The Nexion Group (ASX: NNG) share price has on fire since hitting the ASX boards last week.

In afternoon trade the shares of the leading hybrid cloud, network, security and data centre company are up a massive 36% to 38 cents.

This means the Nexion share price is up 90% since its IPO last week.

The Nexion IPO

Nexion commenced trading on the Australian share market last Thursday after raising $8 million via the issue of 40 million shares at $0.20 per share.

This gave the company a market capitalisation of $25.4 million at the time of listing. This has now increased to just under $50 million following today’s gain.

Among its major shareholders are co-founder and CEO Paul Glass and fellow co-founder and COO Kevin Read. They collectively own 21.4% of its shares outstanding. Including the rest of its management and board, a total of 28.7% of its shares are in the hands of insiders.

The company believes this provides a high degree of alignment with investors.

What does Nexion do?

Nexion offers private cloud infrastructure coupled with public cloud products such as Amazon AWS and Microsoft Azure to create a hybrid cloud service called OneCloud.

It uses software-defined wide-area network (SD-WAN) technology to connect its corporate customers to its OneCloud Nodes.

OneCloud Nodes consist of compute and storage capacity, bonded globally via SD-WAN that customers rent to deploy their corporate applications and integrate their operations into public cloud services offered by the likes of Microsoft, Amazon and Google.

The company currently operates in Perth, Adelaide, and Melbourne. However, it is aiming to become a global operator of Hybrid Cloud SD-WAN infrastructure. Capital from the IPO will be used to fund its expansion.

This will include a staged expansion into New Zealand, Canada, and Africa.

Financials

In FY 2020 the company’s revenue almost doubled year-on-year to $4.5 million. It also achieved EBITDA profitability in FY 2020 after the business demonstrated outstanding scalability with operating costs increasing only 14%.

Management believes the outlook for Nexion is favourable and should support strong growth in revenue and EBITDA over the medium to long term time.

Mr Glass commented: “We are extremely pleased by the level of support from investors and the success of the IPO is testament to the market’s enthusiasm for our business. On behalf of the Board, I would like to welcome our new shareholders to the Company.”

“Since we founded the Company in 2017, NEXION has demonstrated outstanding growth in our initial target market of Australia, but we believe that the best is yet to come. The capital raised will allow us to expand the business in a staged approach beyond its existing domestic footprint and into global markets. Our strategic relationship with Aryaka is instrumental to our global ambitions.”

“NEXION is a business with strong revenue growth potential, a high level of recurring revenue, excellent scalability and a vast market opportunity driven by an irreversible trend towards pays-as-you-go IT platforms. I look forward to reporting on the continued success of the Company,” he concluded.

More reading

• 2 small ASX dividend shares with big yields
• 3 ASX blue chip shares that just raised their dividends
• Jumbo (ASX:JIN) share price slides despite positive update
• Why the McGrath (ASX:MEA) share price popped 14% today
• These ASX 200 shares are trading near 52-week highs 

Motley Fool contributor James Mickleboro 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 are some small ASX dividend shares that have large dividend yields.

Businesses that are smaller may have the potential to grow more because they haven’t reached their growth ceiling yet. However, some of them may be able to deliver higher levels of income because they are paying high dividend yields.

Here are two examples:

360 Capital REIT (ASX: TOT)

This real estate investment trust (REIT) invests across the entire real estate investment world, taking advantage of varying market conditions in order to find the best opportunities. It’s managed by fund manager 360 Capital Group Ltd (ASX: TGP).

The business has been busy with acquisitions and sales in recent months.

In the three months to 30 September 2020, it continued its investment strategy of buying equity stakes in real estate assets and businesses, whilst exiting the debt investments.

It recently settled on the sale of its non-core Penrith shopping centre in line with book value. A few months ago it announced that it had settled seven contracts for its Gladesville investment averaging at a 20.3% premium to the purchase price.

Over the last month the small ASX dividend share has bought a 9.18% interest in Irongate Group (ASX: IAP), a diversified REIT, for approximately $78.6 million.

It has also announced a 50% interest in PMG Funds, a New Zealand based real estate fund manager with over NZ$665 million of real estate funds under management (FUM).

360 Capital REIT said that the partnership gives it exposure to a growing funds management platform across New Zealand. It will allow 360 Capital REIT to invest in direct commercial and industrial real estate transactions in New Zealand.

Management said that the REIT remains well capitalised with no gearing and a focus on growing its real estate strategy.

360 Capital REIT is currently paying a quarterly distribution of 1.5 cents, which translates to a distribution yield of just under 7% at the current share price.

Pengana Capital Group Ltd (ASX: PCG)

Pengana is a fund manager that runs a variety of strategies including Australian share strategies, global shares and global private equity.

In the latest monthly update, Pengana said that its funds under management (FUM) was just under $3.6 billion.

The small ASX dividend share believes that there is significant further capacity in various international equity strategies. Pengana also thinks there is a major growth opportunity in the Pengana Private Equity Trust. There’s also the potential to diversify further over time by adding new strategies, according to management.

Pengana said that one of the key attractions about its business was that it has more than 20% of its FUM in listed vehicles. It says that it has good fee margins and diversified performance fees. It also says that profitability is highly leveraged to growth in FUM. It largely has a fixed operating cost base.

The company believes that a key growth opportunity is the USA expansion platform with its acquisition of a controlling stake in Lizard International.

At the current Pengana share price, it has a grossed-up dividend yield of 6.2%.

More reading

• 3 ASX dividend shares with higher yields
• 2 secret ASX dividend shares with large yields
• 3 small ASX dividend shares with big yields

Motley Fool contributor Tristan Harrison 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 year 2020 was painful for ASX dividend investors. From the ASX banks to Woolworths Group Ltd (ASX: WOW), former blue chip income stalwarts were forced to slash and even cancel dividend payments to levels I’m sure no ASX investor thought was possible.

Take Westpac Banking Corp (ASX: WBC). Westpac did not pay investors an interim dividend at all last year, the first time since the 1980s.

But in 2021 so far, this trend looks well on the way to reversing. So here are 3 ASX blue chip shares that have just announced a dividend increase for their shareholders.

3 blue chip shares that have just given investors a pay raise

Coles Group Ltd (ASX: COL)

When Coles reported its earnings last week, I’m sure investors weren’t really expecting what this grocery giant had in store for them. Coles announced an interim dividend of 33 cents per share, fully franked.

That’s a 10% increase on last year’s interim payout of 30 cents a share, and a 20% bump from the company’s 2020 final dividend of 27.5 cents.

If you annualise that 33 cents payout, it would give a dividend yield of 4.05% on current pricing, or 5.79% grossed-up with full franking.

Rio Tinto Limited (ASX: RIO)

Mining giant Rio Tinto was another ASX blue chip that delighted investors last week with a hefty dividend rise. Rio, like its ASX mining stablemates BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG), has been benefitting enormously from strong commodity prices, especially iron ore. Last week, Rio reported iron ore revenues were 13.4% higher year over year.

 That helped Rio declare a final dividend of US$3.09 and a special dividend of 93 US cents per share. That’s well up from the company’s previous final dividend of US$2.31. On the current exchange rate and share price, that dividend would give an annualised yield of roughly 7.98%, or 6.13%, if you only take the dividend’s final component.

CSL Limited (ASX: CSL)

CSL is another ASX blue chip that delivered a hefty dividend rise last week. The company reported its earnings last Thursday and gave investors a few surprises. Revenues were up 16.9%, and net profits after tax up 45%.

That helped CSL bump its dividend by 9% to US$1.04 a share from 2020’s interim payout of 95 US cents.

On current exchange rates and the CSL share price, that would equate to an annualised dividend yield of 0.98%. However, as my Fool colleague Tristan Harrison astutely noted last week, ASX investors actually got a 9% cut to their real payouts due to the sharp rise in the Aussie dollar against the US dollar over the past year.

Even so, a 9% dividend increase in US dollar terms is still a solid result, beating out inflation many times over.

More reading

• These ASX 200 shares are trading near 52-week highs 
• ASX 200 Weekly Wrap: ASX lower despite bumper dividends
• 2 of the best ASX 200 results from last week
• 2 buy-rated ASX dividend shares for your income portfolio
• ASX retail shares in focus as Aussies spend big in January

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 CSL Ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths 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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Jumbo Interactive Ltd (ASX: JIN) shares are trending lower despite the company advising it has launched a managed services business segment in Australia. During afternoon trade, the Jumbo share price has edged 0.69% lower to $14.49. However, it’s worth noting that at one point during intraday trading, Jumbo shares reached a high of $14.73 after the news broke.

Let’s take a look at what the online lottery ticket seller announced?

What did Jumbo announce?

The Jumbo share price is failing to stay afloat today after the company advised it has launched a managed services business catering to the Australian market. To complement the launch, Jumbo revealed that its foundation partners, Paralympics Australia and St John Ambulance Australia (VIC) Inc. have both signed on.

The newly launched segment will provide a complete lottery management service to not-for-profit organisations. This will include prize procurement, game design, campaign marketing, customer relationship management, and draw management.

Paralympics Australia and St John Ambulance will each have their own lottery games, and Jumbo will earn a fee as a percentage calculated from the total transaction value (TTV). This will be in addition to a share of the profits which Jumbo will also receive.

It’s estimated that these two clients will achieve an annual TTV of around $6.5 million once fully operationally. Furthermore, in the Paralympics Australia agreement, Jumbo will become an official partner of the Paralympics Australia Team.

Both clients will commit to their agreements for a period of up to 4 years. This will consist of a 2-year initial term followed by an option to extend for another 2 years.

According to an Australian Charities Report released in 2018, the total addressable market in Australia for Jumbo’s managed services business is roughly $10.5 billion comprising donations and bequests.

Words from the CEO

Jumbo CEO Mike Veverka touched on the newly launched segment, saying:

We are excited to launch the Managed Services business in Australia with our foundation partners Paralympics Australia and St John Ambulance Australia (VIC).

The addition of managed services in Australia is aligned with our vision of “making lotteries easier” and will assist many not-for-profits meet the challenges of COVID-19 and continue their fundraising efforts via a digital lottery program.

How has the Jumbo share price performed?

Over the last 12 months, the Jumbo share price is up more than 24%, reflecting a recovery in the sector.

Jumbo shares dipped to a low of $6.99 on 16 March, before surging around 85% over the course of the following month

Based on the current Jumbo share price, the company commands a market capitalisation of around $911 million.

More reading

• How to turn $20,000 into $1 million in 10 years with ASX shares

Aaron Teboneras owns shares of Jumbo Interactive Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive 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 McGrath Ltd (ASX: MEA) share price is booming today. At the time of writing, McGrath shares are up 14.8% to 66 cents apiece.

The surge comes after the real estate services company reported its half-year results for the period ended 31 December 2020 (1H FY21).

Strong financials send McGrath share price soaring

McGrath reported revenues for the period totalling ~$56.8 million for 1H FY21. This is a 16% gain compared to the ~$48.9 million reported for the period ended 31 December 2019.

Across the half, company owned sales were a major factor in performance. McGrath advised that there was a 22% increase in the number of properties sold and a 7% increase in the average sales price.

The business earned a net profit after taxes (NPAT) for the period of $8.1 million, compared to a $1 million loss reported in the first half of FY20.

The company’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) blew up a massive 317% compared to the prior corresponding period (pcp). Underlying EBITDA for this half was ~$6.6 million, compared to ~$1.6 million in the pcp. 

This underlying EBITDA result is at the top end of the guidance that McGrath provided on 26 November 2020.

The company also announced a fully franked interim dividend of 5 cents a share.

CEO commentary

Reflecting on McGrath’s results amid the challenges of COVID-19, CEO Eddie Law said:

The residential property market has proved to be very resilient during the ongoing COVID-19 pandemic, compared with other sectors.

Cashed up homeowners, many of whom are prevented from travelling either domestically and internationally, are now largely working from home and as such, are reassessing their lifestyle and surroundings. This is positive for our industry as it results in homeowners either transacting or improving the asset value of their current home.

Despite a challenging year navigating the various lockdowns, McGrath has demonstrated our ability to continue to transact successfully and efficiently should further COVID restrictions are deemed necessary in the future.

We are very pleased as foreshadowed at the AGM, to return to the payment of dividends to shareholders as the business continues to recover and grow.

McGrath share price snapshot

McGrath has a current market capitalisation of $95.9 million. There are 166.8 million shares outstanding.

The McGrath share price zoomed as high as 74 cents during trading today, the highest price it has been since 11 September 2017. Year-to-date, McGrath shares are now up by 43%.

More reading

• Jumbo (ASX:JIN) share price slides despite positive update
• These ASX 200 shares are trading near 52-week highs 
• What to expect from the Afterpay (ASX:APT) half year result
• These ASX gold shares have reported record profits and dividends
• Here’s why the Althea (ASX:AGH) share price is racing 8% higher today

Motley Fool contributor Gretchen Kennedy 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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Reporting season surprises and the continued surge in commodity prices has helped tip these ASX 200 shares into record territory. Here are the ASX 200 shares that have been breaking out to 52-week highs lately. 

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Domino’s delivered a ripper of a result with all regions performing at or above expectations. The half-yearly result saw network sales increased 16.5% to $1.84 billion, while underlying NPAT soared 32.8% to $96.2 million. 

The Domino’s share price ran to an all-time record high of $115.97 on Thursday, and has since cooled down to $104.94 at the time of writing. Nonetheless, brokers are impressed with the company’s results and medium to long-term outlook, with Bell Potter upgrading the company to a buy rating with a $122.00 price target. 

Inghams Group Ltd (ASX: ING) 

On Friday, Inghams reported that its FY21 first-half revenue increased 4.6% to $1.363 billion versus the prior corresponding period (pcp) while underlying NPAT improved 10.7% to $46.5 million. The results sent the Inghams share price to a new, 52-week high of $3.93 during intraday trading.

Goldman Sachs has commented that the operating environment for Inghams is steadily improving following the disruption caused by COVID-19 in the 2020 calendar year. The broker has updated its coverage on Inghams shares with a 12-month target price of $4.25, representing an upside of approximately 15% at the time of writing. 

The broker noted that the biggest near-term risk for the company is its Woolworths Group Ltd (ASX: WOW) supply contract which is due to expire in August 2021. Goldman estimates that this contract accounts for approximately 50% of Inghams’ Australian poultry volumes. As such, retaining the contract in full and under similar terms and conditions is the key to medium-term production and profit stability for the poultry producer. 

OZ Minerals Limited (ASX: OZL)

The OZ Minerals share price is currently ripping to 13-year highs, coinciding with the surge in copper prices. The price of copper has doubled from its lows last March and soared to 9-year highs. Underpinning the copper rally is the demand from China, expectations of tight supply and a wider belief in a commodities ‘super cycle’. 

OZ Minerals delivered a record full-year result last Thursday, with NPAT increasing 30% to $213 million, thanks to higher copper and gold prices. 

Lynas Rare Earths Ltd (ASX: LYC) 

Rare earths is making headlines as China is making moves to limit the export of its rare earth minerals to the United States. Rare earth minerals are used in many applications including computing equipment, batteries, petroleum refining, medical imaging, and defence. 

Lynas has a number of growth initiatives underway including a new rare earths processing facility in Kalgoorlie, Western Australia and a new facility in Texas, US. As the world’s second-largest producer of separated rare earths, and the only significant producer outside of China, Lynas is in an ideal position to support supply chain diversity. 

The Lynas share price has gone from strength to strength, surging by around 50% this year, and hitting a new all-time record high of $6.18 at the time of writing. 

Rio Tinto Limited (ASX: RIO) 

Iron ore prices have continued to sit at elevated levels of more than US$150 per tonne. Higher commodity prices have helped ASX 200 shares in the mining sector maintain strong cash flows, and even better dividend payments. 

After the mining giant’s bumper FY20 performance which included a 22% increase in net earnings of US$9,769 million, it announced a final dividend of US$4.02 (A$5.19) per share. This comprises an ordinary dividend of US$3.09 (A$3.99) and a special dividend of US93 cents (A$1.20) per share.

More reading

• Why Costa, Lovisa, OZ Minerals, & Tyro shares are racing higher today
• These are the 10 most shorted shares on the ASX
• Bell Potter thinks the Domino’s (ASX:DMP) share price is ‘mouthwatering’ 
• ASX 200 Weekly Wrap: ASX lower despite bumper dividends
• Don’t make the same mistake I made

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Woolworths Limited. The Motley Fool Australia has recommended Dominos Pizza Enterprises 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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On Thursday all eyes will be on the Afterpay Ltd (ASX: APT) share price when the payments company releases its highly anticipated half year results.

Ahead of the release, I thought I would take a look to see what the market was expecting from the market darling.

Strong customer growth

The market is expecting Afterpay to reveal strong customer growth during the first half.

For example, according to a note out of Morgan Stanley from last month, its analysts are expecting the company to report active customers of approximately 13.6 million. This represents a 37.4% increase from 9.9 million active customers at the end of FY 2020.

A maiden profit

After operating at a loss for a number of years, Afterpay is expected to report its maiden profit this month.

According to a note out Morgans, it has pencilled in a profit after tax of $5 million versus the market consensus estimate of $21 million.

Whereas analysts at Goldman Sachs are predicting a profit after tax of $17.4 million from revenue of $440.2 million. The latter will be a 99% increase on the prior corresponding period. This is expected to be driven by operating leverage.

Repeat use

Investors have been told to keep an eye on Afterpay’s repeat use metric, which leads the industry.

Goldman Sachs commented: “In our view, this remains the single most critical metric for APT: strongly rising trends are indicative of product market fit, low default rates and future merchant pipeline.”

Growth in this metric could be supportive of the Afterpay share price and vice versa if it softens.

New geographies

The market will be looking for updates on its international expansion in Europe and Asia with this results release.

Last year the company acquired its way onto mainland Europe via the acquisition of Pagantis for $82 million. Pagantis provides a range of buy now pay later and traditional credit services across Spain, France, and Italy. It also has regulatory approval to operate in Portugal.

The company also made smaller acquisitions in South East Asia and could provide an update on its plans in this market.

New products

Another thing that could give the Afterpay share price a boost is an update on new product launches.

Afterpay will shortly release transactions accounts via a partnership with Westpac Banking Corp (ASX: WBC). It has been tipped to expand on this with other offerings such as investment products and even home loans. Though, it may wait to see what the reaction to its transaction accounts is before taking things further.

In addition, at the weekend the company emailed out a change to its term and conditions. Included within the terms was the mention of an Afterpay Card. This is a contactless Mastercard stored in an Apple or Google Pay wallet. It will allow users to tap and pay with their mobile device to pay in four instalments with Afterpay.

The imminent launch of this product appears likely to be announced tomorrow.

Is the Afterpay share price in the buy zone?

While it may not be wise to invest right before a results release, one broker that believes the Afterpay share price is in the buy zone is Morgan Stanley.

Last week the broker put an overweight rating and $170.10 price target on its shares. This compares to the latest Afterpay share price of $151.67.

More reading

• 6 high profile ASX 200 shares reporting results this week 
• Top brokers name 3 ASX shares to buy next week
• 5 things to watch on the ASX 200 next week
• Here’s why the Afterpay (ASX:APT) share price is storming 6% higher today
• What’s the go with the EarlyPay (ASX:EPY) share price today?

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of 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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The gold price hit a new high in the first half of FY21, boosting the bottom line for ASX gold shares.

This month ASX gold miners have been reporting their results, demonstrating the impact of the record gold price on profits.

Northern Star Resources Ltd (ASX: NST) reported record profits and dividends, as did Evolution Mining Ltd (ASX: EVN). Australia’s largest gold miner, Newcrest Mining Ltd (ASX: NCM), doubled its dividend as statutory profit lifted by 134%. St Barbara Ltd (ASX: SBM) reported encouraging results for the half despite operational disappointments in the first quarter. 

But the gold price has been on a downward trend recently and fell to an 8-month low of US$1781.20 last week. The rollout of the COVID-19 vaccine has seen a shift away from the safe haven assets. Rising treasury yields mixed with a stronger US dollar have also put downward pressure on the gold price.

The decline in the gold price has been reflected in ASX gold miners’ share prices. The Newcrest Mining share price is down 33% from its August high.

The Evolution Mining share price is also down 33%, while the Northern Star Resources share price is down 35%. St Barbara has seen its share price decline nearly 45% over the same period.

So how did these ASX gold miners perform in the first half of FY21? 

Newcrest Mining

Newcrest reported a profit of $534 million in 1H FY21, with earnings per share (EPS) rising 121%.

“The strong financial results for the half year show how much the increase in the gold price has translated into improved profitability,” said CEO Sandeep Biswas.

The miner produced 1,038,566 ounces of gold during the half, securing a gold price of US$1,826 an ounce. The half’s gold price was 26% higher than the prior corresponding period, swelling revenues to $2,172 million. An interim dividend of 15 cents per share was declared, 100% up on the previous year. 

The Newcrest board has implemented a new dividend policy going forward. The policy retains the minimum dividend of 15 cents per share per annum but doubles the target free cash flow to be paid in dividends to 30%–60%. This is intended to allow shareholders to benefit from the stronger free cash flows resulting from higher gold prices.

Newcrest investors were certainly benefiting in 1H FY21 thanks to the doubling of dividends. The company’s FY21 gold and copper production guidance remained unchanged at the end of the half-year, although Newcrest noted that gold production is expected to be towards the upper end of the range. 

Northern Star Resources 

Northern Star Resources reported record profits for the first half. Underlying net profit after tax was $194.4 million, up 63% from the prior corresponding period.

Earnings per share increased by 27% to 25 cents a share.

Northern Star executive chair Bill Bearment said the record performance showed the company’s growth strategy was proceeding to plan. The greater size of the company meant it was primed for more grown at all levels, which should further increase returns for shareholders.

Earlier this month, Northern Star implemented a merger with Saracen Mineral Holdings Limited (ASX: SAR), which gives a clear pathway to an annual production of 2 million ounces for the combined operations. 

Northern Star Resources sold 480,341 ounces of gold in 1H FY21 at an average price of A$2,386 an ounce. The company says it is on track to meet FY21 production guidance of 940,00–1,060,000 ounces. An interim dividend of 9.5 cents a share was declared, up 27% from the prior corresponding period. This was based on a dividend payout policy of 6% of revenue.

The gold miner ended the half-year with cash, bullion, and investments of A$372 million and bank debt of $375 million. 

Evolution Mining 

Evolution was another gold miner reporting record profits for the half-year, with underlying net profit after tax increasing 57% to $234 million. The gold miner declared a dividend of 7 cents per share based on its target policy of 50% of free cash flow.

“These record financial results continue to demonstrate the quality of Evolution’s asset portfolio,” said executive chair Jake Klein. “The fully franked dividend is our 16th consecutive dividend and reflects the priority we place on ensuring our shareholders benefit from our high cash generation.”

Evolution produced 350,326 ounces of gold during the half-year at an all-in sustaining cost of $1,182 per ounce. EBITDA increased 17% to $514.6 million, up from $441.2 million in 1H FY20.

Importantly, Evolution achieved success in growing mineral resources and ore reserves at key assets, reflecting the sustainability of its strong cash generation. The gold miner’s cash position increased to $438.1 million compared to $170.3 million at 31 December 2019. This reduced net bank debt to $86.9 million. 

St Barbara

St Barbara reported encouraging results for the first half of FY21. Despite operational disappointments in the first quarter, St Barbara produced 162,660 ounces of gold at an all-in sustaining cost of $1,605 an ounce. The miner has previously provided guidance for full-year production of 370,000 to 410,000 ounces of gold.

Improving contributions from all three of the miner’s operations contributed to profits of $37 million for the half year. Earnings per share were 5 cents (down from 6 cents in 1H FY20). St Barbara ended the first half with $119 million cash at the bank and $101 million debt. 

Gold miners profit 

Gold miner’s results were boosted by the last half’s high gold prices. This resulted in high revenues and profits, allowing the payment of increased dividends.

The gold price has shifted downward, however, as confidence in the COVID-19 vaccine sees investors move away from safe haven assets. 

Gold has traditionally been negatively correlated with share markets, making the commodity a good hedge. But the gold price has also shown steady growth in value over the longer term. That’s why some analysts have predicted the current pullback in gold prices could be short-lived, estimating the gold price could reach somewhere between US$2000 and US$3000 an ounce in the next five years.

ASX gold miners will no doubt be hoping these predictions are on the money. 

More reading

• ASX 200 Weekly Wrap: ASX lower despite bumper dividends
• 5 things to watch on the ASX 200 on Monday
• These were the worst performing ASX 200 shares last week
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Kate O’Brien 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 has been a great start to the week for the Althea Group Holdings Ltd (ASX: AGH) share price.

In afternoon trade, the cannabis company’s shares are up almost 8% to 56 cents.

This latest gain means the Althea share price is now up over 27% since the start of the year.

Why is the Althea share price racing higher today?

The catalyst for the rise in the Althea share price today has been the release of a sales announcement.

According to the release, the company’s Canada-based subsidiary, Peak Processing Solutions, has received a binding purchase order from WeedMD.

The initial order, which is performed as part of a one-year commercial services agreement, is valued at approximately C$130,000. It is expected to be delivered to WeedMD in March.

The release explains that under the agreement, Peak will perform a variety of services for WeedMD. This includes the hydrocarbon extraction of fresh-frozen cannabis biomass used to produce live resin cannabis concentrate products for sale in the Canadian adult-use cannabis market.

Management commentary

Althea’s CEO, Joshua Fegan, said: “We are pleased to have received this initial purchase order from WeedMD, a like-minded innovator in the Canadian adult-use cannabis market. The PO and associated commercial agreement provide further recognition from an industry leader that Peak has the capability to produce and deliver cannabis products of the highest quality. Peak continues to attract strong interest from companies across Canada and the United States looking to enter the Canadian recreational cannabis market.”

This sentiment was echoed by WeedMD’s Executive Chairman and CEO, George Scorsis.

He commented: “We are extremely excited to be working with the Peak team on this first of its kind product for our company and I have the utmost confidence in our execution-focused team of experts. Live resins are a premium offering that are in high demand in the Canadian market and I am confident we have a product that will exceed expectations.”

Today’s gain leaves the Althea share price trading within sight of its 52-week high of 67 cents.

More reading

• What will Elite Cannabinoids mean for ASX cannabis shares?
• How did ASX cannabis shares perform in 1H FY21?
• Here’s why the Althea (ASX:AGH) share price is jumping 7% today
• Why the Althea (ASX:AGH) share price has zoomed up 9% today
• CBD to be sold in pharmacies, ASX cannabis shares react

Motley Fool contributor James Mickleboro 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.

The post Here’s why the Althea (ASX:AGH) share price is racing 8% higher today appeared first on The Motley Fool Australia.

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ASX lithium shares have staged the perfect comeback story, with the likes of Galaxy Resources Limited (ASX: GXY), Orocobre Limited (ASX: ORE) and Pilbara Minerals Ltd (ASX: PLS) delivering triple digit returns since October last year.

A lithium revival  

There has been a global trend for a green-led recovery and the push for carbon neutrality has been gaining momentum. 

China is the world’s largest electric vehicle (EV) consumer, with the government previously extending its US$2 billion in EV stimulus and subsidies to 2020. The Chinese Government is targeting a 20% EV penetration rate by 2025 and has pledged to become carbon neutral by 2060.  

To help repair the economic and social damage caused by COVID-19, the European Commission, the European Parliament and EU leaders agreed on a total of $1.8 trillion euros for ‘a greener, more digital and more resilient Europe’. This will be the largest stimulus package ever financed through the EU budget. 

Turning to the United States, President Joe Biden has reversed many of Trump’s anti-climate policies including rejoining the Paris climate accord. More recently, Biden announced his plans to replace the government’s fleet of cars and trucks with electric vehicles assembled in the US. As of 2019, the US Government had over 645,000 vehicles. 

Following the uplift in lithium demand, the supply-side has also faced its own share of COVID-related interruptions. As a result, month on month lithium prices have finally ticked positive after more than two years of spiralling lower. 

Fastmarkets has highlighted recent lithium market and price developments including: 

• China’s domestic battery-grade lithium carbonate market continued its uptrend supported by spot material shortage, although buying activity remained thin after the Lunar New Year holiday.
• The Asian seaborne battery-grade lithium hydroxide spot price recorded its first gain in five months due to increasingly higher prices reported in the market.
• Europe, US lithium complex moved higher on growing tightness in spot availability.

Pilbara Minerals points to profitability 

Pilbara is among the first ASX lithium shares to report its FY21 first-half results. The company cited improved market conditions and operational performance, supporting positive earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.7 million compared to an EBITDA loss of $24.1 million for the December 2019 half year.  

Commenting on the half-year results, Pilbara Minerals’ Managing Director, Ken Brinsden said: 

Lithium raw material markets are now clearly in an upward trend as it relates to both demand and price, which is now translating to improved spodumene pricing. Further, we are fielding more supply enquiries by the day, implying Pilbara Minerals is well-placed with both low-cost operations and near-term expansion capacity to capitalise on this part of the cycle. 

This result is a step in the right direction for ASX lithium shares after two years of negative earnings. Back in 2018, Galaxy Resources was one of the most profitable ASX lithium shares and despite an approximate $1 billion market capitalisation, it traded at a price-to-earnings (P/E) ratio of just 10!

Foolish takeaway

The lithium revolution is in its early days with significant government stimulus and policies in place to support global EV adoption.

With that said, investors still need to be mindful of the risks involved with ASX lithium shares. Government policies and stimulus could be pulled back. For example, in December 2020, China announced its plans to roll back subsidies for EVs by 20% in 2021. 

At the end of the day, the most important factor is lithium spot prices that directly impact a company’s bottom line. So far, lithium prices have tipped higher, but more demand will be needed to see lithium back at its 2018 highs. 

More reading

• Here’s why the Pilbara Minerals (ASX:PLS) share price is dropping today
• Pilbara Minerals (ASX:PLS) share price jumps 6% on broker upgrades
• Pilbara Minerals (ASX:PLS) share price climbed 12% today, but why?
• Why the Orocobre (ASX:ORE) share price is zooming 7% higher today
• Top brokers name 3 ASX shares to sell next week

Motley Fool contributor Kerry Sun owns shares of Galaxy Resources 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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