I caught up with a mate for a beer last night.

Oh, the beer was incidental. Promise! 

See, we got together to start planning our mid-year holiday.

For the past couple of years, my family has used the winter school holidays to head bush for a driving holiday.

Last year, COVID-restricted, we did the Darling River Run — visiting the Menindee Lakes, Broken Hill, White Cliffs, Bourke, Brewarrina and Dubbo.

The prior year — when state borders were more curiosity than checkpoint — we went to Birdsville (for the Big Red Bash) via Bourke, Thargomindah and Innamincka, heading home via the Birdsville Track and Adelaide.

We did the Bash trip by ourselves, but last year’s holiday was with another family — good friends who also have similar-aged kids to our youngest.

We all had so much fun, we decided to travel together again this year.

Turns out there are two types of people: people like my mate and me who absolutely love the planning and anticipation, almost as much as the trip… and those like my wife, who, well, are just pleased that someone else is happy to take care of all that stuff.

Which is completely fine by me.

I’ve got maps, lists, more maps and more lists.

So last night, over a couple of beers, we sat down to think about what a trip might look like.

Places to visit.

Places to camp.

The best way to get there (usually, given our druthers, via the roads less travelled).

I’m already counting the days.

Don’t get me wrong; I love the idea of just heading in a given direction and seeing where the mood takes us.

But when you’ve got families with kids to cater for, and limits on how long you can be away, time is precious.

As is balancing the desire to see as much as possible with the need to just stop for a few days every now and then to actually soak up what those destinations have to offer.

Yes, how’s the serenity, indeed.

So, while I like the romantic notion of floating on the breeze, we’ll plan, instead.

Not too strictly; we’ll leave room for the possibility of wanting to stay somewhere a little longer — or shorter — as well as taking the advice of the locals for things to see and do.

But we’ll have a rough idea of where we’ll need to be, and by when, to make sure we hit the highlights and still make it home on time for work and school.

I seriously cannot wait.

Campfires, outback sunrises and sunsets. Nature at its best — and most raw, including a landscape carved by millions of years of natural forces.

But you’re ahead of me already, aren’t you?

Yes, planning a holiday is a lot like investing.

You’ve got the whole ‘where do you want to go’ thing.

And the map metaphor.

Good. Nice work.

I want to spend just a few lines on the ‘planning’ thing, though.

Because it’s one thing to know where you want to go (financial independence, a comfortable retirement, money for the kids etc), but you really have to know whether it’s possible.

I have a lot of destinations on my bucket list. More than I can reasonably get to, even in a decade of holidays.

Wanting to go to Uluru, Broome and Cape York is one thing. But expecting to visit them all in a few weeks is more than just a little optimistic.

Not only is trying guaranteed to be futile, because it’s an impossible goal, but you also run the very real risk of vehicle damage and potentially injury or death — not to mention stress and dissatisfaction as you drive 16 hours a day for weeks trying to make it all happen.

A poor analogy? Obviously silly?

No, and yes.

There are a lot of investors throwing Hail Mary passes, in the hope that they might win the share market lotto.

There are many punting on big wins on cryptocurrencies or the latest hot stock.

Day trading.

Expensive ‘trading courses’ and software.

Even as I write this, I’m reminded again of Aesop’s fable of the Tortoise and the Hare. 

I understand the impatience of the investor who can’t or doesn’t want to think in terms of two or three-decade returns.

I get it.

But there is no reasonable alternative.

As soon as you give in to the impulse that says “I can’t do that so I’ll…” you’re on a very slippery slope.

I desperately wish I could see and do more when we head off in June.

I’d love to add more destinations. Tick more things off the bucket list.

But I know, to my own chagrin, that to try that risks ‘seeing’ things without really experiencing them, and, worse, ending up with a deeply unsatisfying, stressful and tiring ‘holiday’.

Albert Einstein apparently (there are far more quotes attributed to him than he actually uttered) said that things should be made ‘as simple as possible, but no simpler’.

The investing parallel (as well as the best advice for the traveller) is to aim for the best returns you can reasonably achieve, but no more.

Because once you start to ratchet up the risk, past a reasonable level, your building gets too tall, your foundations too shallow, and your odds of disaster increase, out of proportion to the potential return.

You never, ever, want to wreck a holiday by being overambitious.

The same goes for investing.

Fool on!

More reading

• Why the Zip (ASX:Z1P) share price is crashing 19% lower today
• Why the Fatfish (ASX:FFG) share price is diving 21% today
• Here’s why the Amplia (ASX:ATX) share price is up 9% today
• Why is the Paladin Energy (ASX:PDN) share price heating up today?
• Readytech (ASX:RDY) share price slides despite strong growth

Motley Fool contributor Scott Phillips 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 You need an investing roadmap appeared first on The Motley Fool Australia.

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The meteoric rise of the Zip Co Ltd (ASX: Z1P) share price has come to an abrupt end on Wednesday.

In afternoon trade the buy now pay later provider’s shares are down 15% to $11.83.

This is a slight improvement on earlier in the day when Zip’s shares were down as much as 19% to $11.27.

Why is the Zip share price crashing lower today?

There appear to have been a few potential catalysts for the decline in the Zip share price today. One of those is general weakness in the tech sector.

It isn’t just Zip shares that are under pressure today. The likes of Afterpay Ltd (ASX: APT) and Appen Ltd (ASX: APX) are also trading notably lower following a weak night of trade on the tech-focused Nasdaq index.

At the time of writing, the S&P/ASX All Technology Index (ASX: XTX) is down 2%.

What else is weighing on the Zip share price?

Profit taking could also be weighing on the company’s shares today. As I mentioned here earlier, prior to today, the Zip share price was up an incredible 143% in the space of a month.

Given that this gain has taken the Zip share price well beyond any broker price targets that I have seen, it would not be overly surprising for a profit taking pull back to occur.

Those strong gains have been driven by its impressive second quarter update, a general re-rating of buy now pay later shares, and speculation that Zip could be planning a secondary listing in the United States.

The latter would allow US fund managers with strict investment mandates to invest and give the company easier access to capital markets in the country.

Anything else?

This leads us nicely onto the third potential catalyst for today’s weakness in the Zip share price.

Speculation that the company was going to list in the United States appears to have given its shares a real lift over the last week or so.

However, in response to an ASX price query yesterday, management made no mention of this speculation when quizzed about what was driving its shares higher.

Investors may be interpreting this as a sign that a secondary listing is not being considered, causing a reversal on some of the gains the speculation has generated.

More reading

• Why Coles, Netwealth, Pro Medicus, & Zip shares are sinking
• ASX 200 down 0.5%: Domino’s delivers, Westpac impresses, Coles sinks
• Why the Evolution (ASX:EVN) share price crashed despite record results
• Why is the Splitit (ASX:SPT) share price underperforming Afterpay and Zip?
• Payright (ASX:PYR) shares get speeding ticket after 32% surge

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 Appen Ltd and ZIPCOLTD FPO. 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.

The post Why the Zip (ASX:Z1P) share price is crashing 19% lower today appeared first on The Motley Fool Australia.

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Fatfish Group Ltd (ASX: FFG) shares are plummeting today with no news out from the company. At the time of writing, the Fatfish share price has plummeted 21.15% to 20.5 cents.

It is, however, important to view today’s falls within the context of the 195% gain the tech venture investment firm notched up yesterday.

Why has Fatfish been so volatile lately?

There are a few recent news items that have drawn focus to the Fatfish share price recently. Firstly, on Monday iCandy Interactive Ltd (ASX: ICI) announced its intentions of selling iCandy digital for $4.8 million to Rightbridge Ventures. Rightbridge is a subsidiary of Abelco, and Abelco is a subsidiary of Fatfish.

This news item, in reality, has no material impact on Fatfish, as it holds a stake in both iCandy and Abelco. Nevertheless, the announcement sent the Fatfish share price soaring.

Secondly, Fatfish appears to have entered the buy now, pay later (BNPL) space through its 78.7% ownership of Smartfunding. The newly developed BNPL offering by Smartfunding is expected to launch on 18 February in South-East Asia.

Lastly, Fatfish has exposure to Bitcoin (CRYPTO: BTC) through the Sweden-based Abelco. Given the momentous rally in the price of the digital currency, the market is all eyes on the speculative potential.

Perfect storm for the Fatfish share price

When you combine the hype of the BNPL sector with the immense speculation surrounding Bitcoin, the rocket ship emoji starts getting plastered all over it. The speculation reaches far and wide with huge inflows of interest. Today alone, Fatfish shares have seen five times their monthly average trading volume in a single day.

The question is whether today marks a reprieve as speculators take profit before pushing the Fatfish share price further upwards. Or whether it is the beginning of a longer downward trend. The answer to this may be largely influenced by how Smartfunding’s roll-out evolves and where the Bitcoin price goes from here.

The Fatfish share price has returned an insane 2400% to shareholders over the last 12 months. Furthermore, the returns delivered by Fatfish have even outperformed Bitcoin itself.

More reading

• The Fatfish (ASX:FFG) share price has exploded 155% higher today
• The Cirralto (ASX:CRO) share price is hitting 52-week highs today
• Why the Fatfish (ASX:FFG) share price is up 74% today
• DigitalX (ASX:DCC) share price soars 18% following Bitcoin update
• Why I’m never selling my Square shares

Motley Fool contributor Mitchell Lawler 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 Why the Fatfish (ASX:FFG) share price is diving 21% today appeared first on The Motley Fool Australia.

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The Amplia Therapeutics Ltd (ASX: ATX) share price is running higher today following the initiation of a multiple-dose study using AM945.

During late-morning trade, shares in the Australian pharmaceutical company are up 7% to 29 cents.

Amplia is an Australian pharmaceutical company. The company is focusing on the development of Focal Adhesion Kinase (FAK) inhibitors for cancer and fibrosis. It’s lead novel oral molecule, AMP945, is a “pure-play” inhibitor. This targets the formation of scar tissue (fibrosis) both in cancer and diseases such as idiopathic pulmonary fibrosis.

AMP945 is aimed at blocking FAK’s activity which lessens scar tissue. Thus, AMP945 allows cancer treatments to be more effective without fibrosis.

What did Amplia announce?

The Amplia share price is on the move today. This comes after the report that it has progressed in the development of its novel inhibitor.

According to its release, Amplia advised that it has commenced a multiple ascending dose (MAD) study in its phase 1 clinical trial of AMP945. The decision to advance the FAK inhibitor was based on the positive results seen to date.

Amplia stated that during phase 1 trial, healthy volunteers undertook a single ascending dose (SAD) of AMP945. Patients were carefully monitored to gain a better understanding of the safety and tolerability parameters. As the initial study nears completion, it was revealed that no health issues were identified regarding the SAD administered to volunteers.

In light of the positive developments, Amplia decided to begin a MAD study involving 3 cohorts of subjects. The first lot of patients will be receiving their doses sometime this week. Different amounts will be administered to each group. The MAD study will run for a period of 7 days.

The data from both the SAD and MAD studies will help Amplia establish the desired dose of AMP945. This will be important for its future phase 2 clinical trial. Amplia is expecting that phase 2 will be commencing at the end of the 2021 calendar year.

Additionally, Amplia noted that it was also studying the impact of food on the absorption of AMP945. Amplia is currently analysing results after the separate trial concluded last month.

Words from the CEO

Amplia CEO, John Lambert, welcomed the company’s progress, saying:

We are delighted that we have been able to advance AMP945 into our MAD study on the basis of the positive data seen so far in the SAD study. AMP945 is a very specific inhibitor of the FAK enzyme and has very little off-target activity. The excellent safety profile that we have seen in our SAD study to date is consistent with data from our preceding non-clinical studies.

We are very encouraged by the data that we have seen from the trial so far and look forward to reporting headline results from this Phase 1 clinical trial in Q2 2021.

About the Amplia share price

In the past 12 months, the Amplia shares have risen close to 200% reflecting positive investor sentiment. During March, its shares dipped to a 52-week low of 4.5 cents before storming higher to 37 cents in October.

Swapping hands for 29 cents today, the company’s shares are only 25% away from its multi-year high.

More reading

• Why the Fatfish (ASX:FFG) share price is diving 21% today
• Why is the Paladin Energy (ASX:PDN) share price heating up today?
• Readytech (ASX:RDY) share price slides despite strong growth
• Why Coles, Netwealth, Pro Medicus, & Zip shares are sinking
• Vicinity Centres (ASX: VCX) share price remains resilient

Motley Fool contributor Aaron Teboneras 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 Amplia (ASX:ATX) share price is up 9% today appeared first on The Motley Fool Australia.

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Volatility has accompanied the Paladin Energy Ltd (ASX: PDN) share price trading today. The uranium producer’s shares sprinted to a 5-year high of 40 cents on open. After pulling back to 38.5 cents, the Paladin share price has since regained its high of 40 cents, up 6.76%.

There’s no news from the company, so what’s cooking in the uranium sector for this stock to be getting so hot?

Uranium gaining appeal in climate fight

With US President Joe Biden now in the Oval Office, action already is being taken on new climate policies. President Biden was quick to re-join the Paris Agreement and stop the $9 billion Keystone XL oil pipeline project.

However, the fact is the population needs energy, and at a growing pace in demand. The Biden administration is planning to address this with its $2 trillion… Yes, TRILLION… climate plan. Nuclear power is included in this plan, and Biden has called for the development of small modular reactors.

Nuclear energy was once an exciting and growing sector. In 1996, ‘atomic’ energy reportedly supplied 17.6% of the world’s electricity. By 2015, that number had fallen to a paltry 10.8% – demand ravaged by disasters and contamination concerns.

However, with the evolution of nuclear energy technology over the years, the benefits are beginning to balance the risks once more.

Where is Paladin Energy situated?

Paladin Energy is a uranium producer that holds multiple tenements across Australia, Canada, and Namibia. Paladin owns a 75% stake in the Langer Heinrich uranium mine in Namibia, which is currently being restarted. The mine originally launched production in 2007 before being shut down in 2018 due to low uranium prices.

It is expected that Paladin will need to spend US$81 million to restart operations at Langer Heinrich. Once reopened, the company anticipates a 17-year mine life for the site.

Currently, Paladin holds leases over an estimated 203 million tonnes of uranium mineral resources. These tenements are scattered between Manyingee (Australia), Michelin (Canada) and Mount Isa (Australia).

Paladin Energy share price heating up

As uranium is revisited as an alternative energy resource, supply and demand concerns have increased the radioactive rock’s price. 

Latest Red Book projects that #uranium demand will continue to rise in the next several decades with increasing electricity demand and a growing need for clean air electricity generation 👉 https://t.co/nBSqMyA7KW pic.twitter.com/Djt9TAF8lf

— OECD NEA ⚛️ Nuclear Energy Agency (@OECD_NEA) January 29, 2021

https://platform.twitter.com/widgets.js

Hence, the Paladin Energy share price has taken a ride on the upside of its own. Shares have increased by nearly 300% in the last 12 months, minting an exceptional return. The company’s share price hit a 52-week low of 3.8 cents on 23 March 2020, which equates to more than 10X today’s current price of 40 cents. 

More reading

• Readytech (ASX:RDY) share price slides despite strong growth
• Why Coles, Netwealth, Pro Medicus, & Zip shares are sinking
• Vicinity Centres (ASX: VCX) share price remains resilient
• Westpac (ASX:WBC) share price jumps after Q1 54% profit growth
• Why the Asaleo Care (ASX:AHY) share price is up 5% today

Motley Fool contributor Mitchell Lawler 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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Readytech Holdings Ltd (ASX: RDY) shares are dropping today after the company released its FY21 first-half report and investor presentation. At the time of writing, the Readytech share price is slumping 4.48% to $1.92.

Readytech share price fails to ignite

Reporting strong growth in key metrics has not stopped the Readytech share price from sliding lower today along with a wider market sell-off. The software-as-a-service (SaaS) education and workforce technology solutions provider reported that it is on track to achieve its FY21 guidance.

Over the first half of FY21, Readytech saw its revenue grow 13.4% to $21.8 million. The increase was driven by a combination of new customer wins and cross-selling to existing customers. Pleasingly, recurring revenue grew 15.6%, comprising 89% of total revenue. According to Readytech, this indicates the movement of customers looking to replace legacy technology with the company’s next-generation cloud-based platform.

The Readytech share price is on the slide after the tech company also reported on its continued investment in future growth. This was seen as operating expenses grew by 24.2% to $13.6 million. Sales and marketing costs also increased as the push for market share increased. On this front, these costs now make up 9.6% of revenue. The company’s spend on R&D came in at $11.8 million.

Management comments

Readytech CEO Marc Washbourne welcomed the results, saying:

Our continued top line growth reflects the team’s focus on winning higher value customers and upselling existing customers into new feature sets. On the back of this positive revenue outcome, we have been able to reinvest back in the business as planned, both in terms of people and technological innovation, which will underpin future growth.

Open Office acquisition

As stated, a key part of the company’s growth strategy is to explore and enter new verticals through acquisitions.

In line with this strategy, Readytech has committed to acquiring government SaaS provider, Open Office. It will pay $54 million upfront with an additional $26 million being paid based on performance.

It should be noted that the takeover is still subject to shareholder approval. This vote will take place at an extraordinary general meeting on 19 March.

What now?

Readytech generated operating cash flow of $7.2 million during the period. As such, the company retains a net cash balance of $33.2 million post the capital raising associated with the proposed Open Office acquisition.

Regarding the company’s earnings guidance, management is confident that demand for its software will remain high in the period ahead, commenting:

Positive outlook and strong momentum in 1H FY21 allows ReadyTech to reaffirm the previously provided earnings guidance. ReadyTech expects FY21 revenue growth rate in the mid-teens, with EBITDA margin in the range of 37%-39%, excluding the Open Office transaction.

Readytech share price snapshot

The Readytech share price is trading flat when compared to this time 12 months ago. Readytech shares fell as low as 96 cents in March 2020 and have since surged by nearly 100%. However, the Readytech share price is still trading nearly 12% below its 52-week high of $2.18. 

Based on the current share price, Readytech commands a market capitalisation of around $187 million.

More reading

• Why Coles, Netwealth, Pro Medicus, & Zip shares are sinking
• Vicinity Centres (ASX: VCX) share price remains resilient
• Westpac (ASX:WBC) share price jumps after Q1 54% profit growth
• Why the Asaleo Care (ASX:AHY) share price is up 5% today
• Netwealth (ASX:NWL) share price dips despite record results

Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Readytech Holdings Ltd. The Motley Fool Australia has recommended Readytech Holdings Ltd. 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) looks set to end its winning streak with a disappointing decline. At the time of writing, the benchmark index is down 0.65% to 6,873.2 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are sinking:

Coles Group Ltd (ASX: COL)

The Coles share price is down almost 6% to $17.15. This follows the release of its half year results this morning. Although Coles delivered a profit result ahead of expectations, investors appear concerned by management’s comments on its outlook. The supermarket giant’s CEO, Steven Cain, warned: “Depending on COVID-19, vaccine roll out and efficacy, and other factors, sales in the supermarket sector may moderate significantly or even decline in the second half of FY21 and into FY22.”

Netwealth Group Ltd (ASX: NWL)

The Netwealth share price is down 4.5% to $17.13. This is despite the investment platform provider delivering strong growth during the first half. For the six months ended 31 December, the company recorded a 30.1% increase in EBITDA to $40.5 million. This was driven by strong growth in Netwealth’s funds under administration over the last 12 months.

Pro Medicus Limited (ASX: PME)

The Pro Medicus share price is down 2.5% to $44.46. This is quite a turnaround for the health imaging company’s shares. At one stage, the Pro Medicus share price had fallen 17% following the release of its half year results. Investors may have been disappointed that its revenue and profits fell a touch short of expectations during the half.

Zip Co Ltd (ASX: Z1P)

The Zip share price has crashed 14% lower to $11.97. This appears to have been driven by profit taking after some incredible gains in recent weeks. As I mentioned here earlier, the Zip share price was up an incredible 143% in the space of just one month. Given these strong gains and the general weakness in the tech sector today, Zip’s decline isn’t overly surprising.

More reading

• Netwealth (ASX:NWL) share price dips despite record results
• ASX 200 down 0.5%: Domino’s delivers, Westpac impresses, Coles sinks
• Why the Evolution (ASX:EVN) share price crashed despite record results
• Why the Pro Medicus (ASX:PME) share price is getting thumped today
• Coles (ASX:COL) share price on watch following half year update

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 recommends Pro Medicus Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Netwealth. The Motley Fool Australia has recommended Pro Medicus Ltd. 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 Vicinity Centres (ASX: VCX) share price has remained resilient after releasing its results for the first half of FY21. At the time of writing, the Vicinity share price has retreated slightly to $1.60, down 0.2%. 

How has Vicinity Centres performed?

Shares in the Aussie retail investment trust (REIT) have remained fairly stable this morning after releasing a disappointing half-year report.

For the first half of FY21, Vicinity Centres reported a loss of $394.1 million. The REIT cited that reduced funds from operations and substantial property revaluation costs contributed to the loss.

Consequently, Vicinity reported funds from operations had declined to $267.1 million, from $337 million in the prior corresponding period. The company attributed this to rental waivers and provisions for unpaid rent during the COVID-19 pandemic.

Additionally, Vicinity Centres also reported a net property valuation loss of $572.4 million for the first half.

Despite the disappointing financial results, Vicinity declared a dividend distribution of 3.4 cents per share for the first half, down from 7.7 cents in the prior corresponding period. The distribution equates to $154.8 million for the first half, reflecting a payout ratio of 62.4%.

Vicinity noted that the conservative dividend distribution was due to the uncertainty around full-year earnings and the COVID-19 pandemic.

The outlook for Vicinity Centres remains uncertain

In the half-year report, Vicinity’s management highlighted the tough trading conditions imposed by the pandemic.

Vicinity Chief Executive and Managing Director, Grant Kelley, noted that:

While the retail industry is showing continuing signs of recovery, we recognise that uncertainty remains, with the potential for further COVID-19 restrictions, the unwinding of temporary government support measures, and a prolonged recovery in CBDs on the eastern seaboard.

Despite the challenging conditions, Vicinity’s management remains optimistic about the company’s outlook. According to Mr. Kelley:

Vicinity is well-positioned to benefit from improving economic conditions, with consumer and business confidence now approximating pre-pandemic levels, fuelled by fiscal stimulus measures and record low interest rates.

However, Vicinity noted that in the interim there remains uncertainty given the fluid nature of the pandemic. As a result, Vicinity did not provide full-year earnings guidance. 

Notably, the company is targeting a distribution payout ratio of 95 % to 100% of Adjusted Funds From Operations (AFFO) for the full year.

What does this mean for the Vicinity Share Price?

Vicinity Centres is one of the largest REITs in the country. Its major assets including Chadstone (Melbourne) and Chatswood Chase (Sydney).

The impact of the COVID 19 pandemic was reflected in the Vicinity share price, which has plummeted more than 35% in the past year.  

At the time of writing, investors remain undecided on the company’s half-year report. Consequently, Vicinity share price trading relatively flat for the day.

More reading

• SCA (ASX:SCP) share price rises on double-digit increase in dividend and profit
• ASX property stocks are likely to beat property investments in 2021

Motley Fool contributor Nikhil Gangaram 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 Westpac Banking Corp (ASX: WBC) share price has risen by 5% after the bank reported a strong recovery of its underlying profit in the first quarter of its 2021 financial year.

Banks continue to face a difficult operating environment with the COVID-19 pandemic still affecting certain areas of the economy. However, Westpac has shown that parts of the economy are now doing much better than in the second half of FY20.

Westpac’s FY21 first quarter profit

Westpac reported that its unaudited statutory net profit was $1.7 billion, up significantly from the FY20 second half quarterly average of $550 million.

It also revealed that it made cash earnings of $1.97 billion for the quarter, up strongly from the FY20 second half quarterly average of $808 million. Excluding notable items, cash earnings grew by 54%.

Those notable items included provisions for the AUSTRAC proceedings, refunds, payments, costs and litigation, write-down of intangibles and asset sales and revaluations. The AUSTRAC provision caused a hit to the Westpac share price when the market first learned of it. 

A key reason for the increase in profit was an impairment benefit of $501 million from improved credit quality, the stronger economic outcomes and a better economic outlook.

The big four ASX bank also said that core earnings were up 28%, or 3% excluding notable items.

Westpac’s net interest margin (NIM) was 2.06%, this was an increase of 3 basis points from the second half of FY20 (up 2 basis points excluding notable items).

Westpac’s loan book and credit quality

The big bank said that credit quality has improved and there were no new large individually assessed provisions. The percentage of stressed assets to total committed loan exposure fell 15 basis points, with almost all industry segments improving. Consumer delinquencies of more than 90 days were lower over the quarter, including Australian mortgages that were overdue by more than 90 days falling by 16 basis points to 146 basis points. 

Looking at the deferrals, the total continues to decline. At 31 January 2021, $11 billion of Australian mortgages were still being deferred. The Westpac share price has steadily climbed more than 40% over the last six months. A significant roll-off of deferrals is expected over February and March.

There was also $400 million of business loans still in deferral at 31 January 2021, which represents less than 1% of the small business portfolio.

Balance sheet strength

Westpac reported that its balance sheet was strong, with its common equity tier 1 (CET1) ratio increasing by 74 basis points quarter on quarter to 11.9%.

CEO commentary

The CEO of Westpac, Peter King, said: “It has been a good start to the year with higher earnings, a stronger economy, and solid progress on our fix, simplify and perform strategic priorities.

“While uncertainty remains around the impact of local COVID outbreaks, there is cause for optimism. The economy is recovering, consumer and business confidence is strong, and the labour market has been much more resilient than expected. At the end of December there were 12.9 million employed Australians compared to 13 million in March 2020.”

Initial reaction

The market has had its say by sending the Westpac share price up by more than 5% so far today. 

Some analysts have also had their say in the result. As quoted in the Sydney Morning Herald, Morningstar analyst Nathan Zaia said: 

The market had been concerned Westpac’s loan book was worse than rivals, but the update and an improvement in arrears rates had allayed those fears. Markets had also worried Westpac had a weaker capital position than rivals, but the update showed it was now sitting on significant surplus capital…I definitely think much bigger dividends are on the horizon.

More reading

• ASX 200 down 0.5%: Domino’s delivers, Westpac impresses, Coles sinks
• Why Domino’s, EML Payments, Redbubble, & Westpac shares are storming higher
• Westpac (ASX:WBC) share price on watch as it delivers $2bn quarterly profit result
• Here’s why the CBA (ASX:CBA) share price is underperforming today
• ASX 200 Weekly Wrap: ASX cools on earnings reality check

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.

The post Westpac (ASX:WBC) share price jumps after Q1 54% profit growth appeared first on The Motley Fool Australia.

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The Asaleo Care Ltd (ASX: AHY) share price is gaining today, up 4.9% at $1.43 at the time of writing. This follows the release of Asaleo’s full-year financial results for FY20.

What did Asaleo Care report?

The personal hygiene products producer and distributor reported a 2.3% increase in revenues from 2019, to $419.2 million. Asaleo Care said its retail segments and B2B incontinence healthcare collectively increased by 6.7%.

The company reported underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $87.2 million, having earlier given an EBITDA guidance in the range of $84-87 million. Underlying EBITDA from its continuing business was $89.2 million, up 6.3%.

Statutory net profit after tax (NPAT) increased by 46.2% to $32.3 million. And the company reported it continues to reduce its net debt, down to $94.9 million from $139.2 million in the 2019 financial year.

Asaleo Care will pay a dividend of 3 cents per share (cps), fully franked, with a payment date of 31 March. Investors who want in on the dividend need to own shares by 16 March.

The company revealed it had not received any COVID-19 related government assistance.

Words from the management

Commenting on the results, Asaleo Care CEO Sid Takla said:

Despite the persistent challenges of 2020, we delivered full year earnings ahead of guidance, revenue growth across both Retail and B2B segments, and delivered market share gains across key retail categories. Our focus remains on executing against our strategic plan, sustaining investment in our brands, driving innovation, and creating efficiencies across our business.

We have entered FY21 with a strong balance sheet and the lowest level of debt since listing, which affords us the capacity to fund ongoing dividends and the flexibility to explore future acquisition opportunities. Asaleo Care is now firmly on a path towards sustainable earnings growth, with longer-term favourable tailwinds supporting our categories…

Takla pointed to an increasing focus on quality aged care, better hygiene awareness, and growing demand for locally produced products to support the company’s growth ambitions.

Looking ahead, Asaleo Care is targeting 5-7% revenue growth and EBITDA of $90-93 million for the 2021 financial year.

Asaleo Care share price snapshot

Asaleo Care’s share price hit a 52-week high on Monday after the company confirmed it was in discussions with Essity Aktiebolag to acquire the outstanding ordinary shares in Asaleo.

The company’s shares are up 31% over the past 12 months, compared to a 1% loss on the All Ordinaries Index (ASX: XAO). Year-to-date, the Asaleo Care share price is 5.15% higher.

More reading

• The Rhipe (ASX:RHP) share price slides despite strong sales growth
• Why the Asaleo Care (ASX:AHY) share price jumped to a 52-week high today
• ASX 200 Weekly Wrap: ASX cools on earnings reality check
• Why is the Ecograf (ASX:EGR) share price on a wild ride today?
• Mesoblast (ASX:MSB) share price surges on new results

Motley Fool contributor Bernd Struben 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 Why the Asaleo Care (ASX:AHY) share price is up 5% today appeared first on The Motley Fool Australia.

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