The S&P/ASX 200 Index (ASX: XJO) was out of form last week and recorded a small decline. The benchmark index ended the week 0.2% lower than where it started it at 6,111.2 points.

Four shares that fell more than most are listed below. Here’s why they were the worst performers on the ASX 200 last week:

Treasury Wine Estates Ltd (ASX: TWE)

The Treasury Wine Estates share price was the worst performer on the ASX 200 last week with a 22.8% decline. Investors were selling the wine company’s shares amid news that the Chinese Ministry of Commerce has initiated an anti-dumping investigation into Australian wine exports into China. In response to this, there is speculation China is preparing to levy hefty import duties on Australian wine exports.

Unibail-Rodamco-Westfield (ASX: URW)

The Unibail-Rodamco-Westfield share price was some way behind as the next worst performer with a 12.9% decline. This appears to have been driven by speculation the shopping centre operator is going to launch a major rights issue in the near future to see it through the crisis.

Cooper Energy Ltd (ASX: COE)

The Cooper Energy share price was out of form and dropped 10% lower. Last week APA Group (ASX: APA) announced that it would temporarily shut down its Orbost gas processing plant so it can be brought up to full operating capacity. The gas pipeline company is doing this under a revenue and cost-sharing deal with Cooper Energy. Investors didn’t appear pleased with the agreement.

Resolute Mining Limited (ASX: RSG)

The Resolute Mining share price wasn’t far behind with a 9.9% decline. Investors selling the gold miner’s shares amid news that Mali’s President Ibrahim Boubacar Keïta resigned after being detained by mutinying soldiers. Resolute’s key Syama gold operation is based in the country. During the June quarter the Syama operation contributed 63,705 ounces of gold production. This represents 59.4% of its total production of 107,183 ounces during the quarter.

More reading

• These were the best performing ASX 200 shares last week
• The ASX 200 fell 0.1% today, Suncorp shines
• Where to now for the NIB share price?
• ASX 200 flat: Suncorp surges higher, A2 Milk acquisition plans, TPG’s half year update
• Meet the latest ASX stock that’s more than doubled its full year COVID-19 earnings

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates 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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It’s been a funny week for the A2 Milk Company Ltd (ASX: A2M) share price.

After opening the week at a near record high of $19.52, the A2 Milk share price dropped almost 7% in the following days. This was after the company announced a record profit of NZ$385.8 million, a 34% increase.

So, what happened?

There is no doubt that A2 Milk has had an absolute stellar 2020 financial year. The company received a positive bump in earnings from the COVID-19 pandemic as people rushed to buy groceries and milk powder. At the same time, A2 Milk seized the opportunity to boost its shareholding in supplier Synlait Milk Ltd (ASX: SM1) to 19.8%.

And to cap it all off A2 Milk Company was included as a member of the S&P/ASX50 Index (ASX: XFL).

However the outlook provided by A2 Milk for FY21, and expectations of slower revenue growth going forward, has caused at least one broker to turn sour on the company and suggest shares are a ‘sell’. I disagree.

There’s still a lot to like about A2 Milk

Firstly, although growth may slow in the coming year, it certainly won’t stop. The company’s guidance for the 2021 financial year said it expected “continued strong revenue growth support by our regions”. This will be driven by investing more into marketing and continuing to increase market share.

Secondly, I think the A2 Milk brand is building a valuable intangible asset moat that adds significant long-term value for investors.  Having a trusted, health focused brand differentiates A2 Milk and lets the product command a premium price for what would otherwise be a commodity product.

Finally, if the company can continue to grow revenue and maintain strong margins, it stands to become a cash-generating monster in the coming years.

For the 2020 financial year, A2 Milk reported a huge return on equity (ROE) of 34%. To put this into context, data compiled by valuation guru and New York University professor Aswath Damodaran suggested the average ROE for the food processing industry was 7.9% in 2019. With no debt and minimal capital expenditure requirements, this cash can be ploughed back into growth or returned to investors.

Should you buy A2 Milk shares?

I think it’s one of the best quality companies to own today, and the A2 Milk share price is reasonable relative to its prospects for growth over the next 5 to 10 years.

I’ve made the mistake before of thinking shares in quality, growing companies looked expensive, only to watch them flourish – hello Fisher & Paykel Healthcare Corp Ltd! (ASX: FPH).

I see the A2 Milk share price in that light today. A high margin, growing business with significant potential to continue compounding returns over the coming years.

More reading

• The ASX 200 fell 0.1% today, Suncorp shines
• ASX 200 flat: Suncorp surges higher, A2 Milk acquisition plans, TPG’s half year update
• Why a2 Milk, Coca-Cola Amatil, Star, & Suncorp shares are charging higher
• a2 Milk share price on watch after announcing Mataura Valley Milk acquisition plans
• Where to invest $10,000 into ASX shares immediately

Motley Fool contributor Regan Pearson owns shares of A2 Milk. You can follow him on Twitter @Regan_Invests. The Motley Fool Australia owns shares of A2 Milk. 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’ve got my eye on Wesfarmers Ltd (ASX: WES) shares right now. The Wesfarmers share price is up 17.6% this year but I think it could climb further.

Why I like the Wesfarmers share price right now

One big reason I like Wesfarmers is its large-cap status. The Wesfarmers market capitalisation is $55.3 billion which makes it a heavy hitter within the S&P/ASX 200 Index (ASX: XJO).

Given the uncertainty we’re seeing right now, I like the safety of large companies like Wesfarmers.

It’s not just the sheer size of the company but also its earnings diversification. Wesfarmers reported solid earnings contributions from across its Bunnings, Kmart, Officeworks and Catch business units.

The Wesfarmers share price edged lower on Thursday after the full-year earnings result which showed strong earnings but a cautious FY21 outlook.

I think there was a lot to like about the result including a robust balance sheet with deep cash reserves. That was evidenced in the conglomerate’s 18 cents per share special dividend following its sale of another stake in Coles Group Ltd (ASX: COL).

That cash position is another reason why I like the Wesfarmers share price right now. Under normal circumstances, I would be worried about cash being a drag on performance.

However, the coronavirus pandemic has thrown a spanner in the works. I think holding cash could be a good idea right now, especially with inflation looking unlikely to head higher.

It leaves Wesfarmers well-placed to make some acquisitions when things settle down. Given the economic conditions are likely to worsen in the medium term, that could also present some undervalued buying opportunities.

When those opportunities present themselves, Wesfarmers will be waiting with a fistful of cash to snap up a bargain. That could be good news for the Wesfarmers share price and the company’s investors.

Foolish takeaway

The Wesfarmers share price has outperformed in 2020 but I think it has further to run.

Strong earnings, a healthy cash position and tactical buying opportunities on the horizon bode well for future growth.

More reading

• 2 ASX 50 shares to buy for your retirement portfolio
• Real reason for Kmart’s empty shelves revealed
• Should you buy ASX shares before or after reporting season?
• Buy CSL and these quality ASX blue chip shares today
• ASX 200 down 0.8%, IDP Education soars

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers 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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WiseTech Global Ltd (ASX: WTC) shares have been surging higher after a strong full-year earnings result. The ASX tech share rocketed 34% higher on Wednesday, but it’s not the only one impressing investors this month.

Here’s why I’m a big fan of WiseTech and 2 more ASX shares as we pass the halfway point of the August earnings season.

Why I like WiseTech and 2 more ASX shares this August

Let’s start with WiseTech. WiseTech is a supply chain software provider with strong market share around the globe.

The ASX tech share rocketed higher after posting a bumper earnings result headlined by a 197% surge in net profit after tax. Revenue from recent acquisitions totalled $166.4 million, up 29% from FY19 figures.

Just as important as the FY20 result was the outlook for the year ahead. WiseTech is anticipating FY2021 revenue growth of 9-19% with earnings before interest, tax, depreciation and amortisation (EBITDA) growth of 22–42%.

Those are some strong numbers that I think could justify WiseTech’s current 55.49 price to earnings (P/E) ratio.

It’s not just the tech sector that impressed me last week. I had my eye on the Domino’s Pizza Enterprises Ltd (ASX: DMP) share price, which was on the move.

Domino’s posted a solid FY20 result despite the coronavirus pandemic and associated uncertainty, with free cash flow up 90.6% to $161.8 million.

The ASX share hit a new record high after impressing investors with strong earnings. That was underpinned by strong same-store sales growth across Japan, Europe, Australia and New Zealand.

I think the outlook looks good for Domino’s in the near term. The business has been resilient despite several store shutdowns and other challenges around the globe.

Finally, the Corporate Travel Management Ltd (ASX: CTD) share price also caught my eye.

The ASX travel share is now up 57.85% in August despite posting an $8.2 million statutory net loss after tax. That included a better than expected earnings result in Q4 2020 to round out the year.

Clearly, there are plenty of challenges ahead for the ASX travel share. However, I’m bullish on Corporate Travel – looking at the medium term, I’d still expect the business sector to pick up before leisure numbers return.

That means the Corporate Travel share price may continue to climb higher and outperform its peers in the coming months. 

Foolish takeaway

These just a few of the ASX shares that caught my eye this week. It’s been a broad week for earnings with WiseTech, Domino’s and Corporate Travel spanning many sectors.

The August earnings season is arguably a great time to buy. Investors have a great look at company financials and management forecasts for the year ahead.

There are no guarantees when investing, but I think these 3 are shaping up as high-quality ASX shares to hold for the long-term.

More reading

• These were the best performing ASX 200 shares last week
• Why the Corporate Travel share price is up 57% in August
• Why I’d buy the Domino’s share price at an all-time high
• The latest ASX 200 stocks hit by broker downgrades
• After a 35% jump, is the WiseTech share price overvalued?

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of WiseTech Global. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. The Motley Fool Australia has recommended Domino’s Pizza Enterprises 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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I think at this Pushpay Holdings Ltd (ASX: PPH) share price, it make great returns over the long-term.

I’m not saying that if you invest $500 you’ll become a millionaire. But I do believe that the Pushpay share price can produce very strong returns for investors due to a number of factors.

A quick overview of Pushpay

Pushpay describes itself as a donor management system, with donor tools, finance tools and a custom community app for the faith sector, non-profit organisations and education providers.

Currently, its biggest client base is large and medium US churches. These churches have large congregations which provide an enormous amount of donations each year. Pushpay is leveraged to this through the digital donations that it processes through its system on behalf of the churches.

Recently Pushpay acquired Church Community Builder which provides a software as a service (SaaS) church management system, largely in the US.

Church Community Builder provides a platform that churches use to connect and communicate with their community members, record member service history, track online giving and perform a range of other administrative functions.

Why I think the Pushpay price share has so much growth potential

The combined Pushpay business can offer clients a stronger combined service to customers. Each business can try to sell to the other’s client base. Plus, the combined business can make a compelling offering to potential new clients. That’s good news for earnings and the Pushpay share price. 

COVID-19 conditions have really accelerated the growth prospects for Pushpay. Social distancing and gathering restrictions led Pushpay to having a stronger FY20 than it first expected. It also helps that Pushpay offers clients a livestreaming service.

In FY20 Pushpay grew its revenue by 32% to US$129.8 million. Not only did Pushpay grow its revenue by a strong amount, its operating leverage also improved substantially. The gross margin rose from 60% to 65% over the year. As a percentage of operating revenue, total operating expenses improved from 65% to 52%.

It’s no wonder the Pushpay share price has shot up since reporting.

These are impressive improvement numbers. That improvement means that Pushpay’s additional revenue in FY21 will add much more to the bottom line than the revenue added in FY19.

Earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) rose by US$23.5 million, up from US$1.6 million to US$25.1 million.

In FY21 Pushpay is hoping and expecting to at least double its EBITDAF in FY21 to between US$50 million to US$54 million.

Longer-term growth

The Pushpay share price has doubled so far in 2020. It might be too much to expect that the company can double in size again over the next eight months – but I think it could comfortably beat the overall ASX return.

In FY20 the company generated US$130 million of revenue. Pushpay is aiming for US$1 billion from the medium and large US church sector over time. An extra US$870 million of revenue would turn Pushpay into a much bigger business. Look at how much operating leverage Pushpay was able to generate by adding just US$31 million of extra revenue.

The large and medium US church sector isn’t the only growth avenue for Pushpay. There are churches in other countries as well as other religions in the US (and globally).

Plus, Pushpay itself has acknowledged that it services not-for-profits and education – these are also extremely large donation sectors that Pushpay could grow into over time. But that’s just a bonus to the current thesis. 

Pushpay is now cashflow positive, it generated US$23.5 million of operating cashflow in FY20. This will allow Pushpay, in its own words, to “assess further potential strategic acquisitions that broaden Pushpay’s current proposition and add significant value to the current business.”

Foolish takeaway

Pushpay is currently trading at under 35x FY22’s estimated earnings. I think over the next five years Pushpay could be one of the best-performing small-to-mid cap ASX shares. I believe the Pushpay share price looks very compelling in my opinion. Even after the strong run this year.

More reading

• Where to invest $10,000 into ASX shares immediately
• The smartest 7 ASX shares to buy if you have $2,000
• Where to invest $20,000 into ASX shares immediately
• Where I’d invest $10,000 today into ASX shares
• Why I would buy Afterpay and this quality ASX tech share

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. 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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Clients of collapsed stockbroking firm BBY had some good news Friday after five years of not knowing whether they would get any of their money back.

The liquidator, KPMG, announced that the first interim cash distribution would be made to former customers who have claimed owed money.

There are about 6,000 former clients who are claiming a total of $64 million. They won’t receive 100% of what they’re owed but will receive a partial repayment as shown:

Product	Equities	Exchange-traded options	Pooled accounts	Interactive Brokers (online platform)
Estimated total cents in the dollar return	73	59	26	44
First/interim distribution (cents in the dollar)	63	50	22	38

BBY was a popular Australian stockbroking company that went into administration in 2015, owing its clients millions of dollars in invested monies.

Its troubles started after a botched deal in 2014 to acquire $192 million of Aquila Resources Limited (ASX: AQA) shares on behalf of a client. 

BBY was unable to meet a margin call related to that transaction, with the ASX Ltd (ASX: ASX) also getting into hot water over bending its rules to prevent a default.

Later investigations by the liquidator triggered allegations of misuse of client funds.

Tennis legend taken to court for $3.3 million

Some of the unusual practices at BBY allegedly included executive chair Glenn Rosewall’s hiring of a psychic to come up with investment strategies.

Rosewall is the son of legendary tennis player, Ken Rosewall, who was himself a director of BBY.

The liquidator is now taking the senior Rosewall to court to claw back a $3.3 million loan repayment he received from BBY.

It is alleged that payment was received when BBY was insolvent and when other creditors had not been paid out. Rosewall is “strenuously” denying the accusation.

The civil case is scheduled for the Supreme Court starting on 8 September.

Rosewall won 8 Grand Slam singles titles over the 1950s, 1960s and 1970s.

More reading

• iSignthis hits ASX with $264 million damages claim
• ASX share price on watch as profit surges 4%
• How to turn $20,000 into over $200,000 in 10 year with ASX shares
• 5 things to watch on the ASX 200 on Monday

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 S&P/ASX 200 Index (ASX: XJO) dropped 0.14% to 6,111 points.  

There were plenty of reports and other updates from the ASX today: 

A2 Milk Company Ltd (ASX: A2M) 

A2 Milk announced today that it is engaged in discussions with Mataura Valley Milk (MVM), a New Zealand dairy nutrition business, to explore options for A2 Milk to participate in manufacturing at MVM’s facility in Southland, New Zealand.  

After some discussions, A2 Milk advises that it made a non-binding indicative offer to acquire a 75.1% interest in MVM for a total consideration of approximately NZ$270 million, based on an enterprise value of around NZ$385 million.  

MVM has now agreed to provide A2 Milk a period of exclusivity to conduct confirmatory due diligence and negotiate definitive transaction documentation.  

The ASX 200 share explained that the exclusivity arrangements are being supported by MVM’s current majority shareholder.  

A2 Milk CEO Geoff Babidge said: “As previously announced, due to the increasing scale of our nutrition business, we have been assessing participation in manufacturing capacity and capability. The potential investment Mataura Valley Milk’s recently commissioned facility, alongside China Animal Husbandry Group, aligns with this strategic objective as we look to complement and build upon our current strategic relationships with Synlait Milk Ltd (ASX: SM1) and Fonterra Shareholders’ Fund (ASX: FSF) which remain in place. Our intention would be to invest further to establish blending and canning capacity at Mataura’s facility to support the establishment of a fully integrated manufacturing plant for infant nutrition.” 

The A2 Milk share price went up 1%.  

Suncorp Group Ltd (ASX: SUN)  

Suncorp reported its FY20 result today.   

The Australian insurance division saw net profit fall by 33.9% to $384 million. The banking & wealth profit dropped by 33.5% to $242 million. New Zealand profit after tax was flat at $245 million.  

Total profit after tax from ongoing functions dropped 26.8% to $871 million and cash earnings fell 32.8% to $749 million.  

However, total net profit for the ASX 200 share jumped to $913 million thanks to a large after-tax profit from the sale of the Capital SMART and ACM Parts businesses.  

Suncorp decided to pay a final dividend of $0.10 per share, bringing the full year dividend to $0.36, down 48.6% from last year.  

Suncopr is maintaining a conservative stance during this period and it has increased its allowance for natural hazards by $130 million to $950 million as well as purchasing aggregate excess of loans reinsurance cover.  

The Suncorp share price went up 11%.  

BWX Ltd (ASX: BWX)  

Natural beauty business BWX reported that its net revenue rose by 26% to $187.7 million. The gross margin increased to 58%.  

Sukin revenue increased by 55% to $81.7 million. Andalou Naturals sales rose by 10% to $53.3 million. Mineral Fusion sales went up 16% to $28.4 million. Nourished Life sales went up 15% to $24.1 million.  

Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 30% to $27.5 million and statutory net profit jumped 59% to $15.2 million.  

The BWX board decided to declare a final dividend of 2.6 cents per share.  

BWX’s net debt improved over the year from $42.8 million last year, to $32 million at the end of FY20.  

BWX said it’s well positioned to capture further market share with an expanded offering and a protected supply chain as our core business continues to support essential services (such as pharmacies and supermarkets) whilst meeting changing demand trends.  

The company is aiming to achieve ongoing growth in revenue and EBITDA of at least 10% in FY21 and said it remains well positioned for long-term, sustainable growth.  

BWX also said its outlook has been further boosted by a $4.5 million one-off benefit to FY21 following agreement on the final consideration payable under the Egide Compensation Plan to the sellers of the Andalou Naturals business, with no impact on the carrying value of Andalou Naturals.

More reading

• Where to now for the NIB share price?
• ASX 200 flat: Suncorp surges higher, A2 Milk acquisition plans, TPG’s half year update
• Why a2 Milk, Coca-Cola Amatil, Star, & Suncorp shares are charging higher
• BWX share price leaps 8% on strong FY20 results
• Meet the latest ASX stock that’s more than doubled its full year COVID-19 earnings

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BWX Limited. The Motley Fool Australia owns shares of A2 Milk. 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 think that one of the most promising areas of the market to invest in at the moment is the tech sector.

In this area there are a good number of companies with the potential to grow strongly over the next decade. This could see them  generate outsized returns for shareholders in the future.

Three mid cap ASX tech shares that I think are worth considering are listed below. Here’s why I like them:

Bigtincan Holdings Ltd (ASX: BTH)

Bigtincan is an enterprise mobility software provider which could have a bright future ahead of it. The company’s software allows sales and service organisations to increase their sales win rates, reduce expenditures, and improve customer satisfaction through improved mobile worker productivity. It has a good number of blue chip clients using its platform including U.S. telco giant AT&T, biotechnology company Thermo Fisher, pharmaceutical company Merck, and big four bank Australia and New Zealand Banking Group (ASX: ANZ). I see this as a testament to the quality of its software.

Bravura Solutions Ltd (ASX: BVS)

Another option to consider is this leading provider of software products and services to the wealth management and funds administration industries. I think Bravura Solutions could be a great option for long-term focused investors. This is due to its strong growth potential thanks to its Sonata wealth management platform and the recent acquisitions of FinoComp and Midwinter. The latter is expected to give it a new avenue for growth in an industry benefiting from structural tailwinds.

Nearmap Ltd (ASX: NEA)

This aerial imagery technology and location data company is another tech company that I would consider buying. Due to the quality of its offering, new product releases, and its massive addressable market in the United States, I remain confident it will be a strong performer over the next decade. The company also has the option of expanding into new territories in the future to increase its total addressable market.

More reading

• Is the ANZ share price a buy?
• Which ASX bank share is the best buy for dividend income?
• ASX 200 rises 0.7%, CSL soars 6.4%
• Nearmap share price slides 13% on release of financial results
• Why a2 Milk, Kogan, Nearmap, & Resolute shares are dropping lower today

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends BIGTINCAN FPO. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd and Nearmap Ltd. The Motley Fool Australia 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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Eureka Group Holdings Ltd (ASX: EGH) shares climbed higher today after the company announced strong full year results. At the close of trade, the Eureka share price was up 5.26% to 40 cents.

What does Eureka do?

Eureka is a property asset manager of senior independent living communities in Australia. The group focuses on flexible guest and care services with 30 owned villages and 9 villages under management representing 2,015 units.

The company, headquartered on the Gold Coast, is committed to providing quality and affordable rental accommodation for seniors and disability pensioners in safe and well managed environments.

What’s driving the Eureka share price?

The Eureka share price increased following the company’s release of strong end of year results. Particular highlights included net profit after tax (NPAT) up 19% to a total of $8.1 million. Adding to this result was the revaluation of properties net gain of $1.80 million. This included a $1.09 million boost from the company’s Tasmanian village portfolio. As a result, Eureka’s earnings before interest, taxes, depreciation and amortisation (EBITDA) was also up 24% to $12.2 million.

In terms of the property manager’s inventory, Eureka made a gain of $1.03 million on the sale of some of its Terranora units. This is ongoing with 31 units yet to be sold. Eureka also experienced an uplift in its joint venture investments.

The company’s cash flows were strong once again. Net cash from operating activities strengthened due to improved occupancy, new village acquisition and a GST refund. The new village acquisition was a 124-unit village in Bundaberg, Queensland. This was funded as a result of the sale of the Terranora units and debt drawdown. Eureka’s debt facility was increased from $55 million to $60 million to partly fund the acquisition. At balance date, the undrawn amount under the facility was $5.53 million. 

Dividend

A final dividend of 0.55 cents per share, amounting to $1.27 million, has been declared. The financial effect of this dividend has not been brought to account in the financial statements for FY 2020 and will be recognised in subsequent reports. Dividends of $3.57 million were paid out over the year.

Where to now for the Eureka share price?

Looking forward, Eureka aims to further expand its core business of providing rental accommodation for independent seniors through the active management of existing assets, the acquisition of additional villages and units, and the realisation of development opportunities, including an expansion of the group’s village in Wynnum, QLD. It also aims to improve the performance of the existing portfolio with continued focus on maintaining and improving occupancy.

As a result of the pandemic, Eureka will continue to implement operational efficiency and cost reduction measures as well as streamline support services through process and systems improvements across its villages. However, the company has noted that it is not able to commit to a specific number for its financial outlook at this time.

More reading

• The ASX 200 fell 0.1% today, Suncorp shines
• 3 exciting mid cap ASX tech shares to buy for the long term
• Vintage Energy share price rockets up 9% following flow test
• Buddy share price soars 19% on record orders
• Super Retail share price leaps 21% in August ahead of Monday’s FY20 results

Motley Fool contributor Daniel Ewing 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 Vintage Energy Ltd (ASX: VEN) share price surged today, closing 9.3% higher at 9.4 cents at the end of trade. This came after the company announced “highly successful” flow test results from its Vali-1 ST1 joint venture.

Vintage Energy is a natural gas exploration and development company that was formed to address the natural gas shortage in Eastern Australia. It has been listed on the ASX since 2018.

What were the results?

The company reported that the flow test program for its Vali-1 ST1 joint venture had been successfully completed. The two-day test measured a stabilised flow rate of 4.3 MMscfd through 36/64″ choke at 942 psi.

Vintage Energy, which holds a 50% stake, said the all flow test objectives were achieved, with data now being analysed to enable reserve assessment.

“As a consequence of the flow testing of the well, our initial estimates of the potential gas flow rate for the Vali-1 ST1 well are in excess of 5MMscfd,” the company said.

Operator and 25% joint venture partner Metgasco Limited (ASX: MEL) said information from the testing would be assessed and incorporated into a commercialisation plan for the asset. This would include an estimate of the number of development wells required to efficiently produce gas and maximise returns from the Valie Field.

The company said the joint venture contained an independently verified, gross 2C contingent resource of 37.7 Bcf or 9.4 Bcf Net. 

Metgasco CEO Ken Aitken said: “I look forward to the rapid analysis of the data gathered to enable reserves to be booked and, subject to successful gas sales and tariff discussions, the JV proceeding to a development decision.”

About the Vintage Energy share price

At 30 June 2020, Vintage Energy had cash of $3,443,239 up from $2,597,761 at the end of the previous quarter.

The company raised $0.75 million in May 2020 through a share purchase plan and $2.25 million from a placement. The issue price was 3.6 cents per share.

The Vintage Energy share price is up 148.65% since its 52-week low of 3.7 cents. However, the share price is down 48.89% since the beginning of the year and down 34.29% since this time last year.

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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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