Amaysim Australia Ltd (ASX: AYS) shares are edging higher following the release of the company’s half-year results. At the time of writing, the Amaysim share price is trading 0.65% at 77.5 cents. 

The financial results for the half year ending 31 December (H1 FY21) are likely to be the last from the company, as it looks to delist from the ASX at the end of March.

What did the company report?

The Amaysim share price is pushing higher after this morning’s update in which the company summarised the sale of its energy business to AGL Energy Limited (ASX: AGL). The sale occurred on 30 September last year for an all cash consideration of $115 million.

A month later, on 2 November, Amaysim took a step towards winding up the company when it announced the intent to sell its mobile segment to Optus Mobile for $250 million. That announcement saw the Amaysim share price leap more than 10% on the day.

On 21 January, shareholders voted in favour of the mobile segment sale, which was completed on 1 February.

Regarding its half-year results, the company noted:

The half year results for the six month period to 31 December 2020 comprise of Energy, being a discontinued operation, and Mobile that is considered a discontinued operation held for sale during the period.

With that caveat in mind, net profit after tax (NPAT) from both the energy and mobile segments came in at $6.52 million in H1 FY21, up 65% compared to the previous corresponding period.

Amaysim reported a 7% decline in revenue from ordinary activities, while diluted earnings per share (EPS) were 2.06 cents, up from 1.27 cents in H1 FY20.

The company will not pay any dividends for the half year. Amaysim noted its main asset is now a material cash balance and it is currently subject to an unconditional off-market takeover offer from WAM Capital Limited (ASX: WAM).

If all goes to plan, Amaysim will pay its major distribution in April and expects to pay the final distribution around October

Amaysim expects to delist from the ASX on 31 March.

Amaysim share price snapshot

The last 12 months have been good for shareholders, with the Amaysim share price up by more than 140%. By comparison, the All Ordinaries Index (ASX: XAO) is flat over that same period.

Year to date, the Amaysim share price is up 1.97%.

More reading

• Why is the WAM Capital (ASX:WAM) share price on the rise?
• Top brokers name 3 ASX shares to sell next week
• Wilson Asset Management (WAM) thinks these 2 ASX shares are a buy
• Here’s why the AGL (ASX:AGL) share price is climbing higher today
• ASX 200 down 0.1%: Telstra update impresses, AMP sinks, Newcrest jumps

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.

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The Bank of Queensland Limited (ASX: BOQ) share price will be one to watch closely this week.

This morning the regional bank announced plans to raise funds to make a huge acquisition.

What did Bank of Queensland announce?

This morning Bank of Queensland announced that it has entered into an agreement to acquire 100% of Members Equity Bank (ME Bank) for a cash consideration of $1.325 billion. This acquisition will be funded by an underwritten capital raising of $1.35 billion.

According to the release, management believes the acquisition of ME Bank will be transformational and that the two businesses are strategically aligned.

It is expected to deliver material scale, broadly doubling the Retail bank and providing geographic diversification.

It also notes that it will combine two strong complementary trusted brands, with shared customer-centric cultures and differentiated customer segments.

Further, management sees a clear pathway to a scaled, common, cloud based digital Retail bank technology platform.

What about the financials?

Positively, Bank of Queensland believes the acquisition will be financially compelling.

It is expected to be low double-digit to mid-teens cash earnings per share accretive including full run-rate synergies in the first year (FY 2022). It is also expected to be cash return on equity accretive, by over 100 basis points including full run-rate first year synergies.

Synergies are expected to reach $70 million to $80 million pre-tax by year three.

The two businesses will have pro forma total assets over $88 billion, with total deposits of more than $56 billion.

Based on ME Bank’s latest results, the acquisition price represents an implied acquisition multiple of 1.05x reported book value and 11.9x cash earnings.

Bank of Queensland’s Chairman, Patrick Allaway, commented: “Today’s announcement is another major step in our strategy to be the leading customer-centric alternative to the big banks. With the addition of the ME Bank business, BOQ now has material scale and a compelling growth platform to support this ambition.”

“The combination of our highly complementary businesses brings together two organisations with a shared purpose and values generating greater value for customers, employees and shareholders. This is underpinned by the successful revitalisation of the bank since early 2020 with the team’s strong execution capabilities being reflected in our earnings progress to the half,” he added.

Capital raising

Bank of Queensland is raising the funds via a $1 billion underwritten 1 for 3.34 accelerated pro-rata non-renounceable entitlement offer and a $350 million underwritten institutional placement.

The offer price for both the placement and the entitlement offer will be $7.35 per share, representing a 12.6% discount to Bank of Queensland’s last close price of $8.41 on 18 February.

The Bank of Queensland share price will return from its trading halt once the placement is complete.

More reading

• Bank of Queensland (ASX:BOQ) shares halted ahead of potential $1.3bn ME Bank acquisition
• Bank of Queensland (ASX:BOQ) shares hit a 52-week high today

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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Advertising provider oOh!Media Ltd (ASX: OML) has revealed devastating numbers across the board for calendar year 2020, while also showing signs of recovery out of COVID-19. 

For the year ending 31 December, the “out of home” ad company saw:

• A 34% drop in revenue, reporting $426.5 million
• A net loss after tax excluding acquisition-related amortisation of $8 million, compared to a profit of $52.4 million in 2019
• Underlying EBITDA of just $63.2 million, which is less than half of $139 million recorded in 2019

“Out of home” advertising includes placements like trains stations, airplanes, shopping centres and roadside billboards.

People staying home due to the coronavirus downturn hammered that subsector much worse than other parts of the industry, according to oOh!Media chief executive Cathy O’Connor.

So the company had to act “quickly and decisively”, she said.

“That included a $167 million equity raising, refinancing of debt facilities, negotiation with property partners to deliver $63 million in net fixed rent savings, capital expenditure reduction of $49 million and operational cost savings of $16 million (excluding JobKeeper).”

The company, which previously had a 6% yield, will continue to suspend dividends.

Optimism for post-COVID recovery

Despite the unflattering numbers from 2020, the prospect of vaccines and workers returning to physical commuting has oOh!Media confident about 2021 and beyond.

Already in the 4th quarter of 2020 the company was back to 70% of pre-COVID revenue, compared to just 57% in the 3rd quarter.

O’Connor also expects to cut further costs.

“The company remains focused on margin growth through the recovery cycle by achieving rent reductions beyond 2020, delivering structural cost savings approaching $10m annual run rate achieved at the end of calendar year ’20 and remaining disciplined on capital expenditure.”

Investors seemed to also take the optimist view, sending the oOh!Media share price 6.4% higher in early trade on Monday.

Lennox Capital equity analyst Olivia Salmon said last month that one of her regrets out of 2020 was not buying into oOh!Media when it executed the emergency capital raise.

“This was a make-or-break capital raise for the company, and this was at the height of the pandemic. We were just too nervous about those earnings coming through.”

The share price was down to 59 cents near the end of March. It is trading now at $1.57, while it had surpassed $3.60 in the middle of 2019.

oOh!Media plays in a pretty reliable space, according to Salmon.

“What you’ve obviously seen is the ad market improve out of sight. Outdoor media is one of these assets that I think will be around for the long term and is unlikely to really be cornered out by digital advertising any more than it already has been.”

More reading

• Amaysim (ASX:AYS) share price higher as company moves to delist
• Bank of Queensland (ASX:BOQ) to raise $1.35bn to acquire ME Bank
• BlueScope (ASX:BSL) share price slides on results
• Why the Lendlease (ASX:LLC) share price is slipping today
• Here’s why the NIB (ASX:NHF) share price is storming higher today

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has recommended oOh!Media 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 BlueScope Steel Limited (ASX: BSL) share price is edging lower this morning following the release of its first-half results for FY21. At the time of writing, the steel producer’s shares have backtracked 2.78% to $16.80.

Let’s take a look and see how the company performed for the period.

What are the highlights?

The BlueScope share price is coming under pressure today despite reporting a positive set of numbers.

In this morning’s release, BlueScope advised it achieved a solid performance across its key business metrics.

For the six months ending 31 December, BlueScope delivered total sales revenue of $5,817.4 million, down 1% on the first half of FY20. The slight fall was attributed to lower selling prices caused by unfavourable currency exchange movements in the Australian dollar despite improved demand.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) came to $772.5 million, up 75% on the prior corresponding period. Stronger steel spreads such as reduced raw material costs and a lift in volumes from demand supported its operating profitability. The company’s largest steelmaking business in Australia and the United States particularly saw strong recovery rates.

Underlying net profit after tax (NPAT) grew to $332.8 million, increasing 67% over this time last year.

After capital expenditure, total group cash flow stood at $265.1 million, a jump of $305 million from H1 FY20.

BlueScope closed the first half with a net cash position of $305.1 million. Previously, the group recorded net cash of $79 million at the end of June last year.

The board declared an unfranked interim dividend of 6 cents per share to be paid to shareholders on 30 March 2021. This is the same amount as management handed out to shareholders in the H1 FY20 period.

Outlook

Looking ahead, BlueScope noted that order and dispatch rates in its key markets remain healthy. Spot steel spreads in North America are forecast to be materially higher than H1 FY21 and longer-term averages. However, due to COVID-19 uncertainty, the business cautioned that the favourable trading conditions might not be sustained.

As a result, BlueScope predicts that underlying EBIT will be in the range of $750 million and $830 million. This will be dependent upon future spread, foreign exchange and market conditions.

About the BlueScope share price

Over the last 12 months, the company’s shares have risen to more than 26%, reflecting a recovery in the sector.

During March, BlueScope shares fell to a low of $8.03 before gradually moving along an upwards trend. The company achieved a 52-week high of $18.80 just last month.

Based on the current share price, the company has a market capitalisation of $8.7 billion.

More reading

• Reliance Worldwide (ASX:RWC) share price in spotlight as it unveils 82% profit surge
• Real reporting season surprise isn’t about profits but dividends
• The latest ASX stocks to be hit by broker downgrades
• The BlueScope (ASX:BSL) share price surges on a profit upgrade today

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.

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Lendlease Group (ASX: LLC) shares are slipping in morning trade after the international property and infrastructure company reported its half-year results. At the time of writing, the Lendlease share price is trading down 0.76% to $11.80.

What’s moving the Lendlease share price?

Challenging operating conditions

The Lendlease share price is on the slide in morning trade despite the company reporting it has recovered from the worst of last year’s COVID-19 slowdown. However, activity still remains below pre-pandemic levels for the property management and development group.

Given the company is reflecting on results compared to the period before the world ground to a halt, there was a common theme throughout its report. In most cases, FY21 half-year results were down compared to the prior corresponding period.

However, Lendlease is reporting that momentum continues to build from the second half of FY20. As CEO and managing director Steve McCann noted, “Core operating EBITDA was $405 million, a significant improvement from the second half of FY20, although lower than the $525 million in HY20.”

Furthermore, the challenging operating conditions impacted each of the company’s business segments. Yet, it wasn’t all bad news, as the weaker environment allowed the company to seize urbanisation projects on attractive terms. These include city blocks in New York and the La Cienega Boulevard in Los Angeles, with a combined estimated end value of $1.8 billion.

The challenging period resulted in a 37% hit to Lendlease’s statutory profit after tax, at $196 million, down from $313 million. Investments were the heaviest impacted during the period, with the segment down 46% compared to last year. This was due to significantly fewer fees derived from asset management. 

Outlook for Lendlease

Lendlease continues to shift towards a focus on core urbanisation and investment platforms. Currently, the development pipeline is $110 billion and is growing with additional projects in US and European cities. However, as international COVID-19 impacts linger, management remained cautious of near-term conversions.

The big standout is the urbanisation pipeline for Lendlease. As mentioned in the update by Mr McCann:

Our urbanisation pipeline is expected to create more than $50 billion of institutional grade assets for our investment partners and the Group’s investments platform. We expect to more than double our current $38 billion in funds under management as this pipeline is delivered.

Due to the impacted result, Lendlease expects to pay an interim dividend of 15 cents per share. This represents a decrease of 50% from the 30 cents per share interim dividend paid last year.

The Lendlease share price has fallen by more than 38% over the past twelve months. 

More reading

• Here’s why the Lendlease (ASX:LLC) share price is wobbling today
• Real reporting season surprise isn’t about profits but dividends

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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The NIB Holdings Limited (ASX: NHF) share price pushing higher on Monday morning.

Following the release of its half year results, the private health insurer’s shares have risen 2.5% to $5.52.

How did NIB perform in the first half?

For the six months ended 31 December, NIB reported a 1.1% decline in revenue to $1.3 billion.

And although the company reported a 0.9% increase in claims expense to $1 billion, a 14.1% reduction in operating expenses to $172.1 million offset this and underpinned profit growth.

NIB delivered a 4.4% lift in underlying operating profit to $86.9 million and a 15.9% jump in net profit after tax to $66.2 million

Despite its profit growth, the NIB board declared a flat fully franked interim dividend of 10 cents per share.

What were the drivers of NIB’s growth?

NIB’s Managing Director and CEO, Mark Fitzgibbon, revealed that the company added 16,000 Australian Residents Health Insurance (ARHI) members during the period. This was an increase of 2.7% and underpinned a 2.2% increase in premium income. Premium income growth would have been 4.2% if it hadn’t postponed its 2020 annual premium increase by six months.

Mr Fitzgibbon also revealed that ~52% of its policy sales were to members under the age of 40, with more than 45% of its sales to people that are new to private health insurance.

Positively, NIB’s membership growth in its core ARHI business is believed to be ahead of the industry growth rate. In addition,  the company experienced an improvement in member retention, which helped support it profit growth.

However, the Chief Executive did warn that its above target profit margin needed to be treated with some caution.

He commented: “ARHI profitability has been slightly distorted by COVID-19 and consequential delays in treatment and claims which is still playing out. We’ve modelled that impact as best we can and continue to make allowance for a claims catch-up in our financial accounts.”

“Yet it’s an inexact science and while ever the pandemic persists, underlying claims costs trends will continue to have some noise, as we’ve seen with events such as the Victorian lockdowns. I also suspect there may be for many, a natural aversion to going to hospital and other forms of treatment involving close contact as a result of COVID-19,” he added.

Outlook

No guidance has been given for the full year due to COVID-19 uncertainties.

However, it does expect strong sales and improved retention to continue throughout FY 2021. Though, as mentioned above, the company is expecting claims to grow as members catch up on postponed treatments.

Looking further ahead, the company is aiming to sell critical illness health insurance in China from FY 2022. It was also be focusing on building the capabilities of its Honeysuckle Health joint venture.

Finally, NIB has become the latest company to announce plans to become carbon neutral. It intends to achieve this by the end of FY 2022.

Mr Fitzgibbon said: “Although our carbon footprint is low, we see no less a responsibility in tackling global warming especially with its well established risks to population health and safety.”

More reading

• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended NIB Holdings 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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February reporting season has so far been largely positive as ASX 200 shares bounce back from COVID-19 related challenges.

Higher commodity prices have helped miners deliver record-breaking profits at the larger end of town, as bad debt and impairment expenses have retreated to help banks deliver upbeat earnings and higher dividend payments.

Despite improved business conditions, these 2 ASX 200 shares have failed to impress brokers and been slapped with a sell rating. 

Goodman Group (ASX: GMG)

The Goodman share price was arguably one of the best performing REITs in 2020, thanks to its focus on high-quality properties and essential infrastructure. However, its shares have struggled to make headway in the new year, falling by more than 10%. 

Goodman’s results on Friday was a testament to its high-quality portfolio, with first-half FY 21 results and full-year guidance ahead of Goldman Sachs consensus.

The company delivered an operating profit of A$614.9 million, well ahead of Goldman’s forecasted $565.7 million. However, the result came in below the broker’s estimate at the property investment line, and the property management contribution was well below its forecast, despite higher average funds under management balance.

Goldman maintained a sell rating with a 12-month price target of $12.24 or a downside of 30% after digesting the results. 

Cochlear Limited (ASX: COH) 

Cochlear’s half-year report for FY21 on Friday was very much about a recovery in operations following significant COVID related disruptions to its cochlear implants (CI) business. The company’s revenues were ahead of Goldman expectations, with a respective 14% and 1% decline in CI units in Q1 and Q2, compared to the -12% and -32% consensus. The upbeat performance saw the Cochlear share price surge by more than 8% on Friday, marking it as the best performing ASX 200 share on the day. 

The company cited improving momentum across the second half, however, still very mixed by regional performance. Clinics in the United States, Japan and Korea were operating near pre-COVID capacity for most of the period, whilst Western Europe delivered a small decline, and emerging markets were still down some 30%. 

Cochlear went ahead to provide investors with FY21 earnings guidance, targeting earnings of $225 million to $245 million, representing growth of 46-59%. Goldman noted that the FY21 guidance implies a 6-10% 2-year compound annual growth rate (CAGR) from FY19, suggesting the recovery will likely still take longer than for many other stocks in the sector. 

The broker also flagged that momentum slowed across several countries from November, and Cochlear saw slower trading again in January and February due to recent surgery slowdowns. However, the deployment of vaccines and an expected recovery in surgical volumes should see volumes improve again. 

Despite the recovery taking place, Goldman still sees a greater risk of indefinite delay/volume loss than for most others in the sector. The broker remains sell-rated on Cochlear with a 12-month target price of $165, representing a 20% downside to today’s prices. 

More reading

• ASX 200 sinks 1.3%, Cochlear soars, TWE sours
• ASX 200 down 0.6%: Cochlear jumps, Goodman upgrades guidance
• Why Cochlear, Goodman, Lovisa, & Whispir shares are surging higher
• Why the Goodman (ASX:GMG) share price is pushing higher
• Cochlear (ASX:COH) share price in focus after delivering a solid half year result

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. The Motley Fool Australia has recommended Cochlear 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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It’s no secret that alternative energy sources are gaining interest. Arguably, many ASX investors are becoming more forward-looking with their investments, rather than making decisions based on lagging indicators. Examples of this include the electrification revolution and the growing interest in renewables technology.

Most recently, it appears ASX hydrogen shares have caught the eye of public markets. 

The market is constantly at work, attempting to uncover the next innovation that will address existing problems. As a former engineer myself, I believe this very ‘first principles’ approach towards investing has worth. Financials are always important, but in my opinion, a business should (first and foremost) add value by solving a problem.

On that note, hot on the tail of the lithium trend, hydrogen energy is another potential innovation in the renewable energy space being closely watched by investors. 

Hydrogen gaining its share of investments

As reported by the ABC, there have been a number of driving forces shining the spotlight on hydrogen in recent months. US President, Joe Biden’s plans for a carbon-free power supply by 2035, and $2 trillion in accelerated investments towards sustainable infrastructure, certainly give alternatives a boost.

More locally, Andrew Forest, best known for his role as chair of Fortescue Metals Group Limited (ASX: FMG), has announced his plans to invest billions into green hydrogen to expand his own energy business.

The beauty of hydrogen is, if it’s generated through electrolysis (a process of separating water molecules into hydrogen and oxygen using electricity), with the electricity sourced from renewable sources, the process is completely emission-free.

So let’s take a look at four ASX companies with exposure to hydrogen. 

Hydrogen shares on the ASX

Hazer Group Ltd (ASX: HZR)

Hazer is a Perth-based company that is in the process of commercialising a more efficient process for producing hydrogen. This unique process utilises iron ore as the catalyst for converting natural gas and methane into hydrogen and graphite. Given Hazer is commercialising its own production process, this company is somewhat of a pure-play hydrogen share.

Last month, Hazer reported its second-quarter performance, in which it reiterated the company’s focus remains on its commercial development project (CDP). Hazer aims to successfully complete this project in order to demonstrate the potential of its ‘Hazer Process’.

The Hazer share price has performed exceptionally well over the last year. Shareholders have been rewarded with a price appreciation of 168% over the period. At the time of writing, Hazer shares are trading at $1.345, with a market capitalisation of around $176 million.

Santos Ltd (ASX: STO)

Taking it to the large-cap space, Santos is also dabbling in hydrogen’s potential. Santos is Australia’s second-largest independent oil and gas producer. Only last week, Santos reported record annual production, with 89 million barrels of oil equivalent – 18% higher than the prior year. Yet, it appears Santos isn’t putting all of its eggs in one basket.

In July of last year, the oil giant commenced a concept study into the potential for hydrogen for the Cooper Basin. Santos Managing Director and CEO Kevin Gallagher stated that natural gas can be decarbonised at its source to make ‘zero-emissions’ or ‘blue’ hydrogen. The carbon dioxide produced would then be captured and stored in the reservoirs from which the gas came.

Hydrogen is also mentioned extensively in Santos’ latest Climate Change Report. It appears the company is still investigating the potential economics of it all. Santos is also working towards a net-zero emissions goal by 2040, which hydrogen could potentially help contribute to.

The Santos share price has struggled over the last 12 months, as demand for oil slumped during lockdowns. At the time of writing, Santos shares are down 11.5% from this time last year, underperforming the S&P/ASX200 Index (ASX: XJO), down 5%.

Province Resources Ltd (ASX: PRL)

Province Resources is a small mining company with a number of gold, sand, copper, and other mineral projects. However, it also operates a green hydrogen project named the HyEnergy Project.

The HyEnergy project was recently acquired through the company’s acquisition of Ozexco. Located in the Gascoyne region of Western Australia, HyEnergy is projected to generate 1 gigawatt (1,000 megawatts) of renewable energy to generate approximately 60,000 tonnes of green hydrogen. The proximity to ports also opens up the potential for exporting to international markets.

The Province Resources share price was plodding along, not doing too much for most of the year until recently. Following the announcement of the company’s acquisition, Province Resources shares skyrocketed from 2.6 cents to 14.5 cents. Since then, the Province Resources share price has fallen back to the current level of 8.5 cents at the time of writing, up 750% in 12 months.

Fortescue Metals Group Limited (ASX: FMG)

Fortescue Metals Group is well known for its iron ore operations in Australia. However, chair Andrew Forrest, and CEO Elizabeth Gaines plan on achieving net-zero emissions for the company by 2040.

To curve Fortescue’s emissions, the decarbonisation pathway is paved by hydrogen and battery electric solutions. In this way, Fortescue won’t necessarily be exporting hydrogen, but the company certainly plans to benefit from its application. 

The motivator for Fortescue is the potential to manufacture Australia’s own locally sourced “green steel”. Currently, Australia benefits from the exportation of our resources, such as iron ore. But if Fortescue can implement its green manufacturing plan through the use of hydrogen, we might be able to produce steel locally. This potential ‘vertical integration’ proposition would undoubtedly represent sweet whispers in the ears of investors.

The Fortescue share price has been boosted by strong iron ore prices over the past year, delivering 123% gains for shareholders. 

More reading

• ASX 200 Weekly Wrap: ASX lower despite bumper dividends
• 5 things to watch on the ASX 200 on Monday
• 2 ASX dividend shares with very generous yields
• Will Fortescue (ASX:FMG) shares really pay an 18% dividend yield in FY21?
• 5 things to watch on the ASX 200 on Friday

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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Macquarie Group Ltd (ASX: MQG) share price has started the week strongly and is pushing higher on Monday.

At the time of writing, the investment bank’s shares are up 4% to $148.39.

Why is the Macquarie share price charging higher?

Investors have been buying Macquarie shares after it upgraded its full year guidance less than two weeks after issuing it.

At its operational briefing on 9 February, management advised that it expects its profit result in FY 2021 to be down slightly year on year. Positively, today, the company revealed that it now expects to achieve profit growth for the full year.

What did Macquarie announce?

According to the release, for the 12 months ending 31 March, Macquarie expects its profits to increase ~5% to ~10% on FY 2020’s results.

Management advised that extreme winter weather conditions in North America have significantly increased short-term client demand for its capabilities in maintaining critical physical supply across the commodity complex and particularly in relation to gas and power.

It explained that Macquarie’s Commodities and Global Markets (CGM) business physically ships gas on the majority of major pipelines across the United States and over time has built capacity to support clients by delivering power and physical commodities to help them meet the unexpected needs of their customers.

However, as before, its short-term outlook is subject to a range of uncertainties. This includes the duration and severity of the COVID-19 pandemic, the uncertain speed of the global economic recovery, and global levels of government support for economies.

Its result will also be subject to the completion of period-end reviews. These include asset impairment and expected credit loss allowances. Though, judging by the Macquarie share price performance, investors don’t appear concerned by these uncertainties.

Macquarie advised that it continues to maintain a cautious stance, with a conservative approach to capital, funding and liquidity. It believes this positions it well to respond to the current environment.

Where next for the Macquarie share price?

Positively, the Macquarie share price has been tipped to go even higher from here by one leading broker.

Earlier this month Morgan Stanley put an overweight rating and $160.00 price target on its shares. Though, this price target could soon change to reflect today’s positive update. 

More reading

• ASX 200 Weekly Wrap: ASX lower despite bumper dividends
• The latest ASX shares upgraded by brokers to “buy” during the reporting season
• ASX 200 Weekly Wrap: ASX cools on earnings reality check
• Telstra (ASX:TLS) share price rises as brokers pass judgement on its profit result
• Top brokers name 3 ASX shares to sell today

Motley Fool contributor James Mickleboro 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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The Audinate Group Ltd (ASX: AD8) share price is pushing higher in early trade.

At the time of writing, the media networking solutions provider’s shares are up almost 1% to $8.33.

Why is the Audinate share price pushing higher?

The catalyst for the rise in the Audinate share price this morning has been the release of its half year results. Those results revealed that the company has seen its revenue levels return to pre-COVID levels.

According to the release, Audinate reported revenue of US$11.1 million. This was flat on the prior corresponding (and COVID-free) period and up 19.5% on the second half of FY 2020.

Management advised that this was driven by a 48% increase in Software revenue. It notes that the company experienced significant growth in royalties, which was supported by growth in retail software sales and Dante Domain Manager sales.

The company’s Chips, cards & modules revenue benefitted from strong growth in Dante AVIO adaptors and good growth in Broadway and Ultimo chips. This partially offset a material decline in Brooklyn revenue. Management advised that its Brooklyn product is often sold into mixing consoles and is consequently most impacted by the decline in live sound and live events due to COVID-19.

Another positive was that Audinate’s gross margin remained steady at 77% despite a material shift toward software revenue. This led to gross profit of US$8.6 million, which was up slightly over the prior corresponding period from US$8.5 million.

However, due to currency headwinds, the company’s earnings before interest, tax, depreciation and amortisation (EBITDA) softened slightly to A$1.8 million. And while the company received A$0.8 million in JobKeeper payments, this was excluded from its EBITDA result.

And on the bottom line, Audinate reported a net loss after tax of A$1.2 million. This compares to a A$0.3 million profit in the same period last year.

Finally, the company recorded an operating cashflow of A$3.2 million, up from A$2.9 million a year earlier. This was primarily a result of cash from the aforementioned COVID related grants.

This left Audinate with cash (including term deposits) of A$66.3 million at the end of the period.

Management commentary

Audinate’s CEO and Co-Founder, Aidan Williams, was very pleased with the company’s performance during a difficult period.

He said: “We were very pleased with the FY21 first half revenue result and the overall financial performance of the business. It is encouraging to see business confidence returning to the AV industry, reflected in good demand for Dante products heading into the second half.”

Dante-enabled products continue to increase in numbers

The company notes that number of Dante enabled products manufactured by Audinate’s Original Equipment Manufacturer (OEM) customers is a key measure of its technology proliferation. It is also traditionally a leading indicator of future revenue growth.

Positively, at the end of the period there were 3,008 Dante-enabled products on the market, up 27% year on year. This is materially more than its nearest competitor.

In addition, the number of OEM customers with Dante-enabled products also grew 23% to 360 over the same period.

Outlook

Management advised that it is seeing confidence return amongst OEMs, system integrators, and end-users. This has resulted in an overall improved industry outlook for calendar year 2021.

Whilst COVID related risks remain (including to global supply chains), they are abating as vaccines are rolled out.

It notes that good trading conditions have continued into the beginning of the second half. However, it continues to expect Brooklyn revenue to be impacted by the downturn in live events and live sound.

Audinate also advised that it is accelerating its investment in growth, with a target headcount of >140 staff by the end of FY 2021. This is expected to result in an increase in operating costs of between A$2 million to A$3 million in the second half. This news could be holding back the Audinate share price a touch today.

Mr Williams said: “Whilst we remain wary of the potential near-term impacts of COVID, we are cautiously optimistic that the pandemic may serve as a catalyst for an acceleration of the transition from old school analogue cabling to networked audio and video. This bodes well for Audinate’s long term growth opportunities, and we are excited by the path we see ahead for our business.”

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended AUDINATEGL 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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