The Telstra Corporation Ltd (ASX: TLS) share price is edging higher in morning trade, up 0.5%.

Below we take a look at the S&P/ASX 200 Index (ASX: XJO) listed telco’s update on the proposed legal restructure of its infrastructure assets.

What did Telstra report on its infrastructure restructuring plans?

The Telstra share price is edging up after the company reporting it expects its proposed legal restructure to be completed by this December.

As part of that plan, InfraCo Fixed would own and operate Australia’s biggest telco’s ducts, fibre, data centres, and exchanges. InfraCo Towers would own and operate Telstra’s passive or physical mobile tower assets. And ServeCo would own the radio access network and spectrum assets.

The telco said it plans to establish its international business “under a separate subsidiary within the Telstra Group to keep that part of the business, including subsea cables, together as one entity”. The international assets will be transferred to the new subsidiary over time, subject to relevant approvals and engagement with appropriate stakeholders.

Telstra reported it will move to establish a new holding company and create separate subsidiaries – InfraCo Fixed, InfraCo Towers, ServeCo and Telstra International – and “transfer the relevant assets into InfraCo Towers and ServeCo”. The company plans to seek shareholder approval of its proposed schemes in October at this year’s annual general meeting (AGM).

When the restructure is completed, Telstra shareholders will own shares in the new holding company on a like for like basis.

Commenting to the restructure, Telstra Chairman John Mullen said:

Even before the COVID pandemic reminded us of the enormous importance of telecommunications infrastructure globally, we could see the opportunity to provide transparency of our assets and opportunities to deliver additional value for shareholders.

The legal restructure is a step toward that outcome. It also reflects the new post-COVID world we are living in and the fact that our assets are a critical part of the infrastructure that is enabling the nation’s rapidly growing digital economy.

Mullen added that aside to shareholder and court approval, “there a number of other steps to work through, including taxation, stamp duty rulings and discussions with government, regulators and other key stakeholders”.

Telstra share price snapshot

Telstra shares have struggled to hold onto their post pandemic selloff gains, and are currently up only 3.9% over the past 12 months. By comparison the ASX 200 has gained 47.6% over that same time. (Remember, this time last year marked the ASX 200 lows.)

Year to date, the Telstra share price has shown renewed strength, currently up 6.6% in 2021. Telstra pays an annual dividend yield of 3.1%, fully franked.

More reading

• ASX 200 Weekly Wrap: Inflation fears hold ASX down
• 2 high yield ASX dividend shares to buy
• Why the Telstra (ASX:TLS) share price has had a top week
• Spacetalk (ASX:SPA) share price surges 77% on Telstra deal
• ASX weakness could be met with $19bn “dividend bonanza”

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. 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 Telstra (ASX:TLS) share price is on the move today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3s9tFc0

The Commonwealth Bank of Australia (ASX: CBA) is the latest player wanting a piece of the buy now, pay later (BNPL) pie.

As BNPL becomes an increasingly crowded space, will this pose a threat to the Afterpay Ltd (ASX: APT) share price? 

CBA’s new BNPL product 

CBA’s BNPL product allows its customers to create a digital Mastercard via the CommBank app, which is accepted anywhere that accepts Mastercard. Customers can use the card for everyday spend for transactions less than $100 and pay in four fortnightly instalments for transactions higher than $100.

The bank aims to roll out its new product in the second half of the year, making it available up to 4 million of its customers. As for merchants, a report in the Australian Financial Review (AFR) has indicated that CBA will charge 1.4% compared to Afterpay’s average 3.8%. 

Goldman thinks Afterpay will continue to be the BNPL king 

Goldman Sachs took a deep dive into the critical success factors for BNPL service providers on 17 March. In this report, the broker maintained a neutral stance on the Afterpay share price with a $127.70 target price. 

Mounting competition may be a concern for many investors, but Goldman believes that there “is enough potential growth for several scaled players”. 

In the case of BNPL in Australia, the broker highlights the critical early mover advantage for Afterpay. Afterpay has already amassed 47% of the BNPL customer base, but more importantly, it “facilitates 66% of the industry’s GMV and makes 76% of the industry’s Net Transaction Profits”. 

Goldman thinks that while the new CBA product might offer a lower transaction cost to merchants, Afterpay “has likely aggregated a user base that is possibly different to the user base that CBA may appeal to”.

The broker also notes that recent launches of Klarna and the National Australia Bank Ltd (ASX: NAB) no-interest card have yet to impact Afterpay’s growth performance. 

Looking over at the US market, Goldman notes that the December 2020 quarter suggests a current market penetration of 3-8% for BNPL transactions.

The broker estimates a potential A$160 billion to A$410 billion gross merchandise value (GMV) opportunity should market penetration increase to 10-25% in relevant retail categories. To add some perspective, Afterpay’s first-half FY21 North American GMV was A$4.25 billion. 

Could history repeat itself?

There has been a steady stream of big players entering the BNPL for the past few years. The Afterpay share price has always been able to shrug off the short-term negative sentiment associated with increasing competition.

In 2016, MasterCard announced its own MasterCard instalment product, which it described as an innovative way to pay, which offers consumers flexible and convenient access to funds when needed. 

In 2019, JPMorgan began offering a point-of-sale (POS) finance feature in its Chase mobile app, while MasterCard acquired Vyze, a consumer financing solutions business, to pursue the same market. 

In late 2020, CBA and NAB both launched a no-interest credit card to combat BNPL.

CommBank Neo and NAB’s StraightUp card would provide customers with up to $3,000 of credit with no interest payments, no late payments and no foreign currency fees but with a fixed, monthly fee. 

In light of increasing competition, Afterpay delivered more explosive growth in its 1H21 results. These results highlight a 106% increase in underlying sales to $9.8 billion, while revenue increased 108% to $374.2 million.

Surging sales and revenue translated to a significant 521% increase in earnings before interest, tax, depreciation and amortisation (EBITDA) to $47.9 million. 

More recently, Afterpay continues to take leadership in the BNPL sector after launching in France, Spain and Italy. 

More reading

• Why the Commonwealth Bank (ASX: CBA) share price is on watch today
• ASX 200 Weekly Wrap: Inflation fears hold ASX down
• Is the NAB (ASX:NAB) share price a buy for dividends?
• 5 things to watch on the ASX 200 on Monday
• 3 five-star ASX shares to buy in March

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. 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 Will mounting competition break the Afterpay (ASX:APT) share price? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3cTdPfh

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Arguably two of the greatest dividend stocks are from tech giants Microsoft Corporation (NASDAQ: MSFT) and Apple Inc (NASDAQ: AAPL). Though they currently have low dividend yields, with Microsoft’s at 1% and Apple’s at 0.7%, investors looking for income shouldn’t overlook these income-producing investments. Not only do both companies regularly increase their dividends, but their payouts are likely to grow substantially in the coming years.

But which of these two dividend payers is the better investment?

Let’s take a look.

Microsoft

The coronavirus pandemic negatively affected many businesses, with some popular dividend-paying companies even reducing or suspending their quarterly dividends. Microsoft, however, didn’t skip a beat.

The tech giant announced a 10% increase to its quarterly dividend last September, increasing the payout to $0.56 every quarter — or $2.24 annually. It was the company’s 16th consecutive annual dividend increase.

Of course, it wasn’t surprising to see Microsoft keep up its long history of annual dividend increases. The company easily affords its dividends. Of its $45 billion of fiscal 2020 free cash flow (cash flow left over after both regular operating expenses and capital expenditures are accounted for), for instance, only $15 billion went to dividends. Similarly, the company’s payout ratio, or the percent of net income it pays out in dividends, was just 34% in fiscal 2020.

With a low payout ratio and an average annual dividend increase growth rate of 9% over the past three years, investors should expect more strong growth from Microsoft’s dividend in the years ahead.

Apple

Apple may have a lower dividend yield than Microsoft, but its payout ratio of just 22% is meaningfully more conservative. In other words, Apple’s dividend has a lot more room to grow in the coming years.

Furthermore, the company’s robust free cash flow of $73 billion in fiscal 2020 is significantly greater than Microsoft’s — and the gap between Apple’s free cash flow and Microsoft’s has widened over the trailing-12-month period. During this timeframe, Apple’s free cash flow was $80.2 billion, compared to Microsoft’s $50.4 billion.

Of course, Apple commands a higher value than Microsoft. The company’s market capitalisation is $2 trillion compared to Microsoft’s $1.7 trillion. But based on this financial analysis, Apple looks like its worth this greater market cap. It’s arguably the more promising and resilient dividend stock. However, its win may only by a narrow margin, if not even debatable. Both tech stocks look like worthy considerations for investors looking to buy stocks poised to produce meaningful income over the long haul.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Why it’s a great time for ASX investors to buy US shares
• 2 ETFs to buy today for future-proof ASX diversification
• Will a US Bitcoin ETF send the Bitcoin price to new record highs?
• How to invest in the Nasdaq Index on the ASX
• ASX investors still can’t get enough of GameStop (NYSE:GME) shares

Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple and Microsoft and recommends the following options: short March 2023 $130 calls on Apple and long March 2023 $120 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Battle of dividend stocks: Microsoft vs. Apple appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

from The Motley Fool Australia https://ift.tt/313Aekr

In morning trade the Serko Ltd (ASX: SKO) share price is pushing higher following the release of an update.

At the time of writing, the travel technology company’s shares are up 5% to $5.91.

What did Serko announce?

This morning Serko provided the market with an update on its performance so far during the month of March.

According to the release, the company has experienced a meaningful uplift in transaction volumes this month.

As a result, Serko’s transactions are currently averaging 68% of the volumes recorded during the same period of March 2019, which was unaffected by the COVID-19 pandemic. This is at the high end of the company’s forecasts.

Serko’s CEO, Darrin Grafton, explained: “During March we have seen transaction volumes increase, with transactions month-to-date averaging 68% of the transaction volumes recorded for the same period in March 2019, which were unaffected by Covid-19. As previously announced, Serko has assumed in its forecasts that travel volumes will be transacting in the range of 40-70% of pre-Covid levels by March 2021, so we are pleased to see transactions currently tracking to the higher end of this range.”

Volumes at highest level during the pandemic

In addition to this, Serko advised that its daily transaction volumes are now reaching their highest rate since the pandemic started. This is being driven by improving trading conditions and the onboarding of new customers.

Mr Grafton said: “We are also seeing daily transaction volumes reaching their highest rate since Covid started materially impacting Serko’s travel volumes in mid-March 2020, and are pleased to note that some of this uplift is reflective of continued onboarding of new customers in Australasia despite the effects of Covid.”

“These positive trends follow ongoing volatility over the past few months as a result of further Covid-related travel restrictions, which saw transaction volumes range from 58% of prior year volumes for the month of December 2020, 40% for January 2021 and 51% for February 2021,” he added.

Pleasingly, the CEO is hopeful that these positive trends will continue, especially given that COVID-19 vaccines are now being rolled out.

“We continue to closely monitor travel trends and hope to see these positive trends continue with the vaccination programs underway in key markets and travel restrictions progressively lifting,” Mr Grafton concluded.

More reading

• 2 ASX shares rated as buys by brokers right now

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 Serko Ltd. The Motley Fool Australia has recommended Serko Ltd. 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 Serko (ASX:SKO) share price is racing 5% higher today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3c5wepK

The Openpay Group Ltd (ASX: OPY) share price has started the week in a positive fashion.

In morning trade, the buy now pay later (BNPL) provider’s shares are up 5% to $2.82.

Why is the Openpay share price charging higher?

This morning Openpay announced its entry into the US$55.8 billion US and UK veterinary markets via new partnerships with ezyVet.

The release explains that ezyVet is the next generation in cloud-based practice management software for veterinary professionals who want to save time, grow their business, and deliver excellence in all aspects of veterinary care.

It supports clinical data across the workflows of over 40,000 licensed users and 2,000 practices across several countries. From these, more than 1,200 practices are in the US, accounting for 25% of the veterinary cloud software market in the country.

What are the agreements?

According to the release, under the agreements, Openpay will be integrated as a payment option within the ezyVet vet practice management software, and ezyVet will introduce vet practice clients to Openpay.

This partnership will enable any of ezyVet’s practices in the US and those in the UK to offer payment plans to pet owners seeking to spread the cost of their veterinary procedures and treatments.

Management expects Openpay to be made available on the ezyVet platform to consumers in the UK before the end of FY 2021 and in early FY 2022 in the US.

Openpay’s CEO, Michael Eidel, commented: “We launched with ezyVet in September last year in Australia to enable pet owners and their fur babies to access Openpay. With a surge in the number of pets being brought into families through COVID-19 lockdowns, this relationship really took off as people sought smarter ways to budget and pay for pet care.”

“We’re delighted to be taking the successful model and trusted partnership with ezyVet to our US and UK operations. This is an important milestone for us – it signifies our first significant US partnership and our entry into the UK healthcare vertical.”

Openpay’s USA CEO and Global Chief Strategy Officer, Brian Shniderman, added: “In the US, owners spend an average of around US$1,380 annually on their dogs which make up the majority of pets in US households. We plan to be just as loyal to our customers as dogs are to their human families by giving them the ability to pay for unexpected illnesses and injuries that afflict all of their cherished pets.”

More reading

• Openpay (ASX:OPY) share price drops despite positive announcement
• Is Afterpay (ASX:APT)’s BNPL competition heating up?
• Why did the Openpay (ASX:OPY) share price slide today?
• The Zip (ASX:Z1P) share price is down 34% in less than a month
• Openpay (ASX:OPY) share price tumbles 6% on increasing loss

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 Openpay (ASX:OPY) share price is charging 5% higher today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/313zwUj

After nine months in suspension, the Freedom Foods Group Ltd (ASX: FNP) share price has returned to trade on Monday morning.

In early trade, the diversified food company’s shares were down a massive 94% to 18 cents.

The Freedom Foods share price has recovered a touch since then but is still down 91% to 28 cents at the time of writing.

Why was the Freedom Foods share price suspended for nine months?

Freedom Foods requested its suspension last year amid a series of significant accounting issues that led to the sudden exit of its CEO and CFO.

These issues ultimately led to the company having to revise and restate previous financial statements, culminating in a loss after tax of $174.5 million for FY 2020.

Freedom Foods share price returns

This morning the Freedom Foods share price is trading again after finalising its recapitalisation plans.

The company is raising up to $265 million via the issuance of unlisted, subordinated secured convertible notes. It has also restructured its existing senior debt facilities with HSBC and National Australia Bank Ltd (ASX: NAB).

The company’s capital raising will comprise an invitation to eligible investors to participate in a wholesale investor offer of up to $130 million of notes and a placement of up to $200 million of notes to its largest shareholder Arrovest.

Arrovest will scale back its investment to a minimum of $135 million depending on the level of participation under the wholesale investor offer.

These funds are being raised at $1.00 per note. After which, these notes will convert into shares calculated by dividing the outstanding face value of the notes (including accrued interest) by a notional share price of $0.70.

Subject to shareholder approvals, these notes can convert into shares at any time at a Noteholder’s election. However, notes will be mandatorily converted where 75% or more of Noteholders have elected to convert.

What will it do with the proceeds?

The proceeds will be used repay between $183 million to $233 million of the company’s existing debt. This is consistent with the requirements of the company’s senior lenders.

The funds will also provide a more flexible capital structure that management believes will better facilitate the ongoing financial and operational turnaround of the company.

And finally, the proceeds will provide incremental capital to support the company’s turnaround strategy.

More reading

• ASX quarterly rebalance: HUB24 joins ASX 200, Brainchip into ASX 300
• ASX 200 recovers strongly, Austal floats higher, Fortescue drops
• Here’s how Freedom Foods (ASX:FNP) performed in the first half

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Freedom Foods Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Freedom Foods (ASX:FNP) share price crashes 94% after 9-month suspension appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3tzRgmu

The conclusion of the February reporting season saw just under 79% of ASX 200 shares issue a dividend, according to CommSec. This is down from the long-term average of 86% but an improvement from the 69% seen back in August 2020.

Investors who purchase a company’s shares before the ex-dividend date are entitled to the next dividend payment. If its shares are purchased on or after that date, the previous owner of those shares will receive the dividend instead. A company’s share price typically falls on the ex-dividend date, to account for the dividend paid.

With more ASX 200 shares paying a dividend, here are the ones going ex-dividend this week. 

Carsales.com Ltd (ASX: CAR) 

Carsales delivered robust 1H21 earnings with an 18% increase in adjusted net profit after tax to $74 million. Its strong cash flow generation and balance sheet supported a 14% increase in interim dividends to 25 cents per share. 

The company will be going ex-dividend on Tuesday 23 March. The issued 25 cents per share interim dividend represents a yield of 1.37% based on its closing price on Friday. 

The Carsales share price is down 10% year to date. At their current $18.20 level, Carsales shares have slumped to an 8-month low. The recent weakness in the Carsales share price is in-line with the broader weakness and selloff for tech shares.

Cochlear Limited (ASX: COH) 

Cochlear’s earnings recovery journey has been slow, with only Q2 FY21 showing positive prior corresponding growth. In the company’s 1H21 results, sales revenue declined 4% to $742.9 million, with the first quarter down 8% and the second quarter up 7%. 

The improved tradition conditions and cash flow generation has seen a return of dividends for Cochlear. Its shares will be going ex-dividend on Thursday 25 March for an interim dividend of $1.150. Despite maintaining a dividend payout ratio of 60% of underlying net profit, this interim dividend only represents a yield of 0.50% based on its Friday closing price of $202.94. 

Healius Ltd (ASX: HLS) 

Healius provides facilities and support services to the healthcare sector with a focus on pathology, imaging and day hospitals. The company has seen a strong improvement in 1H21 earnings with underlying revenues up 16.7% to $953.5 million and net profit after tax up 190% to $75.6 million.

The company announced a fully franked dividend of 6.5 cents per share in line with its 50% to 70% payout ratio. Healius shares will go ex-dividend on Thursday 25 March. 

Seven Group Holdings Ltd (ASX: SVW) 

Seven owns a portfolio of industrial services, property, media and other investors. It delivered a flat 1H21 update with the group’s revenue up 4% to $2,357 million while net profit after tax was 3.1% lower to $246.7 million.

The company edged its interim dividend 10% higher to 23 cents per share fully franked. This represents a yield of ~1% based on its Friday close of $22.14. Seven shares also go ex-dividend on Thursday 25 March.

More reading

• ASX medical shares report promising half-year results
• These 4 ASX shares just got upgraded to a ‘buy’ rating
• Top brokers name 3 ASX shares to buy today
• Leading brokers name 3 ASX shares to sell today
• 2 strong ASX healthcare shares to buy this month

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 carsales.com Limited and Cochlear Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post ASX 200 shares going ex-dividend this week  appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3vKns8t

Bapcor Ltd (ASX: BAP) shares will be on watch this morning. This comes after the company announced its plans to expand in Asia through partly acquiring Tye Soon. At Friday’s market close, the Bapcor share price finished the week at $7.40.

Let’s take a look at what the auto parts retailer announced.

Details of the takeover

The Bapcor share price could be on the move today as investors weigh up the company’s latest update.

According to this morning’s release, Bapcor has executed an agreement for a 25% interest in Tye Soon.

Under the deal, Bapcor will acquire 25% of the issued equity in Tye Soon for an amount of SGD$12.5 million. This is expected to help drive Bapcor’s strategy in increasing its presence across Asia where it sees potential growth opportunities.

The completion of the agreement is scheduled to take place sometime next month. In addition, Bapcor will nominate several directors to join the Tye Soon board.

Bapcor’s managing director and CEO, Mr Darryl Abotomey, commented:

The complementary expertise of Tye Soon and Bapcor brings a range of opportunities for both businesses to collaborate and grow their markets. Tye Soon has particular strengths in genuine parts and aftermarket parts distribution as well as an excellent store network in fast growing South East and North East Asian countries. Bapcor will work with Tye Soon to maximise the opportunities to grow their businesses in Asia and Australasia.

What is Tye Soon?

Founded in 1993, Tye Soon is a leading automotive parts distributor that operates across Southeast and North Asia markets. The company imports and exports a wide range of genuine parts as well as aftermarket parts.

Headquartered in Singapore, the company has one of the largest portfolios of top-tier global brands for automotive parts. This includes Mercedes Benz, Bosch, Hengst, GMB, Nozumi, Champion and others.

The group’s annual revenue is around SGD$200 million across its international operations.

Bapcor share price snapshot

Over the past 12 months, the Bapcor share price has gained about 90%, but is down close to 5% year to date. The company’s shares reached a multi-year high of $8.53 during October last year.

Based on current valuation grounds, Bapcor commands a market capitalisation of roughly $2.5 billion, with 339.4 million shares outstanding.

More reading

• 3 reliable ASX blue chip shares to buy
• Will the ASX share e-commerce boom last?
• 2 explosive mid-cap ASX shares to buy and hold
• 3 reasons why the Bapcor (ASX:BAP) share price could be a buy
• 2 ASX 200 shares to buy for income

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. 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 Bapcor (ASX:BAP) share price will be on watch this morning appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3eYQc7C

The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price could be on the move this morning.

This follows the release of an update on a class action brought against it in the United States during 2016.

What was the class action?

Back in 2016, ANZ confirmed that it was among 17 banks and two international brokerage houses that were named in a class action complaint launched in the United States by two US-based investment funds and an individual derivatives trader.

This related to allegations of the rigging of the bank bill swap rate (BBSW) and bank trading in the United States. The BBSW is an independent reference rate that is used for the pricing securities.

In 2017, ANZ acknowledged to ASIC that, during the course of trading on the BBSW market, a small number of traders attempted to engage in unconscionable conduct on ten dates between September 2010 and February 2012. The bank also admitted that it did not have in place adequate policies and systems to monitor trading and communications of its BBSW traders.

What was today’s update?

This morning ANZ announced that it has reached an agreement to settle the class action brought against it in the United States during 2016.

The settlement is without admission of liability. It also remains subject to negotiation and the execution of complete settlement terms, as well as court approval.

The good news for shareholders, and also the ANZ share price, is that while the terms of the settlement remain confidential, the financial impact of the settlement will not be material.

The bank has not commented on the settlement today. However, back in 2017, the company’s Chief Risk Officer at the time, Nigel Williams, commented on the issue.

He said: “We know our customers and the community expect better from us and we apologise for both the attempted unconscionable conduct and our inability to prevent or detect the behaviour.”

ANZ share price performance

The ANZ share price is up over 22% since the start of the year. Investors will no doubt be hoping this strong run can continue now this issue is behind the bank.

More reading

• Why the Commonwealth Bank (ASX: CBA) share price is on watch today
• ASX 200 Weekly Wrap: Inflation fears hold ASX down
• 2 high yield ASX dividend shares to buy
• Morgan Stanley bullish on the Westpac (ASX:WBC) share price
• Is the Commonwealth Bank (ASX:CBA) share price a buy or hold?

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 ANZ (ASX:ANZ) share price in focus after settling US class action appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/311njj3

A surprising success story to emerge out of the last 12 months has been Australian jewellery and accessories retailer Lovisa Holdings Ltd (ASX: LOV). After a dramatic fall during the market crash last March, the Lovisa share price has rallied strongly since and is now back above its pre-COVID price and trading around new all-time highs.

Let’s take a look at how the retailer has been performing.

What’s been driving the Lovisa share price?

Company background

Lovisa sells on-trend, but affordable, jewellery and accessories. The company aims to deliver a unique in-store shopping experience, with Lovisa stylists providing customers with personalised styling tips and advice. Since launching its first brick-and-mortar store back in 2010, the company has expanded internationally, and now has a presence in 15 countries.

Financial performance

Lovisa’s first-half FY21 results were pretty weak overall. Revenues were down 9.8% versus the first half of FY20 to $146.9 million, while net profit after tax plunged 22.6% to $21.5 million. Despite this, the Lovisa share price surged on the day its results were released.

The results were heavily impacted by COVID-19 lockdowns in various geographies. Strict lockdowns in Victoria hurt sales over the first quarter, but once those restrictions eased, Lovisa reported a strong rebound in foot traffic. However, this was offset by market headwinds in the United States and Europe due to the continuing effects of the pandemic.

A positive sign for investors is that Lovisa has continued with its global expansion plans throughout the pandemic. Lovisa added 25 new stores during the six months ending 31 December 2020, bringing its global total to 460 stores. Fourteen new stores were opened in the US, as well as four in France and four in Australia.

The company also agreed to the acquisition of the European stores of German wholesaler Beeline in November 2020. Lovisa plans to convert around 90 Beeline stores located in six new European markets to Lovisa branding by May 2021. This will give Lovisa a significant presence in Germany, Switzerland, the Netherlands, Belgium, Austria and Luxembourg.

Outlook for FY21

Continued uncertainty around the impacts the pandemic will have throughout the remainder of FY21 make it difficult for the company to commit to a firm earnings outlook. However, Lovisa does note that trading over the first seven weeks of the second half of FY21 has continued to rebound in the Southern Hemisphere.

Despite challenging conditions persisting in the Northern Hemisphere, comparable store sales were up 12% overall during those first seven weeks, suggesting the possibility of a strong rebound over the second half should those green shoots continue to sprout.

Other retailers performing well

The Lovisa share price isn’t the only ASX retail share soaring to new highs, as investors try to price in a possible economic rebound over the next few months. Plus-size women’s clothing retailer City Chic Collective Ltd (ASX: CCX) has also had a stellar run over the last few months, as has Premier Investments Limited (ASX: PMV), the owner of the Just Jeans, Peter Alexander and Jay Jays brands.

More reading

• Why this ASX retail share is tipped as “tremendous”
• ASX fashion and beauty shares shine on half-year results
• 4 ASX retail shares that Morgans thinks are a ‘Buy’
• Why these ASX shares just raced to 52-week highs or better

Motley Fool contributor Rhys Brock has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post The Lovisa (ASX:LOV) share price is trading near record highs appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3vNaeIc