Australian investors, as a whole, tend to put most or even all of their share market investing funds into ASX shares. While, as I’ll outline below, this is generally a mistake, there are good reasons for that.

After all, most Aussies are more familiar with Qantas Airways Limited (ASX: QAN) than with United Airlines Holdings Inc (NASDAQ: UAL). And we’re certainly better acquainted with Woolworths Group Ltd (ASX: WOW) than US supermarket giant Kroger Co (NYSE: KR).

Superficially it makes sense to invest in a company you know, and one you may well do business with yourself. Which is another reason Australian investors’ portfolios tend to be overweight on ASX shares. With a small, geographically isolated population, we like to support the home team.

Additionally, investing in international shares was historically more difficult and expensive than buying shares on the ASX. And many investors don’t realise that the last few years have ushered in a sea change here.

Almost every Australian broker and numerous online trading platforms now enable you to buy US and other internationally listed shares. And the fees are not much higher than they charge for investing in ASX shares.

Some annual share market returns

Let’s look at some share market returns to give you an idea of why sticking solely to ASX shares likely isn’t in your best interests.

We’ll start here at home with the S&P/ASX 200 Index (ASX: XJO), which contains the 200 largest Australian listed companies by market cap. The 1-year returns for the ASX 200 stand at -5.1%. That’s after the index was up 11.2% from 26 August 2019 through to 20 February this year.

We have COVID-19 to thank for that. But then the coronavirus is a global pandemic and has plagued share markets without heed for international borders. And the United States, certainly, hasn’t been spared.

So how have the 2 major US indexes done?

The S&P 500 Index (INDEXSP: .INX) is up 19.6% over the past 12 months. And the tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) has gained 46% in the past year. I’m sure you’d rather have a piece of those gains than the 5.1% loss from the ASX 200.

Some great Aussie shares

Now before the hate mail pours in, there are some fantastic shares on the ASX. Some have delivered eye-popping gains despite being dragged lower during the viral selloff in February and March.

The Afterpay Ltd (ASX: APT) share price leads the ASX 200 pack, with shares in the buy now, pay later company up 277% over the past 12 months,

Mesoblast limited (ASX: MSB) comes in a close second. Mesoblast’s share price has gained 261% over the past full year.

In fact, 6 ASX 200 shares have delivered share price gains of 100% or more over the past 12 months. That’s 6 companies that have doubled, or more, their investors’ money in just one year.

So by all means, do invest in ASX shares. But in my opinion, it’s worth also looking to invest some of your money beyond our fair shores.

Own a piece of the businesses the world uses every day

We’ll get back to the potential to boost your gains by investing internationally in a tick. But first you should be aware of the additional potential risks. And, of course, that there’s no guarantee you’ll achieve bigger gains by investing some of your money outside the ASX.

One thing to be aware of is fluctuations in the exchange rates. If the Aussie dollar gains against the US dollar, your returns will be less if you sell your US shares. On the other hand, if the Aussie dollar falls against the greenback, it would see your gains increase.

There are also some tax issues to keep in mind, including the fact the dividends on US shares won’t come with franking credits.

With that said, there are a number of good reasons not to park your entire share portfolio in ASX shares, beyond the potential to boost your share market gains.

Like diversification.

The Motley Fool’s own Scott Phillips sums it up perfectly:

By investing part of your funds internationally you not only increase the opportunity to find the big winners of tomorrow, but you also reduce the risks that are specific to Australia. Risks that could seriously damage your portfolio.

Scott is talking about risks such China closing its doors to our mineral or wine exports.

Here’s more from Scott:

Some of the very best companies on planet Earth aren’t listed on the ASX. The Australian share market is a minnow on the global stage. Our share market represents a tiny 2% of global stock markets. … If you’re anything like the average Australian, it’s a very fair bet that more than 75% of the products and services you come across each week are owned by US-listed firms.

That’s a startling statistic, but if you’re like me it certainly holds true. Which is why Scott says, “[p]erhaps the single biggest reason to invest internationally is to own a piece of businesses whose products and services we and many others around the world use on a daily basis.”

So how does this advice pan out in real life?

Over at his investment advisory, Share Advisor, Scott Phillips recommends both ASX and US-listed shares. And he’s racked up an admirable track record in both.

Going back all the way to 2011, Scott’s ASX recommendations in Share Advisor have returned an average of 47.9%. That beats the benchmark by a handy 18.0%.

Scott’s also been recommending US stocks in Share Advisor since 2011. The average return there is 203.6%, beating the benchmark by 165.2%.

Have another look at the numbers above. I believe they speak for themselves.

More reading

• If you invested $10,000 into Zip shares in March, here’s how much you’d have today
• Flexigroup share price in trade halt ahead of capital raise
• The Afterpay share price is up 1,000% in 6 months
• 5 things to watch on the ASX 200 on Wednesday
• Qantas to cut 2,420 more jobs

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and Woolworths Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post How to boost your share market gains appeared first on Motley Fool Australia.

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Dollar-cost averaging (DCA) is a popular method of investing in ASX shares. It involves investing a set amount of capital at a determined time period, say $100 every week or $1,000 a month, and sticking to it, regardless of what is happening in the markets.

By capturing the various fluctuations of the market over a given time, dollar-cost averaging can give you an ‘average’ of the overall market’s performance, thus eliminating the risk of making a large purchase at a suboptimal price.

But using a DCA strategy does have its fair share of critics. By definition, this strategy discourages trying to time a buy. Thus, if you follow a DCA, you might be unable to capitalise on a market crash by buying large amounts of shares at historically low prices: that is, ‘buy low, sell high’.

So is a DCA strategy a good idea, or something that you should avoid?

Dollar-cost averaging: pros and cons

In my view, DCAs are best suited to investors who struggle with the emotional burdens that investing can bring. Everyone knows the best time to buy anything is when it is ‘on sale’. And that’s exactly what usually happens in a market crash.

For example, the market viewed mining giant BHP Group Ltd (ASX: BHP) as worth more than $41 a share back in February. In the midst of the March share market crash, the market at one point decided BHP was worth only $25.20. Today (at the time of writing), it has revised that valuation back up at $38.28. Clearly, there was some irrational selling going on, as one company (especially one as large as BHP) cannot possibly be truly worth 50% more today than it was just 5 months ago.

Now, we all know the best time to buy BHP shares in 2020 was on the day they were trading at $25.20. But in the heat of the moment, it is extremely difficult for many investors to pull the trigger when there is fear and panic all around (as there was back in March). “What if it drops lower from here and I lose even more money?” they might ask. Or, “What if I can get another 10% off tomorrow?” Remember, a market’s lowest point is only painfully obvious in hindsight.

It’s precisely because of these emotional roadblocks that many investors will be better off with a DCA. It simply takes this emotional pressure out of the game.

Foolish takeaway

So which is the best strategy? Dollar-cost averaging, or stockpiling your funds until the market tanks?

Well, it really depends on your temperament as an investor. You can always try a ‘hybrid approach’ of setting aside 10%, 20% or 30% of your portfolio in cash to be put to work during a market crash, and employing a DCA strategy when you hit that threshold for the rest of the time.

There is no right answer here, just what works best for you.

More reading

• Forget term deposits and buy these quality ASX income shares
• What are dividend shares and how do you find them?
• Here are the highlights of this ASX reporting season
• ASX 200 Weekly Wrap: Blue chips, earnings drag ASX lower
• 5 blue chip ASX 200 shares a beginner can use to start a share portfolio

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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At lunch on Wednesday the S&P/ASX 200 Index (ASX: XJO) looks set to end its winning streak with a disappointing decline. The benchmark index is currently down 1.25% to 6,084.6 points.

Here’s what is happening on the market today:

Bank shares under pressure.

After a strong day on Tuesday, the banking sector is giving back its gain today. All the big four banks are trading notably lower at lunch, with the National Australia Bank Ltd (ASX: NAB) share price the worst performer in the group. Its shares are down over 2.5% at the time of writing.

Cleanaway impresses.

The Cleanaway Waste Management Ltd (ASX: CWY) share price is racing higher today following the release of the waste management company’s full year results. Despite the negative impact of the pandemic and the landfill levy in Queensland, Cleanaway still delivered a strong result in FY 2020. It reported an 8% increase in underlying net profit after tax to $152.9 million. This positive form allowed the company to increase its full year dividend by 15.5% to 4.1 cents per share.

Whitehaven crashes.

The Whitehaven Coal Ltd (ASX: WHC) share price is crashing lower on Wednesday following the release of its full year results. The coal miner reported a 95% decline in underlying net profit after tax to $30 million. Its performance was impacted by weak coal prices and labour shortage issues. In light of this, Whitehaven paid just a 1.5 cents per share dividend in FY 2020. Down from 50 cents per share a year earlier.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Wednesday has been the Cleanaway share price with a gain of over 8%. This follows the release of its full year results. The worst performer has been the Bravura Solutions Ltd (ASX: BVS) share price with a disappointing 16% decline. A strong FY 2020 result was overshadowed by weak guidance for FY 2021. Management warned that profits could be flat this year.

More reading

• Why Bigtincan, Cleanaway, Worley, & Zip Co shares are storming higher
• Cleanaway Waste share price climbs after earnings, dividend up
• Investors to look beyond Worley’s big jump in earnings and dividend
• Bravura Solutions share price on watch after strong FY 2020 growth but cautious guidance
• 5 things to watch on the ASX 200 on Wednesday

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 Bravura Solutions Ltd. The Motley Fool Australia has recommended Bravura Solutions Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Shares in Cardno Limited (ASX: CDD) have tanked more than 11% in early trade, despite the company beating guidance in its financial results for the year ended 30 June 2020 (FY20).

How has Cardno performed for FY20?

Earlier today, Cardno released its results for FY20.

The company’s report was headlined by an 11.1% surge in earnings before interest, taxes, depreciation and amortisation (EBITDA) for the full year of $43 million. The result marked the 4th consecutive year in which Cardno has hit or exceeded market guidance. Cardno’s result was fuelled by cash flow from operations of $43.5 million for the full year. In addition, the company reported a 4.4% increase in gross revenue of $978.3 million.

Cardno’s management noted that the company has been able to continue to deliver it services despite the COVID-19 pandemic. Fee revenue for the full year increased 11% to $677 million, with the Americas being Cardno’s strongest region. However, Cardno saw fee revenue down 4% in the Asia Pacific region with the company citing a longer than normal reset.

The company attributed its performance to its speciality offerings in health sciences, natural resources and asset management. Cardno highlighted that the company has zero net debt, however did not declare a final dividend for FY20.

What is the outlook for Cardno?

Cardno is a professional infrastructure and environmental services consultancy company. Despite reporting results that are both up on last year and ahead of market guidance, the Cardno share price has tanked more than 11% in early trade. The sell-off follows the company’s softer outlook for FY21.

According to Cardno’s management, the company’s operations will undoubtedly be impacted by the COVID-19 pandemic. As a result, the company provided conservative guidance for its outlook. For FY21, Cardno anticipates EBITDA to be in the range of $40 million to $45 million.

Operations in the Americas will continue to remain in focus, as the company looks to maintain momentum during the pandemic. Cardno noted that its Asia Pacific business is in the first year of a 2-year rebuilding plan, with the company focusing on lifting margins in FY21.

Foolish takeaway

At the time of writing the Cardno share price is down more than 11.5% and is currently trading near its intra-day low of 29 cents. The Cardno share price has struggled in 2020 and is down more than 36% for the year.

More reading

• ‘Destroyed’: AMP faces more sexual harassment allegations
• If you invested $10,000 into Zip shares in March, here’s how much you’d have today
• How to boost your share market gains
• Should you wait for a market crash to invest, or just use dollar-cost averaging?
• ASX 200 down 1.25%: Big four banks tumble, Cleanaway impresses, Whitehaven disappoints

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Flexigroup Limited (ASX: FXL) share price is on the sidelines today after the company announced a trading halt for equity raising. The news comes alongside Flexigroup’s release of its FY20 results, as the company looks to pivot its strategy in the coming 12 months.

The Flexigroup share price was $1.30 at close of trade yesterday, after clawing back from a 52-week low of 38 cents when it bottomed out in March.

So what were the FY20 highlights for the buy now, pay later (BNPL) group? And what are the details of its strategy update?

Flexigroup FY20 result

There were some positive takeaways from the Flexigroup result overall. Its FY20 net profits remained in the black at $21.4 million, active customers were up 30% to 2.3 million compared to FY19, and transaction volumes lifted 17% on last year’s levels to $2.5 billion.

Its BNPL operations delivered as much as 18% volume growth, reflecting strong performances from Australia, New Zealand and Ireland. Notably, Flexigroup’s Australian online volume increased by 172% overall in FY20 and 262% in the second half of this financial year. This is reflected in booming online retail sales via BNPL more broadly.

On the other hand, revenues for the company slumped 5% to $450 million and the net profit result was 6.5% lower. This weaker overall financial performance has prompted Flexigroup to scrap its dividend payout for the time being.

As a result, Flexigroup has initiated a 1 for 3.20 entitlement offer, expecting to raise $140 million in additional equity. $115 million of this figure will be underwritten. The company said these added funds would provide “balance sheet flexibility and support the sustainable and profitable growth outlook”.

Strategic update

The company’s new strategy will focus around the humm platform. To maximise the platform’s profitability potential, Flexigroup and its flagship products will be rebranded under the one name. This would simplify the business around “a unifying value proposition of interest-free instalment payments for consumers and SMEs”.

Flexigroup CEO Rebecca James said:

FY20 has seen Flexigroup make significant progress against its strategy, with the company now primed for sustainable and profitable growth. With the simplification of the business nearly complete, and a common credit decision platform in place across our core consumer product suite, we are ready to put our firepower into larger ticket buy now pay later, and expand our offering with humm90 and bundll.

Flexigroup’s rebranding to humm remains subject to a shareholder vote at the company’s FY20 AGM. A reservation of the ASX ticker “HUM” has already taken place.

James said the rebrand would “simplify our story to our customers and retailers, and clarify our significant market position as a leading BNPL player and provider of long-term interest-free solutions”.

Foolish takeaway

I think a parallel can be drawn between the boom of the buy now, pay later sector and the Australian gold rush that began in 1851.

Companies like Flexigroup are flocking to capitalise on this ‘golden’ opportunity, but to be honest I believe the bigger BNPL players like Zip Co Ltd (ASX: Z1P), Afterpay Ltd (ASX: APT) and Sezzle Inc (ASX: SZL) are a better buy at this point. 

More reading

• Why Bigtincan, Cleanaway, Worley, & Zip Co shares are storming higher
• Zip share price surges 20% on eBay partnership
• The Afterpay share price is up 1,000% in 6 months
• Afterpay share price leaps 7% today after 3 broker upgrades
• Leading brokers name 3 ASX shares to sell today

Toby Thomas owns shares of Sezzle Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended FlexiGroup Limited and Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In late morning trade on Wednesday the S&P/ASX 200 Index (ASX: XJO) is on course to record a disappointing decline. At the time of writing the benchmark index is down 1.2% to 6,086 points.

Four shares that have not let that hold them back are listed below. Here’s why they are storming higher:

The Bigtincan Holdings Ltd (ASX: BTH) share price is up 3.5% to 90.5 cents. Investors have been buying the AI-powered sales enablement automation platform provider’s shares after the release of its full year results. Bigtincan reported revenue growth of 56% to $31 million and annualised recurring revenue (ARR) growth of 53% year on year to $35.8 million. Pleasingly, management expects this strong form to continue in FY 2021. It has forecast ARR growth of 36.9% to 48% year on year.

The Cleanaway Waste Management Ltd (ASX: CWY) share price has jumped 8% to $2.42. This follows the release of the waste management company’s full year results. Cleanaway was a solid performer in FY 2020 despite the pandemic. It reported an 8% increase in underlying net profit after tax to $152.9 million. This positive form allowed the company to increase its full year dividend by 15.5% to 4.1 cents per share.

The Worley Ltd (ASX: WOR) share price is up 6.5% to $9.71 after delivering strong profit growth in FY 2020. The global engineering company reported a 66% increase in underlying NPATA to $432 million. Also growing strongly was its underlying operating cash flow. It came in at $881 million, up from $239 million a year earlier. This was driven largely by the first full year contribution of the recently acquired Jacobs ECR business.

The Zip Co Ltd (ASX: Z1P) share price has surged 18.5% higher to $8.97. This morning the payments company announced a deal with eBay Australia. That deal will see the newly launched Zip Business offer eBay’s 40,000 Australian small and medium-sized businesses the opportunity to access working capital via the eBay marketplace.

More reading

• Flexigroup share price in trade halt ahead of capital raise
• Zip share price surges 20% on eBay partnership
• Cleanaway Waste share price climbs after earnings, dividend up
• Bigtincan share price storms higher on strong FY 2020 result and guidance
• Investors to look beyond Worley’s big jump in earnings and dividend

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 ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends BIGTINCAN FPO. The Motley Fool Australia owns shares of and has recommended BIGTINCAN FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Jumbo Interactive Ltd (ASX: JIN) share price has come under pressure on Wednesday following the release of its full year results.

At the time of writing the online lottery ticket seller’s shares are down 4% to $13.10.

What happened in FY 2020?

It was a bit of a mixed year for Jumbo. After years of explosive growth and margin expansion, Jumbo’s earnings growth came to an end in FY 2020.

For the 12 months ended 30 June 2020, the company posted a 9% increase in total transaction value to $349 million and a 9% lift in revenue to $71 million.

However, a 38.9% increase in administrative expenses to $17.6 million weighed heavily on its profit margins. This increase was predominantly due to the Gatherwell acquisition and positioning the business to underpin planned future growth.

As a result, Jumbo’s underlying net profit after tax came in flat at $26.5 million in FY 2020.

What were the drivers of its results?

During the 12 months the company had to contend with a period of lower jackpot activity. In FY 2019 there were 49 large jackpots, whereas in FY 2020 this reduced to 39 large jackpots.

This lower activity was offset by the shift to online playing during the pandemic, which underpinned a 9% increase in active customers to 827,411.

The company’s founder and CEO, Mike Veverka, commented: “Covid-19 restrictions helped drive players online which helped deliver an increase in ticket sales despite lower jackpots compared to the previous strong year.”

“In addition, the Software as a Service business continues to grow with the signing of our 5th contract with the “Classics for a Cause” lottery and the completion of the onboarding process for the Mater Lottery”, he added.

Dividend.

The Jumbo board declared a final fully franked dividend of 17 cents per share, down from 21.5 cents per share a year earlier.

This took its full year dividend to a total of 35.5 cents, down 1 cent from 36.5 cents in FY 2019.

Outlook.

No guidance was given for FY 2021 with today’s result.

Instead, the company spoke about its long term prospects, reminding investors that it has signed a 10 year reseller agreement with Tabcorp Holdings Limited (ASX: TAH). It notes that 28% of lottery ticket sales are made online in Australia, which gives it a long runway for growth.

It also spoke about its large global total addressable market (TAM) for its SaaS business. It estimates that the business has a $26 billion TAM in Australia, UK, Canada, and USA.

More reading

• Jumbo Interactive share price on watch after signing Tabcorp deal
• Why I would buy Nearmap and this ASX mid cap share right now
• 50% off: 2 dirt cheap ASX shares to buy today
• 3 mid cap ASX shares that could generate strong long term returns
• 3 stellar mid cap ASX shares to buy

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited. The Motley Fool Australia has recommended Jumbo Interactive Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Zip Co Ltd (ASX: Z1P) share price has soared by 19.53% in morning trade today. At the time of writing, the Zip share price has rocketed to $9.06 after closing yesterday’s session at $7.58 This follows the company’s announcement of a new major partnership with eBay Australia.

New partnership driving Zip share price

The new partnership announced today gives businesses the opportunity to directly access working capital through the eBay Australian marketplace. It also aligns with the official launch today of Zip Business. There are currently 40,000 Australian small and medium-sized businesses (SMBs) that have access to this service.

By being part of the eBay marketplace, merchants will now have access to a flexible line of credit. This can be used to purchase inventory while also covering their short-term expense needs for activities such as marketing campaigns. The new tool also has the ability to help merchants manage their cash flow requirements. This is done through online access to a range of credit options.

Zip has also integrated the Spotcap brand into the Zip Business portfolio, as part of the official launch. The Spotcap business will be combined with Zip Co’s risk decisioning and real-time onboarding capability. This will fast track the scaling of the SMB buy now, pay later (BNPL) offering.

Zip is set to roll-out further products in the coming months as part of the Zip Business launch. These new offerings will support both its SMB network, and its retail and channel partnerships.

New debt funding facility

The Zip share price is surging after the company also announced it has finalised a $100 million debt funding facility arrangement with United States firm, Victory Park Capital Advisors. This debt arrangement will be utilised for the Zip Business receivables. It will provide Zip Co with additional capacity to support the launch of its new business announcement.

Peter Gray, Zip Co founder and Chief Operating Officer, commented:

Zip is extremely excited to formally launch its Zip Business platform to create a suite of products for the small business community, a segment that has been underserved by the traditional lenders in recent years. This comes at a time when Australia’s small businesses are confronting the extreme challenge of COVID-19, which has created enormous pressure on cashflow and ongoing business investment. A thriving small business community is critical to the health of the Australian economy and we are deeply committed to supporting the growth of these important businesses.

The announcement by Zip Co today, follows a trading update two days ago regarding New York-based BNPL provider QuadPay, which Zip has acquired. Zip revealed that QuadPay ended the month of July with record monthly transaction volumes, 30% up on the June quarter average. 

With today’s rise, the Zip share price has increased more than 155% in year-to-date trading. Zip is scheduled to release its FY 2020 results to the market tomorrow.

More reading

• Flexigroup share price in trade halt ahead of capital raise
• Why Bigtincan, Cleanaway, Worley, & Zip Co shares are storming higher
• This rising sentiment is spurring the share market’s bull run
• Is this ASX 200 market too greedy right now?
• 4 exciting ASX tech shares surging higher today

Phil Harpur has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The APA Group (ASX: APA) share price is sliding this morning after the company released its financial results for the year ended 30 June 2020 (FY20).

At the time of writing, the APA Group share price is down 2.90% to $10.54 per share.

FY20 highlights

In today’s announcement, APA Group revealed revenue of $2.59 billion for FY20 – a 5.6% increase on the 2019 financial year.

The company reported profit after tax of $317 million in the 2020 financial year, up 10.1% on 2019. According to APA Group chair Michael Fraser, earnings were safeguarded by the company’s strong balance sheet and its long-term contracts.

APA Group reported earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.65 billion in FY20, an increase of 5.1% on FY19.

The company had operating cash flow of $1.1 billion in FY20, an increase of 8.3% compared to FY19. As at 30 June 2020, APA Group had around $2.5 billion in cash and undrawn debt facilities.

The company stated that it will pay a final distribution of 27 cents, the dividend component of which will be fully franked.

Outlook

Looking to the next financial year, APA Group advised it is expecting an EBITDA of $1.63 billion to $1.67 billion in FY21. It also expects distributions to be in line with the 2020 financial year.

Commenting on the outlook for FY21, Mr Fraser stated: 

While our capacity contracts and regulated revenues mean that our business is somewhat resilient through economic cycles, APA’s revenues are still subject to recontracting decisions by customers, throughput volumes on certain assets, the timing of customer FID decisions, as well as lower CPI across the contracts portfolio.

He also stated that practical completion of the company’s Orbost gas processing plant would not take place until the end of the 2021 financial year.

About the APA Group share price

APA Group is a natural gas and electricity infrastructure business. It is the largest provider of natural gas infrastructure in Australia and has been listed on the ASX since 2000.

APA Group shares are up 30.76% since their 52-week low of $8.06, however, they have fallen 5% since the beginning of the year. The APA Group share price is down more than 4% since this time last year. 

More reading

• 3 ASX dividend shares that have increased their payouts in 2020
• ASX 200 Weekly Wrap: Blue chips, earnings drag ASX lower
• 3 Warren Buffett ASX dividend shares you can buy right now
• Investors wanting safe income should own these 3 ASX shares
• 3 ASX dividend shares raising their dividends like clockwork

Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of APA Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Cleanaway Waste Management Ltd (ASX: CWY) share price has soared in early trade today after the company released its FY2020 earnings results. The Cleanaway share price is up more than 8% at the time of writing to $2.42 a share after closing at $2.24 yesterday.

What does Cleanaway do?

Cleanaway is the largest waste management company on the ASX, with a market capitalisation of $4.6 billion. The company is active in the residential, commercial and industrial waste industries, with an especially large presence in the collection of residential waste. Cleanaway has contracts with more than 95 municipal councils for waste collection. It also boasts the largest hydrocarbon (oil) recycling program in the country.

What did Cleanaway report this morning?

The company reported that revenue increased to $2.33 billion, up 2.1% from FY2019.

Earnings before interest, tax, depreciation and amortisation (EBITDA) also rose by 2.5% to $473 million over FY19’s earnings. That translates into an 8.7% increase to 7.5 cents in earnings per share (EPS).

That helped boost underlying net profit after tax by 8.7% to $152.9 million, although statutory net profit slipped 6.6% from FY19’s result to $112.6 million. This was largely due to underlying costs from the recent acquisitions of Toxfree and SKM.

The company also reported that its free cash flow was up 11.5% for FY20 to $230.1 million.

Dividend reward

Dividend investors will be pleased by Cleanaway’s results this morning. The company has announced a 10.5% increase in its final dividend to 2.1 cents per share. That pulls its total dividend payments up to a fully franked 4.1 cents per share for the financial year, up 15.5% on FY19’s payout of 2.55 cents per share. The final dividend will be paid on 14 September, with the option of participating in the company’s dividend reinvestment plan at no discount.

This dividend gives Cleanaway a trailing yield of 1.83% on yesterday’s closing share price.

Cleanaway’s segments were a mixed bag. Revenue from Solid Waste was up 0.8% to $1.37 billion, while revenue from Industrial & Waste was down 8.3% to $313.4 million. Liquid Waste & Health reported a 3.8% increase to $513.6 million.

Cleanaway share price outlook for FY21

Looking to FY21, the company told investors that “trading conditions remain too variable to provide guidance currently”. A trading update will be provided at the company’s annual general meeting on 14 October instead.

However, the company’s CEO Vik Bansal has this to say on the FY20 results:

Our financial results highlight the defensive characteristics of our revenue streams. Each of our operating segments – Solid Waste Services, Industrial & Waste Services and Liquid Waste & Health Services – performed well during the year despite the effect of COVID-19, which highlights the diversification benefit of our operating segments and strength of our business.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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