridge Magnetite project and Fortescue Future Industries, we will continue to deliver strong results to ensure all our stakeholders benefit from Fortescue’s success.

The post Fortescue (ASX:FMG) share price under spotlight with BIG FY21 dividend forecast appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison owns shares of Fortescue Metals Group Limited. 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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There’s been much talk this week in the UK about a potential new cryptocurrency backed by the central bank, dubbed ‘Britcoin’.

Other jurisdictions like China, the US, European Union and Japan have also thought about the concept, but no country has yet taken the plunge.

According to DeVere Group chief executive Nigel Green, governments are anxious about the emergence of decentralised digital currencies like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH).

“Revealing just how worried they are about the ongoing epic rise and influence of Bitcoin and other cryptocurrencies, the Bank of England is reportedly set to establish its own digital currency — which they have previously routinely dismissed,” he said.

“If the Bank and government officials believe Britcoin will supersede Bitcoin, they are mistaken. In fact, it will have the opposite effect.”

Green cited 3 big reasons why the birth of such a ‘national digital currency’ would actually drive up the price of Bitcoin.

Validating the existence of cryptocurrencies

Green reckons a rival central bank cryptocurrency would ironically act as a massive endorsement for the existing players.

“In what will be a masterclass in the law of unintended consequences, by jumping on the bandwagon, central banks are validating the concept of Bitcoin and its inherent values of being digital, global, borderless, quicker and more cost-effective than traditional money.”

This newfound “legitimacy” would spur further investment and innovation in the technology, he added.

“The crypto ecosystem will become even more robust, and the pace of mass adoption will be accelerated.”

Central control defeats the purpose of crypto

A digital currency controlled by a sovereign central bank defeats the whole point of “borderless” transactions, according to Green.

“[Britcoin] will still be controlled and manipulated by the Bank of England, meaning they can adjust supply and therefore its value. With Bitcoin, there is no single authority and a progressively limited supply,” he said.

“Why would businesses, such as Amazon for example, in the longer-term favour a currency that is digital but not borderless in the same way as cryptocurrencies are?”

Gen Y and Z’s pathological distrust of traditional banking

Younger “digital-native” people do not trust old school financial institutions, said Green.

“They’ve been influenced by the enormous surge in tech as they came into adulthood, which came around the same time as the global financial crash that hit in 2008.”

He added that those young folks will soon become the recipients of “the largest transfer of wealth in history” via inheritances from baby boomers.

And much of that cash will be parked into non-traditional assets.

“Britcoin will be controlled by a handful of people from the Bank [of England] who have conversations and make decisions behind closed doors,” said Green.

“Bitcoin is controlled by no one and discussions are held out in the open and decisions are transparent and community-based. Which one do you think is the future of money?”

After a recent slump, Bitcoin has gone from about $46,500 to $54,400 this week alone. Ethereum has rallied less dramatically, heading from about $3,000 to $3,120.

The post 3 reasons why new ‘Britcoin’ will drive Bitcoin higher appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo owns shares of Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. 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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If you’re looking to overcome low interest rates, then you may want to look at the dividend shares listed below.

Both options offer investors attractive yields that are superior to anything you’ll find with term deposits and savings accounts. Here’s what you need to know about them:

Aventus Group (ASX: AVN)

The first ASX dividend share to look at is this leading owner, manager, and developer of retail parks with a portfolio of 20 centres valued at $2.2 billion. At the last count, Aventus had a diverse tenant base of 593 quality tenancies, with national retailers representing 87% of its total portfolio.

It has been thanks partly to this tenancy mix, and its overweight exposure to household goods and everyday needs, that Aventus has been a very strong performer during the pandemic. In fact, it continues to report growth and property valuation increases.

One broker that expects this solid form to continue is Morgans. It currently has an add rating and $3.26 price target on its shares.

The broker is also expecting its dividends to continue growing. It is forecasting distributions of 17.5 cents per share in FY 2021 and then 17.8 cents per share in FY 2022. Based on the latest Aventus share price, this represents 5.6% and 5.7% yields, respectively.

Coles Group Ltd (ASX: COL)

Another ASX dividend share to consider is this supermarket giant. Coles could be a great option for income investors due to its defensive qualities, strong market position, and solid long term growth prospects.

The latter is being underpinned by its Refresh Strategy, which is leading to significant investments in its online business, distribution, and automation.

The team at Morgan Stanley are positive on the company and have a buy rating and $19.00 price target on its shares. The broker is also forecasting fully franked dividends of 57 cents per share in FY 2021 and then 59 cents per share in FY 2022.

Based on the latest Coles share price, this will mean yields of 3.25% and 3.35%, respectively, over the next two years.

The post 2 ASX dividend shares that analysts rate as buys 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 COLESGROUP DEF SET. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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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Might the Sezzle Inc (ASX: SZL) share price be one to think about after the buy now, pay later company’s recent decline.

Since 8 July 2021, the Sezzle share price has actually dropped by around 16%.

There hasn’t been too much market sensitive news since its quarterly update for the three months to 31 March 2021.

One announcement has been that the buy now, pay later business has entered into a three-year agreement with the US-listed Target Corporation. In early June, it said that it had concluded its proof of concept with Target. Under the agreement, Sezzle’s product will be used in-store and across Target’s digital platforms, providing access to interest-free payment plans for purchases made at Target.

Another announcement was that Discover Financial Services is going to invest US$30 million into Sezzle, based on a share price of $8.83. The two parties have also proposed to enter into an expanded partnership, including plans for a buy now, pay later network solution on the Discover Global Network, as well as a dedicated referral program introducing Discover credit and debit products to Sezzle’s consumer base.

Investors particularly like to pay attention to the quarterly update from the buy now, pay later business.

Latest quarterly update

When the company first announced its performance for the three months to 31 March 2021, the Sezzle share price went up 8.4% to $9.63 on the day. But it has actually fallen by 16% from then.

Sezzle revealed that in the first quarter of its 2021, it reached new highs for underlying merchant sales (UMS), active consumers, active merchants and repeat usage.

UMS for the first quarter increased 214.1% year on year to US$375.1 million (or $492.5 million in Australian dollar terms). This represented 16.9% quarter on quarter growth. The March UMS beat December’s UMS by 30%.

The buy now, pay later business also said that its income as a percentage of UMS remained steady year on year at 5.9%.

Another 400,000 active consumers were added during the quarter, bringing the total to more than 2.6 million active consumers (up 126.6% year on year).

Over 7,300 active merchants were also added in the quarter, the largest quarterly increase in the company’s history. There were over 34,000 active merchants on the Sezzle platform at the time of the update.

Management said that the consumer profile continues to improve as active consumer repeat usage grew to 90.7% (which was the 27^th consecutive month of improvement).

It also saw a positive shift of more than 10 percentage points year on year towards automated clearing house (ACH) as a payment method. This comes with lower costs.

Is it time to look at the Sezzle share price after the decline?

The broker Ord Minnett currently rates Sezzle shares as a buy. The price target is $11.90, which suggests the Sezzle share price could increase by a large 45% over the next 12 months if the broker is right.

Ord Minnett has pointed out that the deal with Target could lead to a significant increase to UMS in future years and proves its alternative offering can win over major merchants.

The post Is the Sezzle (ASX:SZL) share price a buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison 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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On Thursday the S&P/ASX 200 Index (ASX: XJO) was back on form and stormed higher. The benchmark index rose 0.5% to 7,417.4 points.

Will the market be able to build on this on Friday? Here are five things to watch:

ASX 200 futures pointing slightly higher

The Australian share market could end the week on a mildly positive note. According to the latest SPI futures, the ASX 200 is expected to open the day 4 points or 0.05% higher this morning. This follows a positive night on Wall Street, which saw the Dow Jones rise 0.45%, the S&P 500 climb 0.4%, and the Nasdaq edge 0.1% higher.

Oil prices jump

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could end the week on a high after oil prices jumped overnight. According to Bloomberg, the WTI crude oil price is up 1.6% to US$73.58 a barrel and the Brent crude oil price is up 1.8% to US$76.06 a barrel. A combination of a softening US dollar and tightening US supplies boosted prices.

Janus Henderson impresses

The Janus Henderson Group CDI (ASX: JHG) share price could charge higher today following the release of its second quarter results after the market close yesterday. The fund manager reported a 95% increase in second quarter adjusted operating income to US$269.3 million. Management advised that this reflects growth in assets due to positive markets and good investment performance. This translated into significant performance fees. The Janus Henderson share price rose 6% on Wall Street.

Fortescue rated as a sell

According to a note out of Goldman Sachs, its analysts believe the Fortescue Metals Group Limited (ASX: FMG) share price is overvalued. This follows the release of its fourth quarter production update. While Fortescue smashed the broker’s expectations with its record shipments, it wasn’t enough for a change of rating. Goldman notes that its shares trade at a significant premium to its rivals and thus has retained its sell rating and put a $19.90 price target on them.

Gold price jumps

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) will be on watch after the gold price jumped overnight. According to CNBC, the spot gold price is up 1.2% to US$1,828.10 an ounce. Traders were buying gold in response to the US Federal Reserve’s dovish tone.

The post 5 things to watch on the ASX 200 on Friday appeared first on The Motley Fool Australia.

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

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Are you interested in making some additions to your income portfolio? if you are, then below are two options to consider.

Here’s why these ASX 200 dividend shares have been rated as buys:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

The first ASX 200 dividend share to consider is ANZ. It could be a top option due to the increasingly positive outlook for the big four banks. This is being driven by improving trading conditions and cost reductions.

For example, during the first half of FY 2021, ANZ reported a statutory profit after tax of $2,943 million and cash earnings from continuing operations of $2,990 million. This was up 45% and 28%, respectively, on the second half of FY 2020. More of the same is expected with its third quarter update next month.

Analysts at Morgans are positive on the company and have an add rating and $34.50 price target on its shares.

As for dividends, the broker is forecasting fully franked dividends of $1.45 per share in FY 2021 and then $1.65 per share in FY 2022. Based on the latest ANZ share price of $27.75, this represents yields of 5.2% and 5.9%, respectively.

Sonic Healthcare Limited (ASX: SHL)

Another ASX 200 dividend share to look at is Sonic Healthcare. It is one of the world’s leading healthcare providers, with operations in Australasia, Europe and North America.

Sonic has been a very strong performer in FY 2021. This has been driven by growth across the business, but particularly from its COVID-19 testing business. And with the Delta strain proving hard to control, testing volumes look likely to remain elevated for some time to come. This bodes well for its performance in FY 2022.

Analysts at Credit Suisse expect its growth to continue. In light of this, last week the broker retained its outperform rating and lifted its price target to $43.50.

Credit Suisse is also forecasting partially franked dividends per share of 99 cents in FY 2021 and then 102 cents in FY 2022. Based on the latest Sonic share price of $40.22, this implies potential yields of 2.45% and 2.55%, respectively, over the next couple of years.

The post 2 buy-rated ASX 200 dividend shares with attractive yields appeared first on The Motley Fool Australia.

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• Own ANZ (ASX:ANZ) shares? Here’s what to look for during reporting season
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 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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The S&P/ASX 200 Index (ASX: XJO) has had a pretty decent day of trading this Thursday. At market close, the ASX 200 is up a healthy 0.52% to 7,417 points. But let’s now take a deeper look at which ASX 200 shares traded the most heavily today.

3 of the ASX 200’s most heavily traded shares on Thursday

Regis Resources Limited (ASX: RRL)

ASX 200 gold miner Regis Resources is our first share to check out today. A hefty 11.3 million Regis shares have changed hands so far. This is probably the direct result of the Regis share price performance today.

This Regis Resources share price closed the day up 5.65%, trading at to $2.62. this is after going as high as 7% earlier today. This move seems to be a consequence of the company’s fourth-quarter update that was released to the markets before open. Investors seemed impressed with the record production and sales volume the miner recorded.

Telstra Corporation Ltd (ASX: TLS)

Yet again, ASX 200 telco Telstra makes this list. This Thursday has seen a very substantial 17.3 million Telstra shares swap owners today so far. That’s despite the flat performance of the Telstra share price today.

It ended the day where it started – at $3.78 a share. In saying that, Telstra just yesterday hit a new 52-weekly high of $3.82. So perhaps momentum or just goodwill is spilling into the telco’s trading volume today.

Vicinity Centres (ASX: VCX)

And our top ASX 200 share today in terms of trading volume goes to ASX 200 Real Estate Investment Trust (REIT) Vicinity Centres. A staggering 24.5 million Vicinity units traded today, well eclipsing any of its closest rivals. Even so, there is no obvious reason why this company has experienced so much trading volume today.

The Vicinity share price ifinished the day flat at $1.51 a share. REITs have been in the news a little bit lately, so this might be why there are heavier trading volumes than normal with Vicinity today.

The post Here are 3 of the most heavily traded ASX 200 shares this Thursday appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen owns shares of Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Marley Spoon AG (ASX: MMM) share price will be one to watch on Friday.

This follows the release of the meal kit delivery company’s second quarter update.

How did Marley Spoon perform in the second quarter?

Marley Spoon continued its growth during the second quarter of FY 2021, albeit at a slower rate than recent quarters following a normalisation in customer behaviour.

According to the release, the company reported second quarter revenue of EUR80.6 million, which was up 10% on the prior corresponding period. Management advised that this was driven by all regions, with Europe leading at 43% growth compared to the prior corresponding period.

This ultimately led to its first half revenue growing 36% year on year.

What about earnings?

Potentially weighing on the Marley Spoon share price tomorrow could be its operating result.

The update reveals that the company recorded an operating loss of EUR9 million during the period. This led to a half year operating loss of EUR15 million. Management advised that this was driven by its investment in growth and talent.

In addition, the company reported a Contribution Margin of 27% for the second quarter, down nearly 4 percentage points versus the same period last year. Management blamed this on an adverse operating environment in the US.

Outlook

One positive that may lend some support to the Marley Spoon share price on Friday was management reaffirming its revenue guidance for FY 2021.

Despite the slowdown in the second quarter, it expects to deliver year on year growth of 30% to 35%.

Though, this positive may be offset by a downgrade to its Contribution Margin guidance to 27%. This is down from its prior guidance of 28% and in line with FY 2020’s Contribution Margin.

Management commentary

Marley Spoon’s CEO, Fabian Siegel, commented: “We are pleased to report continued post-COVID growth for the past quarter. Net revenue grew 12% on a constant currency basis. More importantly, our Active Subscriber base, a leading indicator of true underlying growth, grew 37% year over year.”

“User behaviour across the regions has mostly normalized to its pre-COVID state with the 2021 holiday season being more pronounced than in pre-COVID years. Our business continues to show strong growth enabling us to re-affirm full year 2021 net revenue guidance.”

Mr Siegel then provided more colour on the aforementioned adverse operating conditions in the US.

He explained: “However, in Q2 our team continued to face operational headwinds, especially in our US business. These included unprecedented weather disruptions in Q1, which led to the temporary closure of our Texas site, and acute nationwide labour shortages which not only impacted our facilities directly, but also affected our inbound food supply and logistics partners. We are implementing a series of measures across the organisation and supply chain to improve productivity and quality. These improvements are mitigating the impact on our margins and customer satisfaction. Given the aforementioned we are revising our CM guidance for the year to be consistent with the 2020 margin.”

Nevertheless, the CEO remains positive on the future and expects strong revenue growth over the coming years.

He concluded: “Our investment in growth and strengthening our operational bench, paired with the lower than expected margin in H1 led to a negative Operating EBITDA margin of (9%) for the half year. At the same time, we controlled investments to deliver near to break-even cash from operating activities. We are also pleased to have secured additional funding in Q2 to further support our 2021/2022 growth investments and mid-term ambition of becoming a 1 billion Euro revenue business by 2025.”

The post Marley Spoon (ASX:MMM) share price on watch after mixed Q2 update 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. 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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