The Advance NanoTek Ltd (ASX: ANO) share price could come under pressure on Thursday following the after-hours release of its FY 2020 results.

How did Advance NanoTek perform in FY 2020?

For the 12 months ended 30 June 2020, the sunscreen-focused advanced materials company delivered revenue from ordinary activities of $17.97 million. This was a 46% increase on the prior corresponding period and in line with its May guidance for revenue of $18 million.

One metric that did fall short of its guidance was its profit before tax. Advance NanoTek reported a 121% increase in profit before tax to $7.46 million. This compares to the guidance of $8.4 million for FY 2020 it gave on 11 May. No explanation was given in relation to why the company hit its sales target but fell short of its profit before tax guidance.

On the bottom line, the company reported a net profit after tax of $5.3 million, which was down 44.7% on the prior corresponding period. Though, it is worth noting that FY 2019’s profit after tax was positively impacted by its decision to write back a tax benefit of $6.25 million.

FY 2021 outlook.

The increasing demand for hand sanitiser globally during the pandemic looks set to impact its sales in FY 2021. Management notes that this increase is limiting the production capacity of manufacturers for products such as sunscreens.

The company is also anticipating a gap in sales over the next three months as distributors sell down inventory. While management expects the first half to be an improvement on the first half of FY 2019, it looks likely to be down on the corresponding period in FY 2020.

Despite this, Advance NanoTek has been ramping up production and building up its inventory. Management commented: “The Board is very satisfied with this new strategy because ANO has significantly shortened delivery times-frames to five days and reduced the cashflow burden on our distributors of having to hold significant inventory in their warehouses.”

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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 Advance NanoTek 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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Investment management firm Pinnacle Investment Management Group Ltd (ASX: PNI) saw its share price rocket 28.8% higher in July alone, and it’s now up by 40.3% since the start of last month.

The Pinnacle Investment share price hit a monthly high of $5.19 on 30 July, before following the broader market down to close the month at $5.01 per share. That earns it a spot among the top performers on the All Ordinaries Index (ASX: XAO) last month.

Year-to-date, the Pinnacle Investment share price has gained 18.02%, after falling 1.96% in today’s trade. Over that same time the All Ords — down 0.5% today — lost 9.9%.

Like most stocks, Pinnacle fell sharply during the big pandemic-fuelled equity selloff in late February into mid-March. Pinnacle shares bottomed on 25 March at $2.51 per share. Since then, the Pinnacle Investment share price has gained a whopping 119%.

What does Pinnacle Investment Management do?

Pinnacle is an Australian-based investment management firm with multiple affiliates. The company works to establish and support a wide range of investment management firms. It provides investment managers with distribution, fund infrastructure and support services. Its affiliated managers operate autonomously.

As at 31 May 2020, Pinnacle’s 15 affiliates managed a combined $57.0 billion in assets covering a range of asset classes.

Why did the Pinnacle Investment share price shoot higher?

In an announcement on 6 July, Pinnacle reported that 5 its affiliates earned approximately $25.8 million in performance fees for the 2020 financial year. At the time, Pinnacle forecast the performance fees would increase its net profit after tax (NPAT) by $6.7 million. Pinnacle’s share price surged 10.4% the day following its announcement.

Pinnacle also is a likely beneficiary of a wider shift away from traditional banks as investors seek to take more control of their finances. This trend gained traction after the Royal Commission into banking and financial services unearthed a range of unethical practices amongst some of Australia’s best known banks and financial institutions.

Annual shareholder report

Pinnacle released its annual shareholder report yesterday. Coming in at $32.2 million, the company’s NPAT attributable to shareholders is up 5.6% from the $30.5 million achieved in the 2019 financial year (FY19).

Earnings per share (EPS) attributable to shareholders also increased year-over-year to 17.9 cents. That’s up 4.7% from 17.1 cents in FY19.

Pinnacle’s fully franked final dividend per share of 8.5 cents saw total dividends reach 15.4 cents, the same total dividend payout as the previous year.

The Pinnacle Investment share price is currently sitting at $5.50 per share with a market capitalisation of $1.02 billion.

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Motley Fool contributor Bernd Struben 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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If you’re young and are just starting out with investing, you might focus on growth shares like Zip Co Ltd (ASX: Z1P) that offer potentially strong returns.

This is because, with time on your side, you can afford to invest in higher risk shares as you have the opportunity to recover your losses further down the line if things don’t go to plan.

But when you are approaching retirement, I feel your focus should shift to lower risk options that offer income and capital preservation.

With that in mind, I have picked out two ASX shares which I think would be great options for a retirement portfolio:

Coles Group Ltd (ASX: COL)

I believe this supermarket giant would be a fantastic option for a retirement portfolio. This is due largely to its solid long term outlook and defensive qualities. The latter has been on display for all to see this year during the pandemic. Coles looks set to deliver a very strong profit result later this month, which should put it in a position to increase its dividend nicely. I expect more of the same in FY 2021, especially given recent lockdowns, and for its growth to continue over the next decade and beyond. Another positive is its favourable dividend policy which sees it pay out between 80% and 90% of its earnings to shareholders. Based on the current Coles share price, I estimate that this will mean a 3.4% fully franked dividend yield in FY 2021.

Rural Funds Group (ASX: RFF)

Another top option for a retirement portfolio could be this agriculture-focused property group. This is because of the quality of its assets and its positive long-term distribution outlook. Thanks to its long-term tenancy agreements and periodic rent increases, I believe Rural Funds will be able to grow its distribution at a consistently solid rate long into the future. An added bonus is that it pays its distribution in quarterly instalments, providing investors with a regular source of income. In FY 2021 Rural Funds intends to pay an 11.28 cents per share distribution. Based on the latest Rural Funds share price, this equates to a 5.4% yield.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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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There are some ASX shares that look absurdly cheap right now in my opinion.

I’d like to snap up some of them for my portfolio. There are plenty of businesses that seem troubled due to COVID-19 impacts – I wouldn’t want to buy those. It could be like trying to catch a falling knife.

There are other shares that have good growth potential, but their share prices are too eye-watering for me at the moment. I’m thinking about shares like Kogan.com Ltd (ASX: KGN) and Afterpay Ltd (ASX: APT).

But I think these ASX shares could be very cheap buys right now:

Share 1: Vitalharvest Freehold Trust (ASX: VTH)

Vitalharvest is a real estate investment trust which owns some of the largest aggregations of berry and citrus farms in Australia. Those farms are leased to leading horticultural business Costa Group Holdings Ltd (ASX: CGC).

From those existing farms it receives a solid fixed rental return as well as variable rent in the form of 25% of the profit generated by those farms. The last 18 months has been quite difficult for Costa (and Vitalharvest’s) earnings, but I think we have passed the worst point.

I think increased earnings and distributions from improved variable rent could be a boost for shareholders and the Vitalharvest share price.

Another boost could come from the new manager Primewest Group Ltd (ASX: PWG). Primewest plans to look for new acquisition opportunities for the ASX share in both Australia and New Zealand.

It’s going to look for farms, processing and manufacturing facilities for food, food and beverage packaging facilities and storage facilities relating to food. I think this wider investment scope, and a regular acquisition plan, will make more investors take notice of Vitalharvest.

It had a net asset value (NAV) of $0.95 per unit at 31 December 2019. At the current Vitalharvest share price that’s a 19% discount, assuming the NAV hasn’t changed. There’s a chance the NAV has grown since then. Of course, it could also have fallen.

Using the last 12 months of distributions, it offers a current distribution yield of 6.2%.

Share 2: NAOS Small Cap Opportunities Company Ltd (ASX: NSC)

This is a listed investment company (LIC). The job of a LIC is to invest in other shares on behalf of shareholders.

Some of its current investments include retirement living business Eureka Group Holdings Ltd (ASX: EGH), IT and telecommunications provider Over The Wire Holdings Ltd (ASX: OTW) and IP voice network business MNF Group Ltd (ASX: MNF). These businesses are proving defensive during COVID-19. For example, one of MNF’s customers is Zoom, the video conferencing business, which has seen a large amount of growth.

This LIC looks for ASX shares with market caps between $100 million and $1 billion. It has a high-conviction portfolio of around ten businesses, meaning it has a large position in each share with an aim of holding for them for the long-term.

I think this LIC is really cheap because of the discount to its net tangible assets (NTA). At 30 June 2020 it had pre-tax NTA per share of $0.68. At the current NAOS Small Cap Opportunities Company share price it’s trading at a 23.5% discount to the June NTA.

The LIC has had a tough couple of years, but I think performance will return to a more normal level as the economy recovers from COVID-19. FY20 was a solid year for the Naos LIC, its 2.6% portfolio return (after expenses, before fees) was 8.26% better than the return of the S&P/ASX Small Ordinaries Accumulation Index.

The ASX share seems to have a floor of a quarterly 1 cent per share dividend, equating to an annual 4 cents per share. This is a grossed-up dividend yield of 11%.

I think the NTA discount is so large that you can’t go too wrong with this pick, unless there’s another crash later this year due to COVID-19 or the US election.

Foolish takeaway

I think both these ASX shares look very cheap and there’s a good chance the discount to their underlying values will close up over time. Even if they don’t rise, shareholders will be rewarded with seemingly large income payments over the next 12 months. At the current prices I’d probably go for Vitalharvest, but I’d be happy to buy both.

More reading

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Tristan Harrison owns shares of NAO SMLCAP FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd and Over The Wire Holdings Ltd. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO and MNF Group Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Kogan.com ltd and Over The Wire Holdings 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 S&P/ASX 200 Index (ASX: XJO) fell by 0.6% today to 6,001 points.

COVID-19 restrictions continue to get stronger across the country. People travelling from NSW to Victoria will now have to quarantine in a hotel for 14 days. Meanwhile, Queensland has shut the border to NSW and ACT.

Telstra Corporation Ltd (ASX: TLS) asset sale

Australia’s biggest ASX 200 telco announced today that it has entered into an agreement to sell its data centre complex in Clayton, Victoria, to Centuria Industrial REIT (ASX: CIP) for $416.7 million.

The sale includes a triple-net lease-back arrangement which means Telstra will keep ownership of all the IT and telco equipment. Telstra will be responsible for the operations, upgrades, repairs, future capex spending and the security.

The lease is for an initial period of 30 years with two 10-year options for Telstra to extend the lease. Centuria said that the data centre complex had an initial yield of 4.2% and it had a gross lettable area of 26,139 square metres.

The 3.2 hectare complex is 25km from the Melbourne CBD and includes 10 buildings. It has Telstra’s newest 6.1MW data centre, its adjacent 6.6MW data centre and the associated energy centre.

Telstra CEO Andy Penn said: “As part of T22, we have an ambition to monetise up to $2 billion worth of assets to strengthen our balance sheet. This deal means we have no reached over $1.5 billion. Data centres are an incredibly important part of the digital ecosystem and we continue to own and operate world-leading facilities in Australia and overseas.”

The Telstra share price fell 2.3% today.

Centuria Industrial REIT FY20 result and capital raising

Centuria announced its FY20 result and a capital raising along with the Telstra data centre acquisition.

The ASX 200 share’s net rental profit, called the funds from operations (FFO), was $63.5 million for the year. This translated to FFO per unit of 18.9 cents, down from 19.3 cents.

The industrial real estate investment trust (REIT) announced a full year distribution of 18.7 cents per unit, up from 18.4 cents last year.

Its gearing reduced from 37.4% last year to 27.2% at 30 June 2020. The net tangible assets (NTA) per unit increased from $2.73 to $2.82 at the end of FY20.

In FY21 the REIT is guiding that FFO per unit will be 17.4 cents and the FY21 distribution will be 17 cents.

Not only did the ASX 200 share announce the acquisition, but it’s also buying a $16.4 million industrial facility in Smeaton Grange, NSW and a $14 million facility in Tullamarine, Victoria.

To fund all of these new properties it’s doing a fully underwritten entitlement offer of $340.8 million at an issue price of $3.15 per unit. That’s a 4.8% discount to the last closing share price yesterday.

Centuria Office REIT (ASX: COF) FY20 result

Another Centuria property fund also announced its result today.

Management said that the REIT performed well despite the difficult operating conditions because of COVID-19 impacts. Around 25% of its income is derived from Australian state and federal government tenants.

Its funds from operations rose by $24.2 million to $85.4 million. However, in per-unit terms FFO actually declined slightly to 18.6 cents. The distribution increased slightly to 17.8 cents, up from 17.6 cents. Distribution guidance for FY21 is 16.5 cents per unit.

The REIT’s NTA didn’t change, it was still $2.49 at the end of FY20. Gearing increased slightly to 34.5%.

Centuria Office Fund manager Grant Nichols said: “We believe COF provides quality, highly connected and affordable office space at a time when tenants are focused on their operating costs. Due to its high occupancy, strong underlying tenant covenants and an average building age of 15.9 years, COF remains well pleased to continue delivering attractive income returns to unitholders, with FY21 distribution guidance equating to a current distribution yield of around 9%.”

The forward distribution yield guidance may have been 9% when Mr Nichols delivered that statement, but the Centuria Office REIT share price rose 6.6% today, reducing the prospective yield for future buyers.

More reading

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Motley Fool contributor Tristan Harrison 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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