Tag: Motley Fool

The Aussie share market is retreating today after Wall Street recorded substantial losses across the board on Friday.

The S&P/ASX 200 Index (ASX: XJO) is shedding 1% to 7,045.5 points in morning trade.

Also in reverse is the Santos Ltd (ASX: STO) share price.

At the time of writing, the energy producer’s shares are down 1.06% to $7.44.

Why are Santos shares slipping today?

Following the release of the company’s half-year results last week, investors are eyeing Santos shares as they go ex-dividend today.

This means if you purchased the company’s shares last Friday or before and still own them, you will be eligible for the latest dividend.

When a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out. This is because investors try to make a quick profit after securing the dividend.

For those eligible for Santos’ interim dividend, shareholders will receive a payment of US 7.6 cents per share on 22 September. Based on the current USD:AUD exchange rate, this equates to roughly 10.8 Australian cents apiece.

Furthermore, the interim dividend reflects an increase of 38% compared to the prior corresponding period (US 5.5 cents per share).

The dividend is also unfranked.

Under the company’s capital management framework, Santos aims to return US$605 million to shareholders through the interim dividend and an on-market share buyback. The latter received a bump from the US$250 million announced in April 2022 to US$350 million currently.

Is Santos a buy?

Following the energy producer’s scorecard for the 2022 half-year results, analysts at Macquarie weighed in on Santos shares.

According to ANZ Share Investing, the broker raised its 12-month price target by 4% to $10.40. Based on the current Santos share price, this implies an upside of 40%.

On the other hand, Citi and UBS cut their rating by 3.5% to $8.30, and 2.1% to $9.45, respectively.

Santos share price snapshot

Since the beginning of 2022, the Santos share price has mostly travelled in circles until accelerating since the company’s results.

Year to date, Santos shares are up 18%.

In comparison, the benchmark ASX 200 index is down 5% over the same timeframe.

Santos has a price-to-earnings (P/E) ratio of 15.47 with a market capitalisation of roughly $25.23 billion.

The post Why is the Santos share price in the red on Monday? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Monday
• Here are the top 10 ASX 200 shares today
• Why Accent, Cochlear, Newcrest, and Santos shares are charging higher today
• Why is the Santos share price soaring 6% on Friday?
• Here are the top 10 ASX 200 shares today

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Aaron Teboneras 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 Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/GP3c804

The Lendlease Group (ASX: LLC) share price is in the red in morning trade.

Lendlease shares plunged 4.5% at the open to a low of $10.06 before retracing to their current at $10.34, down 0.58%.

This follows the release of the S&P/ASX 200 Index (ASX: XJO) property and infrastructure group’s full-year results for the 12 months ending 30 June (FY22).

Profits turn to losses

Key takeaways from the report include:

• Statutory loss after tax of $99 million, down from a profit of $222 in FY21
• Core operating profit after tax of $276 million, a decrease of 27% year on year
• Record work in progress of $18.4 billion
• Final dividend of 11 cents per share, partly franked, down from 12 cents per share in FY21

What else happened during the 2022 financial year?

Lendlease said the ongoing impacts of COVID hindered its performance over FY22. Despite those headwinds the company reported progress in its organisational reset.

The changes included simplifying its operating model and refreshing its leadership and the overall structure of the organisation.

Costs were significantly reduced, exceeding the company’s savings target of $160 million per year. Lendlease also formed some $11 billion of investment partnerships over the year to grow its platform.

Other key financials included earnings per share (EPS) of 40.1 cents, down from 54.8 cents per share the prior year.

Full-year dividends came in at 16 cents per share, down from 27 cents in FY21.

The company noted a big uptick in its performance in the second half of the year, saying it had “solid momentum” heading into FY23. Core profit in H2 came in at $248 million, up from $28 million in H1.

Gearing of 7.3% is below the company’s target range of 10% to 20%, with total available liquidity of $3.9 billion.

What did management say?

Commenting on the results, Lendlease CEO Tony Lombardo said:

We made significant progress in resetting our company for future growth. We are now a leaner organisation and more agile in responding to our customers. This year, we formed approximately $11 billion of investment partnerships that will underpin strong growth in funds under management while work in progress is at a record $18.4 billion.

Lendlease CFO Simon Dixon added:

Maintaining financial strength, reflected in gearing of less than 10%, was a priority for the group as we transitioned through a reset year. This was achieved while deploying an additional $1 billion of development capital during the year.

What’s next?

Looking ahead, the Lendlease share price could be in for some continuing headwinds in FY23 from higher inflation and interest rates.

The company forecasts its return on invested capital for the investments segment to be in the range of 6% to 7.5% for FY23 while forecasting a return on invested capital for the development segment in the range of 4% to 6%.

Lendlease forecast earnings before interest, taxes and depreciation (EBITDA) margin for its construction segment in the range of 1.5% to 2.5% for FY23. That’s below its target range of 2% to 3% due to ongoing risks from COVID-19 disruptions, supply chain constraints and costs pressures.

Lendlease expects a material improvement in the outlook for FY24, with a return on invested capital target for its development segment of 10% to 13% and a return on equity target of 8% to 11%.

Lendlease share price snapshot

The Lendlease share price is around 5% in 2022, a drop just under the 7% year-to-date loss posted by the ASX 200.

The post Lendlease share price dips as profits and dividends take a hit in FY22 appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• EML share price leaps 11% on results and share buyback
• Why is the Santos share price in the red on Monday?
• Nearmap share price jumps 5% on takeover update
• Better buy stock: Alphabet vs. Amazon
• Ampol share price dips as profits reach historic highs

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 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.

from The Motley Fool Australia https://ift.tt/XfPF3aw

The Nearmap Ltd (ASX: NEA) share price has taken a big step closer to leaving the ASX as its board unanimously backed last week’s takeover offer from Thoma Bravo.

The board’s decision comes after the bidder undertook its seven-day due diligence where both parties entered into a scheme implementation deed.

Shares in the aerial mapping ASX tech company jumped 4.8% to $2.06 in early trade. But the Nearmap share price stayed under the $2.10 offer price as hopes of a competing bid faded.

Why Nearmap’s board is backing the takeover

Nearmap’s board agreed to the scheme of arrangement after it engaged in a “robust” review process with its financial and legal advisors.

It has urged shareholders to vote in favour of the scheme in the absence of a better offer. The Nearmap board believes this is an attractive offer as it is at a premium to where the Nearmap share price was trading recently.

The board also pointed out that the all-cash takeover gave certainty of value to shareholders. The limited set of conditions attached to the deal was also a deciding factor.

Takeover conditions

The scheme contains several standard conditions. This includes an independent expert issuing a report that finds the takeover to be in the best interests of shareholders.

The transaction must also be approved by Australia’s Foreign Investment Review Board and has to be cleared in the United States.

There are also certain circumstances whereby either the bidder or target has to pay the other a break fee of up to $10.5 million.

Naturally, Nearmap’s shareholders will have to vote in favour of the scheme, and the local court give its blessing, for the deal to go ahead.

What did the directors say?

Nearmap chairman Peter James commented on the takeover bid, saying:

Nearmap has achieved considerable success to date in Australia and North America and while, in the long-term, there remains potential future growth trajectory, this has to be balanced with the business and market risks that Nearmap shareholders face remaining as a publicly listed independent company.

In considering the merits of the Thoma Bravo proposal, the Directors have at all times been guided by our overarching responsibility to consider the interests of Nearmap and all of its shareholders. It is our view that the Thoma Bravo Scheme will realise attractive and certain value for shareholders in current markets.

Next steps

A scheme booklet containing details of Nearmap’s takeover and an independent expert’s report will be sent to shareholders in October 2022.

The shareholder meeting to vote on the scheme is expected to be held the month after.

If everything goes to plan, the scheme is expected to be implemented by late November.

The post Nearmap share price jumps 5% on takeover update appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• ASX reporting season weekly wrap: Winners and losers
• Why Brambles, Challenger, Nearmap, and Super Retail shares are rising today
• Nearmap share price on watch as revenue leaps 29%
• Why BlueScope, Carsales, Core Lithium, and Nearmap shares are racing higher
• Nearmap share price jumps 30% on takeover news

Motley Fool contributor Brendon Lau has positions in Nearmap Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nearmap Ltd. The Motley Fool Australia has positions in and has recommended Nearmap Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/78XoPsb

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) and Amazon (NASDAQ: AMZN) are two of the most influential technology companies in the world. On the heels of turbulence for the market, and growth stocks in particular this year, each company’s valuation is also down significantly from its previous high.

With these industry leaders potentially on track for big rebounds, investors could wonder which stock looks like the better buy at today’s prices. Read on to see why two Motley Fool contributors have different views on which company will be a better performer for your portfolio.

The case for Amazon

Keith Noonan: When it comes to innovation, Amazon has an absolutely incredible track record. The company built an online bookstore into the leading overall online retail platform, and it continues to shape the direction of the e-commerce world. The tech giant also spearheaded the evolution of cloud-infrastructure services with Amazon Web Services, and the technologies it provides are at the heart of the modern internet and the evolution of cloud-based software.

Amazon also has a fast-growing digital advertising business that has plenty of room for long-term expansion. Because the company controls the leading online-retail marketplace, it has some natural advantages in the ads space, and it’s still in the early stages of leveraging these strengths to build on its position in the category.

The company is also a leader in smart speakers and voice-based operating systems, and its move to acquire iRobot should bolster its position in the consumer devices category and augment broader strategic initiatives. Between its various products and services for consumers and businesses, Amazon has access to an incredible amount of data, and this should help the company take advantage of opportunities in artificial intelligence and continue mapping out new growth strategies and ways to capitalize on synergies between its businesses.

Amazon’s cloud segment is highly profitable and continues to grow at an impressive clip, and advancements in automation and robotics could ultimately make its market-leading e-commerce business much more profitable. With big opportunities in its two core businesses, growth potential in other categories, and a penchant for market-defining innovation, Amazon looks like a great buy today.

The case for Alphabet

Parkev Tatevosian: The factors that help make Alphabet an excellent stock to buy are that it holds a dominant position in a massive industry and sells at a relatively inexpensive valuation. Indeed, Alphabet is home to Google, the most powerful search engine worldwide. That’s a critically important business to dominate because so many purchase decisions start with an internet search.

It can partly explain how Alphabet has expanded its revenue from $46 billion in 2012 to $258 billion in 2021. More importantly, it helped boost operating income from $13.8 billion to $78.7 billion in that same time. Businesses with less dominant positions frequently grapple with competitors, which works toward lower profits. Alphabet’s search engine makes money through advertising. Companies pay Alphabet to have their websites listed near the top of search engine queries.

It’s estimated that advertisers will spend $838 billion globally in 2022, an 8.4% increase from the year before. That massive figure allowed Alphabet to expand beyond its $258 billion revenue in 2021. If it operated in a smaller market, it could approach a ceiling much faster, making an investment less lucrative.

GOOG Price to Free Cash Flow data by YCharts.

Despite these excellent prospects, Alphabet is trading relatively inexpensively at a price-to-free-cash-flow ratio of 25.6 and a price-to-earnings ratio of 22.8. These are below its historical averages through the last five years.

Which big tech stock should you buy today?

Unless you’re only interested in owning one of these big tech companies in your portfolio, this is a case where buying both stocks could be the right move. Alphabet’s top positions in search, digital advertising, and mobile give it clear avenues to long-term expansion. Meanwhile, Amazon’s market-leading e-commerce and cloud computing businesses give it a strong growth engine, and the company has proven it can successfully branch into new categories. Both of these technology leaders look poised to tap into secular growth trends, and each stock stands a good chance of being a long-term winner.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Better buy stock: Alphabet vs. Amazon appeared first on The Motley Fool Australia.

(function() { function setButtonColorDefaults(param, property, defaultValue) { if( !param || !param.includes(‘#’)) { var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0]; button.style[property] = defaultValue; } } setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’); setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’); setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’); })()

More reading

• Why did the Amazon share price fall today?
• This stock is beating amazon at its own game
• Why the Amazon share price rose today
• The 1 reason Amazon shares may not be a buy right now
• Everyone is talking about this stock. Is it a good long-term option?

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Keith Noonan has no position in any of the stocks mentioned. Parkev Tatevosian has positions in Alphabet (C shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), and Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

from The Motley Fool Australia https://ift.tt/vG4I09g

The NIB Holdings Ltd (ASX: NHF) share price is up from the open following the release of the company’s full-year results for FY22.

At the time of writing, the NIB share price is trading 5.57% higher at $7.675.

Let’s check what the company reported.

NIB grows revenue, slumps profit

Key takeouts from the period include:

• Group underlying revenue of $2.8 billion, up 7.2% year on year
• Operating profit of $235.3 million, up 14.8% from the same time last year
• Net profit after tax (NPAT) came in at $133.8 million, down 16.6% from “investment losses”
• Group claims expense (total claims for underwriting segments only) came in at $2.1 billion, up 4%
• Statutory earnings per share (EPS) of 29.6 cents, down 15.9% from the previous year’s result
• Final dividend of 11.0 cents per share fully franked, down from 14.0 cps in FY21

What else happened for NIB?

Whilst revenue was up 7% for the year, NPAT was more than 16% lower due to volatility in the financial markets.

“The losses represented a negative swing of $81.8 million on previous year earnings of $51.8 million,” NIB explained today.

The company also increased the value of support measures to its customers to $100 million following COVID-19 impacts.

Meanwhile, premium revenue in its flagship Australian Residents Health Insurance (ARHI) business gained 5% year on year, whereas claims fell 3% to $1.5 billion.

Management commentary

Speaking on the announcement, NIB managing director Mark Fitzgibbon said:

Our Australian Residents Health Insurance business (ARHI) grew 3.2%, well above what we expect the industry will report. Premium revenue rose 5.2% to $2,286.2 million, even though we deferred the 2022 annual premium increase. Our final quarter of FY22 was particularly good; the best we’ve experienced in seven years.

Across the Group, we’re especially pushing hard on our Payer to Partner (P2P) strategy and making our value proposition as much about maintaining good health as it is today about financial protection.

What’s next for NIB?

The company is reportedly looking forward to more favourable macroeconomic conditions for each of its businesses looking ahead.

Fitzgibbon noted the company’s payer to partner (P2P) strategy is looking to ramp up and increase digital engagement with customers.

He said:

AHRI is in very good shape and away to a very good start adding 4,399 members in the first six weeks of FY23. We expect net growth of 3-4% this year [in the segment] …

NIB New Zealand will continue to grow as we further develop our integrated life and living products and pursue additional partnerships with Māori communities. NIB Travel is positioned well to ride the back of resurgent travel with new, superior underwriting arrangements.

The NIB share price is down more than 5% in the last 12 months but has gained more than 8% year to date.

The post NIB share price gains 6% despite net profit drop in FY22 appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Monday
• Here are the top 10 ASX 200 shares today
• Is this why the NIB share price is lagging Medibank on Friday?
• Medibank shares are currently trading on a 4% dividend yield. How does this compare to NIB?
• What could a tighter household budget mean for NIB shares?

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 recommended NIB Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/PUOXIWy

The Ampol Ltd (ASX: ALD) share price is moving to the downside on Monday after the company released its half-year results.

At the time of writing, shares in the transport fuels supplier are down 0.85% to $33.85.

Ampol share price falters despite dazzling results

• Total revenue up 83% from the prior corresponding period to $11,333 million
• Replacement cost operating profit (RCOP) EBIT up 120% to $693.1 million (continuing operations)
• Sales volume increased 4% to 11.5 billion litres
• Statutory net profit after tax (NPAT) up 114% to $695.9 million
• Interim dividend up 131% to $1.20 per share
• Completed Z Energy acquisition

The meteoric rise in oil prices lifted Ampol’s half-year result to unprecedented levels. However, the effects were not felt as tailwinds for all of the company’s divisions. Rather, refining benefitted while retail sales were impacted.

According to the report, the fuels and infrastructure division witnessed a major uptick in earnings. This was mostly attributable to a ninefold increase in Lytton refinery RCOP EBIT to $443.9 million. In turn, the Lytton refiner margin came in at US$22.35 per barrel.

However, on the convenience retail side, Ampol succumbed to headwinds including floods, Omicron, and reduced demand due to high fuel prices. As a result, the consumer-facing division experienced an earnings decline to $127.3 million.

What else happened in the half?

In addition to record results, the half involved significant acquisition and divestment activities. Namely, the completion of the company’s Z Energy acquisition.

The process of integrating the New Zealand fuel retailer was officially completed on 10 May 2022. For reference, the Ampol share price has climbed 2.5% since then.

Furthermore, Ampol upped its investment in what it labels ‘future energy’. Rising from $1.6 million to $13.2 million, the company poured millions into rolling out its electric vehicle charging brand AMPCharge.

What did management say?

Commenting on the result, Ampol managing director and CEO Matt Halliday said:

Against the backdrop of increased market volatility due to the global energy shock, COVID-19 outbreaks and extreme weather, Ampol has delivered the strongest half-year Replacement Cost Operating Profit in its history. This result demonstrates the benefits of Ampol’s integrated supply chain.

The turnaround is particularly remarkable considering last year the federal government was depending on a ‘fuel security package’ to keep its head above water.

What’s next?

Today, investors are staring down record profits. However, management’s commentary on current conditions is less rosy. For July, the Lytton refiner margin has stooped to US$16.46 per barrel. Although, Ampol notes that inventory levels are low given this time of year.

In contrast, the convenience retail division strengthened in July. The company believes its retail strategy will continue to gain traction, supporting better income.

Ampol share price snapshot

The Ampol share price has largely been immune to the tattering of equity markets in 2022. Specifically, the company’s shares have risen 14.13% in value, compared to a 5.34% fall in the S&P/ASX 200 Index (ASX: XJO).

At present, Ampol trades on a price-to-earnings (P/E) ratio of 14.5 times.

The post Ampol share price dips as profits reach historic highs appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• ASX 200 energy shares mixed amid bearish oil price outlook
• 3 ASX 200 shares wielding a shield for returns: fundie

Motley Fool contributor Mitchell Lawler 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.

from The Motley Fool Australia https://ift.tt/NC20pw1

The Adbri Ltd (ASX: ABC) share price slumped after management posted a drop in profits even as revenue improved for the six months to 30 June 2022.

Strong demand from its construction and mining customers wasn’t enough to offset rising costs and bad weather.

This is despite the construction materials and lime producer cutting costs and lifting prices for its product.

The news caused a 12% sell-off in the Adbri share price to $2.34 in early trade when the S&P/ASX 200 Index (ASX: XJO) slipped 0.2%.

Summary of Adbri’s 1HFY22 results

• Interim revenue increased to $812.4 million, up 8.0% on 1H21 driven primarily by strong construction and mining sector demand and improved pricing across most products
• Statutory net profit after tax (NPAT) decreased 15.0% to $48.1 million
• Underlying NPAT decreased 1.3% to $54.3 million on 1H21.
• The drop in NPAT was due to operational challenges associated with extreme wet weather events on the east coast of Australia; anticipated lower lime volumes; higher raw materials, shipping, transport, power and fuel costs
• Cost-out program delivered $7.5 million in gross savings for 1H22, only partially offsetting inflationary pressures
• Fully franked interim dividend of 5.0 cents per share, down from 5.5 cents per share in 1H21, equating to 70.6% dividend payout ratio of underlying earnings excluding property profits

Other key highlights to Adbri’s interim profit results

Adbri is pursuing opportunities in the infrastructure construction market. The federal and state governments have committed billions to new road, rail and power projects.

The company said that it achieved a 29% win ratio on infrastructure tenders bid in the half. Its order book is also up around 30% since end of 2021.

Further, its lime business may be benefitting from shipping delays. Local customers are increasingly turning to Adbri to secure stable supply while Adbri’s competitors struggle to import enough product.

However, the company’s margin squeeze shows how competitive the building materials market is. This is unlike other S&P/ASX 200 Index (ASX: XJO) shares, such as Brambles Limited (ASX: BXB) and Amcor CDI (ASX: AMC), which are having an easier time managing costs pressures.

Management commentary

Adbri’s managing director and chief executive officer, Nick Miller, commented:

We have delivered another period of top line growth, with increasing volumes across the majority of our product lines as strong demand continued in the construction and mining sectors, despite significant disruption to the business as a result of severe weather events on the east coast of Australia. The Company has actively managed its pricing strategy to partially mitigate significant inflationary pressures while continuing to execute our cost reduction program to deliver savings and protect earnings.

Outlook

Management backed away from providing a guidance for FY22 due to the uncertain trading environment.

But it did note that demand for its products is expected to stay strong in the second half. This is so much so that underlying earnings in 2HFY22 will be ahead of the same period last year.

What’s driving the growth is its cement, concrete, aggregates, masonry, joint ventures and recent business acquisitions.

The company is also targeting circa $10 million in cost savings for the year and is looking to make more out-of-cycle price increases for its products.

Adbri share price snapshot

The Adbri’s share price has fallen around 40% over the past year. In contrast, the ASX 200 index lost a more modest 5%.

But Adbri is in good company as other ASX building materials companies are also struggling. The James Hardie Industries plc (ASX: JHX) share price has lost 31% while the Boral Limited (ASX: BLD) share price has shed 55% over the same period.

The post Adbri share price tumbles 12% following a drop in profits appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Ampol share price dips as profits reach historic highs
• Own Coles shares? Here’s what to expect from the supermarket giant’s FY22 results
• Reliance Worldwide share price slumps 3% on ‘year of significant operational challenges’
• Qantas share price sinks upon call for CEO resignation
• Could ASX battery minerals shares be in for a boost next month?

Motley Fool contributor Brendon Lau 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 Amcor Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/ZnmxkYj

Coles Group Ltd (ASX: COL) shares will be on watch this week.

On Wednesday, the supermarket giant is expected to release its full year results for FY 2022.

Ahead of the release, let’s look to see what analysts are expecting from the company.

What is expected from Coles in FY 2022?

According to a note out of Goldman Sachs, it is expecting the company to report a 2.2% increase in group sales to $39,417 million.

This is expected to be driven by a 2.4% increase in Food sales to $34,654 million and a 2.7% lift in Liquor sales to $3,621 million, which will offset a 4.2% decline in Coles Express sales to $1,142 million.

As a comparison, the consensus estimate is for slightly higher sales of $39,601 million for FY 2022.

What about profits?

Goldman is forecasting a spot of margin pressure, which it expects to lead to relatively flat earnings in FY 2022.

It has pencilled in an underlying net profit after tax of $1,004 million, which will be down 0.1% year over year. This is broadly in line with the consensus estimate of $1,010 million.

The broker explained:

While we expect that WOW and COL will deliver similar 4Q comps of 6.4% and 6.3% YoY respectively, we expect that WOW will deliver moderate margin expansion of 40bps due to positive mix while COL will deliver steady EBIT margins YoY given higher opex as it begins to become more proactive on digital transformation.

What else could impact Coles’ shares?

Goldman also highlights that the company’s outlook could have an impact on the performance of Coles’ shares this week.

It concludes:

Outlook statements will be key in terms of volume demand and pricing as well as cost inflation given still elevated fresh prices as well as re-surfacing of absenteeism. Longer-term opex/capex investments will also be key especially as COL will step up to deliver Ocado and Witron investments as WOW continues to invest behind digital including market place and retail media.

Goldman Sachs currently has a neutral rating and $17.30 price target on Coles shares.

The post Own Coles shares? Here’s what to expect from the supermarket giant’s FY22 results appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 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?
• 2 ASX 200 dividend shares to buy right now according to analysts
• Are Coles shares an ASX buy ahead of the company’s earnings next week?

Motley Fool contributor James Mickleboro 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.

from The Motley Fool Australia https://ift.tt/BKfvE39

The Reliance Worldwide Corporation Ltd (ASX: RWC) share price is in the red this morning after the S&P/ASX 200 Index (ASX: XJO) plumbing products producer released its full-year earnings results.

After opening at $4.22 – 6.4% lower than its previous close – the stock has regain some ground to trade at $4.36. However, that’s still 3.33% lower than it was at the end of Friday’s session.

Reliance Worldwide share price falls despite surging sales

• Sales came to US$1.17 billion – a 17% improvement on that of the prior corresponding period (pcp)
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) rose to US$258.9 million – a 2% increase
• Net profit after tax (NPAT) came in at US$137.4 million – down 3% on that of the pcp
• Earnings per share (EPS) was 17.5 US cents – a 3% drop
• Declared a 5 US cent final dividend, bringing its full-year dividend to 9.5 US cents – a 2% improvement.

Reliance Worldwide’s operating cash flow was down 44% year-on-year to US$139.6 million as the company invested in its inventory levels in a bid to counter supply chain disruptions. On top of supply chain issues, the company battled high commodity, freight, packaging, and energy prices, as well as inflation.  

Meanwhile, its revenue was boosted by its EZ-Flo acquisition, new product revenues, volume growth, and price increases. Average price increases of around 9.5% were implemented in its key markets over the period.

Its sales in the America’s lifted 26% last financial year. In the Asia Pacific and Europe, Middle East, and Africa regions, they increased 6% and 1% respectively on a constant currency basis.

When adjusting for acquisition and integration costs, among other impacts, the company’s EBITDA came to US$268.7 million while its NPAT increased to US$161.4 million. Those figures represent respective improvements of 3% and 2%.  

What else happened in FY22?

The major news from the company last financial year was its acquisition of EZ-Flo International. EZ-Flo manufactures and distributes plumping supplies, with a focus on specialty products.

News of the acquisition – which dropped alongside a trading update – saw the market bid the Reliance Worldwide share price 0.4% higher in October.

The company also completed the acquisition of Australia’s largest producer of bronze brass copper alloys, LCL, in August 2021.

What did management say?

Reliance Worldwide CEO Heath Sharp commented on the company’s earnings, saying:

This was a year of significant operational challenges. Supply chain disruption, ongoing COVID outbreaks, and cost inflation were all prominent. Despite this, our team has guided the company effectively through these disruptions and delivered record underlying net earnings.

For a second consecutive year we have set new all-time volume records across many of our markets. At the same time, we have been able to implement price increases in all our markets to offset the significant cost inflation we encountered throughout the year.

What’s next?

The company didn’t offer new earnings guidance today. However, it did provide an update on market conditions.

It said short-term demand outlook for its key markets was satisfactory while backlogs in repair and maintenance markets and construction activity in Australia should support volumes. It also noted that its end market exposure – predominantly repair and maintenance activity – should provide greater economic resilience than the residential construction market.

However, looking to the medium term, the company says weaker global economic conditions and recession risks in its key markets means its outlook is less certain. Its working to mitigate risks of rising interest rates, weaker consumer confidence, inflation, and supply chain disruption in financial year 2023.

Reliance Worldwide share price snapshot

Today’s fall included, the Reliance Worldwide share price is trading 32% lower than it was at the start of 2022. It has also dumped 25% since this time last year.

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

The post Reliance Worldwide share price slumps 3% on ‘year of significant operational challenges’ appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here are the top 10 ASX 200 shares today

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 positions in and has recommended Reliance Worldwide Corporation Limited. The Motley Fool Australia has recommended Reliance Worldwide Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/fg1hbdl

The Qantas Airways Limited (ASX: QAN) share price is down 2.13% in early trade Monday with a union calling for chief executive Alan Joyce to resign in the aftermath of his apology to customers.

Over the weekend, Qantas offered its frequent flyers gifts such as $50 credit and lounge passes to quell anger over its service quality this year. 

“Over the past few months, too many of you have had flights delayed, flights cancelled and bags misplaced,” Joyce said.

“On behalf of the national carrier, I want to apologise and assure you that we’re working hard to get back to our best.”

However, Transport Workers’ Union national secretary Michael Kaine labelled the apology “a stunt” that does nothing to solve the problems.

“Enough of the gimmicks,” he said.

“If Qantas management, or indeed Joyce, really cared about customers, the right thing to do would be to appoint a new CEO with the business acumen to bring back highly trained, experienced workers and treat them with respect.”

Customers and regulators are all frowning at Qantas

Despite Australians again travelling in massive numbers this year after years of interstate and international border restrictions, the Qantas share price has dropped 8.7% so far in 2022.

Customers have heavily criticised the airline for charging a premium over its budget rivals in return for its service, but not delivering on that premise.

Joyce blamed “good reasons” for the issues.

“We’re already seeing a sustained improvement in baggage handling and on-time performance, and while factors out of our control like weather can have an impact on our schedule, we expect things to keep improving each week.”

The news is not much better in the back office either.

Earlier this year, Qantas proposed to acquire its wet lease provider Alliance Aviation Services Ltd (ASX: AQZ) in a $765 million deal.

But recently the Australian Competition and Consumer Competition has expressed concerns about the potential adverse effects of such a takeover on the aviation industry.

The watchdog has the power to block the deal if its final report concludes that is the best route to preserve competition in the sector.

The post Qantas share price sinks upon call for CEO resignation appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Qantas share price dips as ACCC raises acquisition concerns
• What’s creating tailwinds for the Qantas share price today?
• What’s lifting the Qantas share price on Monday?
• Qantas share price unimpressed despite $15m solution to ‘well-publicised challenges’
• Why did the Qantas share price fly higher today?

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 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.

from The Motley Fool Australia https://ift.tt/EQ6NmB8