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The Worley Ltd (ASX: WOR) share price is well in the green after the S&P/ASX 200 Index (ASX: XJO) energy engineering giant released its full-year earnings.

The stock is currently trading 5.9% higher at $14.90 a share, after opening 0.9% higher at $14.20 this morning.

Worley share price gains as after-tax profit reaches $172m

Here are the key takeaways from Worley’s statutory financial year 2022 (FY22) earnings:

• Aggregated revenue came to $9 billion – a 3% increase on that of the prior corresponding period (pcp)
• Meanwhile, revenue and other income lifted 2% to $9.7 billion
• Earnings before interest, tax, and amortisation (EBITA) lifted 41% to $449 million
• Net profit after tax (NPAT) and amortisation rose 55% to $243 million
• Basic earnings per share (EPS) surged 109% to 32.8 cents
• Declared 25 cent, unfranked final dividend, bringing its full year payout to 50 cents – flat with that of FY21

Looking to the company’s underlying earnings, it reported underlying EBITA of $547 million – an 18% improvement – and an underlying after-tax profit of $329 million – a 19% increase.

Its underlying basis EPS came to 62.8 cents – an 18% year-on-year increase.

The company also improved the quality of its earnings, with 35% of its total revenue – $3.2 billion worth – coming from sustainability activities.

Worley’s operating cash flow, however, fell 41% to $316 million

What else happened in FY22?

The major news from Worley in FY22 was its withdrawal from Russia. The company announced its plan to remove its services from the nation after Russian forces invaded Ukraine.

The Worley share price gained 25.6% over the course of FY22, closing the fiscal year at $14.37.

What did management say?

In a letter to shareholders, Worley CEO and managing director Chris Ashton said:

These results are indicative of continued market expansion in both our traditional and sustainability related work. We have delivered an improved result against a backdrop of geopolitical and economic challenges. This is a direct result of the changes we’ve made to our business. We’ve set up a scalable business, and we’re delivering ongoing benefits from our cost‑saving programs.

What’s next?

The company expects its average FY22 underlying EBITA margin – 6% – to be sustained in FY23. Meanwhile, it’s seeing indicators that point to improving revenue.

Sustainability-related work now accounts for 50% of its factored sales pipeline, placing it in a leadership position for the energy transition. It’s also investing $100 million in organic growth over three years to boost its sustainability solutions, digital enablement, and process technology.

Worley also boasts a $15.4 billion backlog.

Worley share price snapshot

It’s been a good year so far for the Worley share price.

The stock has lifted 37% since the start of 2022. It’s also trading 29% higher than it was this time last year.

For comparison, the ASX 200 has slipped 6% year to date and 7% over the last 12 months.

The post Worley share price surges as FY22 revenue reaches $9.7b appeared first on The Motley Fool Australia.

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More reading

• Elmo share price surges after 32% revenue boost
• Iron ore is down 28% since June. What does this mean for the BHP share price?
• BrainChip share price up on 529% revenue surge
• Coles share price slides 5% as inflation hampers FY23 growth outlook
• Dividend beasts: 3 ASX 200 shares that have delivered reliable payouts over the past 7 years

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 price of iron ore has continued its descent having collapsed more than 28% from its June 7 highs of $146.50 at the open on Wednesday.

The raw material now trades in line with its December 2021 levels, giving back the entirety of its gains earned in 2022.

As seen below, this had been a net negative for the BHP Group Ltd (ASX: BHP) share price, up until around 15 August, when the share has broken away from the underlying commodity price.

What does this mean for BHP shares?

Judging from the chart above, both the price for iron ore and the BHP share price had moved in striking similarity up until the middle of this month.

Since, BHP has turned away whilst iron ore has continued its walk down south. This could suggest that the mining giant’s diversified operations or exposure to other commodities may be a factor.

It could also be that the market still favours BHP’s offtake and other contractual agreements that ‘lock in’ the price the miner receives.

However, in the period from 23 June to 22 August, the number of buy calls has dwindled. In June, 10 out of 19 brokers covering the share said it was a buy, to just 9 from 20 on today’s date, per Refinitiv Eikon data.

The consensus price target from this list has dwindled too, in from $48.25 per share to $43.39 a share, a 10% total decline.

Looking ahead, there is some optimism on the price of iron ore. Analysts at Marex noted that September and October are usually “peak construction months,” due to a “rush to complete projects before the winter comes and it becomes too cold,” in a recent note.

Moreover, Australian miners were a leading sector on the ASX yesterday, surpassing the benchmark S&P/ASX 200 Index (ASX: XJO).

According to Reuters, the spike in iron ore prices on Tuesday was chiefly responsible. If it were to retrace its losses, there’s a good chance those with iron ore exposure to various points along the iron ore value chain could rally alongside this.

In the past 12 months, the BHP share price has gained almost 5%, as well as 12% this year to date.

The post Iron ore is down 28% since June. What does this mean for the BHP share price? appeared first on The Motley Fool Australia.

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More reading

• The ASX 200 mining share ‘in a wonderful position with a pristine balance sheet’: expert
• How have ASX dividend shares been performing this earnings season?
• Could this be set to boost ASX 200 iron ore shares?
• Could the BHP share price be set to benefit from ‘China reopening’?
• Could ASX battery minerals shares be in for a boost next month?

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 BrainChip Holdings Ltd (ASX: BRN) share price is in the green in early trading on Wednesday amid the company posting its half-year financial report for FY22.

Shares of the artificial intelligence tech company are currently trading 2.08% higher for 98 cents each, after hitting an early high of $1.01 a share.

Let’s go over the highlights of the report.

What did BrainChip Report?

• Revenue up 529% year-over-year (YoY) to US$4.83 million (AU$6.97 million)
• Operating loss down 1% YoY to US$8.56 million (AU$12.35 million)
• Net tangible assets per share up 74.22% YoY to US$1.69 (AU$2.44) from 97 US cents (AU$1.40)
• Diluted loss per share down 16.36% to negative US$0.46 cents (AU$0.66)
• No dividend declared

BrainChip revenues increased primarily due to its partnership with MegaChips and licensing revenues of Akida 1000.

One significant development BrainChip reported was its progress in producing its Akida semiconductor edge processors. The company received a report from its manufacturing partner SocioNext America that its chips qualified from being engineering samples to production chips.

The company issued 1.69 million shares in its annual report after the balance sheet date, raising AU$206,342.

What else happened in FY22?

BrainChip’s total expenses grew 37% to $18.75 million during the reporting period. Sales and marketing expenses grew 64% to facilitate the company’s rebranding and to engage with its current and prospective customers.

General and administrative expenses also grew 39% through a combination of a higher employee headcount and increased software and office lease fees.

Another item that grew considerably was its share-based payment expenses, swelling 128% to AU$5.27 million. The rise was attributable to equity issued to directors and to employees.

BrainChip noted that the effect of the coronavirus “continues to affect general activity levels within the community, the economy, and the operations of [BrainChip’s] business”. The company notes the virus has the potential to affect its “future earnings, cash flow, and financial condition”.

What’s next?

Although no guidance or outlook was provided in its half-year financial report, its most recent quarterly activities report states that it is working towards commercialisation by developing its Akida neuromorphic IP. The company completed technical scoping with targeted customers and established commercial partnerships.

Progress in this area by BrainChip is, therefore, expected to continue as it onboards additional partners and earns licencing fees from its technology.

BrainChip share price snapshot

The BrainChip share price is currently up 44% year to date. It’s far outperformed the S&P/ASX 200 Index (ASX: XJO) which is more than 6% lower in 2022 so far.

BrainChip’s market capitalisation is $1.68 billion at the time of writing.

The post BrainChip share price up on 529% revenue surge appeared first on The Motley Fool Australia.

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More reading

• Dividend beasts: 3 ASX 200 shares that have delivered reliable payouts over the past 7 years
• 3 ASX 200 shares going ex-dividend tomorrow
• 5 things to watch on the ASX 200 on Wednesday
• The Imugene share price has tumbled 18% since the company’s last update. What’s happening?
• Why did the EML share price tumble 12% on Tuesday?

Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Coles Group Ltd (ASX: COL) share price is down 4.8%.

Coles shares closed yesterday trading for $19.35 and are currently trading at $17.79.

This comes following the release of the S&P/ASX 200 Index (ASX: XJO) retail giant’s full-year results for the 12 months ending 30 June (FY22).

Here’s what investors are mulling over this morning.

Coles share price dips despite revenue growth

• Sales revenue of $39.4 billion, up 2.0% from FY21
• Earnings before interest, taxes, depreciation and amortisation (EBITDA) of $3.4 billion, an increase of 0.2% from the prior year
• Basic earnings per share (EPS) of 78.8 cents, up 4.6% from FY21
• Full-year dividend of 63 cents per share (cps), fully franked, up 3.3% year on year

What else happened during the year?

Coles reported its Smarter Selling program delivered benefits of roughly $230 million over the financial year. The retailer said it was on track to deliver its four-year program of $1 billion of Smarter Selling benefits by the end of the 2023 financial year.

With another year of growth, Coles reported three-year headline sales growth of 12.0% in its Supermarkets segment, with 18.0% growth in Liquor and 8.1% growth in Express.

Capital expenditure in FY22 came out at $1.2 billion. The final fully franked dividend was 30 cents per share, up 7.1% from FY21.

As at 30 June, Coles had net debt of $506 million with net assets of $3.1 billion.

What did management say?

Commenting on the results, Coles CEO Steven Cain said:

We have now delivered the third year of our transformation strategy, including significant growth in our eCommerce operations, coupled with additional efficiencies from our Smarter Selling program. We continue to focus on delivery of our vision to be the most trusted retailer in Australia and grow long-term shareholder value…

The ongoing headwind of rising cost inflation further underscores the importance of our Smarter Selling program. The commissioning commencement of three of our four automated distribution centres and online customer fulfilment centres in 2023 will also allow us to drive future efficiencies while delivering an enhanced offer to inspire customers.

Coles chair James Graham added, “The need for the Group to evaluate and respond quickly to a changing operating environment has never been more important as we focus on ensuring value for customers in an inflationary environment.”

What’s next?

Looking ahead, the Coles share price could be facing some headwinds after the company said both its Liquor and Supermarket sales growth are expected to be impacted by the cycling of COVID-19 lockdowns in the first half of FY22 and price inflation in the second half of FY22.

The retailer expects Express weekly fuel volumes and sales to benefit from increased mobility, though the size of those benefits depends on fuel costs.

Property earnings in FY23 are forecast to be slightly lower than in FY22.

Coles noted that inflation is impacting its cost base with increasing wages, rent, fuel, supply chain and capital costs, atop lingering impacts from COVID-19.

In FY23, Coles expects to open 20 new stores, close nine stores and renew approximately 40 stores in Supermarkets, and in Liquor.

Capital expenditure is expected to be between $1.2 billion and $1.4 billion, inclusive of its Witron and Ocado projects.

Coles share price snapshot

The Coles share price is up 1% in 2022, handily outperforming the 8% year-to-date loss posted by the ASX 200.

The post Coles share price slides 5% as inflation hampers FY23 growth outlook appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• Own Coles shares? Here’s what to expect from the supermarket giant’s FY22 results
• Earnings preview: Here are 3 ASX 200 shares reporting this week
• 3 ASX 200 shares inking new multi-year highs today
• Why did the Coles share price just smash its all-time high?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET. 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) shares in this article may not be thought of as leading ASX dividend shares.

However, I believe that the companies I’m going to reveal should be counted as dividend beasts. Each of the names below have grown their dividends since 2015.

A growing dividend isn’t the only factor that is important when investing in businesses. I also like to see that the company has a good chance of growing earnings into the future, as rising profit can have a positive influence on share prices.

I like owning ASX dividend shares because of how they reward shareholders with a regular payout.

Let’s look at three ASX 200 dividend shares with pleasing records.

Brickworks Limited (ASX: BKW)

Brickworks has grown its dividend each year since 2014. It’s quite diversified thanks to its underlying segments.

It is a major shareholder of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), an investment house spread across a number of sectors including telecommunications, property, financial services, resources, agriculture, and swimming schools. Soul Pattinson itself has paid a steady stream of growing dividends to shareholders.

Brickworks also owns half of a quality industrial property trust which is constructing buildings such as huge warehouses for names like Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL). The growing net rental profit from Brickworks’ property investments can help fund bigger dividends.

It’s worth mentioning too that the ASX 200 dividend share hasn’t cut its dividend for over four decades.

As the name implies, Brickworks also has brickmaking operations in Australia and the US. It also makes many other building products in Australia such as roofing and masonry.

It has a trailing grossed-up dividend yield of 4.3%.

Bapcor Ltd (ASX: BAP)

Bapcor is a leading auto parts company in the Asia Pacific region, owning numerous businesses like Burson, Autobarn, Autopro, Truckline, Midas, and Battery Town. It also owns a quarter of Tye Soon, an Asian auto parts business.

The ASX 200 dividend share has grown its dividend for shareholders every year since 2015. It is currently benefiting from the strong market conditions for automobiles. More people are using their private vehicles and the strong second-hand market means there is plenty of demand to keep older cars running.

It has plans to grow its store network, improve its efficiencies, grow in Asia, and increase the amount of private brand products it sells. In the recent FY22 result, Bapcor grew its annual dividend by 7.5% to 21.5 cents per share.

The ASX dividend share offers a trailing grossed-up dividend yield of 4.75%.

Collins Foods Ltd (ASX: CKF)

Collins Foods is a large franchisee of KFCs in Australia and Europe. It also has a small, but growing, network of Taco Bells in Australia.

The ASX 200 dividend share has grown its dividend every year since 2014.

It has been benefiting from the long-term trend of its same store sales (SSS) growth as well as an expanding network of KFC outlets. Taco Bell is a very useful growth avenue for the company.

In a recent presentation, the ASX 300 share noted that its operating cash flow is helping capital investment to grow its restaurant chain. Over the past five years, its operating cash flow has gone up 60% and the dividend has gone up 59%.

The company points to “significant expansion opportunities” in Europe. In the Netherlands alone, it’s targeting up to 130 net new restaurants over the next decade.

Using the trailing dividends, Collins Foods has a grossed-up dividend yield of 4%.

The post Dividend beasts: 3 ASX 200 shares that have delivered reliable payouts over the past 7 years appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 shares going ex-dividend tomorrow
• 5 things to watch on the ASX 200 on Wednesday
• The Imugene share price has tumbled 18% since the company’s last update. What’s happening?
• Why did the EML share price tumble 12% on Tuesday?
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Tristan Harrison has positions in Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks, Collins Foods Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks, COLESGROUP DEF SET, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Bapcor and Collins Foods Limited. 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 gold price has descended in recent times, but will it bounce back or continue to struggle?

Since 15 August, the spot gold price has fallen 2.9% from US$1815.50 an ounce to US$1,761.10 an ounce, CNBC data shows.

ASX shares impacted by the gold price include Evolution Mining Ltd (ASX: EVN), Northern Star Resources Ltd (ASX: NST) and Newcrest Mining Ltd (ASX: NCM).

What’s the outlook for the gold price

Multiple analysts are cautious on the gold price. Since March, gold has shed 13.8% from a high of US$2043.30 an ounce on 8 March.

City Index senior market analyst Matthew Simpson is predicting gold could fall to US$1700 an ounce. He said in comments provided to The Motley Fool:

A clear indication that gold investors are concerned is that the CBOE gold volatility index (GVZ) and downside protection – via put options – are both on the rise.

Simpson said gold will be highly sensitive to both the Jackson Hole Symposium and Core personal consumption expenditures (PCE) inflation data this week. US Federal Reserve chair Jerome Powell is set to speak at the central bank’s annual event on Friday. Simpson added:

Concerns that Jerome Powell will deliver a hawkish tone to his speech alongside a recession warning has seen the US dollar continue to surge and weigh on the yellow metal, as it gets dragged lower with metals and risk sentiment in general.

However, he noted a bullish case for gold would be a weak inflation print, and Powell delivering a “less hawkish” speech than expected. But he said, “that isn’t looking too likely right now, so we are on guard for further losses for gold and its potential to move fall to $1700”.

Meanwhile, ANZ senior commodity strategist Daniel Hynes and commodity strategist Soni Kumari are also tipping gold to “find its floor” at about US$1,700 per ounce.

Analysts noted aggressive federal rate hikes and the higher US dollar are “holding down the gold price in a research note last Thursday. However, they are predicting the central bank to ramp up purchases as currencies weaken. The analysts said:

While growing recession fears, due to rising rates against sticky inflation, should see some haven flows, central bank purchases are likely to be strong as currencies depreciate and geopolitical risks rise. This should help mitigate weaker physical demand.

However, Evolution Mining executive chairman Jake Klein has predicted gold could hit more than $2,000 per ounce next year, Bloomberg reported last week.

Evolution reported in financial results last week that it achieved a realised gold price of US$2,425 an ounce in FY22.

Meanwhile, Newcrest reported a realised gold price of US$1,787 per ounce. Northern Star is due to report FY22 results to the market on Monday. 

The post Can the gold price outshine sticky inflation? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• Why did the Newcrest share price just slump to a 6-year low?
• 5 things to watch on the ASX 200 on Monday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Domino’s Pizza Enterprises Ltd (ASX: DMP) share price is in focus today after the company released its full-year earnings.

The company also announced it’s expanding its footprint into three new markets – Malaysia, Singapore, and Cambodia – through the acquisition of 287 corporate stores for upwards of $214 million today.

Shares in the S&P/ASX 200 Index (ASX: XJO) pizza chain franchiser last traded at $67.07.

Domino’s share price on watch on record store growth

Here are the key takeaways from Domino’s financial year 2022 (FY22) results:

• Global sales came to $3.92 billion – a 4.6% improvement on those of the prior corresponding period (pcp)
• Underlying earnings before interest and tax (EBIT) fell 10.5% to $262.9 million
• Revenue lifted 4.1% to around $2.29 billion
• Underlying net profit after tax (NPAT) slumped 12.5% to $165 million
• Underlying earnings per share (EPS) reached 190.6 cents – a 12.6% slip
• Declared 68.1-cent 70% franked final dividend, leaving its full-year payout 9.8% lower at 156.5 cents per share

In the Asia Pacific, Domino’s sales grew 4.9% last financial year while its EBIT slipped 9.7%. Over in Europe, regional sales rose 4.3% to $1.5 billion while EBIT fell 11% to $78.8 million. Full-year EBIT grew 2.8% in Australia and New Zealand, reaching $3.3 million.

Its total EBIT of $262.9 million represented a year-on-year fall but was 19.1% higher than pre-pandemic levels. This was largely driven by changing sales conditions in the first half, a multi-million reinvestment in its Australia and New Zealand franchise business, and the rebuilding of its Danish business.

The company’s online sales surpassed a milestone $3 billion in FY22, lifting 4.4% to get there.

Domino’s added 450 new stores in FY22 – 294 organically and 156 through acquisition ­– a 15.3% increase and a new record. It ended the period with 3,387 stores globally.

What else happened in FY22?

The financial year just been was an exciting period of growth for the pizza giant.

It surpassed a major milestone in Japan, opening stores in all of the country’s 47 prefectures, making it the only pizza company with a national footprint. Sadly, the Domino’s share price slipped 3% on the back of the news.

FY22 is also the first year in which the company is reporting earnings from its Taiwan business. Domino’s announced its plan to acquire 156 stores in the nation in late FY21, marking its entrance in a tenth Asia Pacific market.

What did management say?

Domino’s CEO and managing director Don Meij commented on the company’s earnings, saying:

We have reached a challenging but important milestone, as we transition from ‘living with COVID’ to facing historic inflation, on track for a significant expansion in delivered food across the Quick Service Restaurant industry.

It is clear that this inflationary environment, more than any we’ve seen historically, requires a nuanced and multi-layer approach: reducing costs and maximising the benefits of scale, lifting menu prices where appropriate, and balancing these with ‘inflation busters’ that shows Domino’s consistently offers choice.

We made clear when COVID first affected us that we would be investing in growth … Today, we can measure ourselves against those goals, and are pleased with our performance drawing a line from ‘pre-COVID to now’ – integrating a new market, adding 865 stores (+34.3%), growing sales by 35.2%, and EBIT by 19.1%.

What’s next?

Domino’s didn’t provide any exact earnings guidance today. Though, it outlined several growth expectations and provided a brief trading update.

Meij said the market for delivered food was expected to grow more than 45% by 2026, and the company is jumping onboard for the ride. It intends to continue growing its network by 8% to 10% annually, focusing on opening stores closer to customers, thereby increasing customer satisfaction and lowering the costs of delivery services.

Delivery efficiency is also a pillar stone of the company’s response to inflation. That’s brought promotional offerings and pricing initiatives, such as the addition of a delivery service fee.

Domino’s also expects its same store sales to grow between 3% to 6% this fiscal year.

The company has already opened 13 new stores in FY23. Meanwhile, its network sales have slipped 2.4% over the start of FY23 compared to those of the pcp.

Domino’s share price snapshot

The Domino’s share price has had a particularly rough trot as of late.

It has fallen 45% since the start of 2022. It’s also trading 53% lower than it was this time last year.

For comparison, the ASX 200 has dumped 8% year to date and 7% over the last 12 months.

The post Domino’s Pizza share price in focus as full-year sales near $4b appeared first on The Motley Fool Australia.

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More reading

• 2 excellent ASX growth shares that analysts say are buys
• Here are 3 top ASX growth shares that experts are tipping as buys
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited. 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 Energy Index (ASX: XEJ) has climbed 5.21% this week, but one ASX energy share has easily outperformed the index.

The Australian Pacific Coal Ltd (ASX: AQC) share price has soared 196.3% from 13.5 cents at market close on Friday to the current share price of 40 cents.

So why is this ASX energy share having such a good run this week?

What’s going on with Australian Pacific Coal shares?

Investors have been buying up Australian Pacific Coal shares after the company announced news of a takeover bid.

Australian Pacific received a non-binding alternative proposal on the sale of its Dartbrook coal project in New South Wales from Naveko Pty Ltd.

The plan involves Naveko providing instant funding to Australian Pacific via an equity subscription for 19.97% of Australian Pacific shares for a total of $3.78 million. Nakevo is also proposing to make a takeover bid for Australian Pacific for up to 30 cents per share.

In April, the company received an offer from major shareholder and creditor Trepang Services Pty Ltd.

Nakevo’s proposal, received on Friday, is still at an early stage. Australian Pacific said the offer is “conditional” and “requires further consideration”.

Meanwhile, the outlook for the coal price could also be providing Australian Pacific with a boost.

In FY22 results released last week, ASX coal share Yancoal Australia Ltd (ASX: YAL) predicted thermal coal prices will remain elevated in 2023. Yancoal said:

Ongoing supply-side constraints and demand resulting from shortages and disruption to global energy markets should sustain elevated prices for seaborne thermal coal into 2023.

The coal price has soared more than 146% in a year, according to Trading Economics data.

Share price snapshot

This ASX energy share has surged 135% in the past year and 167% in the year to date.

In the past month, Australian Pacific shares have rocketed 281%.

Australian Pacific Coal has a market capitalisation of $20.2 million, based on the current share price.

The post Why has this ASX energy share surged 196% since the start of the week appeared first on The Motley Fool Australia.

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More reading

• Guess which little-known ASX coal share just rocketed 100%
• Why are ASX 200 coal shares having another cracker of a day?
• Yancoal share price lifts on 677% earnings boost
• Why India can’t get enough of Aussie coking coal and which ASX shares have exposure
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Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 will be closely monitored on Wednesday morning after the logistics software maker released its full-year results and future outlook.

What did the company report?

• Revenue was up 25% to hit $632.2 million
• Earnings before interest, taxation, depreciation and amortisation (EBITDA) was up 54% to hit $319 million
• Statutory net profit after tax was up 80% to hit $194.6 million
• Free cash flow was up 71% to hit $237.3 million
• Final ordinary dividend was raised from 3.85 cents per share to 6.4 cents.

What else happened in FY22?

WiseTech has acquired a remarkable 41 companies since listing on the ASX in 2016.

During the last financial year, it completed two takeovers — Inobiz and Hazmatica.

“We are actively looking at further tuck-in acquisition opportunities which are typically smaller in size but can quickly bring their team, technology and knowledge, without major rewrites, and rapidly add value to the CargoWise ecosystem,” said WiseTech founder and chief executive Richard White.

“We also continue to look at larger, strategically significant, acquisition opportunities supported by our strong balance sheet, cash flow and funding options.”

What did management say?

White said of the full-year result:

This standout performance demonstrates the increasing resilience of our business model. In an environment of persistent supply chain constraints, inflationary pressures and COVID-related business disruption, to have delivered these outcomes is a real testament to the strength of our business, the dedication of our people, and the effectiveness of our 3P strategy.

COVID-related capacity constraints, port congestion and labour shortages experienced during the year resulted in an overloaded supply chain which could take some time to unwind. Demand for goods continues to outpace pre-COVID-19 levels, 4.9% above pre-COVID trendlines.

What’s next?

Assuming market conditions stay reasonably similar, WiseTech is predicting revenue growth of 20% to 23% for the 2023 financial year and EBITDA growth of 21% to 30%.

“We are well placed to benefit from the continuing M&A consolidation activity amongst global logistics operators, and their increasing investment in replacing legacy systems with digital solutions, as well as pursuing our own M&A opportunities,” said White.

“Looking ahead, we also remain focused on R&D and accelerating our investments to deliver breakthrough products that enable and empower those that own and operate the supply chains of the world.”

WiseTech share price snapshot

In a remarkable rally, the WiseTech stock price has rocketed more than 51% since 22 June.

That means that it’s only down 11.5% for the year so far, despite getting caught up in the general sell-off of tech and growth shares.

The price-to-earnings ratio is still arguably quite high, sitting at 122.

The post WiseTech share price on watch as net profit rockets 80% appeared first on The Motley Fool Australia.

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More reading

• Earnings preview: Here’s which ASX shares are reporting today
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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. 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 Zip Co Ltd (ASX: ZIP) share price will be in the spotlight this week as the company gears up to release its FY22 results.

The ASX buy now, pay later (BNPL) provider is slated to unveil its full-year report tomorrow.

While once all the rage, Zip shares have experienced an almighty fall from grace.

As the BNPL hype hit a fever pitch across the ASX, the Zip share price reached the lofty heights of $13. At these levels, the company boasted a market capitalisation of nearly $7 billion.

Fast forward 18 months and the market has well and truly fallen out of love with ASX BNPL shares. 

The Zip share price has crumbled almost 80% this year to 92 cents, giving the company a market cap of $630 million.

Shareholders will be hoping to see their fortunes turn tomorrow when Zip releases its FY22 results. 

Here’s what we know so far

Based on Zip’s unaudited quarterly reports, the ASX BNPL share’s FY22 results could look something like this.

• Total transaction volume (TTV): $8.6 billion – up 51% from $5.7 billion in FY21
• Transactions: 75 million – up 81% from 41.3 million in FY21
• Revenue: $606 million – up 55% from $392 million in FY21
• Customers: 12 million – up 64% from 7.3 million in FY21
• Merchants: 90,700 – up 77% from 51,300 in FY21

It’s worth noting that Zip completed its acquisition of QuadPay on 31 August 2020. So, the company’s FY22 results will benefit from an extra two months’ contribution from QuadPay compared to FY22.

What I’m watching in Zip’s FY22 results

When Zip hands in its full-year results tomorrow, I think the following things will be worthy of a closer look.

Unit economics

The key to a company’s sustainability, and ultimate profitability, lies in its unit economics.

For ASX BNPL players like Zip, this is all about how well they can convert the transaction value that flows through their platform into revenue. And from there, how much of this revenue they can collect from customers.

For Zip, the key metrics to watch here are the company’s revenue margin, cash cost of sales (which includes bad debts), and cash transaction margin.

In the first half of FY22, Zip’s revenue margin retreated to 6.7%, down from 6.9% in HY21.

Its cash cost of sales performance also deteriorated on the back of rising bad debt expenses. As a percentage of TTV, cash cost of sales jumped from 3.2% to 4.6%.

Ultimately, this didn’t bode well for Zip’s cash transaction margin, which subtracts cost of sales from the revenue margin. This figure stood at 2.1% in HY22, down from 3.5% in FY21, and 3.7% in HY21.

In February, management noted it was taking direct action to improve bad debt performance. Investors will be keen to see if these initiatives have been bearing fruit.

Zip has a medium-term target of achieving cash transaction margins between 2.5% and 3%.

Balance sheet health

Zip’s business model is heavily reliant on debt funding. 

And due to the nature of its services, a lot of its revenue sits in customer receivables, waiting for customers to repay their instalments. 

As a result, it’s important to pay close attention to Zip’s balance sheet.

The key line items to focus on include cash, customer receivables, and borrowings.

Investors will also be able to glean further insights from the relevant accounting notes for these line items.

Operating expenses

Zip is undeniably in a growth phase, overlooking earnings in order to chase long-term gains.

But as the company continues to burn through cash while its unit economics deteriorate, Zip has recognised something has to give.

In response, management is undertaking what has internally been dubbed Operation Blue Sky. It’s all about cutting costs in order to make the company’s operations more economically viable.

This will see the company rein in its employee expenses by $30 million, put new financial services products on the back burner, tighten new lending, and step back global expansion. 

So, Zip’s operating expenses are sure to be in the spotlight tomorrow. 

The first of these cost management initiatives kicked off in April this year, so the benefits are unlikely to meaningfully show up until FY23.

Nonetheless, investors will be hoping to see a deceleration in expenses growth tomorrow, particularly compared to the first half of FY22.

The big expenses to watch will be employee costs and marketing costs.

The post Looking to buy Zip shares? Here’s what to look for in tomorrow’s results appeared first on The Motley Fool Australia.

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More reading

• Why is the Zip share price sinking 5% on Monday?
• Why is the Block share price tumbling 6% today?
• These are the 10 most shorted ASX shares
• How does Zip’s ‘Operation Blue Sky’ stack up against Block’s battening down of the hatches?
• Why is the Zip share price behaving so strangely on the ASX today?

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. 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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