The Zip Co Ltd (ASX: Z1P) share price has surged 8.5% higher in morning trade. This follows a trading update on New York-based buy now, pay later (BNPL) provider QuadPay.

QuadPay has evolved to become one of the leading platforms in the United States (US), where the local retail market is estimated to be worth US$5 trillion per year.

Zip reported that it had entered into an agreement to acquire the remaining shares in QuadPay back in early June, as the ASX-listed BNPL provider expands on its global strategy. Zip Co has scheduled an EGM meeting to vote on the proposed acquisition of QuadPay on 31 August 2020.

Record month of July for Quadpay

Zip revealed today that QuadPay had ended the month of July with record monthly transaction volumes – higher than US$70 million, which was 30% up on the June quarter average. The monthly transaction volume is also more than 600% higher on a year-on-year basis.

QuadPay added 133,000 new customers during the month, and the company passed the 2 million customer milestone during August. QuadPay also reported to be continuing to achieve impressive high net transaction margins above 2%.

In addition, QuadPay’s enterprise sales pipeline is reportedly still strong going into the US holiday season.

New strategic partnerships and merchant agreements

QuadPay partnered with a number of Internet Retail 1000 merchants during July, such as Fanatics and Mercari. These partnerships are set to generate a combined US$3 billion in online volume. Also, all are on track to be up and running before the busy fourth quarter US holiday period.

A number of successful strategic partnerships were also finalised during July. These include agreements with Fiserv (NASDAQ: FISV). This will see BNPL services rolled out across QuadPay’s US based merchant base, in conjunction with with Fanatics.

QuadPay has also partnered with MasterCard‘s Vyze financing platform. This will enable BNPL services to be provided within the Vyze platform.

Quadpay secures new debt facility

The US BNPL provider also managed to secure a debt facility provided by Goldman Sachs and Oaktree of up to US$200 million. The new credit facility will be used by QuadPay to further expand its BNPL business throughout the US.

Brad Lindenberg, QuadPay Co-CEO, said:

The momentum we are starting to see is a testament to our product and technology capabilities which are being recognized as market leading. QuadPay is the easiest platform for enterprise merchants to integrate with, both online and in-store. With less than 15% of the Internet Retail 1000 offering an interest free BNPL service, we look forward to joining forces with Zip and rapidly accelerating our growth in market.

At the time of writing, the Zip share price was up by 8.5% to be trading at $7.15.

More reading

• Why Afterpay, Bubs, Fortescue, & Zip Co shares are charging higher
• Fortescue and 2 more ASX 200 shares to watch this week
• 5 things to watch on the ASX 200 next week
• The Afterpay share price is up a massive 700% since March. Is it still a buy?
• This ASX fund manager is going back to value in a post-COVID world. Here’s why.

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 and recommends Mastercard. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has recommended Mastercard. 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 Monash IVF Group Ltd (ASX: MVF) share price has fallen lower this morning, down 9.95% at the time of writing to 57 cents. The fall in the Monash IVF share price came after the company released its annual result for the year to 30 June 2020.

What was in the announcement?

The company had revenue of $154.4 million in the 2020 financial year, this was down 4.3% compared to revenue received during the prior financial year. According to the company, revenue was impacted by the disruption created by coronavirus and the departure of fertility specialists in Victoria. 

Monash IVF reported net profit after tax of $11.7 million in the 2020 financial year; this was down 40.9% when compared to net profit after tax of $19.9 million earned in the 2019 financial year. The company stated that there was an adverse impact to net profit after tax of $3.9 million during March to June when compared to the prior corresponding period. According to the company, this was due to the coronavirus shut down. 

Adjusted net profit after tax, which excluded irregular items, was $14.4 million, according to the company this was above previous guidance of $14 million released in June. 

Earnings before interest, tax, depreciation and amortisation (EBITDA) were $32.8 million. This compared to EBITDA of $37.2 million in the previous financial year.

The company reported that its balance sheet was strong and allowed for investment into future growth including a Sydney CBD clinic and partnerships in South East Asia. 

Monash IVF treated 14,894 patients in the 2020 financial year, this was down 7.2% compared to the number of patients treated during the 2019 financial year. Total Australian patient treatments were 13,149 in the 2020 financial year, a drop of 5.6% compared to the 2019 financial year.

The company commented on the result and its current outlook, stating;

“Whilst COVID-19 has disrupted operations since March 2020, the Group is well positioned to grow earnings going into FY21 with strong recovery in June and July 2020 across all markets with increased marketing investment.” 

About the Monash IVF share price

Monash IVF provides IVF and fertility solutions. It operates in Australia and Asia and has been listed on the ASX since 2014.

In May 2020, Monash IVF raised $80 million from investors. This was via a retail entitlement offer and a placement to sophisticated and institutional investors. The issue price was 52 cents per share.

The Monash IVF share price is up 62.9% from its 52 week low of 35 cents, however, it is down 41.2% since the beginning of the year. The Monash IVF share price is down 36.7% since this time last year.

More reading

• Why G8 Education, Monash IVF, NIB, & Uniti shares are dropping lower

Motley Fool contributor Chris Chitty 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 Reliance Worldwide Corporation Ltd (ASX: RWC) share price surged more than 23% in early trade today. That’s despite the plumbing supplies company recording a significant drop in profit for FY20.

How did Reliance perform in FY20?

In its financial report released today, Reliance headlined a 33% drop of $89.4 million in net profit after tax (NPAT) for FY20. Reliance also reported an 18% drop in adjusted NPAT of $130.3 million. Earnings before interest, taxes, depreciation and amortisation  EBITDA were $217.9 million.

Despite the hit to earnings, Reliance recorded promising revenue figures for FY20. The company highlighted a 5% lift in net sales for FY20 of $1.16 billion. However, the coronavirus pandemic heavily impacted sales in the second half of FY20, with sales performance varying across regions.

Reliance sales in the US fared well during the pandemic, with a 13% lift in FY20 net sales for the region. Sales in the Australian market saw a small growth of 2%. However, sales in Europe, the Middle East and Africa dropped 20 per cent in the second half due to the coronavirus restrictions, and fell 10% for FY20.

Reliance cited a slowdown in global residential construction due to COVID-19 for its performance in FY20. Reliance management said despite growth in demand, the company’s performance was hampered by supply chain challenges and different market responses to the pandemic.

Although Reliance reported a significant drop in net profit, the company declared a final dividend of 2.5 cents per share.

Outlook for the Reliance share price

Given the uncertain market outlook and potential impacts of the COVID-19 pandemic, Reliance did not provide earnings guidance for FY21. However, the company expected core end-markets to remain resilient in the 2021 financial year.

Reliance highlighted a 22% lift in sales in the US in July 2020. The company also noted a slight increase in sales in the APAC region and reported that sales were recovering in Europe, the Middle East and Africa.

In addition, the company said it had undertaken several restructuring initiatives in FY20 to support future growth. This included the closure of its Tennessee manufacturing facility and restructuring of activities in the UK.

As a result, the company expected to deliver annual cost savings of $25 million by the end of 2021. Synergies from its recent acquisition of John Guest were also expected to deliver annual savings of about $31.3 million by the end of year.

Foolish Takeaway

At the time of writing, the Reliance share price is trading more than 17% higher for the day. Shares in the company have been sold-down slightly after hitting an intra-day high of $3.54 earlier.

More reading

• Reliance Worldwide operations to continue in Victoria
• How will Victoria’s stage 4 lockdowns impact ASX shares?
• Why the Reliance Worldwide share price is one to watch today
• The rocketing Aussie is shaping up as a new threat to the profit season
• Top broker picks the cheapest ASX stocks to buy today

Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Reliance Worldwide Limited. The Motley Fool Australia has recommended Reliance Worldwide 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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After a poor start to the day, in late morning trade the S&P/ASX 200 Index (ASX: XJO) has edged ever so slightly higher. At the time of writing the benchmark index is up a fraction to 6,114.9 points.

Four shares that are climbing more than most today are listed below. Here’s why they are charging higher;

The Afterpay Ltd (ASX: APT) share price is up 3.5% to $81.60. This morning the payments company announced its expansion into mainland Europe through the acquisition of Spanish buy now pay later provider Pagantis. It currently provides a range of buy now pay later and traditional credit services across Spain, France, and Italy. It also has regulatory approval to operate in Portugal. Management notes that the addressable ecommerce market in these four countries exceeds 150 billion euros or $247 billion.

The Bubs Australia Ltd (ASX: BUB) share price has pushed 5.5% higher to 97.5 cents. This follows the announcement of a memorandum of understanding (MOU) with joint venture partner Beingmate. The MOU gives Bubs the opportunity to acquire an ownership interest in one of Beingmate’s infant formula manufacturing facilities in China and obtain its support in securing a SAMR brand slot. It appears to believe this is the best option it has for gaining entry into the lucrative market. Unfortunately, it will mean sharing its China-based profits with Beingmate. It is also worth noting that Beingmate doesn’t have a great track record. Fonterra lost hundreds of millions of dollars when it teamed up with the infant formula manufacturer.

The Fortescue Metals Group Limited (ASX: FMG) share price is up 3.5% to $18.62. This morning the iron ore producer released its full year results and revealed record shipments, revenue, earnings, and cashflow in FY 2020. Over the 12 months the mining giant’s net profit after tax lifted 49% to US$4.7 billion. This allowed the Fortescue board to pay a fully franked full year dividend of $1.76 per share. An increase of 54% on the prior corresponding period.

The Zip Co Ltd (ASX: Z1P) share price has jumped 8.5% higher to $7.15. Investors have been buying the payments company’s shares after it provided an update on its soon-to-be-acquired US-based QuadPay business. According to the release, QuadPay achieved record monthly transaction volume in excess of US$70 million in July. This represents a 30% increase on the June quarter average and a 600%+ increase year on year.

More reading

• Bubs share price storms higher on new China plans
• Fortescue share price pushes higher after declaring huge FY 2020 dividend
• Fortescue and 2 more ASX 200 shares to watch this week
• Afterpay share price on watch after announcing European expansion
• 2 of the best ETFs for investing in ASX shares

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 BUBS AUST FPO and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended BUBS AUST 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 Austal Limited (ASX: ASB) share price is flat this morning following the release of the company’s FY2020 results. At the time of writing, the Austal share price has edged lower to $3.58 after closing Friday’s session at $3.61. The global defence contractor’s shares were up as much as 5.5% to $3.81 at one stage before giving back all of those gains. 

What’s moving the Austal share price?

The Austal share price has edged lower this morning despite the company announcing a net profit after tax (NPAT) of $89 million for the six months ending 30 June 2020, up 45% on the prior period. The company reported a 13% increase in revenue for the full-year to $2,086 million.

Earnings before interest, tax depreciation and amortisation (EBITDA) came in at $176.1 million, a 30% jump on FY H120 results.

The company achieved record revenue, EBITDA, EBIT and NPAT. This was underpinned by expansion of commercial shipbuilding, growth revenue support in the United States and a favourable FX translation.

Austal’s cash flow from its operations remained unchanged at $164.5 million, and underlying earnings per share was at 25 cents, up 42%.

The global shipbuilder recorded a strong balance sheet of $272.4 million net cash on hand.

The company declared an unfranked final dividend of 5 cents per share. Austal has paid a total of 8 cents per share for the full year, a year-on-year increase of 33%.

What were the drivers of Austal’s results?

Austal’s FY20 results highlighted strong growth in its US segment, news of which has already been driving the Austal share price higher over the last month. Over half of total group revenue was accounted for by US Navy contracts. Three vessels were delivered with a further seven in construction.

In the company’s Australian operations, shipbuilding margins grew 210% with EBIT more than doubling (180%) following infrastructure investment over the past three years.

COVID-19 impact

The operational impact from coronavirus has been minimal on the company.

Austal did advise its commercial ferry market is likely to be affected, however it is considered a relatively small area of revenue for the business.

The current commercial market turnover for Austal is less than 10%. The shipbuilder aims to have a pipeline of $1 billion to be bided over the next three years.

FY21 0utlook

Austal did not provide EBIT guidance for FY2021 given the global economic uncertainty. However, the company has an order book of $4.3 billion with expectations that both defence and commercial ships will be delivered by FY2024.

Furthermore, Austal has committed to investing $100 million to build a modern steel shipbuilding plant in the US that is estimated to be completed within the next two years. This will position Austal to bid for work in a series of significant contracts for the US Navy.

Commenting on Austal’s FY20 results, COO Patrick Gregg said:

The financial results highlight the success of our ongoing strategy to grow our defence business, which now makes up approximately 88 per cent of the Group’s revenue across construction and support. The value of this is clear as we see that the broader Defence Market is strengthening and has largely been shielded from the economic impacts of COVID-19.

Importantly, these record earnings have translated into significant cash flow, enhancing our strong balance sheet position with $397 million of cash. This financial strength is enabling Austal to target strategic investment opportunities to drive the Company’s next phase of growth whilst at the same time increasing dividends and considering debt reductions in FY2021.

About the Austal share price

The Austal share price has recovered nearly 55% from its March low of $2.31. Whilst trading around 28% lower than its 52-week high, the Austal share price has fallen 4.8% in year-to-date trading.

More reading

• Austal share price jumps on Alabama expansion
• 3 surging ASX defence shares to buy next week

Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited. 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 Cynata Therapeutics Ltd (ASX: CYP) share price leapt by as much as 14% this morning as patient enrolment begins on the company’s COVID-19 trial.

Cynata is trialling the use of its Cymerus MSC technology in COVID-19 patients with respiratory distress. The study will be conducted in New South Wales with 12 patients to receive Cymerus MSC infusions. Efficacy of the treatment will be assessed according to levels of oxygen in the blood as well as safety and tolerability. 

The Cynata share price has since pulled back slightly to 92 cents per share, up 11.59% on yesterday’s close.

What does Cynata Therapeutics do? 

Cynata Therapeutics is a stem cell and regenerative medicine company. It is focused on the development of therapies using its proprietary therapeutic stem cell platform technology, Cymerus. Cymerus is able to achieve economic manufacture of cell therapy products, including mesenchymal stem cells (MSCs), at a commercial scale, without the limitation of multiple donors. 

MSCs are primarily found in the bone marrow and remain dormant until called upon to promote healing within the body. They age as we age, and their number and effectiveness decreases over time. MSCs are at the forefront of a new generation of treatments being investigated for use in treating diseases including osteoarthritis, heart disease, and Crohn’s disease. Cynata’s Cymerus technology allows cells for therapeutic use to be produced in virtually limitless quantities. 

COVID-19 treatment 

Cynata is now conducting a clinical trial into the use of Cymerus MSCs in the treatment of coronavirus. The trial forms part of a broader clinical development strategy for the Cymerus MSC product to be trialled in COVID-19 patients in other countries.

Commenting on the trial, Cynata’s CEO Ross MacDonald said:

Our substantial pre-clinical database in relevant disease models, together with the urgent need for more effective treatments for critically ill patients with COVID-19 patients, allowed us to accelerate planning….we are pleased to be able to move so quickly to further investigate the potential benefits our MSCs could have to treat patients in dire need during this global pandemic.

Cymerus MSCs have demonstrated promising pre-clinical trial results in several conditions that can arise from severe COVID-19 infection, including acute respiratory distress syndrome. Cynata plans to advance Cymerus MSCs into phase 2 trials for severe complications arising from COVID-19 as well as graft versus host disease. A phase 3 trial is planned for osteoarthritis.

The utility of the technology has also been demonstrated in preclinical models of asthma, diabetic wounds, heart attack, sepsis, and acute respiratory distress syndrome. 

Foolish takeaway 

Cynata joins Mesoblast Limited (ASX: MSB) in trialling treatments for COVID-19. The focus on this new clinical development area is a logical step based on the current global environment and Cynata’s solid pre-clinical foundations in respiratory and related diseases. 

The Cynata share price is currently trading at 92 cents per share, putting its market cap at just over $100 million.

More reading

• Is this ASX biotech share the next CSL?
• Afterpay and Mesoblast were among the most traded shares on the ASX last week
• Tech shares race to record highs as Bank of America tips BHP and Rio shares
• The Starpharma share price jumps on new partnership deal
• Up 230% in a year! Is the Mesoblast share price a buy?

Motley Fool contributor Kate O’Brien owns shares of CYNATA THR 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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I want to tell you the story of four companies.

The first is (shh… I have to say this quietly) a travel company.

The second is an online retailer.

The third is a consumer goods business.

The last is in the media monitoring game.

What these companies have in common is that they’re all recommendations of one of our investment advisory services, Motley Fool Share Advisor.

The other thing they have in common is that they’ve all been taken to the woodshed at one time or another over the past 18 months.

I’m sure I don’t need to tell you what’s impacting travel at the moment.

And shares of this company, Corporate Travel Management Ltd (ASX: CTD), (I own shares, for the record), have had a torrid time of late.

From around $22 in January, shares fell to under $5 by mid-March.

Ouch.

The online retailer is Kogan.com Ltd (ASX: KGN) (I own shares here, too). When the founder, Ruslan Kogan, sold a stack of shares in August last year. Before the sale, shares changed hands for $6.02. A couple of days later, they were $5.54. By early March, you could pick one up for $3.60.

The third company on our list was one of the market darlings in 2017 and early 2018. Shares sold for $7.70 a pop. The company is skincare peddler BWX Ltd (ASX: BWX), the name behind Sukin, and other brands. Fast forward almost exactly 12 months to January last year, and you could buy shares for $1.54 each.

The last on our list is iSentia Group Ltd (ASX: ISD), which provides data and analysis on ads and news mentions of companies, issues and people. Its shares sold for almost $5 in late 2015. By January of last year, they were only 25c.

Four businesses, each of which suffered precipitous drops, all for ostensibly decent reasons.

I mean seriously… travel?

And when a founder is selling, why hang around?

And BWX, which had torched a seemingly fast-growing business and butchered an acquisition?

Ditto iSentia, which had paid up for a business that ended up being worth literally nothing.

Four absolute dogs.

“Get rid of ‘em”, right?

I mean, just think for a second:

When Ruslan Kogan sells his shares… and the share price falls by more than 40%… aren’t you just a bit suspicious. I mean, he obviously knew something, right? And who wants to wear the pain of a 40% loss? Far better to cauterise the wound by selling and moving on, with a dirty look back at Ruslan, who obviously took us for mugs.

And when Corporate Travel fell… I mean the shares are off by more than 75%! Why hold onto that – if you’ll excuse the term – crap, anyway. Don’t we want shares that go up?

BWX was a basket case. Everyone could see that. Sales growth went into reverse. The company torched a heap of cash. And it lost its two most important executives.

iSentia was over. It was a shadow of itself. A botched acquisition, plus keen competitors and ubiquitous online data meant the company was never going to recover its former glory. And yes, that 95% share price fall!

The only problem is that I’m a stubborn bastard.

Despite what ‘everybody’ already ‘knew’, I didn’t sell any of them.

Not because I was being stubborn, per se. There’s no glory in that.

But because I refused to just listen to everyone else, and do what they were doing.

Truth be told, I’ve never really been one to care too much about what other people think.

I’m not one of the cool kids. Don’t feel the need to look or sound impressive.

But nor am I someone who makes a point of being disagreeable. Which hopefully makes me a good fit as an investor. 

But back to our Four Horsemen.

While people were bleating about Ruslan’s share sales, we saw no reason to panic. The numbers were good, and the trajectory was right.

Our thesis called for a steady long-term growth in customers, spending more across more product categories, encouraged by Kogan’s clever marketing and product choices. Oh, if you’re prone to conspiracy theories, Ruslan must have known something. (Also, Bill Gates and 5G are out to get you. He’s probably reading this right now…).

In the end, Ruslan Kogan left millions on the table. Shares went from $3.60 to currently sit north of $22. His sale, at just under $6, would have quadrupled in value. No, he’s not crying into his coffee, and nor should he be. We never had a problem with him selling, and good luck to him. In the meantime, his continued focus on running the company has made a lot of money for a lot of people.

So much for the conspiracy (but maybe that’s just what they want you to think )

And Corporate Travel?

Those $5 shares of the terminally injured business are now selling for around $13.40. Not dead after all.

What about BWX?

After a long time in the doldrums, they’re trading 300% higher than they were 18 months ago.

Four out of four coming righ…

Not so fast.

Poor old iSentia is still completely languishing, at almost the same level as last January.

So why include it?

Because I’m not perfect, and cherry-picking just the good stuff is disingenuous.

Sometimes, holding on doesn’t work out.

I’m not ashamed to admit I’m wrong sometimes.

(And, let’s be clear, any of these four companies could change course at any time. Beware of people declaring victory – or defeat!)

Investing isn’t about always being right (it’s not possible).

It’s about being right as often as possible, while making sure you make enough money from the winners to cover the losers with enough left over to beat the market.

It’s not easy.

It’s often emotionally – and financially! – challenging.

Very, very few companies go up and to the right on the old share price chart, without any volatility.

My point, then, is that letting the market tell you what to do is just plain silly.

The market thought Kogan shares were only worth $3.60. That Corporate Travel was only worth $5. And that BWX was worth only $1.50 and change.

Kogan shares now sell for six times that price. Corporate Travel for more than 2.5x. And BWX about 3x.

And yes, iSentia for peanuts.

But overall?

Overall, I’d be very happy to own those four companies. Yes, even the loser, if it meant I also got to own the winners. Of course, I’d be happy just to own the winners, but my crystal ball is on the blink.

I’m also pretty happy that our members at Motley Fool Share Advisor have benefited from these gains, too. We ask them to put their trust in us, and I imagine that’s easier said than done when the market falls out of love with the companies we recommend!

Remember, pessimism always sounds smart, but it’s usually self-indulgence and feelings of intellectual superiority dressed up as sober analysis.

You – and I – will make mistakes. We’ll be wrong. 

But so will the market.

Don’t let it – or the Negative Nevilles and Nellies – tell you what to do.

Fool on.

More reading

• Are Webjet and other ASX travel shares taking off?
• ASX 200 Weekly Wrap: Blue chips, earnings drag ASX lower
• These are the 10 most shorted shares on the ASX
• These were the best performing ASX 200 shares last week
• WiseTech and 2 more ASX shares outperforming this earnings season

Scott Phillips owns shares of Corporate Travel Management Limited and Kogan.com ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended BWX Limited and Corporate Travel Management Limited. The Motley Fool Australia has recommended iSentia Group Ltd and 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 Uniti Group Ltd (ASX: UWL) share price has dropped lower this morning following the release of its full year results.

At the time of writing the shares of the Telstra Corporation Ltd (ASX: TLS) challenger are down 3.5% to $1.58.

How did Uniti perform in FY 2020?

Uniti was a solid performer in FY 2020 and delivered strong sales and earnings growth thanks largely to the acquisitions of LBNCo, OPENetworks, and 1300 Australia during the year and organic growth in the second half.

For the 12 months ended 30 June 2020, the company delivered a 306% increase in revenue to $58.2 million.  

Thanks to a notable increase in its margins, Uniti’s earnings grew at an even quicker rate. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $26.5 million. This compares to negative EBITDA of $0.9 million a year earlier.

Pleasingly, this EBITDA growth looks set to continue in FY 2021. At the end of the period, the company’s annualised underlying EBITDA run rate stood at $41 million.

Its performance in the new financial year will also be boosted by the $532 million acquisition of OptiComm. This acquisition is expected to complete in October and be 23% earnings per share accretive (inclusive of synergies).

If the OptiComm acquisition completes successfully, management expects to be operating on an EBITDA run rate of $90 million per annum.

Management commentary.

Uniti Group’s Managing Director and CEO, Michael Simmons, was pleased with its transformational year.

He commented: “FY20 has seen Uniti Group completely transform from a loss-making, fledgling start-up to a highly profitable, diversified and growing organisation, with the platform set for further marked expansion over the coming years.”

“Whilst we are pleased to have secured a number of materially accretive business acquisitions during FY20, what we are most proud of is that our team has delivered strong organic growth in the last 6 months, a period in which no new acquisitions were undertaken and the nation was (and remains) in the midst of dealing with the impacts of COVID-19 and with no financial contributions received from JobKeeper.”

“This is evidence that we are building a business with highly defensive qualities, capable of making strategic acquisitions, integrating them effectively, and delivering forecast earnings accretion, enhanced by organic growth,” he added.

Outlook.

No real guidance has been provided for FY 2021, but the company has spoken about its plans.

Management has suggested that its acquisitions could continue for its Consumer & Business Enablement business in FY 2021, subject to market and regulatory changes.

It also advised that it expects its Wholesales & Infrastructure business to continue to grow in FY 2021. This is based on strong contracted pipeline. It notes that there has been minimal slowdown in the construction of new projects since COVID-19. As a result, strong net active port growth is expected despite higher vacancy rates and expected delays in/lower settlements in the property sector.

The company also revealed that adjacent market opportunities will be actively pursued during the year.

More reading

• The Reliance share price is rocketing up despite drop in net profit. Here’s why.
• Why Afterpay, Bubs, Fortescue, & Zip Co shares are charging higher
• Austal share price flat despite solid FY20 results
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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 Telstra 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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Qantas Airways Limited (ASX: QAN) has announced the removal of the role of Qantas International chief executive officer.

Tino La Spina, who currently serves in the role, will exit the company at the end of the month.

The lengthy ongoing downtime of international flights as a result of COVID-19 forced the company’s hand, according to group chief executive Alan Joyce.

“The COVID crisis is forcing us to rethink our business at every level. It’s increasingly clear that our international flights will be grounded until at least mid-2021 and it will take years for activity to return to what it was before.”

The responsibility for international operations will be handed to Qantas Domestic CEO Andrew David, who also looks after Qantas Freight.

International fleet will be idle for a while 

Joyce warned last week that the airline would concentrate on the domestic business before even thinking about re-starting its international routes.

Even the Australia–US flights, which are usually a bread-and-butter earner for the airline, would need to wait.

“The US, with the level of prevalence there is probably going to take some time. It will probably need a vaccine before we could see that happening,” he said.

“We potentially could see a vaccine by the middle or the end of next year and countries like the US may be the first country to have widespread use of that vaccine. So that could mean that the US is seen as a market by the end of 21, hopefully we could, dependent on a vaccine, start seeing flights again.”

La Spina spent 14 years at Qantas, also serving as chief financial officer.

“He’s a talented executive who brings his trademark enthusiasm to every challenge. I know I speak for the rest of the executive team and for the board in thanking him sincerely for the huge contribution he has made,” said Joyce on Monday.

Qantas last Thursday announced a $2.7 billion loss-before-tax. Its share price had since risen to rest at $3.90 over the weekend, before dropping to $3.82 in early trade today.

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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. 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 Senex Energy Ltd (ASX: SXY) share price is this morning edging higher after the oil and gas company reported production and earnings before interest, taxes, depreciation and amortisation (EBITDA) growth at the top end of upgraded guidance. At the time of writing, the Senex share price has risen 3.8% to 27 cents. Senex Energy is delivering on its promised transformation into a material east coast natural gas producer with considerable expansion in the works. 

What does Senex Energy do? 

Senex Energy is an oil and gas exploration and production company. It has a portfolio of onshore assets located in Queensland and South Australia. Senex has 16 oil fields in the Cooper Basin, Australia’s largest onshore oil and gas province. The company also holds around 2,000 square kilometers of gas acreage in the Surat Basin on Australia’s east coast. 

What’s moving the Senex share price? 

The Senex share price was boosted after the company reported a 73% increase in production which reached 2.1mmboe. Sales revenue increased 28% in FY20 to reach $120 million. Underlying EBITDA increased 51% to $53 million and operating cashflow was up 16% to $52 million. During the financial year, Senex Energy completed its $400 million Surat Basin gas development project. This means a platform is now in place to support material production expansion and acceleration from extensive gas reserves positions. 

CEO Ian Davies said, “Our success in FY20 sees Senex’s transformation to a diversified oil and gas producer now complete. We have a low-cost business model with a diversified asset portfolio and material acceleration and expansion growth.” 

With the onset of coronavirus, Senex Energy implemented protocols to mitigate the impacts of the pandemic. This ensured business continuity and uninterrupted operations throughout the critical period. Capital works programs continued on schedule. Action was also taken to streamline operations which will deliver material and ongoing cost savings. “Senex remains a highly cost competitive, agile, and scalable business well positioned to deliver on its growth strategy,” said Davies. 

What’s the outlook for Senex Energy? 

Senex Energy’s outstanding production performance in FY20 has reset expectations. The company is now targeting production of 3.6 – 4.1mmboe from its foundation asset base. This is an increase of half a million barrels compared to baseline guidance provided earlier this year. With an ongoing focus on operating and cost efficiencies, Senex Energy has maintained FY22 earnings and cashflow targets despite the lower commodity price outlook. 

The balance sheet remains strong with $80 million in liquidity at 30 June 2020. Deleveraging is underway with a targeted net cash position by the end of FY22. Davies commented, “After an incredibly successful year, Senex has unquestionably delivered the foundations to achieve a step change in annual production, cashflow, and earnings”.

The Senex share price has recovered nearly 108% since its March low but has fallen 22.9% in year-to-date trading.

More reading

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Motley Fool contributor Kate O’Brien 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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