Tag: Motley Fool Australia

The REA Group Limited (ASX: REA) share price will be one to watch this morning following the release of its results for the 12 months ended 30 June 2020.

How did REA Group perform in FY 2020?

In FY 2020 REA Group was presented with challenging market conditions and unprecedented global uncertainty because of the pandemic.

Its first half performance was impacted by significant declines in residential listings and new project commencements. This was driven by a restrictive lending environment following the Royal Commission. Whereas the second half was of course impacted by lockdowns, social distancing, and economic uncertainty caused by the coronavirus pandemic. This ultimately led to national listing volumes falling 12% in FY 2020.

Despite this, REA Group handed in a robust set of numbers this morning. For the 12 months ended 30 June 2020, the property listings company reported revenue of $820.3 million. This was a decline of just 6% on the prior corresponding period.

And thanks partly to a 9% reduction in operating expenses to $328.2 million, REA Group’s earnings before interest, tax, depreciation, and amortisation (EBITDA) fell just 5% to $492.1 million. The latter compares favourably to the analyst consensus estimate of $468 million for FY 2020.

On the bottom line, REA Group posted a 9% decline in net profit after tax to $268.9 million and earnings per share of 204.1 cents.

At the end of the period the company had a strong balance sheet, with low debt levels and a cash balance of $223 million.

This balance sheet strength allowed the REA Group board to declare a full year dividend of 110 cents per share, down 7% on FY 2019’s dividend.

Management commentary.

REA Group’s CEO, Owen Wilson, was very pleased with the way the company performed during a difficult 12 months.

He commented: “I am proud of the way REA has responded to the COVID-19 crisis, quickly adapting our products and experiences to enable Australians to continue to find, buy and sell property. In these challenging conditions, our products and services are playing an increasingly vital role in supporting our customers and vendors.”

“Pleasingly, our flagship site realestate.com.au extended its leadership position in FY20. Each month, 60% of Australia’s adult population is visiting our site, with a new record of almost 12 million people in May,” said Mr Wilson.

FY 2021 outlook.

Management notes that the pandemic continues to create widespread market volatility. In light of this and the economic uncertainty, it advised that it is difficult to predict market outcomes.

However, FY 2021 started positively. In July, national residential listings were up 16% with Sydney up 47% and Melbourne up 13%. Management notes that the magnitude of the listings increases reflect the weak comparatives in July 2019.

Furthermore, despite the effects of COVID-19, it saw strong levels of buyer enquiry in July underpinned by low interest rates and healthy bank liquidity.

Though, it acknowledges that it will be a different story in Melbourne in August because of lockdowns. And combined with listing volume declines in the Commercial and Asia businesses, it expects to see an adverse impact on its first quarter revenue.

In addition to this, the company revealed that it has deferred price increases that were due to commence on 1 July. Once conditions improve sufficiently, it will consider implementing these increases. In the meantime, it hopes to offset this somewhat by keeping its core operating costs at least flat for the full year.

Mr Wilson concluded: “The property market has shown great resilience, bouncing back from the lows of COVID-19, however, the extent of this recovery is still dependent on the efforts to contain the virus and the outlook for the underlying economy. We have a strong balance sheet, a talented workforce and a loyal audience which will see us emerge an even stronger business once more normal conditions return.”

More reading

• 5 things to watch on the ASX 200 on Friday
• The best blue chip ASX shares to buy today
• House prices are falling – which ASX shares are in the firing line?
• TPG and 1 other ASX share to buy and hold for long-term growth
• Where to invest $20,000 into ASX shares right now

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

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The Myer Holdings Ltd (ASX: MYR) share price is on watch today after the department store conglomerate gave an update on trading after the close of market last night. Myer revealed that trading was severely impacted by COVID-19 and that finance with its existing lenders had been extended. The Myer share price is already 61% lower in year-to-date trading.

Stores closures

Myer closed all 60 stores in late March, standing down approximately 10,000 team members. Stores were progressively reopened from 8 May 2020, with a majority reopened by 27 May 2020. Myer has revealed that store closures had a severe impact on sales. In addition, sales have been severely impacted by a significant reduction in foot traffic, especially at CBD locations. In the latest blow, metropolitan Melbourne stores have now been closed for a further period of six weeks under stage 4 restrictions.

Online channel 

Myer says that growth in online sales was strong during 2H FY20, and accelerated significantly during the period of store closures. The retailer will no doubt be hoping for a further boost in online sales during the latest lockdown. But given Myer conducts the majority of sales via its physical stores, online sales are highly unlikely to compensate for revenues lost to store closures. 

Cost measures

Myer says it has instituted disciplined cost control measures in the face of the pandemic. It has also received support from the federal government via JobKeeper and rent relief and deferrals. This means that despite the loss of revenue from store closures, the company expects to report a small cash positive position at the end of FY20. This compared favourably to net debt of $39 million at the end of FY19. 

Agreement has been reached with Myer’s bankers to extend its banking facility until August 2022. The amended $340 million facility is $20 million less than the existing facility, in part reflecting the company’s success in deleveraging its balance sheet. Lenders have agreed no covenant testing will be required in FY20 given the significant impact of COVID-19 on Myer’s operations in 2H FY20.

Turnaround

Prior to the onset of coronavirus, Myer was in the midst of a multi-year turnaround plan which aimed to consolidate store offerings and improve profitability. The retailer saw a 3.8% drop in total sales in 1H FY20 which fell to $1,607.9 million. Online sales grew 25.2% to $168.2 million. This represents around 10% of total sales, meaning it was not enough to offset the decline in in-store sales during the half. 

About the Myer share price

Myer had been experiencing subdued conditions even prior to the pandemic – profit fell 26.9% in the first half and the dividend remained suspended. The company still has considerable work to do to execute its turnaround plan, and must now do so in some of the toughest operating operating conditions in its history. The Myer share price has recovered 90% since its March low of 10 cents but is still down 61.22% over the past year. The Myer share price has not traded over $1 since May 2017.

More reading

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• These are the 10 most shorted shares on the ASX

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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Is the Australian Foundation Investment Co.Ltd. (ASX: AFI) (AFIC) share price a buy?

There are a number of things to consider.

Quick overview of AFIC

AFIC is a listed investment company (LIC) which has been operating since 1928, it’s one of the oldest listed investment businesses in Australia.

The job of a LIC is to invest in ASX shares on your behalf. It typically owns around 80 to 100 companies in its portfolio across a range of industries. AFIC chooses those businesses for their ability to perform through economic cycles and generate returns over the long term.

Costs

One of the main reasons to consider investing in AFIC rather than other investment managers is AFIC’s extremely low management expense ratio (MER). The MER in FY20 was 0.13%. That’s almost as cheap as the cheapest ASX-focused exchange-traded funds (ETFs) like Vanguard Australian Shares Index ETF (ASX: VAS) and BetaShares Australia 200 ETF (ASX: A200).

The lower the costs to manage the portfolio the higher the net returns are to shareholders. That’s one of the main reasons why the AFIC share price is attractive.

On the costs side of things, AFIC is one of the best value options.

Net return performance

Costs are only part of the equation. It’s the net returns that are the most important attribute.

In the recently-announced FY20 result AFIC announced that its net asset per share growth including dividends (and franking credits) outperformed the S&P/ASX 200 Accumulation Index (including franking credits) by 3.5% over the 12 months to June 2020. However, AFIC has underperformed the index by 0.8% per annum over five years and 0.1% per annum over the past decade.

The FY20 performance is a good start to the recovery of long-term underperformance though. Better long-term portfolio returns would be good news for the AFIC share price.

Dividends

But some investors may be less focused on total returns. Perhaps dividends are more important as long as AFIC delivers long-term capital growth.

AFIC’s dividend has been very reliable this century with no dividend cuts. However, there hasn’t been much dividend growth over the past few years. It’s sticking to an annual dividend of $0.24 each year.

The danger of sticking to the same dividend payment each year is that you can eat into the portfolio value if the total returns aren’t strong enough. We can see that in FY20; AFIC generated almost $0.20 of earnings per share (EPS) but paid $0.24 of dividends per share. That means it paid more than 100% of the FY20 profit out as a dividend.

If AFIC’s underlying ASX share holdings can grow then it isn’t a problem, but if AFIC keeps paying out more than 100% of its profit then the capital value would slowly shrink and make it harder to maintain the dividend. That would be bad news for the AFIC share price.

Many of AFIC’s big holdings are being impacted by COVID-19 at the moment.

AFIC’s biggest holdings

At 30 June 2020 its biggest positions were: CSL Limited (ASX: CSL), Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), Wesfarmers Ltd (ASX: WES), Transurban Group (ASX: TCL), Westpac Banking Corp (ASX: WBC), Macquarie Group Ltd (ASX: MQG) and National Australia Bank Ltd (ASX: NAB).

With such a large focus on financial shares, it’s clear that the AFIC share price is fairly reliant on the Australian economy to perform well. That could be tough with the recent Victorian lockdowns and the expected economic hit.

Is the AFIC share price a buy?

An interesting element of LICs is that sometimes they can trade at a premium to their net tangible asset (NTA) value and sometimes they can trade at a discount.

In the run up to the 2019 federal election AFIC (and many other LICs) were trading at a discount to their NTAs. But now AFIC is trading at a premium again, so it’s not cheap today. It currently offers a grossed-up dividend yield of 5.3% – not bad for retirees. But otherwise I think there are better options for growth and dividends out there for most investors.

More reading

• Is the AFIC share price a buy after a 41% drop in profit?

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia owns shares of Transurban Group 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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On Thursday the S&P/ASX 200 Index (ASX: XJO) was back on form and pushed higher. The benchmark index rose 0.6% to 6,042.2 points.

Will the market be able to build on this on Friday? Here are five things to watch:

ASX 200 to edge lower.

The ASX 200 index looks set to end the week in a subdued fashion. According to the latest SPI futures, the benchmark index is expected to open the day 7 points or 0.1% lower this morning. This is despite a positive night of trade on Wall Street which saw the Dow Jones rise 0.6%, the S&P 500 climb 0.65%, and the Nasdaq index storm 1% higher. This follows the release of better than expected U.S. jobs data.

Oil prices mixed.

Energy producers such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) will be on watch today after a mixed night for oil prices. According to Bloomberg, the WTI crude oil price has fallen 0.3% to US$42.05 a barrel and the Brent crude oil price is trading flat at US$45.18 a barrel. Demand concerns were weighing on oil prices during overnight trade.

Gold price continues its charge.

Gold miners including Evolution Mining Ltd (ASX: EVN) and Saracen Mineral Holdings Limited (ASX: SAR) could be on the rise on Friday after the gold price continued its charge. According to CNBC, the spot gold price rose 1.4% to US$2,077.70 an ounce. Concerns about global economic growth has supported the precious metal.

REA Group results.

The REA Group Limited (ASX: REA) share price will be on watch this morning when it hands in its full year results. According to a note out of Goldman Sachs, it is expecting the property listings company to report an 8% decline in revenue to $804 million and a 9% reduction in EBITDA to $456 million. It will then be looking for guidance in the range of $525 million for EBITDA in FY 2021.

News Corp result.

Major REA Group shareholder, News Corp (ASX: NWS) is also scheduled to release its results this morning. The same broker note reveals that Goldman Sachs is expecting the media giant to report a 30% decline in EBITDA to $886 million. The broker is also expecting a rebound in its EBITDA in FY 2021. It will be looking for guidance of $1,085 million in FY 2021.

More reading

• The best blue chip ASX shares to buy today
• ASX 200 rises 0.7%, ResMed result disappoints
• Village Roadshow locked in a capital raise as it secures new $70m facility
• Deepening partnership with Telstra fails to excite the Dubber share price
• With global share markets soaring, here’s why it’s still a good time to buy ASX shares

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

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The Australian share market is home to a good number of high quality blue chip shares for investors to choose from. 

Three blue chips which I think would be great options for a balanced portfolio are named below:

Here’s why I like them:

CSL Limited (ASX: CSL)

My favourite blue chip share on the Australian market remains this global biotherapeutics giant. CSL is made up of two world class businesses – CSL Behring and Seqirus. CSL Behring is the global leader in plasma therapies, whereas Seqirus is the second biggest in the influenza vaccines industry. I believe both businesses have strong long-term growth potential thanks to their leading therapies and lucrative research and development pipelines. So, with the CSL share price down materially from its 52-week high, now could be an opportune time to make a long term investment.

REA Group Limited (ASX: REA)

REA Group is another of my favourite blue chip shares. I was very impressed with its performance during the housing market downturn and the way it still achieved strong profit growth despite the tough trading conditions. While the housing market is now under pressure because of the pandemic, I’m optimistic that it will recover swiftly once the crisis passes. This could mean a rebound in property listings in 2021. Which combined with price increases, new revenue streams, and cost cutting, could see REA Group’s growth accelerate over the coming years.

Telstra Corporation Ltd (ASX: TLS)

I’ve been very impressed with the way Telstra has turned around its fortunes over the last 18 months and feel it is well placed to return to growth in the near future. This is due to the return of rational competition in the telco industry, its cost-cutting plans, and its leadership position in 5G. Another positive is that I believe the dividend cuts are over and its current payout is sustainable. In light of this, now could be a good time to consider a patient long-term investment in the company’s shares.

More reading

• Deepening partnership with Telstra fails to excite the Dubber share price
• Where I would reinvest my Rio Tinto dividends
• Invest like Warren Buffett and buy these ASX shares
• House prices are falling – which ASX shares are in the firing line?
• ASX 200 drops 0.6%, Telstra sells data centre for $416.7 million

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

The post The best blue chip ASX shares to buy today appeared first on Motley Fool Australia.

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There are always good ASX shares to invest in, you just need to find them and buy them at the right price.

Plenty of the ASX’s best growth shares have risen strongly over the last few months like Xero Limited (ASX: XRO) and Goodman Group (ASX: GMG). I don’t think I could buy them at these high levels.

But there are other ASX shares with plenty of growth potential that I’d love to buy for my portfolio:

Magellan High Conviction Trust (ASX: MHH) – $6,000

This is a listed investment trust (LIT), I think it’s one of the best investment businesses around. It’s run by Magellan Financial Group Ltd (ASX: MFG) with Hamish Douglass at the helm.

The Magellan strategy is to invest in high-quality global businesses, not ASX shares, for the long-term.

At the end of June 2020 its equity positions were: a 13.8% allocation to Microsoft, a 13.7% allocation to Alibaba, a 9.5% allocation to Tencent, an 8.6% allocation to Alphabet, a 7.8% allocation to Facebook, a 7.4% holding of Starbucks, a 5.9% holding of SAP, a 5.7% holding of Visa and a 5.1% holding of Estee Lauder.

As you can see by the weightings, it’s a high-conviction portfolio which aims to outperform the market over the long-term.

The ASX share has a growth-focused portfolio, but it currently also has a large cash position. At 30 June 2020, 22.5% of the portfolio was cash. So it’s defensively positioned in-case the market takes another tumble due to COVID-19 or the upcoming US election.

One of the benefits of listing in LITs is that sometimes you can buy them for a lot less than their net asset value (NAV). At the time of writing, the LIT has an indicative NAV of $1.56 per share compared to the Magellan High Conviction Trust share price of $1.44 – a discount of around 7.5%.

Bubs Australia Ltd (ASX: BUB) – $2,500

I think one of the best ways to outperform over the long-term is to choose growth shares at the early stages of their expansion before most other investors realise the growth potential.

Bubs is one of those ASX shares that I think is on track for a very good future. It’s an infant formula company with a focus on goat milk products.

FY20 was a solid year of growth with revenue increasing by 32% to $62 million. The fourth quarter of FY20 showed very promising growth internationally with Chinese direct sales growth of 26% and other export market revenue up 71% despite pantry stocking in the third quarter of FY20 due to COVID-19.

Bubs earns a much higher margin on the infant formula that it sells, compared to other products, so as infant formula becomes a larger part of total sales the overall company will be more profitable. Bubs will also benefit from economies of scale.

The ASX share is regularly launching new products which will diversify its future earnings. New products include Vita Bubs (a vitamin and mineral supplement range), as well as ‘Bubs Goat Milk Junior Nutrition’ which is for children between the ages of 4 to 12.

I think the Bubs share price looks cheap for a long-term buy at under $0.90.

Pushpay Holdings Ltd (ASX: PPH) – $2,500

The Pushpay share price has drifted 18% lower over the past month as the excitement over Pushpay’s FY20 growth and FY21 expectations settled down. Lower prices are obviously better for buyers.

But I think the ASX share looks more like a buy now than it did before releasing its FY20 result.

The shift to digital giving looks like it’s here to stay, particularly with COVID-19 continuing to impact large parts of the US. Pushpay allows its large and medium US church clients to livestream to congregations. That’s a very useful feature in this current environment. Digital giving is also safer, infection-wise, than giving cash.

Pushpay now thinks that its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) can at least double in FY21. That’s very strong guidance in my opinion. We should want our portfolio to be full of growing businesses like Pushpay.

At the current Pushpay share price it’s trading at 28x FY23’s estimated earnings.

Foolish takeaway

I like the idea of being able to buy some of the best global shares at a good discount, which is why I allocated the most to Magellan High Conviction Trust. However, I think that Pushpay and Bubs are two of the brightest ASX share prospects, which is why I also allocated $2,500 to each to them.

More reading

• Where to invest $20,000 into ASX shares right now
• Top ASX Stock Picks for August 2020
• Will the coronavirus kill cash?
• 3 top ASX shares to buy for growth investors in August
• Why these ASX mid cap shares could smash the market over the next 5 years

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX and Xero. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO. The Motley Fool Australia 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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The Orocobre Limited (ASX: ORE) share price rocketed 33.3% higher in July. The huge share price surge earned the Australian mineral resources company a top spot among the biggest monthly gainers on the All Ordinaries Index (ASX: XAO) in July. The All Ords, in comparison, gained 0.9% for the month.

Orocobre’s shares joined most other Australian stocks in the late February and early March COVID-19 market rout. The Orocobre share price tumbled 41% from 21 February through 23 March. The share price didn’t turn around until hitting a 52-week low of $1.84 per share on 14 May.

By the end of July, the miner’s share price had rebounded strongly, up 61% from the 14 May low. Orocobre shares closed the month at $2.97 per share. 

Since then, the Orocobre share price has gained another 10.5%, giving the company a market cap of $898 million.

What does Orocobre do?

Orocobre is an Australian based global lithium carbonate supplier as well as a producer of boron.

In partnership with Toyota Tsusho Corporation and JEMSE, Orocobre constructed and currently operates the world’s first commercial, brine-based lithium operation. The company announced the Stage 2 Expansion of its flagship Olaroz Lithium Facility in Argentina in 2018. This will significantly expand its lithium carbonate production capacity. It supplies the fast growing industrial, technical and battery markets.

Orocobre and TTC have also commenced building a lithium hydroxide plant in Naraha, Japan suitable for different battery technologies. Orocobre also owns Borax Argentina S.A, a boron chemical and mineral producer.

Why did the Orocobre share price soar in July?

In the June quarter, Orocobre reported selling approximately 1,600 tonnes of lithium carbonate at approximately US$4,105 a tonne.

Like many miners, pandemic-related shutdowns restricted the company’s ability to complete all of its sales during the quarter. Most of these issues have been addressed, but delivery levels are still below normal, with customers delaying shipment due to excess inventories.

There was no clear signal from the company that would have sent the Orocobre share price 33% higher in July. Lithium remains oversupplied and prices remain at near record lows. It would seem forward-looking investors may be buying shares of Orocobre with an eye on the rapid growth forecast for the electric vehicle and home battery markets, both of which should lead to an increased demand for lithium.

At the time of writing, the Orocobre share price is sitting at $3.28 per share, closing the day up by 4.56%.

More reading

• These were the best performing ASX 200 shares in July
• These are the 10 most shorted shares on the ASX
• Top brokers name 3 ASX shares to sell next week
• These were the best performing shares on the ASX 200 in July
• Orocobre share price remained flat yesterday despite difficult quarter

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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The S&P/ASX 200 Index (ASX: XJO) rose by 0.7% today to 6,042 points.

There was a slight reprieve in Melbourne for some meat production. Poultry processors can operate at 80% capacity whilst abattoirs with less than 25 employees and seafood processors with fewer than 40 staff will not be required to reduce their operations.

ResMed Inc (ASX: RMD) share price drops 7.4%

ResMed’s FY20 result didn’t do enough to impress investors today. 

For FY20 the healthcare business grew revenue by 13% to US$3 billion, with revenue growth of 9% to US$770.3 million in the final quarter.

ResMed reported that its non-GAAP gross margin improved by 80 basis points to 59.8% for FY20. The fourth quarter gross margin was 59.9%.

The ASX 200 share’s FY20 net operating profit rose by 40% to US$809.7 million with non-GAAP operating profit growing by 24% to US$890.9 million. Fourth quarter non-GAAP operating profit rose by 24%.

ResMed’s CEO Mick Farrell said: “Our fourth quarter results reflect the strength and resiliency of our business in today’s uncertain environment. We finished fiscal year 2020 with double-digit revenue growth to $3 billion and operating profit up 24% on a non-GAAP basis.

“Throughout our fiscal fourth quarter, we continued to support the COVID-19 pandemic response through increased manufacturing of our ventilators, including bilevels, and ventilation mask systems while also supporting our customers with digital health solutions and other innovative tools to enable remote care for patients.

“Looking ahead, we are confident in our ability to navigate through the ongoing challenging clinical and economic environment to deliver for all our stakeholders. Sleep laps and physician practices are reopening across many geographies, and we’re seeing accelerated adoption of digital health solutions which supports our long-term strategy. We remain vigilant and thoughtful about the outlook for our business as we continue to serve our customers, and we believe our strong foundation will accelerate our growth over the longer term.”

Nick Scali Limited (ASX: NCK) share price jumps 14.6%

The furniture retail announced a good FY20 result and an impressive outlook.

Sales revenue only dropped by 2.1% despite COVID-19. Operating profit margins improved, leading to net profit after tax (NPAT) being flat at $42.1 million.

The board of Nick Scali decided to increase the final dividend by 12.5% to 22.5 cents per share.

Nick Scali revealed that trading during the month of July continued to be strong with written sales orders rising by more than 70%, following on from May and June where sales orders were also up more than 70%.

The retailer said that the orders will be delivered in the first quarter of FY21 and contribute to revenue in FY21. Revenue will be much higher in the first half of FY21 than last year and management are expecting profit to be up by at least 50% compared to the prior corresponding period.

Myer Holdings Ltd (ASX: MYR) update

The department store business announced an update today after the market had closed.

The ex-ASX 200 business said that it has amended and extended its debt facility to August 2022. The amended facility is $20 million lower at $340 million. No covenant testing will be required at the end of FY20 due to COVID-19. But covenants will be tested quarterly in future periods.

Myer’s sales were severely impacted during the lockdown period and there was lower footfall after the stores had reopened. However, strong online sales growth has mitigated some of that impact.

Management said that the combination of disciplined cost control, government support via jobkeeper and other payment deferrals, rent relief and deferrals has meant the company expects to report a small positive net cash position at the end of FY20 despite the loss of revenue and earnings. This compares to $39 million of net debt at the end of FY19.

Melbourne Myer stores have closed due to the new restrictions, however click and collect will be available at a limited number of stores.

More reading

• Village Roadshow locked in a capital raise as it secures new $70m facility
• Harvey Norman share price gets a helping hand from competitor’s rosy outlook
• Deepening partnership with Telstra fails to excite the Dubber share price
• With global share markets soaring, here’s why it’s still a good time to buy ASX shares
• Expert warns that record-breaking gold price is facing painful correction

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

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It has been some time since we have seen the Freedom Foods Group Ltd (ASX: FNP) share price trading on the ASX boards.

But that doesn’t mean the embattled food company isn’t busy behind the scenes.

This afternoon Freedom Foods announced the appointment of its new interim chief executive officer to lead it through its current crisis.

What did Freedom Foods announce?

According to the release, the Freedom Foods board has unanimously appointed Michael Perich as its interim Chief Executive Officer with immediate effect. Mr Perich is a major shareholder of the company.

This appears to be a good fit for the company. Mr Perich, in his capacity as an Alternate Director, has been taking a lead role in the ongoing investigations and review of its operations.

He will be replacing Brendan Radford, who stepped into the role of acting CEO after the unceremonious departure of Rory Macleod in June.

Freedom Foods explained the move: “While the review is still ongoing, it has become clear that for the successful recapitalisation of the company there is a need for executive ownership and accountability to implement the operational turnaround. “

“This cannot wait for an external search for a new CEO to be completed. Michael Perich has a deep understanding of the business and will provide the stability, focus and leadership required as the Company manages the issues that have been previously reported to the ASX,” it added.

This is not expected to be a long term appointment, though. The release explains that the board intends to conduct an external process for the appointment of a permanent CEO at the appropriate time once the operational turnaround is sufficiently progressed.

In addition to this, the company continues to search for a Chief Financial Officer. For now, Stephanie Graham will continue in the acting CFO role until an appointment is made.

More reading

• What can we learn from the Freedom Foods share price saga?
• Here are the 10 most shorted shares on the ASX
• Why the Freedom Foods share price will be suspended until 30 October

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Freedom Foods Group 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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Global testing and inspection company, ALS Ltd (ASX: ALQ), saw its share price gain a whopping 29.4% in July. That puts the share price near the top of the list of best performing earners on the S&P/ASX 200 Index (ASX: XJO) for the month. The ASX 200, by comparison, gained 0.5% in July.

The ALS share price was hammered earlier in the year during the huge coronavirus-inspired share market selloff. From 20 February to 24 March, the ALS share price lost more than half its value, plummeting 53%.

Since the 24 March low however, ALS’ share price has been trending strongly higher, gaining 83% by the end of July to close the month at $8.40 per share.

Year to date, the company’s share price hasn’t quite recovered from its viral plunge. But it’s getting close, down less than 2.7% since 2 January, giving it current a market capitalisation of $4.3 billion.

What does ALS do?

ALS Ltd is a global testing, inspection and certification company. ALS’ early history was focused on servicing the mineral exploration industry. Since then, the company has broadened its exposure into a wide range of sectors including agriculture, pharmaceuticals and construction.

ALS — Australian Laboratory Services — dates back to 1863, when it began as a small chemical company. It went on to list on the local Australian stock exchange in 1952. Today, ALS is a global company with operations in Asia, South America, North America, Africa, Europe and, more recently, the Middle East.

The company employs more than 13,000 staff in over 65 countries. Its dividend yield sits at 2.0%.

Why did ALS Ltd’s share price soar in July?

Some top name brokers favoured ALS in July, with both Morgan Stanley and Macquarie likely helping boost the share price with their overweight and outperform ratings.

ALS’ move to refocus a new effort on COVID-19 safety also looks have paid off.

According to the company’s website, its ‘Safe by Choice’ platform helps enable customers to reopen and operate their businesses safely. Its new services include COIVD-19 surface sampling as well as testing and facility hot spot mapping.

With the coronavirus again spreading rapidly in Victoria and re-emerging in other Australian states, the demand for testing and hot spot mapping also likely helped the ALS share price gain a further 5.4% so far in August.

More reading

• These were the best performing ASX 200 shares in July
• These were the best performing shares on the ASX 200 in July
• Why the ALS Ltd share price is up again today

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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