The AD1 Holdings Ltd (ASX: AD1) share price has been flying high today after the company announced a milestone contract award.

The AD1 share price rocketed to an intraday high of 6.8 cents, up 25%, in opening trade but has retreated through the day to 5.7 cents, up 9.62%.

A quick take on AD1

Based in Melbourne, AD1 provides customer-branded recruitment technology platforms, utility software billing services and management platforms.

Its ‘Acquire solutions’ is an energy industry sales intelligence tool that allows a company to manage its sales database.

‘Zone solutions’ is a customer portal that collates information to provide a range of reporting metrics for customers. The platform also offers customer-self service options, negating the need to connect to a company representative.

What did AD1 announce?

In today’s release, AD1 advised its utility division has signed a 5-year agreement with Australian energy retailer, Locality Planning Energy (LPE).

The new deal will expand AD1’s current scope of work for LPE. This will include energy sales intelligence (Acquire) and customer portal (Zone) solutions for LPE’s existing customers. In turn, the new offering will enable improved cost efficiencies by enhancing the customer experience using sophisticated technology.

The expanded agreement builds on the original contract signed in May 2018. AD1 previously delivered billing & operations Software-as-a-Service (SaaS) solution and related managed services for LPE’s on-market customers.

It’s expected that the new deal will generate revenue of about $10 million for AD1 over the 5-year term. This is a 200% revenue increase on the previous contract signed.

Management commentary

AD1 CEO Prashant Chandra welcomed the new agreement, saying:

This is a landmark deal for the company and we are thrilled to extend and expand our partnership with LPE for a further five years.

Our utilities SaaS solutions assist energy retailers enhance their value offering and achieve their growth objectives in a very cost-effective manner. The five-year expansion of services is a validation of the value in our commercial offering.

Mr Chandra said additional revenues under the deal would start post-implementation, which was anticipated to be completed during the July-September 2021 quarter. It would increase the company’s recurring SaaS and managed services revenue by approximately 50% compared to FY20, he said.

AD1 share price snapshot

The AD1 share price has surged 510% higher since early June last year. At the current share price, AD1 has a market capitalisation of $34 million.

More reading

• Why the Harvey Norman (ASX:HVN) share price just hit a decade-high
• 3 under the radar ASX small cap shares to watch
• Why the Bionomics (ASX:BNO) share price is climbing today
• What to expect from the JB Hi-Fi (ASX:JBH) half year result
• Here’s why the Alterity Therapeutics (ASX:ATH) share price blasted 20% higher 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.

The post Why the AD1 (ASX:AD1) share price rocketed 25% today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2YYrcUJ

The Australian share market may be dropping lower today but that hasn’t stopped the Harvey Norman Holdings Limited (ASX: HVN) share price from continuing its ascent.

In afternoon trade the retail giant’s shares are up 1% to a decade-high of $5.68.

This latest gain means the Harvey Norman share price is now up almost 19% since the start of 2021.

Why is the Harvey Norman share price at a decade-high?

Investors have been fighting to get hold of the company’s shares in recent months due to a very strong sales update in November and recent positive updates from its rivals. This has sparked hopes of a blockbuster half year result later this month.

In respect to its November update, the retailer revealed aggregated sales revenue growth of 28.2% between 1 July and 21 November compared to the prior corresponding period.

Management advised that this was driven by strong same store sales growth across almost all regions and particularly in the ANZ market.

Australian franchisees delivered a 30.4% increase in comparable store sales, whereas its New Zealand stores reported a 20.4% lift in comparable store sales. This includes stores that were temporarily closed due to COVID-19.

Pleasingly, thanks to margin expansion, Harvey Norman’s unaudited profit before tax grew 160.1% between 1 July and 31 October.

What is expected for the first half?

According to a note out of Goldman Sachs, its analysts are expecting Harvey Norman to deliver sales of $2,294.8 million and earnings before interest and tax of $634.7 million.

This represents a 26.2% and 105.8% increase, respectively, compared to the first half of FY 2020.

On the bottom line, Goldman expects its net profit after tax to increase 117.8% to $432.1 million. This is forecast to lead to an interim dividend of 20 cents per share, up 233.3% year on year.

Is it too late to buy Harvey Norman shares?

Goldman Sachs currently has a buy rating on the company’s shares.

However, it is worth noting that the recent rise in the Harvey Norman share price means it is now trading well ahead of the broker’s price target of $4.90.

One broker that still sees upside for the company’s shares is Macquarie. Last week it put an outperform rating and $6.00 price target on Harvey Norman shares.

More reading

• ASX stock of the day: Temple & Webster (ASX:TPW) goes from strength to strength
• Why these market experts aren’t concerned about the ASX 200’s pullback
• Top brokers name 3 ASX shares to buy today
• This ASX company will double its earnings this year: fundie
• With retail sales numbers rising, how are these 3 ASX shares performing?

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 Why the Harvey Norman (ASX:HVN) share price just hit a decade-high appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3tIeiZ0

If you’re looking to gain exposure to the small side of the market, then you might want to take a look at the small cap ASX shares listed below. 

Here’s why these small cap ASX shares could be ones to watch:

Felix Group Holdings Limited (ASX: FLX)

Felix is a cloud-based enterprise software-as-a-service marketplace platform provider for the commercial construction and related industries. It connects contractors and their third-party vendors, automating, and streamlining a range of critical procurement-related business processes. Since launching in 2013, its online Vendor Marketplace has grown to become a leading marketplace for the Australian commercial construction sector. In FY 2020 the company reported sales revenue of $3.7 million. This compares to its global total addressable market estimated to be worth $7.2 billion.

PlaySide Studios Limited (ASX: PLY)

PlaySide Studios is one of the largest independent video game developers in Australia. At present, the company has a total of 52 titles developed, including games based on its own original intellectual property and games developed with Hollywood studios. The latter comprises titles relating to Jumanji, The Walking Dead, and Disney Pixar’s Cars. From these titles, PlaySide delivered a 55% increase in revenue to $7 million in FY 2020. This is just a fraction of its global market opportunity, which the company currently estimates to be worth $77.2 billion per annum.

Serko Ltd (ASX: SKO)

Serko is an online travel booking and expense management provider. Its Zeno Travel product provides AI-powered end-to-end travel itineraries, cost control and travel policy compliance to corporate customers. Whereas its other platform, Zeno Expense, allows users to automate and streamline the expense administration function, identify out-of-policy expense claims, and prevent fraud. Times have been hard because of the pandemic, but demand is starting to pick up. This should be supported by its recent deal with travel giant Booking.com.

More reading

• 3 growing small cap ASX shares to watch
• 2 ASX shares that this fundie really likes right now
• 2 stellar small cap ASX shares rated as buys
• 3 exciting ASX tech shares to buy
• 2 very exciting small cap ASX shares to watch

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 3 under the radar ASX small cap shares to watch appeared first on The Motley Fool Australia.

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

The Bionomics Ltd (ASX: BNO) share price continues to climb today after the company announced it had received commitments for a placement.

At the time of writing, shares in the clinical-stage biopharmaceutical company are up 2.2% to 22.5 cents. Today’s movement follows major gains for the Bionomics share price recently, up 48% over the past week.

What’s moving the Bionomics share price?

Bionomics advised that it has entered agreements for a placement with several North American and European institutional and sophisticated investors to raise almost $16 million.

Under listing rule 7.1, the company will use its 15% placement capacity to issue 110,287,132 ordinary shares to eligible investors. Each share price will be offered at 14.5 cents, reflecting a 20% discount on the 30-day volume-weighted average recorded on 5 February. Notably, the new parcel of shares is trading at a 55% discount based on the current Bionomics share price.

The company expects the placement to be completed before 26 February.

Once the capital raise is wrapped up, Bionomics will launch an entitlement offer to its existing shareholders. The share purchase plan will offer the same price of 14.5 cents apiece. Bionomics will release further details to the ASX market in due course.

In addition, Apeiron Investment Group will help fund Bionomics’ BNC210 Phase 2b Clinical trials to treat post-traumatic stress disorder (PTSD). This was conducted with Apeiron underwriting a further raising of $15 million at a minimum price of 6 cents per share.

Management commentary

Bionomics executive chair Dr Errol De Souza welcomed the progress, saying:

We were pleased that a number of well-known specialist life sciences investment funds participated adding to a very strong shareholder base, which includes Apeiron Investments, Biotech Value Fund, Merck, Peter Thiel and Mike Novagratz.

We remain on track to the completion of our ongoing 7-day dosing pharmacokinetic study of our novel BNC210 tablet formulation in 1Q CY2021 and starting the Phase 2b PTSD trial in mid-2021.

Apeiron founder Christian Angermayer added:

We are pleased to support Bionomics both as an underwriter in this placement and as a long-term shareholder of the company. We look forward to participating in the entitlement offer alongside other investors.

PTSD and other mental health disorders are enormous burdens for those that live with them. Bionomics’ lead drug BNC210 has already received fast track designation from the FDA and I am confident of the strong potential of the upcoming Phase 2b PTSD trial to drive value for both patients and shareholders.

Foolish takeaway

The Bionomics share price has accelerated over the past 12 months, gaining more than 228%. The company’s shares hit a low of 3 cents in March, before moving on an upwards trajectory.

At the current share price, Bionomics commands a market capitalisation of $165 million.

More reading

• What to expect from the JB Hi-Fi (ASX:JBH) half year result
• Here’s why the Alterity Therapeutics (ASX:ATH) share price blasted 20% higher today
• CBA, Westpac, ANZ adopt same tech as Bitcoin
• Afterpay and Zip were among the most traded ASX shares last week
• ASX retail shares show strong signs of resurgence 

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 Why the Bionomics (ASX:BNO) share price is climbing today appeared first on The Motley Fool Australia.

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

With earnings season now underway, I have been looking at what is expected from some of Australia’s most popular companies.

On this occasion, I’m going to take a look a retail giant JB Hi-Fi Limited (ASX: JBH).

What is expected from the JB Hi-Fi half year result?

A strong first half result is expected from JB Hi-Fi on 15 February. And while much of its financials have been pre-released in January, there’s still plenty to be keeping an eye on.

In case you missed it, last month JB Hi-Fi revealed that it had a very strong half thanks to continued elevated customer demand for consumer electronics and home appliance products.

As a result, it expects to report a 23.7% increase in sales to $4,941.2 million and a whopping 86.2% lift in net profit after tax to $317.7 million for the half.

What else should you look for?

According to a note out of Goldman Sachs, it has suggested that investors watch out for a number of key factors.

These include cash flow, drivers of performance across operating leverage, its gross margins, and a trading update for January.

Goldman is expecting the retailer to report an operating cash flow of $224.9 million, capital expenditure of $28.5 million, and a net cash position of $257.8 million.

From this, it is forecasting the company to declare a fully franked interim dividend of 178 cents per share, which is up 79.8% on the prior corresponding period.

Looking ahead, Goldman commented: “While we expect trends into January to have remained strong, even if moderating, any trading updates or outlook updates will be key indicators to understand the earnings trends into 2H21 and beyond.”

Is the JB Hi-Fi share price in the buy zone?

Goldman Sachs believes the JB Hi-Fi share price is fully valued now and has put a neutral rating and $51.60 price target on its shares.

It prefers Super Retail Group Ltd (ASX: SUL) and has a buy rating and $14.80 price target on its shares.

More reading

• ASX retail shares show strong signs of resurgence 
• Here’s a bargain ASX share in a sea of expensive stocks
• 2 ASX dividend shares with yields above 5%
• 3 ASX dividend shares with large yields and consistent payouts
• 3 ASX dividend shares with yields above 4%

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail 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 What to expect from the JB Hi-Fi (ASX:JBH) half year result appeared first on The Motley Fool Australia.

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

The Alterity Therapeutics Ltd (ASX: ATH) share price is soaring today, up by more than 20% at the time of writing. The Alterity share price is currently trading at 4.7 cents a share.

Alterity Therapeutics is an Australian biotechnology company that focuses on commercialising research into Parkinsonian movement disorders, Alzheimer’s disease, Huntington disease, and other neurodegenerative disorders.

Michael J Fox Foundation puts up funding, Alterity share price soars

Alterity Therapeutics announced today that the company has been awarded a US$495,000 research grant from The Michael J. Fox Foundation for Parkinson’s Research.

The funding will be put toward determining the optimal dosing of ATH434 for Parkinson’s disease (PD) based on imaging of brain iron.

After Alzheimer’s disease, PD is the second most common age-related neurodegenerative disorder. It occurs when brain cells that make dopamine degenerate and ultimately die. 

ATH434 is Alterity Therapeutics’ lead drug candidate for the treatment of PD. It’s considered the first of a new generation of small molecules designed to inhibit the aggregation of pathological proteins implicated in neurodegeneration.

This is the second grant the company has received from The Michael J. Fox Foundation to continue its ATH434 research.

Highlights from the Alterity Therapeutics Q2 FY21 report

In addition to today’s news, Alterity Therapeutics released its second-quarter FY21 report on 28 January 2021.

Following a successful $35 million placement, Alterity advised that the company will continue to progress the Phase 2 clinical development program for ATH434. 

Some of the big institutional Alterity Therapeutics shareholders include UBS AG, Australia, Merrill Lynch International Limited, and Credit Suisse AG.

Discussing Q2 FY21 achievements, the company’s new CEO Dr David Stamler said: 

We’ve made important progress throughout the quarter with our commercialisation program for ATH434, including the initiation of our MSA natural history study and growing scientific validation of our library of compounds. I look forward to evaluating new opportunities for PBT2 in the important area of antibiotic resistance. We are well capitalized to continue to advance the company in the coming year.

Geoffrey Kempler, who founded the company in November 1997, stepped down from the CEO role and continues as non-executive chair.

The Alterity share price has powered up roughly 116% over the previous 12-month period.

More reading

• CBA, Westpac, ANZ adopt same tech as Bitcoin
• Afterpay and Zip were among the most traded ASX shares last week
• ASX retail shares show strong signs of resurgence 
• Boral (ASX:BLD) share price slumps as dividend cut
• 3 ASX dividend shares with higher yields

Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Here’s why the Alterity Therapeutics (ASX:ATH) share price blasted 20% higher today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3tzIFB7

Three big banks have launched the first-ever blockchain product to be used in commercial banking in Australia.

A privately-held business named Lygon made the announcement on Tuesday, showing how it implemented blockchain to create digital bank guarantees.

The company is a joint venture between Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking GrpLtd (ASX: ANZ), Westfield owner Scentre Group (ASX: SCG) and IBM (NYSE: IBM).

Blockchain, also referred to as a decentralised database, is a technology that “chains” together bits of data stored with individual users to form one big coherent picture. It’s the same technology that cryptocurrencies like Bitcoin, Ethereum and Dogecoin are based on. 

Paper-based bank guarantees have a more than 200-year-old history in Australia. 

Lygon chief Justin Amos said the digitisation of such an old system was a massive milestone.

“Lygon is paperless, transparent, accessible, and standardised, removing the inefficiencies, costs, and risks associated with a paper-based system,” he said.

“The ability to reduce the risk of fraud and handling errors is a major advantage to Lygon, particularly given the heightened focus on digital security for businesses of all sizes and scale these days.”

Reducing a 4-week transaction into 1 day

Bank guarantees assure a payee that if a payer defaults on money owed, the financial institution would cover the shortfall.

In the example of a residential tenancy agreement, Lygon’s blockchain has condensed a manual process that can take 4 weeks into potentially 1 day.

“Banks can maintain database ledgers of all digital guarantees in existence, with access to a full and auditable history of every transaction ever made,” said Amos.

“Landlords are not at risk of losing or holding invalid guarantees, and retailers, as well as other tenants, have a simplified and fast system for providing security and accessing premises sooner.”

ANZ banking services lead Nigel Dobson said 3 parties were usually involved in a bank guarantee.

“The Lygon platform actually benefits all 3. It’s a win-win-win situation.”

For CBA global client solutions chief Jessica Dwyer, the blockchain technology lies in cutting out numerous gratuitous manual steps.

“Reducing the multiple hand-off points, reducing the necessity of our customers to walk in and out of a branch, buying down the risk that’s associated with fraud.”

The Lygon joint venture is also working on other financial uses for blockchain, Amos said.

“Our core technology can be applied to other types of payment guarantees and financial instruments, such as performance bonds, offering a wide range of opportunities to pursue as we expand Lygon’s reach and service offering.”

More reading

• Motley Fool CIO, Scott Phillips, talks to Sky News: Tesla’s bitcoin bandwagon, and ASX dividends back on menu
• Scentre (ASX: SCG) dividend restart fails to quell sceptics
• SCA (ASX:SCP) share price rises on double-digit increase in dividend and profit
• 2 blue chip ASX dividend shares to buy
• ASX 200 Weekly Wrap: RBA unleashes ASX’s inner animal

Motley Fool contributor Tony Yoo 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 CBA, Westpac, ANZ adopt same tech as Bitcoin appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3q2rENP

Australia’s leading investment platform provider CommSec has released data on the most traded ASX shares on its platform from last week.

Here’s the data:

Zip Co Ltd (ASX: Z1P)

This buy now pay later (BNPL) provider’s shares were the most traded on the CommSec platform by some distance. Zip shares accounted for 3% of total trades last week. However, just 39% of these came from buyers. Unfortunately for the sellers, the Zip share price recorded a sizeable 19% gain over the five days. A new chair appointment and a strong BNPL update from PayPal helped drive its shares higher.

Betashares Nasdaq 100 ETF (ASX: NDQ)

This exchange traded fund (ETF) was popular with investors and accounted for 1.7% of trades on CommSec. A sizeable 78% of these trades came from buyers. They may have been buying the ETF in response to strong updates from Amazon and Apple.

Silver Mines Limited (ASX: SVL)

This silver-focused mineral exploration company’s shares were heavily traded last week, accounting for 1.5% of trades by CommSec investors. Almost two-thirds of these trades came from buyers who appear to have been looking for exposure to the precious metal after Reddit tried to initiate a short squeeze.

Afterpay Ltd (ASX: APT)

Afterpay shares were among the most traded shares again last week. They were responsible for 1.3% of trades on CommSec, with sellers accounting for 60% of these trades. As with rival Zip, these sellers will be disappointed to have missed out on a 12% gain over the five days. This appears to have been driven partly by a bullish broker note out of Bell Potter.

Rent.com.au Ltd (ASX: RNT)

This online rental listings company’s shares were very popular with investors last week. Rent.com.au shares were attributable for 1.2% of trades on CommSec, with close to two-thirds coming from the buy side. Investors were fighting to get hold of its shares after renowned tech investor, Bevan Slattery, took part in an institutional placement. The Rent.com.au share price jumped almost 500% last week.

More reading

• Why Challenger, DEXUS, Emeco, & Zip shares are tumbling lower
• ASX 200 rises 0.6%, Vocus jumps on takeover offer, Afterpay hits new record
• Will LimePay IPO drive ASX BNPL shares even higher?
• Why the Afterpay (ASX:APT) share price is exploding even higher today
• Why the Zip (ASX:Z1P) share price is storming 10% higher today

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 BETANASDAQ ETF UNITS and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Afterpay and Zip were among the most traded ASX shares last week appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3cRpg8M

Australia’s retail industry has demonstrated its resilience over the past six months. Despite dire predictions at the start of the COVID-19 pandemic, ASX retail shares have performed strongly with rising sales and profits.

According to the Australian Bureau of Statistics, retail sales rose 2.5% in the December quarter on a seasonally adjusted basis. This follows a 6.5% rise in the September quarter. Consumers unable to travel are instead choosing to spend discretionary income on homewares, furniture, and electronics.

ASX retail shares are taking advantage of these shifting spending patterns and outperforming the dire predictions that proliferated last year. 

Online shopping surges 

Online shopping has surged in the wake of the pandemic, with the global e-commerce market expected to reach $4.5 trillion in 2021.

Many ASX retail shares have seen this trend reflected in their own sales statistics. JB Hi-Fi Limited (ASX: JBH) reported 161.7% growth in online sales in the first half of FY21, while Adairs Ltd (ASX: ADH) reported a 99.7% increase in online sales in the first 23 weeks of FY21. Premier Investments Limited (ASX: PMV), the company behind Smiggle, Peter Alexander, Just Jeans, and Dotti, saw a 60% increase in online sales in the first 24 weeks of FY21. 

Online-only retailers are sharing in the e-commerce spoils. Temple & Webster Group Ltd (ASX: TPW) reported a 118% increase in revenue in the first half of FY21, with active customer numbers growing 102% to 687,000. “The advantages of being the online market leader are apparent as we continue to grow our market share,” said CEO Mark Coulter in the company’s most recent update.

Online beauty retailer Adore Beauty Group Ltd (ASX: ABY) has updated its revenue forecast for the first half of FY21 to $95.2 million, a 7% increase on the prospectus forecast. “We are pleased to report strong sales ahead of our Prospectus forecasts. The business has continued to scale, deliver content, and meet the needs of our customers at a time when they need it most,” said CEO Tennealle O’Shannessy.

Travel spend diverted to retail 

As consumers find themselves stuck on Australian shores, many are reallocating their offshore travel spend to domestic adventures. This has resulted in a sales surge for Super Retail Group Ltd (ASX: SUL), the company behind popular stores BCF, Rebel Sports, and Super Cheap Auto.

Super Retail Group reported unprecedented consumer demand in the first 26 weeks of FY21, with like-for-like sales up 24%. The BCF brand reported a 51% uplift in sales as customers sought accessories to allow them to take advantage of adventures in their own backyard. BCF grew online sales by 113% while Super Retail Group reported an 87% overall increase in online sales. As a result, Super Retail Group upgraded its forecast profits and vowed it would repay $1.7 million in JobKeeper support. 

Consumers spending more time at home have also looked to upgrade their surroundings, spending big on furnishings and homewares. Nick Scali Limited (ASX: NCK) reported an exceptional six months of trading in the first half of FY21, with sales revenue up 24.4% to $171.1 million. This flowed through to a 99.5% increase in net profit after tax, which reached $40.5 million.

“The first half of financial year 2021 had many challenges to navigate including government-mandated store closures, supply chain issues and significant delays experienced with global shipping providers,” said CEO Anthony Scali. “Despite these events, the team was able to capitalise on shifting consumer spending patterns and deliver a record result for the company.” 

Adairs and Temple & Webster also reported strong results thanks to increased spending on the home. Adairs reported an increase in total sales of 23.4% in the first 23 weeks of FY21, upgrading group sales guidance for the first half of FY21 to $235–$245 million (compared to $179 million in the prior corresponding period). CEO Mark Ronan noted: “It is now clear our first half FY21 result will be outstanding ….whilst we have clearly been a COVID-19 beneficiary, the result has been delivered through the team’s strong execution against our articulated business strategies.”

Temple & Webster reported earnings before interest, tax, depreciation and amortisation (EBITDA) of $14.8 million in the first half of FY21, up from $2.3 million in the prior corresponding period. 

Electronics and whitegoods in favour 

Consumers spending more time at home are not just looking to upgrade their furnishings — new appliances and entertainment options are also favoured.

Whitegoods retailer Harvey Norman Holdings Limited (ASX: HVN) reported a 28.2% increase in sales revenue for the period between 1 July 2020 and 21 November 2020, while profit before tax was up 160.1% between 1 July 2020 and 31 October 2020. These results were achieved despite lockdowns shuttering many stores during the period.

JB Hi-Fi also reported strong sales momentum in the first half, with continued elevated customer demand for consumer electronics and home appliance products. Sales surged 23.7% to $4,941 million, providing an 86.2% boost to profits, which reached $317.7 million. 

Kogan.com Ltd (ASX: KGN) reported that business growth continued at a strong pace over the Christmas period, with 7 of its biggest 10 trading days ever occurring in the period surrounding Black Friday. Gross sales grew by 96% in the first half of FY21, while gross profit was up more than 120%. The company now boasts more than 3 million active customers, with over a million customers served during the Christmas period.

“The Black Friday week saw some of the most extraordinary trading we have ever seen. We are proud to have delivered another record half while undertaking significant investments into the future of the business,” said founder and CEO Ruslan Kogan.

Retail resurgence 

Despite early concerns about the impact of COVID on Australian retail, ASX retail shares have shown great resilience in the face of the pandemic. Customers unable to utilise their travel budgets are turning instead to retail therapy, boosting returns for ASX retailers. Whether this trend will continue as the vaccine begins to roll out and borders open remains to be seen. But for now, many ASX retail shares are rewarding investors with strong results. 

More reading

• Scentre (ASX: SCG) dividend restart fails to quell sceptics
• Nick Scali (ASX:NCK) returns half the JobKeeper it received
• Here’s a bargain ASX share in a sea of expensive stocks
• 2 ASX dividend shares rated strong buys by brokers
• 3 great ASX tech shares to buy

Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited and Super Retail Group Limited. The Motley Fool Australia has recommended ADAIRS FPO and Temple & Webster Group 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 retail shares show strong signs of resurgence  appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3pb1cjT

Boral Limited (ASX: BLD) shares are dropping lower today after the company released its half-year results for FY21. At the time of writing, the Boral share price has fallen 4.6% to $5.16. 

What’s pushing the Boral share price lower?

The Boral share price is on the slide today after the company reported a net profit after tax of $156 million, which is on par with its first-half performance in FY20. The company advised that this number excludes significant items.

Earnings before interest, tax, depreciation and amortisation (EBITDA) for the period ending 30 December 2020 was $486 million, down 1% on the prior corresponding period (PCP). The EBITDA figure also excludes significant items.

Boral Australia experienced an 8% fall in revenue to approximately $1.6 billion for the first-half FY21. This compares to the previous year’s $1.7 billion in revenue. The company associates the revenue loss with lower volumes and pricing, particularly caused by a decline in major project work across New South Wales and Queensland.

Boral North America also took a 9% revenue hit on its continuing operations. First-half FY21 revenue was around $1.1 billion compared to $1.2 billion for 1H FY20.

Free cash flow took a massive leap from $35 million in the first-half FY20 to $333 million in 1H FY21.

And while Boral last year paid investors a 13.5 cent dividend for the period, the directors decided that no interim dividend would be paid for the 1H FY21. 

This decision was based on the company’s current net debt (including leases) which weighed in at $1.9 billion. The board determined not to pay the interim dividend since this number was higher than its $1.5 billion target.

Looking ahead

In today’s update, Boral noted uncertain market conditions in both Australia and the US. However, it expects some disruptions (such as coronavirus) to impact the remainder of FY21 considerably less.

Boral advised that transformation initiatives being executed by the business delivered $65 million of gross benefits during the first-half FY21. 

The company expects the full year FY21 transformation benefits to be around $170 million to $190 million before inflation and hopes this gain will offset the revenue losses caused by business slowing down.

Transformation initiatives implemented to date include the sale of 50% interest in USG Boral for US$1.01 billion and Meridian Brick for US$250 million. Both transactions are scheduled for completion in FY21.

Boral has appointed a new CEO and CFO, and set in place revised growth strategies. The transformation initiative has also boosted sales and marketing activities.

Boral share price and company snapshot

Boral Australia is an integrated construction materials and building products manufacturer and supplier. Its products include cement, aggregates, concrete, asphalt, bricks, roofing, masonry products and timber. Boral also maintains a network of concrete, asphalt and manufacturing sites across Australia.

Based on the current Boral share price, the company has a market capitalisation of $6.6 billion and has 1.2 billion shares outstanding.

Over the past six months, the Boral share price has gained nearly 40%.

More reading

• This key ASX stock pick in the building sector has multiple re-rating opportunities
• The ASX 200 stock facing a day of reckoning at the February reporting season

Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Boral (ASX:BLD) share price slumps as dividend cut appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2N4q0wq