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The S&P/ASX 200 Index (ASX: XJO) is out of form on Tuesday. In afternoon trade, the benchmark index is down 0.2% to 7,635 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Brainchip Holdings Ltd (ASX: BRN)

The Brainchip share price is down 26% to 36 cents. Investors have been selling the semiconductor company’s shares after it released its FY 2023 results. They appear disappointed that Brainchip continues to generate almost no revenue and burn through cash like kindling. Brainchip reported revenue of US$232,000 and a loss after tax of US$28.9 million.

DGL Group Ltd (ASX: DGL)

The DGL share price is down 42% to 60 cents. This follows the release of the industrial solutions company’s half-year results. DGL reported a 3% increase in revenue to $217 million but a 43% reduction in statutory net profit after tax to $5.9 million. Unreliable weather forecasts and supply chain disruptions impacted first-half results.

Weebit Nano Ltd (ASX: WBT)

The Weebit Nano share price is down 10% to $4.01. This has been driven by the release of the semiconductor company’s half-year results. The heavily shorted company reported a grand total of $153,000 in revenue for the six months with a loss of $25.2 million. Weebit Nano currently has a market capitalisation of $750 million.

Zip Co Ltd (ASX: ZIP)

The Zip share price is down 9.5% to 84.5 cents. This is despite the buy now pay later provider delivering a strong half-year result this morning. Zip reported a 28.9% increase in revenue to $430 million and group cash EBTDA of $30.8 million. The latter is up from negative $33.2 million a year earlier. It appears that investors were pricing in even stronger growth.

The post Why Brainchip, DGL, Weebit Nano, and Zip shares are dropping today appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX All Ords stock just crashed 46% on half-year earnings
• Brainchip share price crashes 23% following another year of losses for ASX AI chipmaker
• 4 ASX tech shares tumbling on results releases
• Zip share price tumbles 9% despite explosive first-half growth
• These are the 10 most shorted ASX shares

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 positions in and has recommended Zip Co. 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 ASX All Ords is lower on Tuesday with the S&P/ASX All Ordinaries Index (ASX: XAO) down 0.55%.

Among the ASX All Ords stocks reporting earnings results today is chemicals business DGL Group Ltd (ASX: DGL), whose share price dived 45.6% to a new 52-week low of 56 cents this morning.

This followed news of a 43% nosedive in profit in 1H FY24.

The DGL share price is currently 60 cents, down 41.75%.

Let’s look at DGL’s report as well as the earnings performances of two other ASX All Ords stocks today.

ASX All Ords materials stock DGL plummets 46%

DGL reported revenue of $217 million in 1H FY24, in line with 1H FY23, along with a 3% increase in underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) to $30.4 million.

However, its statutory net profit after tax (NPAT) came in at $5.9 million, representing a 43% dive.

DGL Founder and CEO Simon Henry said unreliable weather forecasts and supply chain disruptions impacted first-half results.

Henry said:

We have taken corrective actions, and these disruptions are normalising, giving us confidence in the outlook.

DGL expects a stronger second-half performance, in line with typical annual seasonal trends.

The company said it has an intensified focus on managing costs and maximising efficiencies.

DGL is continuing to invest in growing its network and assets and improving its systems and warned this would lead to lower full-year net profit due to higher finance and depreciation costs.

However, the underlying FY24 EBITDA for the ASX All Ords stock “should be broadly in line with FY23”.

The company reported an underlying operating cash flow conversion of 93%. Its net assets are worth $339.2 million, up 2% since 30 June 2023, and its net debt was $117.2 million as of 31 December 2023.

No interim dividend for City Chic shareholders

The City Chic Collective Ltd (ASX: CCX) share price tumbled 12.5% to 49 cents after the ASX All Ords plus-size clothing retailer reported sales revenue of $105.8 million in 1H FY24, down 29% on 1H FY23.

City Chic also reported an underlying EBITDA loss of $7.5 million.

The company said it expects to return to profitable trading in 2H FY24.

Phil Ryan, CEO and Managing Director, said the company had been focusing on rightsizing its cost base,
optimising its inventory position, and introducing new products to drive demand.

He said:

I am pleased to report that the revitalisation of our product assortment is delivering improving margin and sellthrough rates, particularly in stores.

Our cost reduction measures will deliver approximately $25m in annualised savings and mitigation, exceeding our initial targets.

While cost of living pressures are impacting transaction volumes, the feedback and sell-through on our new ranges has been encouraging and our new product is expected to support our return to profitable trading.

The ASX All Ords company will not pay an interim dividend “in light of continued market uncertainty and the Group’s capital management priorities”.

Alumina reports on a “difficult year”

The Alumina Ltd (ASX: AWC) share price is down 7.6% to $1.01 after the company released its full-year FY23 results.

Alumina owns 40% of Alcoa World Alumina and Chemicals (AWAC), which form part of Alcoa Corp’s bauxite and alumina business segments.

Alumina reported a net loss after tax of US$150 million in FY23 compared to a US$104 million profit in FY22.

This follows AWAC reporting an EBITDA of US$165 million for FY23 compared to US$817 million in FY22.

AWAC’s alumina production fell to 10.3Mt, down from 11.8Mt in FY22. The realised alumina price for FY23 was US$352 per tonne, with the cash cost of production very close to it at US$308 per tonne.

Once again, Alumina shares will not pay a dividend to shareholders. The ASX All Ords materials share hasn’t paid a dividend since September 2022.

The company said 2023 was a “difficult year” due to lower production and higher costs.

However, progress on several fronts has been made in recent months, including confirmation of long-awaited mine plan approvals in Western Australia (WA).

AWAC has also chosen to fully curtail operations at the Kwinana refinery in WA and partially curtail operations at its San Ciprian refinery in Spain.

Alumina said:

Together with the ongoing focus on profitability improvement across all aspects of the portfolio, these initiatives provide AWAC with a strong foundation to create a significantly higher quality refinery portfolio.

As we reported yesterday, Alcoa has made a takeover bid for its minority joint venture partner. The Alumina board is currently recommending the proposal to shareholders.

The post Guess which ASX All Ords stock just crashed 46% on half-year earnings appeared first on The Motley Fool Australia.

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More reading

• Why Alumina, Kogan, Mayne Pharma, and Suncorp shares are racing higher
• Alumina shares leap 8% on Alcoa takeover bid
• Which ASX All Ords stock is diving 18% on FY23 results?
• 4 All Ords ASX dividend shares going gangbusters on results
• 3 ASX All Ords shares crashing as much as 24% on results

Motley Fool contributor Bronwyn Allen has positions in Alumina. 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 S&P/ASX 300 Index (ASX: XKO) is down 0.3% during the Tuesday lunch hour, but we certainly can’t blame this ASX 300 stock for those losses.

Shares in the Aussie childcare centre operator are up a whopping 13.8% at the time of writing, trading for $1.275 apiece.

Any guesses?

If you said G8 Education Ltd (ASX: GEM), go to the head of the virtual class.

The ASX 300 stock is soaring today as investors mull over the company’s full-year 2023 results.

Read on for the highlights.

ASX 300 stock leaps on 2023 profit boost

• Revenue of $983 million, up 9.1% from 2022
• Statutory net profit after tax (NPAT) of $56 million, up 53.1% year on year
• Operating earnings before interest and tax (EBIT) up 25.2% from 2022 to $101 million
• Fully franked dividend of 3 cents per share, up from 2 cents per share in 2022

What else happened with G8 Education during the year?

The 53% increase in NPAT that looks to be sending the ASX 300 share rocketing today was attributed to G8’s earnings recovery. This was driven by improved centre performance, well-managed support office costs and lower net finance costs.

Occupancy levels slipped slightly from 2022 to 70.4% (down from 70.6%). But management noted this had stabilised in the second half of 2023, offering a positive start to 2024.

G8 Education also highlighted that 90% of its long day care centres are now rated as ‘exceeding’ or ‘meeting’ the National Quality Standard.

The 3 cents per share final dividend takes the company’s full-year passive income payout to 4.5 cents per share, up 50% from 2022. At the current share price that equates to a fully franked yield (partly trailing, partly pending) of 3.5%.

What did management say?

Commenting on the results sending the ASX 300 stock sharply higher today, G8 Education CEO Pejman Okhovat said:

Our team’s effort in 2023 saw G8 Education continue to improve its financial performance by focusing on improving experiences for its families and employees, while maintaining a disciplined approach to running our business, optimising our network, and carefully managing costs and our balance sheet.

At our Strategy Day in late 2023, we announced a program of network optimisation to improve group performance. I’m pleased to report we have completed eight of the targeted 31 divestments with another tranche of eight with in-principal agreements.

What’s next for the ASX 300 stock?

Looking at what could impact the ASX 300 stock in the year ahead, G8 reported that spot occupancy for the week ending 25 February was 66.3%, 1.7% higher than in 2023.

G8 increased fees by 4.5% in January to alleviate ongoing inflationary pressures. Management said the company’s capital allocation framework “supports strong cashflow”. 2024 capex is estimated to be $40 million to $45 million.

G8 Education share price snapshot

With today’s big boost factored in, the G8 Education share price is up 5% over the past 12 months, not including the dividend payouts.

The ASX 300 stock is up 37% from the recent 7 December lows.

Another ASX education stock leaping higher on results!

Although not an ASX 300 stock, Keypath Education International Inc (ASX: KED) is another ASX education stock that’s handsomely rewarding shareholders today.

The Keypath share price is up 17% at the time of writing, with shares trading for 55 cents apiece.
This follows on the company’s half-year results for the six months ending 31 December (1H FY 2024).

Keypath Education shares leap on revenue boost

• Revenue of US$66.9 million, up 14.0% from H1 FY 2023 (up 15.3% on a constant currency basis)
• Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of US$2.3 million, US$9.1 million higher than H1 FY 2023
• Net position of US$41.7 million, with no debt, as at 31 December
• Keypath FY 2024 revenue guidance in upper end of range of US$130 million to US$135 million

The post Guess which ASX 300 stock is surging 14% amid mounting profits appeared first on The Motley Fool Australia.

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More reading

• 2 ASX shares rocketing up to 20% on takeover news
• Tyro share price retreats 13% despite rocketing profits
• 2 ASX industrials shares crashing up to 22% on earnings
• Everything you need to know about the new Coles dividend
• Brainchip share price crashes 23% following another year of losses for ASX AI chipmaker

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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There’s been plenty of M&A activity in recent months and this trend shows no signs of slowing.

This morning, two ASX shares revealed that they have received takeover offers.

Here’s what you need to know:

Prospa Group Ltd (ASX: PGL)

The Prospa share price has jumped 15% to 43 cents after the financial technology company accepted a takeover offer. Prospa has entered into a scheme implementation deed with a consortium led by the Salter Brothers Tech Fund.

Prospa’s Independent Board Committee (IBC) unanimously recommends that shareholders vote in favour of the 45 cents per share cash offer. That is in the absence of a superior proposal and subject to the independent expert’s report.

While a premium to recent levels, it is a long way from the ASX share’s 2019 IPO price of $3.78 per share.

In other news, this morning Prospa reported a 7.4% increase in half-year revenue to $145.4 million and a profit before tax of $9 million (from a $6.3 million loss).

QANTM Intellectual Property Ltd (ASX: QIP)

The QANTM share price is up 20% to $1.38. This morning, the intellectual property services company confirmed that it has received a non-binding indicative proposal from Rouse International.

Rouse is a UK-based international intellectual property firm operating in 12 jurisdictions, with a significant emphasis on the Asia Pacific region.

Following careful consideration of the unspecified offer, the QANTM Board has agreed to Rouse’s request to conduct due diligence with a view to putting forward a binding offer capable of being considered by shareholders.

Management warned that there is no certainty that a transaction capable of being considered by shareholders will eventuate.

The post 2 ASX shares rocketing up to 20% on takeover news appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX 300 stock is surging 14% amid mounting profits
• Tyro share price retreats 13% despite rocketing profits
• 2 ASX industrials shares crashing up to 22% on earnings
• Everything you need to know about the new Coles dividend
• Brainchip share price crashes 23% following another year of losses for ASX AI chipmaker

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 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 Tyro Payments Ltd (ASX: TYR) share price is tumbling today as the market makes sense of its FY24 half-year results.

Shares in the payments solutions provider are down a staggering 12.5% to $1.05 currently. The move marks a swift reversal from the $1.30 price that Tyro shares changed hands in the first moments of trading.

Tyro share price ignores first-half growth

Here are some of the key metrics for the six months ended 31 December 2023:

• Transaction value up 2.2% to $22.17 billion
• Merchant count grew by 2.8% to 68,780
• Revenue up 9.5% to $237.1 million
• Gross profit up 10.5% to $105.2 million
• EBITDA up 40.6% to $27.35 million
• Statutory net profit after tax (NPAT) up 367.2% to $5.14 million

What else happened in the first half?

Tyro’s latest report showed transaction value derived from its discretionary merchants — retail and hospitality — were soft in the first half.

Of the two, retail suffered the most, experiencing a 2.1% decline to $5.393 billion processed. Meanwhile, the hospitality vertical saw transaction value increase a meagre 1.8% to $9.455 billion.

The company’s non-discretionary segment delivered the source of growth. Tyro’s ‘services/other’ vertical clipped the ticket on $1.704 billion of card tapping, up 7.2% from the prior corresponding period. However, ‘health’ merchants stole the show, increasing payment value by 24.2% to $3.139 billion.

The company also noted its new merchant applications were offset by “elevated merchant churn of 16%” versus 11.7% in the previous first half. Interestingly, Tyro attributed this churn to the macroeconomic environment, aggressive competitive behaviour from one of its point of sale partners and the ‘Bring Your Own (BYO)’ offering.

Finally, legal matters between Tyro and Kounta (a point-of-sale provider) unfollowed throughout the period. On 16 November 2023, the courts ruled in favour of Tyro as Kounta was found to be in breach of its contractual obligations, sending the Tyro share price higher.

Shortly after, Kounta filed an appeal to the New South Wales courts. The two companies have since reached a settlement resulting in Tyro receiving $10 million in damages and Kounta being barred from offering competing products until 6 September 2024.

What did management say?

Tyro CEO and managing director Jon Davey highlighted the improving economics from broadened solutions, stating:

Our customers appreciate the simplicity of our integrated payments and cashflow offering. During the half, almost one in five new customers signed up for our payments and banking products, valuing the benefits that an integrated solution provides, and we expect this number to grow significantly over the calendar year.

Furthermore, Davey highlighted an accelerated development of new payments and banking features, which will be released to merchants from June.

What next for Tyro?

A glimpse into the next six months was shared through the company’s updated FY24 guidance. Based on the figures, management expects the second half to resemble the first. The company’s FY24 guidance is as follows:

• Transaction value between $43 billion to $44 billion
• Gross profit between $208 million to $215 million
• EBITDA between $54 million to $58 million
• Targeted EBITDA margin of approximately 26%

Pleasingly for shareholders, positive free cash flow is forecast to continue.

Tyro share price snapshot

In light of today’s decline, the Tyro share price is now 34% below where it was a year ago. For context, the broader S&P/ASX 200 Financials (ASX: XFJ) sector is up nearly 12% over the same span of time.

Factoring in its latest earnings, Tyro now trades on a price-to-earnings (P/E) ratio of roughly 56 times.

The post Tyro share price retreats 13% despite rocketing profits appeared first on The Motley Fool Australia.

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More reading

• Why Fletcher Building, GQG, Pilbara Minerals, and Tyro shares are climbing today

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

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The Australian share market is out of form on Tuesday with the All Ordinaries index currently down approximately 0.3%.

While that’s disappointing, it is nothing compared to the declines being recorded by the two ASX industrials shares listed below.

Here’s why they are being sold off today:

Ashley Services Group Ltd (ASX: ASH)

The Ashley Services share price is down 22% to 27 cents. This morning, the integrated provider of training, recruitment and labour hire released its half-year results and reported a 10.8% increase in revenue to $290.8 million but an 83% decline in net profit after tax to $1 million. The company’s profits were hit by impairments relating to the Linc business.

The ASX industrials share’s managing director, Ross Shrimpton, was disappointed with the half. He said:

The first half result has been challenging. The outcome of the Linc acquisition is disappointing. As with all acquisitions, there was risk associated with the purchase of Linc. We had 18 months to renew the major customer contract or secure new customers and expand within the higher margin Oil and Gas sector. As of today, the business is ongoing, but with minor contracts in hand. Earnings from Linc in FY24 will be negligible.

The value of acquired customer relationships (originally $2.5 million) have been written off in full throughout FY23 and H1 FY24. Goodwill has also been impaired, with its value reduced to $0.35 million during H1 of FY24.

Silk Logistics Holdings Ltd (ASX: SLH)

The Silk Logistics share price is down 13% to $1.55. This follows the release of the logistics provider’s half year results. Silk reported a 9% increase in revenue to $276.5 million but a 22.4% decline in underlying net profit after tax to $7.6 million. Management blamed the profit decline on additional right-of-use (property lease) depreciation expense.

Looking ahead, the company expects revenue of $540 million to $560 million and underlying EBIT of $34 million to $37 million. Though, management warned that trading conditions are tough. It said:

Trading conditions are expected to remain challenging for the remainder of FY24. Silk will focus on preserving profitability through increased operational efficiencies, driving organic growth and integration of acquired businesses to realise synergy benefits. Silk maintains a positive outlook with respect to its business development pipeline and its customer value proposition to win further new business.

The post 2 ASX industrials shares crashing up to 22% on earnings appeared first on The Motley Fool Australia.

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More reading

• Tyro share price retreats 13% despite rocketing profits
• Everything you need to know about the new Coles dividend
• Brainchip share price crashes 23% following another year of losses for ASX AI chipmaker
• 4 ASX tech shares tumbling on results releases
• Guess which ASX 200 stock is nosediving 20% on half-year results

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 positions in and has recommended Silk Logistics. The Motley Fool Australia has recommended Silk Logistics. 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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Having rebounded from a lengthy slide to soar 206% over the past month (as of market open), the Brainchip Holdings Ltd (ASX: BRN) share price is crashing today.

Shares in the All Ordinaries Index (ASX: XAO) artificial intelligence (AI) chip maker closed yesterday trading for 49 cents. In morning trade on Tuesday, shares are swapping hands for 38 cents apiece, down 22.5%.

For some context, the All Ords is down 0.3% at this same time.

This comes after Brainchip released its full-year 2023 results after market close yesterday.

Here are the highlights.

(Note, all figures in US dollars.)

Brainchip share price crumbles amid mounting losses

• Net loss after tax of $28.9 million, compared to a net loss of $22.1 million the prior year
• Trade and other receivables of $2.42 million, up modestly from $2.35 million in 2022
• Release of second generation Akida technology (Akida 2.0)
• Cash and cash equivalents of $14.3 million as at 31 December

What else happened with Brainchip during the year?

The increased year on year losses that look to be weighing on the Brainchip share price today were said to reflect lower revenue as the company shifted focus to the development and marketing of Akida 2.0.

Operating expenses also increased modestly year on year.

Cash outflows used in operating activities came to $17.5 million for the year, up from $13.6 million in 2022.

Brainchip’s second-generation Akida neuromorphic AI product, Akida 2.0, became available as IP in October.

Brainchip did not secure royalty-bearing IP sales agreements in 2023. But the company noted it had “laid the foundations for future commercial success through a more focused, targeted, and qualified customer engagement strategy”.

Though judging by today’s selling action, ASX investors don’t appear overly enthusiastic about those foundations.

2023 also saw Brainchip exit the S&P/ASX 200 Index (ASX: XJO) in September, following the S&P Dow Jones Indices quarterly rebalance.

What did management say?

Commenting on the 2023 results sending the Brainchip share price plunging today, CEO Sean Hehir said:

While the bottom-line loss increased year over year, the results reflect the large transformation Brainchip underwent in 2023 as we invested heavily in developing our second Generation Akida technology and expanded our sales and marketing capability.

Hehir noted that these investments “are indicative of our continued confidence in the market potential and our detailed plans to capitalise on that opportunity”.

Brainchip share price snapshot

With today’s big loss factored in, the Brainchip share price is down 26% in 12 months.

The ASX AI stock remains up 152% over the past month.

The post Brainchip share price crashes 23% following another year of losses for ASX AI chipmaker appeared first on The Motley Fool Australia.

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More reading

• The Brainchip share price is up 213% this month. Is Nvidia to blame?
• How is the BrainChip share price rocketing 27% today?

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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A number of ASX tech shares have released their latest results this morning.

Unfortunately, it seems that not all these results have gone down well with the market.

Here’s are four ASX tech shares falling after reporting their latest numbers:

Altium Ltd (ASX: ALU)

The Altium share price is down 1% to $64.45. This morning, the electronic design software provider released its half-year results and reported a 15.9% increase in revenue to US$136.6 million and an 11.4% lift in net profit after tax to US$33 million. Altium declared an interim dividend of 30 cents per share, which is up from 25 cents per share a year earlier.

Altium is in the process of being acquired by Japanese tech company Renesas.

Dicker Data Ltd (ASX: DDR)

The Dicker Data share price is down 1.5% to $11.68. This follows the release of the computer hardware and software distributor’s full-year results which revealed a 5.6% increase in gross revenue to $3.3 billion and a 12.5% jump in net profit after tax to $82.15 million.

Dicker Data’s Chairman and CEO, David Dicker, said:

The last few years have been somewhat difficult. Last year, another one. However, we still increased gross sales by over 5% and after tax profits by 12.5%. Our NZ operation continues to improve and our security business has great growth potential. All in all, a very satisfying result, especially when compared to our direct competitors, and the more general market. Things are starting to look up on the general front and 2024 looks promising.

Readytech Holdings Ltd (ASX: RDY)

The Readytech share price is down 10% to $3.22. This morning, this enterprise software provider reported a 14.2% increase in revenue to $54.7 million and a 10.6% lift in underlying EBITDA to $17.4 million.

However, it has lowered its expectations for the second half. Readytech’s co-founder and CEO, Marc Washbourne, said:

Due to timing of a number of high conviction enterprise contracts shifting to FY25, we now expect the growth rate for FY24 to be in the low double digits. Accordingly, we have updated our medium-term target to exceed organic revenue growth of $170.0 million by FY27.

Weebit Nano Ltd (ASX: WBT)

The Weebit Nano share price is down 8% to $4.10. This follows the release of the semiconductor company’s half-year results. The heavily shorted $800 million company reported a grand total of $153,000 in revenue for the six months with a loss of $25.2 million.

This reflects higher research and development costs of $18 million for the period and the doubling of its sales and marketing expense to $3.3 million.

The post 4 ASX tech shares tumbling on results releases appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Dicker Data, and ReadyTech. The Motley Fool Australia has positions in and has recommended Dicker Data. The Motley Fool Australia has recommended ReadyTech. 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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ASX 200 stock Johns Lyng Group Ltd (ASX: JLG) is cratering on Tuesday, falling 20.15% shortly after the market open after the building services company released its 1H FY24 earnings.

At the time of writing, Johns Lyng is the worst-performing stock of the ASX 200 benchmark index.

While the company said it had delivered strong earnings growth, investors appear to be disappointed with the numbers. The ASX 200 stock fell to an intraday low of $5.75 in the first hour of trading.

The Johns Lyng share price opened at $6.65 and is currently sitting at $5.80.

ASX 200 stock spiralling on news of profit drop

Johns Lyng specialises in the rebuilding and restoration of properties damaged in weather events for the insurance industry. It also builds commercial property and offers strata management services.

Here are the key numbers for 1H FY24:

• Sales revenue of $610.6 million (1H FY23: $635.6 million)
• Group earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $69.7 million (1H FY23: $64.5 million)
• Net profit after tax (NPAT) of $31.1 million (1H FY23: $34.1 million)
• Earnings per share (EPS) of 8.47 cents (1H FY23: 9.68 cents)
• Net assets of $460.3 million, including net cash of $53.7 million
• Interim dividend of 4.7 cents per share payable 19 March (fully franked)
• Dividend is 56% of NPAT in line with the payout policy of 40%-60% of NPAT

What else happened in 1H FY24 for this ASX 200 stock?

Johns Lyng said it had a record volume of Business as Usual (BaU) work during the quarter. This resulted in $426.1 million in revenue, up 13.7% on 1H FY23.

However, Catastrophe (CAT) revenue was lower at $120.4 million, down 35% on the record revenue of 1H FY23. However, the company points out that this represents more than 87% of its full-year FY24 forecast. This has led to an upgraded full-year revenue forecast of $177.8 million.

The company said its group EBITDA of $69.7 million includes BaU EBITDA growth of 28.1% to $55 million.

Johns Lyng said it continued to execute its strategy for international growth by expanding its partner network through agreements with Allstate Insurance in the US and Tower Insurance in New Zealand.

What did Johns Lyng management say?

Group CEO and managing director Scott Didier AM said:

We are proud to deliver these strong results for the first half of FY24, which again underscore the resilience of our business model and operational framework.

Our IB&RS BaU work constitutes the cornerstone of JLG’s earnings. With an annuity style profile, these earnings instil a confidence in our sustained revenue streams, and we anticipate substantial growth as we continue to enhance our market presence and capitalise on our diversified service portfolio, notably within our burgeoning Strata business.

During the period, we established our fifth strategic growth pillar, Essential Home Services. This followed the acquisition of Smoke Alarms Australia and Linkfire, which significantly progressed our goal of being a full turnkey solution for homeowners, property managers, and Strata managers.

What’s next for Johns Lyng?

This ASX 200 stock now has upgraded guidance for FY24.

Johns Lyng upgraded its full-year forecast group sales revenue to $1.207 billion and forecast EBITDA to $129.4 million.

The company said its deep relationships with insurers coupled with the continued expansion of its strata services network “forms the bedrock of the future growth prospects for the IB&RS [BaU] division”.

Didier noted an “ongoing and escalating trend” of higher value work in the catastrophe business as a result of prolonged adverse weather events.

Johns Lyng share price snapshot

The ASX 200 building services stock is down 0.33% over the past 12 months.

By comparison, the S&P/ASX 200 Index (ASX: XJO) is up 5.5% over the same period.

The post Guess which ASX 200 stock is nosediving 20% on half-year results appeared first on The Motley Fool Australia.

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More reading

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Motley Fool contributor Bronwyn Allen 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 Johns Lyng Group. The Motley Fool Australia has recommended Johns Lyng Group. 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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Both TPG Telecom Ltd (ASX: TPG) and Telstra Group Ltd (ASX: TLS) shares may be attractive to investors looking for ASX telco shares that can provide defensive earnings. But, there’s one that appeals to me more than the other.

Telstra is one of the biggest brands in Australia, while TPG operates a number of brands including Vodafone Australia, TPG and iiNet.

I will look at a few key areas that influence my decision.

Dividends

I wouldn’t want to sell my shares if I were a long-term investor. But, I would want to receive a flow of dividends because that would be how I access my returns.

TPG just reported its FY23 result, which included an annual dividend of 18 cents per share. This payout was the same as FY22 and translates into a grossed-up dividend yield of 5.2%.

Telstra recently revealed its FY24 first-half result which included a dividend per share payout of 9 cents per share (an increase of 5.9%), which translates into an annualised 18 cents per share dividend. At the current Telstra share price, that’s a grossed-up dividend yield of 6.6%.

On this front, Telstra is the winner – its dividend is growing and the dividend yield is bigger.

Operating leverage

One of the main things that I want to see from a business is that its profit can grow faster than revenue, even if slightly faster.

Investors normally focus on how much profit a business makes, so profit growth is a pleasing characteristic.

These ASX telco shares have the ability to display operating leverage. Once the telecommunications network infrastructure has been constructed, the additional users can leverage that same infrastructure, enabling the profit margins to grow assuming everything else remains the same.

In the most recent results, TPG reported service revenue growth of 4.3% to $4.63 billion, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 9.4%, but adjusted net profit after tax (NPAT) dropped 9.6% to $584 million.

Telstra reported in the FY24 first half that total income increased 1.2% to $11.7 billion, underlying EBITDA grew by 3.1% to $4 billion and net profit after tax rose 11.5% to $1 billion.

So Telstra delivered better profit growth, which is helpful to the underlying value of Telstra shares.  

Business plans

Both companies are working hard on growing their mobile businesses by investing heavily in their 5G networks.

Telstra claims to have the market-leading network, and this seems to be attracting a good amount of subscribers each reporting period, which is helping its operating leverage. TPG has growth plans too, but the network is not as big as Telstra and it has fallen behind because of the delayed merger between TPG and Vodafone Australia.

I like that Telstra has been working on diversifying its earnings in a number of different ways, including growing internationally with Digicel Pacific, expanding in digital healthcare with Telstra Health, and growing its cybersecurity capabilities (after an acquisition).

Foolish takeaway

Quite often, being the biggest and strongest comes with advantages. Hence, in my opinion, Telstra is the clear leader and Telstra shares are the better buy.

The post Better buy: TPG or Telstra shares? appeared first on The Motley Fool Australia.

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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 positions in and has recommended Telstra Group. 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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