The Premier Investments Limited (ASX: PMV) share price is pushing higher on Tuesday after releasing a business update.

At the time of writing the retail conglomerate’s shares are up 2.5% to $15.83.

What was in Premier Investments’ update?

This morning Premier Investments advised that in line with step one of the Government’s plan to reopen Australia, Premier Investments will be opening the balance of its stores in Australia from Friday May 15. This follows the reopening of its Queensland and Northern Territory stores late last week.

Outside Australia, in New Zealand the company plans to reopen its stores on May 14, whereas its UK and Asia stores will remain closed until at least June 1.

Sales update.

These store openings are good news for the company as their closures had caused a significant decline in global sales.

According to the release, Premier Investments’ total sales for the six weeks to May 6 were down 74% on the prior corresponding period.

It would have been much worse had the company not made its high level of investment in online technology over the last decade.

This strong online capability has supported strong online sales growth during the pandemic. Since the beginning of the temporary store closures, Premier Investments’ online sales have surged by 99%.

The Peter Alexander brand has been a real standout. It has experienced a 295% increase in online sales over the period.

But perhaps most impressive was that during the week ended May 2, Peter Alexander Australia’s online sales alone were up 18% on the total sales across both online and its entire 122 store and concession network in Australia during the prior corresponding period.

Balance sheet strength.

Premier Investments remains in a strong financial position and looks set to comfortably ride out the storm.

As at May 1, the company’s consolidated cash position was $256.2 million. It also maintains access to undrawn facilities of $91.8 million. Management believes this leaves it well placed to begin its recovery, including progressively bringing back its workforce to reopen.

Though it has warned that there could still be tough times ahead.

It commented: “No one can reliably predict the pace and timing of the upcoming phase of economic recovery. In this recovery period, Premier Retail’s sales and margin by store, by country, by brand and by region are highly uncertain and will be dictated predominately by the manner in which consumers respond to the return of instore shopping in their local communities, bound by strict social distancing rules and health guidelines.”

In light of this, it has no plans to provide guidance for FY 2020 at this stage.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments 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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Australia’s leading online automotive classifieds website Carsales.Com Ltd (ASX: CAR) has seen a partial rebound in its share price since late March, but is still down 26% since mid-February.

Does this now provide investors with a good buying opportunity?

Sharp downturn in sales volumes

Social distancing and isolation measures implemented to combat the coronavirus pandemic has unsurprisingly translated to a reduction in buying and selling activity for Carsales. Therefore, this has impacted classifieds listing sales volumes and revenues.

In a recent trading update in late April, Carsales revealed that between 10 March 2020 and 21 April 2020, seller and dealer used car lead volumes were down very sharply by approximately 25% compared to normal levels. 

However, on a positive note, traffic on carsales.com.au had remained resilient over the prior month, and private seller and dealer used car lead volumes were growing solidly.

Well-positioned to ride out the crisis

Despite the enormous challenged posed by the crisis, Carsales appears to be taking all the necessary steps to mitigate the negative impact of the coronavirus pandemic on its operations. This includes the initiation of cost-saving measures such as reducing board executive remuneration, temporarily standing down around 250 employees and reducing outdoor brand marketing.

Also, Carsales’ debt and liquidity positions appear to be reasonably solid, considering the unprecedented challenges that the automotive industry is currently facing. At the end of March, Carsales had a relatively manageable net debt position of $355 million and a relatively strong liquidity position with around $190 million in available cash.

Is the Carsales share price a buy?

Despite the current market downturn, I believe that Carsales does offer investors a good long-term buying opportunity. That said, more share price volatility could still be around in the months ahead.

It is important to take into consideration that the automotive sector is highly impacted by economic cycles, but has always proven to be fairly resilient. Whilst it can suffer sharp downward swings in very challenging times, such as the one we are in now, it typically bounces back fairly quickly once market conditions improve.

Already there are signs that market conditions for Carsales may improve in the not too distant future. With the release of the Federal Government’s 3-step plan to reopen Australia by late July, this is likely to provide a welcome boost to new car sales in the months ahead, which could translate to a further uplift in the Carsales share price.

I also believe that Carsales’ industry leadership position in the Australian market, along with its geographic diversification, positions it well to outperform the S&P/ASX 200 Index (ASX: XJO) over the longer term. In particular, the international growth potential for Carsales appears to remain strong, especially in the fast-growing South Korean market.

More reading

• These were the top 10 ASX 200 shares over the last year
• Brokers may be upgrading this ASX stock even as it delivered a plunge in profits
• Is it time to invest in shares or wait on the sidelines?
• In a post-COVID world, could Australia be the next superpower?
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Phil Harpur owns shares of carsales.com Limited. The Motley Fool Australia has recommended carsales.com 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 last year has been tough. We’ve had bushfires, floods, and now coronavirus. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) is down 14% from this time a year ago. But where there is disaster, there is also opportunity. We take a look at the 10 ASX 200 shares that have performed the best over the last year. 

Silver Lake Resources Limited (ASX: SLR)

Shares in Silver Lake Resources are up 155% over the past year. The gold miner has benefitted from the recent strong increase in gold prices and move to safe haven assets. Its cornerstone asset is the Mount Monger Gold camp located 50km south east of Kalgoorlie in Western Australia. 

In the March quarter, Silver Lake produced 65,548 ounces of gold and 438 tonnes of copper. The miner posted record sales of 68,183 ounces of gold at an average sale price of $2,170 an ounce. The all-in sustaining cost of production was $1,380 an ounce. 

PolyNovo Ltd (ASX: PNV)

Shares in PolyNovo are up 151% compared to this time a year ago. Shares in the healthcare company have appreciated on increasing revenue and market potential for PolyNovo’s product. 

PolyNovo produces NovoSorb BTM, an implantable dressing that can be absorbed into the body as it heals. Sales of NovoSorb BTM increased from $1.7 million in FY18 to $9.3 million in FY19. Guidance for FY20 has been in the region of $12 million. 

The company is close to breaking even and plans are in place to expand its product offering into hernia treatment and breast repair. The current focus remains on aggressively pursuing market penetration rather than short term profits.

Fisher & Paykel Healthcare Corporation Ltd (ASX: FPH)

Fisher & Paykel Healthcare shares have appreciated 87% over the past year. The company designs and manufactures products for use in respiratory care, surgery, acute care, and sleep apnea. 

Fisher & Paykel updated its full year guidance in March from revenue of $1.2 billion to revenue of $1.25 million. Net profit is now expected to be $275–$280 million up from $260–$270 million. 

The medical company has seen strong demand for its products which are being used in the treatment of coronavirus. Fisher & Paykel’s respiratory humidifiers and consumables are directly involved in treating patients. The company has also benefitted from stronger sales of its Homecare products and a weaker New Zealand dollar. 

EML Payments Ltd (ASX: EML)

Shares is EML Payments have gained 70% over the past year. The payment solution company provides gift card and incentive programs, reloadable value cards, and virtual accounts for business payments. 

In the 5 years to FY19 EML Payments’s earnings before interest tax depreciation and amortisation (EBITDA) grew by 82% on a compound annual basis. Revenue increased 37% in FY19 to $97.2 million. Approximately 87% of revenue was generated from recurring revenue streams. 

Evolution Mining Ltd (ASX: EVN) 

Evolution Mining shares are up 64% over the past year. Along with other gold miners, Evolution’s share price has been boosted by the gold price increase. The gold price has risen from below $1,900 an ounce a year ago to above $2,600 an ounce currently. 

In the March quarter, Evolution produced 165,502 ounces of gold, bringing year-to-date gold production to 528,359 ounces. For FY20 Evolution Mining has provided guidance of gold production of 725,000 ounces at an all-in sustaining cost of $940 – $990 per ounce. 

Gold Road Resources Ltd (ASX: GOR)

Another gold miner on the list, the Gold Road Resources share price has climbed 62% over the past year. During the March quarter, the Gruyere Gold Mine (which Gold Road Resources has a 50% interest in) produced 59,595 ounces of gold at an all-in sustaining cost of $1,135 an ounce. Gold Road Resources reaffirmed its annual production and cost guidance in late April. 

Attributable gold sales in the March quarter totalled 31,700 ounces at an average price of $2,001 an ounce. Gold Road Resources had cash on hand and bullion of $115 million at the end of the March quarter. A $100 million revolving credit facility was drawn to $80 million giving the miner a net cash position of $35 million. 

Fortescue Metals Group Limited (ASX: FMG)

Fortescue Metals Group shares are up 61% over the past year with the miner reporting record shipments in the March quarter. Strong operating performance and demand have resulted in sustained cashflow generation and upgraded guidance. 

Fortescue reported record iron ore shipments of 42.3 tonnes in the March quarter, with year-to-date shipments a record 130.9 million tonnes. Strong free cash flow generation left the miner with cash on hand of US$4.2 billion at the end of the quarter. Net cash was US$0.1 billion, compared to net debt of US$2.9 billion a year prior 

Resmed Inc (ASX: RMD)

Resmed shares are trading up 56% from their position a year ago. Resmed makes products that have been in high demand due to the coronavirus pandemic. The medical device company has responded by ramping up production of ventilators. 

In the March quarter, revenue grew by 16% on the prior corresponding period. Net operating profit increased 39%. Resmed says it is confident in its ability to navigate through the challenging clinical and economic environment. 

Saracen Mineral Holdings Ltd (ASX: SAR)

Shares is Saracen Mineral Holdings are up 55% over the past year. Another gold miner benefiting from rising gold prices, Saracen reported record gold production in the March quarter. 

Saracen produced 158,133 ounces of gold at an all-in sustaining cost of $1,133 an ounce. The company has maintained its FY20 guidance of 500,000 ounces of gold. Saracen has large ore stockpiles exceeding 1.7Moz which will help insulate the business should mining be restricted by COVID-19 impacts. 

Xero Limited (ASX: XRO)

Xero shares have climbed 53% over the last year. The company provides cloud-based accounting software to small and medium businesses. With more than 2 million subscribers, Xero is operating in an industry where structural growth is being driven by regulation and a broad-based shift to the cloud. 

Increased remote working is also likely to hasten this shift to the cloud. Prior to the pandemic, Xero was seeing healthy growth in subscriber numbers. While this may slow in the near term, long term structural factors still work in Xero’s favour. 

More reading

• Carsales share price down 26% since February. Is it now a good buy?
• Brokers may be upgrading this ASX stock even as it delivered a plunge in profits
• Is it time to invest in shares or wait on the sidelines?
• In a post-COVID world, could Australia be the next superpower?
• 5 things to watch on the ASX 200 on Tuesday

Kate O’Brien owns shares of POLYNOVO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Emerchants Limited. The Motley Fool Australia owns shares of Xero. The Motley Fool Australia has recommended Emerchants Limited and ResMed 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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ASX tech shares took a beating in March and many are yet to recover previous highs. This means many ASX tech shares are trading at lower multiples than we’ve seen in some time.

For those with a long-term horizon, market dips are often a good time to add to the portfolio. These 3 ASX tech shares have shown promising form through the pandemic and have the potential to provide long-term rewards. 

Altium Limited (ASX: ALU)

Altium is well-positioned in the current environment, with electronic design anticipated to be relatively resilient to unfolding market conditions. Management remains firmly committed to its aspirational market leadership target of US$200 million revenue in FY20. 

Altium’s model is robust and well-diversified across industry segments and regions worldwide. Marketing and direct selling are conducted via the internet and telephone. The roll-out of new cloud platform Altium 365 is being accelerated as worldwide demand for cloud-based collaborative tools grows rapidly.

Appen Ltd (ASX: APX)

Appen reiterated its full-year guidance for earnings before interest, tax, depreciation and amortisation (EBITDA) of $125 million to $130 million last month. The company maintains a healthy balance sheet with cash resources in excess of $100 million. Its global crowd workers are ideally situated, working from home as usual. 

Appen has delivered annual compound growth in revenue of 60% over the past 5 years. A pandemic-led increase in the use of search, social media and e-commerce platforms could enhance Appen’s performance, as could the weaker Australian dollar and greater availability of crowd workers.

Arguably the largest global provider of data for machine learning, Appen is strengthening its revenue base by extending the range of customers and expanding into new geographies.

Whispir Ltd (ASX: WSP)

Whispir has shown resilience in the current downturn. A record 49 net new customers were added in the March quarter. This was thanks to increased demand for communications software due to the coronavirus pandemic. Many Whispir customers are utilising the platform to activate and coordinate their COVID-19 business continuity plans. 

Whisper provides a software-as-a-service (SaaS) communications workflow platform that is used by the government for COVID-19 communications. The platform automates interactions between businesses and people, and boasts more than 500 enterprise clients. 

Whispir added 8 international brands as customers during the quarter, demonstrating how the platform can expand into multiple use cases for customers. The company is well funded and on track to achieve its FY20 prospectus forecast of revenue of $37.84 million. Revenues increased by 20% in the most recent half while annualised recurring revenue increased 22% to $36.7 million.

More reading

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Motley Fool contributor Kate O’Brien owns shares of Altium and Appen Ltd. The Motley Fool Australia owns shares of Altium and Appen Ltd. The Motley Fool Australia has recommended Whispir 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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In morning trade the Kogan.com Ltd (ASX: KGN) share price is shooting higher following the release of a business update.

At the time of writing the ecommerce company’s shares are up 5% to $8.80.

How is Kogan performing?

Last month Kogan released an update which revealed strong third quarter sales growth.

This was driven largely by a 50% jump in sales in March following the closure of retail stores nationally. Kogan’s gross profit also grew by over 50% during the month.

Pleasingly, this strong form has continued into April and the company has seen its sales and gross profit growth accelerate.

According to the release, Kogan’s sales grew by more than 100% in April compared to the prior corresponding period.

Things were even better in respect to profits. Its gross profit grew more than 150% and its adjusted EBITDA increased by more than 200% in April. This strong month means that Kogan’s adjusted EBITDA is now up 40% financial year to date compared to the same period in FY 2019.

This was despite the company investing heavily in building its brand and growing its active customers with its largest ever monthly marketing expense in April.

It certainly appears to have paid off. Kogan grew its active customers by 139,000 during the month to 1,948,000 customers.

Long term incentive plan.

In addition to its business update, the company advised that the Remuneration Committee is proposing to introduce a long term incentive (LTI) plan for its executive directors, Ruslan Kogan and David Shafer.

Kogan Chairman Greg Ridder explained: “Ruslan and David are outstanding business leaders. They have been fundamental in building and growing the high performing company we see today, and shareholders have been rewarded with an exceptional return on their investment since IPO.”

“Recent performance of the Company highlights the solid foundations of our business – with strong customer appeal, multiple revenue streams, diverse supply chains, and world-class proprietary systems and processes. The proposed LTI grant (which will be by way of options over ordinary shares) involves at-risk equity with an additional service condition of at least three years.”

“Other than usual annual reviews, no changes to the modest fixed remuneration of Ruslan and David are proposed. The Remuneration Committee has received advice from an independent expert and believe that the proposed option grant will generate long term shareholder value. We believe the grant is in the best interests of all shareholders,” he concluded.

More reading

• 5 top ASX shares to buy and hold for a decade
• Where to invest $20,000 into ASX shares for strong long term returns
• ASX shares and investing trends that could boom post COVID-19
• 3 ASX shares I should have bought last month
• These All Ords shares have just hit 52-week highs or better

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Kogan.com 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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The CSR Limited (ASX: CSR) share price will be in the spotlight today after it posted a big drop in underlying profits.

But the decline is better than what brokers were forecasting and could give the underperforming building supplies group a much-needed boost.

The CSR share price shed more than a quarter of its value since the start of the year when the S&P/ASX 200 Index (Index:^AXJO) lost 18% of its value.

COVID-19 impact on sector

Stocks exposed to housing construction have been doing it tough as the COVID-19 pandemic threatens to bring housing activity to its knees!

CSR’s peers, James Hardie Industries plc (ASX: JHX) and Boral Limited (ASX: BLD), have also been doing it tough. The JHX share price lost 22% and the BLD share price surrendered close to 40% since January.

Shareholders in CSR will be hoping for a bit of respite after management announced a 60.6% jump in full year net profit to $125.3 million.

NPAT beats expectations

This was due to impairment charges it took in the previous financial year, although if you excluded this, underlying net profit “only” declined 25.8% to $134.8 million.

I say “only” because consensus estimates were predicting a more than 30% plunge to around $120 million.

The group’s Building Products revenue fell 6% to $1.6 billion due to weakness in the housing market even before the COVID-19 outbreak, but this is a good number given that residential construction activity was down 21% on average.

Its aluminium business helped offset some of the losses with the division posting a 63% increase in earnings before interest and tax (EBIT). This isn’t unexpected as input costs stabilised in the second half of the year while the lower Australian dollar provided another uplift.

Building on solid ground

Investors will also find it reassuring that management is yet to notice any material impact from the coronavirus on its operations. The first few months of FY21, which started on 1 April, have been pretty steady with sales at its Building Products division dipping 3%.

CSR claims to have a strong balance sheet with net cash of $95 million, but management is taking no chances. It cancelled its final dividend, suspended its on-market share buyback and secured an additional $200 million in debt.

Foolish takeaway

But the group isn’t out of the woods. While the coronavirus hasn’t derailed demand for its products, management believes its only a matter of time before it’s impacted.

The problem is CSR doesn’t know when that might happen or to what extent earnings will suffer.

This is likely to temper broker’s willingness to upgrade their forecasts on the back of the better than expected FY20 profit results.

Shareholders should enjoy any bump in CSR’s share price today as it’s going to be an anxious few months.

More reading

• Is it time to invest in shares or wait on the sidelines?
• In a post-COVID world, could Australia be the next superpower?
• 5 things to watch on the ASX 200 on Tuesday
• 3 cheap ASX 200 shares for value investors
• The latest ASX shares to be downgraded by top brokers

Motley Fool contributor Brendon Lau owns shares of James Hardie Industries plc. Connect with him on Twitter @brenlau.

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 Altium Limited (ASX: ALU) share price could come under pressure today after it warned that it could fall short of its aspirational goal of US$200 million in revenue in FY 2020.

What did Altium announce?

This morning the electronic design software company advised that it is anticipating some headwinds in May and June as a result of the ongoing restrictions and continued lockdowns associated with COVID-19 in the United States and Western Europe.

Management explained that while Altium is operationally and commercially well positioned, the consequential economic and social impacts of the lockdowns are likely to impact its performance in the final quarter of the financial year.

Altium’s CEO, Aram Mirkazemi, commented: “While engineers are actively doing prototype designs, and the electronics industry is holding up relatively well, the cash preservation priorities of small to medium size businesses are likely to affect the timing of closing sales in our typically strongest months of the year being May and especially June.”

In an effort to drive volume during these challenging market conditions, the company has launched attractive pricing and extended payment terms. It has also accelerated the introduction of its new digital online sales capability, as part of the execution of its man-out-of-the-loop strategy to bolster transactional sales capacity.

Management explained that this digital sales model will take time to ramp up but is expected to be important to support its climb to the 100,000 subscribers target by 2025.

This will be a big increase on the subscribers it expects to report in FY 2020. Altium’s CFO, Joe Bedewi, confirmed that the company remains committed to achieving its 50,000 subscriber target for the full year.

What about the rest of the business?

While Altium is best known for its Altium Designer product, there are a number of businesses that make up the group.

Mr Bedewi provided an update on how they have been performing through the crisis.

He said: “Our NEXUS team is actively closing deals and has a good pipeline for the remainder of Q4. TASKING also has performed well on a year to date basis and is further buoyed by the reopening of car manufacturing production in Europe. Octopart is receiving solid traffic to its website, as engineers search for electronic parts, and, at this point, is holding up its cost-per-click rates with distributors.”

Outlook.

Altium remains well-positioned to navigate this short term headwind. The company is financially very strong and has a current cash balance of more than US$77 million.

Mr Bedewi concluded: “While we may see a positive impact from stimulus packages to be released by governments in key economies, and are excited by the rollout of Altium 365 and our digital online sales platform, our long-term aspirational goal of US$200 million revenue for the full year will require our typically strong months of May and June to be unaffected and have the usual strong finish. At this point, given the economic consequences of the continued restrictions, this is likely to be a low probability.”

More reading

• In a post-COVID world, could Australia be the next superpower?
• Is the Altium share price a buy?
• 3 ASX growth shares to buy immediately with $3,000
• 2 ASX shares that every investor should own
• 3 of the best ASX 200 shares to buy and hold for 10 years

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