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The Liontown Resources Limited (ASX: LTR) share price is sliding lower today despite the company’s silence.

The S&P/ASX 200 Index (ASX: XJO) lithium share is down 2% right now, trading at $1.705.

For context, the index is currently up 0.04% while the S&P/ASX 200 Materials Index (ASX: XMJ) has slipped 0.06%.

So, what might be going wrong for the Liontown share price today? Let’s take a look.

What’s going on with the Liontown share price?

The Liontown share price is tumbling on Wednesday alongside those of its ASX 200 lithium peers.

Indeed, the ASX 200 materials sector is being weighed down by stock in Lake Resources N.L. (ASX: LKE) and Core Lithium Ltd (ASX: CXO). They’ve fallen 4.5% and 3.7% right now, making them the two worst performing ASX 200 materials shares.

The Liontown share price is the sector’s fifth worst performer while those of Allkem Ltd (ASX: AKE) and Pilbara Minerals Ltd (ASX: PLS) are also struggling.

It marks the second consecutive day in which Liontown is trading in the red and leaves the stock roughly flat with where it was this time last week.

Such recent performance seemingly marks an end to its meteoric rise. The lithium share is currently trading 95% higher than its lowest point of 2022 so far – 87.5 cents – reached in late June.

Interestingly, it’s been nearly three weeks since the market heard price-sensitive news from the company.

It dropped its latest quarterly report on 28 July, detailing what the company’s CEO and managing director Tony Ottaviano dubbed “a significant period of positive activity and progress”. That saw the Liontown share price lift 6%.

Though, investors who jumped on board with the company at the start of the year haven’t quite broken even.

The stock is still trading 2.5% lower than it was at the beginning of 2022. Though, it’s gained 82% since this time last year.

The post Why is the Liontown share price limping lower on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why is the Liontown share price leaping 5% on Monday?
• Why has the Liontown share price roared 30% higher in a week?
• Here are 2 ASX lithium stocks analysts rate as buys
• 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 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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BHP Group Ltd (ASX: BHP) shares have been on most investors’ radars this week. That’s as the S&P/ASX 200 Index (ASX: XJO) mining giant reported its full FY22 results yesterday.

And those results were impressive.

The highlights included a record dividend payout. It also included a 16% increase in underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) from continuing operations. EBITDA reached US$40.63 billion in FY22, also a record high.

BHP shares closed up 4.3% yesterday.

What you may not know about BHP shares and coal

While BHP shares are generally connected with iron ore, and to a lesser extent copper and nickel, some 23% of the miner’s FY22 EBITDA came from coal.

The big year-on-year leap in its coal earnings was driven by soaring prices for the other black gold, amid a broader global energy crisis spurred by Russia’s invasion of Ukraine.

In the financial year just past, BHP shares did take a step away from coal. The miner completed the sales of its interests in the BMC and Cerrejón energy coal assets. However, BHP opted to retain and operate its New South Wales Energy Coal business until mine closure in 2030.

And the company doesn’t appear to have any intention of exiting the coal business, stating:

Long term, we believe that higher quality metallurgical coals will still be used in blast furnace steel making for decades based on our bottom-up analysis of likely regional steel decarbonisation pathways.

However, BHP has moved its coal project plans in Queensland to the back burner.

Queensland moves the mining royalty goal posts

In June the Queensland Government surprised miners by tying the royalties it receives from them to the rising price of coal. By some estimates, this could see the miners paying as much as three times the prior tax levels.

This has seen BHP hit the pause button on its Blackwater South coal mine project, which has a 90-year mine life.

Commenting on the decision to reporters (courtesy of the Australian Financial Review), BHP CEO Mike Henry said:

There’s been a significant increase in the sovereign risk associated with Queensland. Which has caused us to say, ‘Well, we really can’t deploy further capital into that business for the time being’.

Henry added that the regulatory processes BHP has engaged in with the Queensland Government for approval of the coal mine simply offered the miner that option, not the obligation to invest:

It gives you the option to make a decision to invest. Since then, we’ve had changes to the Queensland royalty regime that were quite sudden and didn’t involve any engagement with industry. We’ll go back and reassess what the plans for the business are going forward.

How have BHP shares been tracking?

BHP shares have come off their April highs amid lower iron ore prices. Year to date the BHP share price is down 4%, compared to a 2022 loss of 6% posted by the ASX 200.

The post Can BHP shares keep cashing in on coal? appeared first on The Motley Fool Australia.

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More reading

• An ASX 200 market darling in the past, but don’t expect fireworks from the CSL share price going forward
• Brokers say BHP and this ASX 200 share are buys
• Here are the top 10 ASX 200 shares today
• Why has the Panoramic Resources share price surged 40% in a month?
• Why BHP, Life360, Tassal, and Temple & Webster shares are charging higher

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.

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It’s been a bouncy but overall negative day so far this Wednesday for ASX shares. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) is sitting at around 7,110 points, up an anaemic 0.05% so far. But it’s looking a lot worse for the Core Lithium Ltd (ASX: CXO) share price today.

Core Lithium shares have had a clanger so far in today’s session. This ASX 200 lithium stock has copped a 4.7% drop at the time of writing to $1.42 a share after closing at $1.49 yesterday and opening at $1.47 this morning.

Soon after market open, Core Lithium fell all the way down to $1.36 a share, which was a drop of almost 8% at the time.

So what’s going on here?

Why has the Core Lithium share price cratered today?

Well, there’s nothing out of the company itself this Wednesday that explains this rather sizeable drop. The last major piece of news out of the company was the exploration update Core Lithium released on Monday.

This prompted enormous investor excitement at the time, with the Core Lithium share price rising more than 10%.

But Core Lithium shares have been on a tear for far longer than that. Over the past month, this ASX lithium stock has gained an impressive 50%. Year to date, Core Lithium shares are up a whopping 126% or so.

So perhaps the weakness we are seeing today is an acknowledgement that this extraordinary share price run had to end at some point. Notably, we are seeing weakness across most of the ASX lithium share space today.

Pilbara Minerals Ltd (ASX: PLS) and Liontown Resources Limited (ASX: LTR) are also both down today, although not by as much as Core Lithium shares.

At the current Core Lithium share price, this ASX 200 lithium stock has a market capitalisation of $2.46 billion.

The post Why is the Core Lithium share price careering 5% lower today? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Here are the top 10 ASX 200 shares today
• 3 ASX 200 shares having a super start to the week
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why BlueScope, Carsales, Core Lithium, and Nearmap shares are racing higher

Motley Fool contributor Sebastian Bowen 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 Santos Ltd (ASX: STO) share price is currently in the red by more than 2% even though the oil and gas ASX share just announced its FY22 half-year report that included huge returns.

It revealed a record result and much larger shareholder returns in the form of a dividend and share buyback.

On top of that, it also announced a final investment decision on Pikka.

HY22 result

It said that underlying profit grew by 300% to US$1.27 billion, statutory net profit jumped 230% to $1.17 billion and free cash flow went up 199% to $1.71 billion.

Santos benefited from the “significantly higher” oil and LNG prices, due to stronger global energy demand as well as a higher interest in PNG LNG after the merger with Oil Search.

It grew the interim dividend by 38% to US 7.6 cents. It also increased its previously-announced on-market share buyback from US$250 million to US$350 million. Profit and shareholder returns can have a big impact on the Santos share price.

Santos also revealed it’s in advanced discussions with a shortlist of parties for the sale of a 5% interest in the PNG LNG project. Expected proceeds are in-line with the market consensus valuation, according to management. Santos said it intends to retain a 37.5% interest in PNG LNG.

Pikka final investment decision

As operator of the Pikka phase one oil project located on the north slope of Alaska, Santos announced that the project will proceed.

The expected production is 80,000 barrels per day, with first oil anticipated in 2026. The 2P reserves are 397 million barrels gross pre-royalties. Santos’ share of capital expenditure is US$1.3 billion.

Santos is expecting an internal rate of rate (IRR) of 19% at a long-term oil price of US$60.

The ASX share is committed to the project being net-zero, in terms of scope 1 and scope 2. It has entered into memorandums of understanding with Alaska Native Corporations to deliver carbon offset projects.

Santos said this project would add further diversification to its portfolio and reduce geographic concentration risk.

Santos share price snapshot

Since the beginning of 2022, Santos shares have risen by 6%. It is down 20% since 8 June 2022.

The post Santos share price slips despite record profit and dividend boost appeared first on The Motley Fool Australia.

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More reading

• Santos share price on watch after 300% first half profit growth
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• What’s impacting the Santos share price today?
• Is the Santos share price a buy following the energy giant’s latest acquisition?

Motley Fool contributor Tristan Harrison 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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1) The CSL Limited (ASX: CSL) share price fell around 4% in Wednesday trade to $285. This comes after the popular biotech reported a 6% fall in FY22 net profit on revenue growth of just 3%.

For a company trading on a trailing price-to-earnings (P/E) ratio of around 40 times, the growth is underwhelming, to say the least. 

Admittedly, the past year has not been an easy one, with CSL Chief Executive Paul Perreault saying…

“CSL has delivered a good result at the top end of our guidance, demonstrating our resilient performance against the ongoing challenges presented by the global COVID pandemic.”

CSL is anticipating a return to growth in FY23, forecasting an uplift in profits of around 8%. 

Once the darling of the ASX, the CSL share price first hit these levels coming up to three years ago now, lagging the returns of the ASX 200.

Given its competitive advantage, CSL might be seen as a safe investment, but trading on 40 times earnings, going forward it’s unlikely to deliver anything like the bumper returns from years gone by.

2) With the ASX 200 up around 10% from its June lows, it feels like the easy “rebound” gains have already been made.

Results season has largely been “as expected” for many of the large-cap stocks that have so far reported. 

Resource and commodity companies: booming profits and dividends in FY22, but expecting lower commodity prices and higher costs in FY23. BHP Limited (ASX: BHP) has been the standout, with the BHP share price now trading on a fully franked dividend yield of around 11%. Just don’t bank on that same yield going forward. 

Tech stocks: still posting losses, but with a keen eye on breakeven. Many share prices have made a partial recovery, albeit from falls of up to 80% or more, as tax loss selling hit them for six. 

Reporting today, SaaS stock Whisper (ASX: WSP) said it’s “on track for positive EBITDA in FY23 as it reported an FY22 EBITDA loss of $10.6 million. The Whispir share price is up 67% from its June lows, but down 75% from its July 2020 highs. I own the stock, for my sins.

Bank stocks: a decent FY22, but a more challenging FY23. After holding up reasonably well during the “inflation correction”, the CBA share price now looks downright expensive, and only trades on a fully franked dividend yield of 3.9%.  

3) So, where to from here?

I’m pinning my short-term hopes on a few ASX microcap stocks I own, many of which have (sadly, for me) not participated in the stock market recovery of the past two months.

One is MSL Solutions (ASX: MSL), a leading SaaS technology provider to the sports, leisure, and hospitality sectors. Its share price is showing signs of life on Wednesday — up 10% on modest volume — but is still trading lower than when it updated the market on May 31 with a strong forecast for FY22.

MSL Solutions reports tomorrow. It has forecast revenue growth of around 30% and trades on a forecast EBITDA multiple of around 12 times. MSL shares are not exactly cheap, but with a decent level of predictable revenue, I think the company should be able to keep growing nicely into the future.

The post An ASX 200 market darling in the past, but don’t expect fireworks from the CSL share price going forward appeared first on The Motley Fool Australia.

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More reading

• CSL share price drops despite expectations of growth in FY23
• CSL share price on watch following FY22 results
• Brokers say BHP and this ASX 200 share are buys
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Bruce Jackson has positions in MSL Solutions Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. 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 Wesfarmers Ltd (ASX: WES) share price is outperforming the market despite the company’s silence. The retailer has been joined in the green by many of its S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) peers.

Indeed, consumer discretionary is up 1.37% at the time of writing. And the Wesfarmers share price is its fifth best performer, having gained 2.15% to trade at $48.93.

At the same time, the S&P/ASX 200 Index (ASX: XJO) is slipping 0.2%.

So, what might be driving the stock and its peers higher on Wednesday? Let’s take a look.

What’s boosting the Wesfarmers share price today?

The Wesfarmers share price is on the up-and-up today. Its gain follows a strong session for retailers on Wall Street. Many were buoyed by earnings from consumer discretionary giants.

The Walmart Inc (NYSE: WMT) share price lifted 5.1% overnight on the back of the retail monolith’s quarterly earnings. The company posted US$152.9 billion of revenue – an 8.4% increase on that of the prior corresponding period (pcp) – while its operating income fell 6.8% to US$6.9 billion.

Fellow retailer Home Depot Inc (NYSE: HD) also posted quarterly results, boasting US$43.8 billion of sales, a 6.5% lift on those of the pcp, and US$5.2 billion of net earnings – an 11.5% improvement. The stock gained 4% on the back of the release.

Other New York-listed retailers such as Target Corporation (NYSE: TGT) and Best Buy Co Inc (NYSE: BBY) also saw their shares rise 4.5% and 4.4%, respectively.

Meanwhile, a continuing short squeeze saw the Bed Bath & Beyond (NASDAQ: BBBY) share price surge 29%, as The Motley Fool reports.

Such international action has seemingly moved the ASX 200 on Wednesday. Consumer discretionary is leading the way today, coming in as the market’s top performing sector.

Outperforming the Wesfarmers share price on the index are those of Super Retail Group Ltd (ASX: SUL) – which reported today, City Chic Collective Ltd (ASX: CCX), Bapcor Ltd (ASX: BAP) – another company that dropped earnings today – and Premier Investments Limited (ASX: PMV). They’ve gained 8%, 3.8%, 2.8%, and 2.3% respectively.

The post Why is the Wesfarmers share price smashing the ASX 200 today? appeared first on The Motley Fool Australia.

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More reading

• Did you know you’re investing in lithium when you buy Wesfarmers shares?
• Do any ASX lithium shares pay dividends?
• ASX 200 better buy: Wesfarmers or Woolworths?
• 2 excellent ASX dividend shares experts rate as buys
• What’s impacting ASX 200 retail 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 Super Retail Group Limited, Target, and Walmart Inc. The Motley Fool Australia has positions in and has recommended Super Retail Group Limited and Wesfarmers Limited. The Motley Fool Australia has recommended Bapcor and Premier Investments 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 Aussie share market is relatively flat today after Wall Street recorded a mixed bag overnight.

In midday trade, the S&P/ASX 200 Index (ASX: XJO) is shedding 0.11% to 7,097.8 points.

Also heading south is the Commonwealth Bank of Australia (ASX: CBA) share price.

At the time of writing, the banking giant’s shares are down 1.51% to $99.93 apiece.

CBA shares trade ex-dividend

Following the release of the bank’s full-year results earlier this month, investors are eyeing CBA shares as they go ex-dividend today.

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

Traditionally, 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 CBA’s final dividend, shareholders will receive a payment of $2.10 per share on 29 September.

This brings the full-year dividend to $3.85 per share, reflecting an increase of 10% compared to the prior corresponding period.

The dividend is also fully franked.

Under the company’s capital management framework, the dividend payout ratio was 68% of the bank’s cash earnings.

CBA advised it will continue to target a full-year payout ratio of 70-80% of cash NPAT and an interim payout ratio of approximately 70% of cash NPAT.

Are CBA shares still a buy?

Following the bank’s financial scorecard for the full year, analysts at Morgan Stanley weighed in on CBA shares.

According to ANZ Share Investing, the broker raised its 12-month price target by 1.2% to $83.00. Based on the current CBA share price, this implies a downside of 17%.

Similarly, Goldman Sachs cut its rating by 4.4% to $86.86 apiece.

It appears both brokers are in agreeance with what they believe CBA shares should be worth in the current climate.

CBA share price snapshot

Since the beginning of 2022, the CBA share price has travelled in circles to post a small loss of 1%.

In comparison, the benchmark ASX 200 index is down almost 5% over the same time frame.

CBA has a price-to-earnings (P/E) ratio of 18.52 and commands a market capitalisation of roughly $170 billion.

The post Why is the CBA share price sliding today? appeared first on The Motley Fool Australia.

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More reading

• Magellan share price in freefall despite 44% rise in profits
• Super Retail Group share price jumps 8% on soft FY22 results
• Why these 2 ASX shares rocketed 40% last month
• 5 things to watch on the ASX 200 on Wednesday
• ‘Green premium’: What could it mean for the Vulcan Energy share price?

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 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 Lake Resources N.L (ASX: LKE) share price has seen better days than today.

Around midday, shares in the lithium exploration company are southbound despite the absence of any news. At present, the Lake Resources market capitalisation is 8.5% lighter than it was yesterday, with a share price of $1.23.

Let’s take a closer look.

Cool your jets

Some investors are calling time on their Lake Resources investment on Wednesday. Though, the lack of announcements from Lake directly suggests there could be other factors at play.

On Monday, we reported on the heightened short interest in Lake Resources shares. The lithium explorer managed to make the top 10 most shorted ASX shares last week, attracting a noteworthy 10.8% short interest.

To give some context, the Lake Resources share price had been on a tear prior to Thursday last week. In the space of less than a month, investors bid the company’s shares up more than 150%. A rewarding return for those lucky shareholders.

Hence, it’s unsurprising that some investors might be opportunistically taking their bags of cash and running for the hills.

Looking at lithium more broadly, the landscape remains relatively unchanged. In fact, S&P Global reported on Friday that industrial-grade lithium carbonate prices had edged higher. Furthermore, Trading Economics shows lithium carbonate prices holding steady at around US$70,500 per tonne.

Lake Resources is slated to report its full-year results on 30 September.

Lake Resources share price in review

Today might look grim for Lake Resources shares, but zooming out, it looks a whole lot better. In the last 12 months, the lithium explorer has notched a gain of 116%. That is a severe outperformance of the S&P/ASX 200 Index (ASX: XJO) and its dismal fall of 5.5%.

However, the mighty return doesn’t coincide with mighty margins. For now, Lake is yet to derive any revenue from operations. In turn, the company recorded a $6.1 million loss for the 12 months ending 31 December 2021.

The post Why is the Lake Resources share price sinking 8% on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Here are the top 10 ASX 200 shares today
• Why is the Lake Resources share price rebounding 5% on Monday?
• Here are the 3 most heavily traded ASX 200 shares on Monday
• These are the 10 most shorted ASX shares

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.

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The Dexus Property Group (ASX: DXS) share price has given back some small early gains and is currently down 0.7%.

Dexus shares closed yesterday trading for $9.16 and are now at $9.10.

This comes following the release of the commercial real estate group’s full-year results for the 12 months ending 30 June (FY22).

Dexus share price wobbles despite strong FY22 results

• Net profit after tax (NPAT) increased 41.9% year on year to $1.62 billion
• Distributions of 53.2 cents per security, up 2.7% from FY21 and beating guidance
• Occupancy of 95.6% for the Dexus office portfolio and 98.1% for the Dexus industrial portfolio
• $1.9 billion of cash and undrawn debt facilities as at 30 June

What else happened during the year?

Dexus attributed much of its NPAT boost to fair value gains on investment properties, share of net profit of equity-accounted investments, and a favourable net fair value movement of interest rate derivatives.

Milestones during the year included securing $1.6 billion of investment onto its funds management platform with “a number” of new investors coming aboard.

Also topping the list in FY22 was Dexus’ agreement to acquire AMP Capital’s real estate and domestic infrastructure equity business. The company said it remains focused on completing the transaction, which will provide it with up to $21.1 billion of funds under management.

On the environmental, social and governance (ESG) front, Dexus highlighted that it was the only real estate company to achieve a Gold Class distinction in the S&P Global Sustainability Yearbook 2022.

What did management say?

Commenting on the results, Dexus CEO Darren Steinberg said:

We’ve achieved a lot this year in what has been a complex environment. We have selectively recycled assets and made investments to support long term growth which involved over $10 billion of industrial, office, retail and healthcare transactions across the group.

Sustainability is integrated across our entire business. For more than a decade, we have been focused on energy efficiency as well as reducing the group’s emissions and environmental footprint.

Dexus’ CFO Keir Barnes added:

Dexus achieved 2.7% growth in distributions per security for the 12 months ended 30 June 2022. This result is particularly pleasing given our initial market guidance for distribution growth of not less than 2% which was upgraded in the second half to growth of not less than 2.5%.

What’s next?

The Dexus share price is likely facing some headwinds today after the company forecast a challenging period over the next two years. Dexus cited increasing interest rates, continuing supply chain disruptions, the global energy crisis and geopolitical risks as creating ongoing uncertainties.

Looking ahead, Steinberg said:

Based on current expectations regarding interest rates, continued asset sales and barring unforeseen circumstances, Dexus expects distributions of 50.0 – 51.5 cents per security for the 12 months ended 30 June 202313, below the 53.2 cents per security distribution delivered in FY22.

In 2024 and beyond, he added, “We are set to emerge as one of the leading real asset managers in the Asia-Pacific region positioned to capitalise on underlying structural trends, and we are confident of continuing deliver long-term value.”

Dexus share price snapshot

The Dexus share price is down 19% in 2022. That compares to a year-to-date loss of 7% posted by the S&P/ASX 200 Index (ASX: XJO).

The post Dexus share price wobbles amid strong FY22 results and reduced FY23 dividend guidance appeared first on The Motley Fool Australia.

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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.

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The ReadyTech Holdings Ltd (ASX: RDY) share price is in the red in midday trade amid the company reporting a strong performance in its FY22 results.

Shares of the software as a service (SaaS) company are currently changing hands for $3.18 each, a fall of 1.24% on the day so far.

Let’s go over the highlights of the report.

What did ReadyTech Holdings report?

• Revenue up 16.8% year on year (YoY) to $78.3 million
• Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) up 45.50% YoY to $27.5 million
• Net customer revenue retention rate of 106%, up from 104% in FY21
• Gross opportunity pipeline up 31.57% YoY to $25 million

The company reported healthier top and bottom lines combined with a strong net customer retention rate. Sales momentum also picked up, with the company significantly growing its opportunity pipeline.

ReadyTech reported a 27% compound annual growth rate (CAGR) for its revenue over the last four years.

This was helped through the company onboarding 48 marquee brands, each contributing $50,000 in subscription and implementation revenue. The combined total of these companies was said to be $8 million.

What else happened in FY22?

The company announced four acquisitions in various sectors to boost the brand’s competitive standing. These included Open Windows, Avaxa, Itvision, and PhoenixHRIS. During the financial year, these companies contributed revenue of $4.3 million.

However, the company’s operating expenses also grew 63.1% to $50.8 million, with most of the increase attributed to increased research and development (R&D) and sales and marketing costs.

A major contributor to the company’s finances was the justice sector, contributing $23.9 million in revenue and $8.8 million in earnings. These figures grew 18.6% and 25.7% respectively on a YoY basis.

What did management say?

ReadyTech co-founder and CEO Marc Washbourne said:

FY22 was a highly successful year for ReadyTech driven by the disciplined execution of our vertical SaaS playbook strategy. Our investments in product-market fit, sales and marketing – with a particular focus on enterprise accounts – saw the Company deliver strong organic growth across all verticals.

What’s next?

ReadyTech said it’s expecting organic revenue growth to be in the mid-teens for FY23, with $2 million added to its income statement from its acquisitions.

The company said the justice sector continues to be a major tailwind. ReadyTech said its delivery of case management solutions represents a serviceable market of $250 million. This is spread across courts, legal services, tribunals, and public prosecutors.

The company also stated it has already partnered with the Ministry of Justice in the UK, providing a scheduling and listing module. It also has the potential to port its products to other Commonwealth countries.

ReadyTech share price snapshot

The ReadyTech share price has taken a beating over the last year, down 17% year to date

But it’s still fared better than the S&P/ASX All Technology Index (ASX: XTX). It’s lost more than 24% over the same period.

At its current share price, ReadyTech has a market capitalisation of around $350 million.

The post ReadyTech share price slips despite earnings increase appeared first on The Motley Fool Australia.

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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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