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There is no denying that the S&P/ASX 200 Index (ASX: XJO) had a pretty dreadful day of trading on the ASX boards this Tuesday. The ASX 200 ended up finishing the day down 1% after falling as hard as 1.7% earlier in the session. So that makes the Northern Star Resources Ltd (ASX: NST) share price’s performance even more remarkable.

This ASX 200 gold miner ended up having one of the best days it has had for a while today. The company finished the day up a very pleasing 4.63% at $10.16 a share after opening at $9.85 this morning.

So what could be behind this marked outperformance for Northern Star?

Well, to put aside any obvious reasons, there has been no major news or announcements out of the gold miner today. Or indeed this week. Thus, we can only speculate.

But big moves from a mining company are almost always linked to news or price movements of the major commodities they mine. So let’s look at what gold is doing.

Gold mining share Northern Star glitters

Looking at the gold price, we can see it’s actually near its 52-week high. The yellow metal is currently trading slightly over US$1,900 an ounce at US$1,912. It was only at the start of the month that gold was under US$1,800. So we’ve seen a significant appreciation in gold prices over a relatively short time frame.

This can probably be explained by the ongoing Russia-Ukraine crisis that has been dominating world politics recently. Gold is regarded as a ‘safe haven’ asset by many investors. This is due to a number of reasons, including gold’s physical nature and its history as a monetary base.

During times of economic or geopolitical tension, we often see gold rise in value as investors bail out of ‘risky’ assets like shares and into gold and cash. The Ukraine Crisis is a perfect example of global geopolitical stress. So this might be why gold has been on the rise over the past few weeks. My Fool colleague Bernd also looked into gold’s role as a safe haven earlier today.

So we have a rising gold price and increasing uncertainty across the global economy. As such, we can argue that this is why we have seen the Northern Star share price receive so much love during today’s trading session. We saw this playing out across other gold mining shares like Newcrest Mining Ltd (ASX: NCM) today too.

It’s not just today though. Northern Star shares are now up almost 8% in 2022 so far. As well as by more than 22.5% in February alone.

At the current Northern Star share price, this ASX 200 gold miner has a market capitalisation of $11.88 billion, with a dividend yield of 1.87%.

The post Here’s why the Northern Star (ASX:NST) share price had such a stellar day appeared first on The Motley Fool Australia.

More reading

• Opportunity? 5 ASX 200 shares that traded at 52-week lows today
• These 3 ASX 200 shares are topping the volume charts on Tuesday
• Here’s why Mike Cannon-Brookes isn’t giving up on AGL (ASX:AGL)
• Think VAS is the best ASX index fund? These ETFs have beaten it over the past decade…
• ASX 200 (ASX:XJO) midday update: Coles and Cochlear impress, Nanosonics sinks

Motley Fool contributor Sebastian Bowen owns Newcrest Mining Limited. 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 Bruce Jackson.

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Owners of Commonwealth Bank of Australia (ASX: CBA) shares likely know about the bank’s push into ‘green’ and environmental, social, and governance (ESG) loans and finance solutions.

But the broader public might not. That is, until today. This morning, the bank embarked on another push to bring its ‘green’ products to the forefront of the public’s minds.

As of Tuesday’s close, the CBA share price is $96.04. That’s 2.09% lower than it was at the end of Monday’s session.

Today was a rough day for the broader market as well. The S&P/ASX 200 Index (ASX: XJO) tumbled 1% while the All Ordinaries Index (ASX: XAO) slipped 1.13%.

Let’s take a look at today’s news from the biggest bank on the ASX.

CBA looks back on the birth of its ‘green’ solutions

The CBA share price suffered today amid a broader market slump.

In more positive news, the bank has sponsored an article on its ‘green’ and ESG finance solutions. It was published by the Australian Financial Review this morning.

The article discussed CBA’s ESG Term Deposits, its Green Repurchase Agreements, and its Green Development Loans.

The former was announced late last year when IFM Investors invested $200 million into the term deposit. Capital from the term deposit will be used to fund ESG-friendly loans.

Around the same time, CBA and Northern Trust announced the completion of a $50 million Green Repurchase Agreement.

Finally, earlier in 2021, CBA signed Australia’s first Green Development bond with Charter Hall Group (ASX: CHC). The integrated property group used the facility to finance the build of a carbon-neutral office building in Victoria.

“Sustainable finance products are the pipes that connect global pools of capital to the companies transitioning their business to more sustainable outcomes,” CBA executive of institutional banking and markets, Andrew Hinchliff, was quoted by the AFR as saying today.

And ‘green’ and ESG-focused finance is a journey the bank is ready to continue in 2022.

It reportedly thinks the sustainable finance market will be boosted by clients’ demand for ESG funding this year.

“All clients are looking at how to transition, and how to demonstrate those commitments to their stakeholders,” CBA managing director of sustainable finance and ESG, Charles Davis, was quoted as saying.

“Companies turn to sustainable finance products to codify that commitment by directly linking their funding costs to the delivery of a critical strategy.”

CBA share price snapshot

This year has been rough on the CBA share price.

Today’s fall included, it’s now 6% lower than it was at the start of the year. Though, it’s still 15% higher than it was this time last year.

The post Own CBA (ASX: CBA) shares? Here’s how the bank is pushing its ‘green’ and ESG investment products appeared first on The Motley Fool Australia.

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• Should you be buying ASX 200 bank shares in February?
• ASX 200 shares stage comeback amid Russia optimism
• The Bank of Queensland (ASX:BOQ) share price has leapt 10% in 3 weeks. How does this compare to the other big banks?
• At today’s CBA (ASX:CBA) share price, how big will the FY22 dividend yield be?
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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 Bruce Jackson.

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Last week we explored whether EML Payments Ltd (ASX: EML) might be an overlooked inflation play.

The question stemmed from the payment solution company suggesting each 1% increase in interest rates produced an additional $15 million in earnings before interest and tax.

In answering that question, we spoke with TAMIM Asset Management’s head of Australian equity strategy, Ron Shamgar. The main takeaway, EML appears to be well placed in a higher interest rate environment.

While discussing this matter, the experienced investor put forward a case for why gross debit volume (GDV) is less important than what some investors might believe.

What is gross debit volume?

Before we dive into why GDV may not be the most important metric for EML Payments, we should understand what it represents.

In the context of the payment processing world, GDV — or gross debit volume — is the dollar amount processed by the company via its payment platforms. Some other companies might refer to it slightly differently, whether it is gross transaction volume or simply transaction value.

For EML, GDV is the total sum of money handled by its payment solutions. Think of it as the total size of the pie before EML Payments gets to take its own slice.

For reference, the ASX-listed company recorded $31.6 billion in GDV for the six months ended 31 December 2021. Representing an increase of 209% on the prior corresponding period.

What is more important for ASX-listed EML Payments?

According to Shamgar, GDV growth alone is not exactly telling of the company’s performance. The reason behind this is the mix of various ‘take rates’ across different payment types.

Further explaining this, the fund manager said:

[…] if you think about Sentenial GDV, there’s kind of two parts to it. You’ve got the open banking GDV — which comes from Nuapay, which is the open banking subsidiary — that’s the sexy growth part that probably earns 30, 40, 50 bps [basis points]. And then you’ve got a lot of the existing Sentenial business, which processes that GDV, but really earns like 2,3,4,5 bps on it.

So, the GDV number is less important, because you could have a different mix of clips of it. Obviously, gift cards [from the Gift and Incentive segment] are very high at 4% or 5%. And then prepaid is like one and a half percent. And then, banking is maybe 0.3%. So it just depends on the mix in that GDV.

Instead of focusing on the overall size of the pie and trying to guess the composition of different take rates, the fund manager suggests an alternative focus for investors.

I think the way to look at EML is less focused on the GDV — because you never get to know the mix — and more focused on their revenue and margins and so on. I think that has obviously been impacted this year. But, I think we’re going to start seeing that go back up [in the] second half, and then into FY23 and FY24.

ASX-listed EML Payments finished the day with its share price 5.4% lower. The company’s shares are now down 26.1% since the beginning of the year.

The post Why EML (ASX:EML) shares could be set for a rebound, but not for the reason you might think appeared first on The Motley Fool Australia.

More reading

• These were the worst performers on the ASX 200 last week
• Don’t fear the rise! One ASX share that’s ready for an interest rate hike
• EML (ASX:EML) share price sinks 9% despite record-breaking product demand
• Is the EML (ASX:EML) share price the most undervalued growth opportunity?
• Down almost 20% in 2022, is the EML share price now too good to ignore?

Motley Fool contributor Mitchell Lawler owns EML Payments. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended EML Payments. The Motley Fool Australia owns and has recommended EML Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Once a week I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Flight Centre Travel Group Ltd (ASX: FLT) remains the most shorted share after its short interest rose to 15.45%. Short sellers aren’t giving up on this travel agent giant despite Australia’s borders reopening.
• Betmakers Technology Group Ltd (ASX: BET) has seen its short interest surge to 11.3%. This may be due to the sky high multiples the betting technology company’s shares trade on and competitive pressures in the industry.
• Zip Co Ltd (ASX: Z1P) has seen its short interest rise week on week to 11.2%. Much to the delight of short sellers, this buy now pay later provider’s shares have fallen to a 52-week low this week after revealing a larger than expected loss during the first half. Concerns that Zip may need to raise capital are also weighing on sentiment.
• Kogan.com Ltd (ASX: KGN) has seen its short interest ease to 10.3%. This ecommerce company’s shares have been targeted due to concerns over its inventory management and higher marketing spend.
• Webjet Limited (ASX: WEB) has short interest of 9.9%, which is down slightly week on week. Once again, short sellers aren’t giving up on this online travel agent’s shares despite improving trading conditions.
• Mesoblast limited (ASX: MSB) has short interest of 9.6%, which is down slightly week on week. Poor trial results, significant cash burn, and the loss of a major deal with Novartis have all been weighing on Mesoblast’s shares.
• Nanosonics Ltd (ASX: NAN) is back in the top ten with short interest of 9.6%. Short sellers will have been pleased to see this infection prevention company’s shares crash to a 52-week low this week after its results disappointed.
• Polynovo Ltd (ASX: PNV) has seen its short interest rise to 8.9%. This high level of short interest may be due to concerns over this medical device company’s mixed performance and the lofty multiples its shares trade on.
• Redbubble Ltd (ASX: RBL) is back in the top ten with short interest of 8.1%. Last week this ecommerce company reported an 18% reduction in half year revenue and a whopping 95% decline in EBIT.
• Temple & Webster Group Ltd (ASX: TPW) has seen its short interest rise to 8%. Short sellers will have been pleased to see this online furniture retailer’s shares tumble since the release of its half year results.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

More reading

• Opportunity? 5 ASX 200 shares that traded at 52-week lows today
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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. owns and has recommended Betmakers Technology Group Ltd, Kogan.com ltd, Nanosonics Limited, POLYNOVO FPO, Temple & Webster Group Ltd, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Kogan.com ltd and Nanosonics Limited. The Motley Fool Australia has recommended Betmakers Technology Group Ltd, Flight Centre Travel Group Limited, Temple & Webster Group Ltd, and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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S&P/ASX 200 Index (ASX: XJO) bank shares are in focus amid an outlook of increased inflation and rising interest rates.

Higher rates can negatively impact the ASX 200 banks’ lucrative mortgage lending, as home buyers may shy away from the higher finance costs.

But most analysts forecast that impact will be more than offset by the broader loan margins they can garner in a higher rate environment.

It’s not rocket science, really.

To exaggerate the point, if interest rates were at – gasp – 10%, you can see how the banks can take a larger slice of the loan repayments than if rates are at 2% without raising undue objections.

Are ASX 200 bank shares a good opportunity?

According to the head of research Australia at Morgan Stanley, Richard Wiles, higher rates have set ASX 200 banks up for outperformance in 2022.

As The Australian reports, Wiles said despite some company-specific issues, the “good reporting season eased some key concerns”.

The “better than feared” results saw the banks’ earnings and pre-provision profits exceed “his forecasts by an average of 13 per cent and 8 per cent respectively, reducing concerns about the magnitude of downside risk”.

Indeed, Commonwealth Bank of Australia (ASX: CBA), the biggest bank on the ASX 200, with a market cap of $167.4 billion, smashed consensus expectations for 1H FY22 with a statutory net profit after tax (NPAT) leaping 26% to $4.74 billion.

CommBank’s fully franked interim dividend also increased by 17% year-on-year. And it announced an on-market share buyback of up to $2 billion.

Wiles labelled the margin pressure faced by the ASX 200 banks during the half-year gone by as “disappointing”. But he believes that “the outlook for margins has improved”.

According to Wiles (quoted by The Australian), “We believe that recent trends in the mortgage market and the growing prospect of earlier and larger RBA rate rises will see margins trough in 2H22 and then start to recover.”

Morgan Stanley notes that business and institutional loan growth has picked up. And the broker forecasts that home loan growth will remain strong.

How have the big banks been performing this year?

All of the ASX 200 bank shares have outperformed the benchmark in 2022, save CBA.

The CBA share price is down 6.7% year-to-date.

Over that same period the Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price has slipped 1.0%; the National Australia Bank Ltd (ASX: NAB) share price is up 2.4%; and Westpac Banking Corp (ASX: WBC) shares have gained 8.2%.

The ASX 200 itself is down 5.9% in 2022 so far.

The post Should you be buying ASX 200 bank shares in February? appeared first on The Motley Fool Australia.

More reading

• Why ANZ (ASX:ANZ) shares have been punished, but experts are now bullish
• Why NAB (ASX:NAB) has been losing market share, but its shares are set to soar
• The Westpac (ASX:WBC) share price has gained less than $4 in 10 years. Have the dividends been worth it?
• Rate rise coming? 2 finance ASX shares to buy right now
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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 Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Superloop Ltd (ASX: SLC) share price finished deep in the red today after the company reported its half-year results.

Shares in the telecommunications infrastructure company ended the day swapping hands at 96 cents apiece, a 10.7% fall.

Let’s take a look at what may have impacted the Superloop share price today.

Superloop share price in the red on half-year results

Highlights from the H1 FY22 results include:

• Net loss after tax of $21.267 million, 12.7% more than the $18,871 million loss in the previous corresponding period (pcp) of H1 FY21
• Statutory reported earnings before interest, tax, depreciation and amortisation (EBITDA) of $3.236 million, a 44.2% drop on the pcp
• Underlying EBITDA of $9.1 million, up 12.2% on pcp
• Total revenue of $119.8 million, a 125% boost on pcp
• Gross margin of $39.6 million up 60.8% on pcp
• No dividends were declared

What else happened in the half?

Superloop also completed the takeover of Australia’s largest independent internet service provider, Exetel, in the first half of the financial year. This added 110,000 new consumer and business customers to the result.

This acquisition boosted Superloop consumer revenue by 303% and business revenue by 180%.

Wholesale revenue also surged 12.8% on the back of Superloop launching a new connect platform. This platform is now servicing more than 11,600 customers.

In October, the telecommunications company revealed it had agreed to sell its Hong Kong arm and some Singapore assets for $130 million. The Superloop share price soared on the back of this news.

Management commentary

Commenting on the results, Superloop CEO and managing director Paul Tyler said:

Throughout the first half of this financial year, the Group has achieved some significant strategic milestones, including the completion of the acquisition of Exetel and the announced sale of the Hong Kong business and select Singapore assets.

Fundamentally, Superloop now has a simpler, more focused business, and a greater strategic focus on growth.

What’s next?

The company expects to complete the sale of the Hong Kong and select Singapore assets in the first quarter of 2022 (subject to regulatory approvals). This will provide the company with a net cash position of about $50 million. Superloop plans to use this capital to pursue growth opportunities and reduce debt levels.

The company said it is seeing evidence of student accommodation demand for its products returning in January and February.

Superloop believes it is well-positioned for future growth and expects to achieve an underlying EBITDA between $23 and $25 million in FY22.

Superloop share price summary

The Superloop share price has lost more than 6% in the past year, while it is descending around 19% year to date.

In the past week, it has dropped around 8%, while it is down 17% in the past month.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned 5.6% over the past year.

Superloop has a market capitalisation of roughly $464 million based on today’s share price.

The post Out of the loop: Superloop (ASX:SLC) share price drops 11% on half-year results appeared first on The Motley Fool Australia.

More reading

• Why Nanosonics, Superloop, Uniti, and Zip shares are tumbling today

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended SUPERLOOP FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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As anyone who has glanced at the markets today would know, this Tuesday has been a rather depressing day of trading for the S&P/ASX 200 Index (ASX: XJO). The ASX 200 finished the day down a nasty 1%. A fall of that nature will inevitably have some shares falling harder than others. But some ASX 200 shares have actually hit new 52-week lows as a result of today’s losses.

But as any value investor would tell you, market malaise over a company can sometimes be a compelling buying opportunity for the brave investors out there. Especially if said shares are of a high calibre.

So let’s check out five ASX 200 shares that hit new 52-week lows today.

5 ASX 200 shares hitting new 52-week lows today

GQG Partners Inc (ASX: GQG)

Funds management company GQG is our first share to check out today. This relative ASX newcomer had a shocker during today’s trading session. The company’s shares closed the session down by a nasty 7.28% at $1.40 apiece.

But, earlier, this share hit a new 52-week low of $1.38. GQG only listed on the ASX back in October last year, so this 52-week low is also an all-time low.

Xero Limited (ASX: XRO)

ASX 200 tech share Xero is well-known to investors now, thanks in part to its historic membership of the old WAAAX group of high-flying tech shares. Unfortunately, Xero’s flying patterns are more akin to Icarus’ these days. At market close, Xero’s share price finished at $98.49.

But the online accounting software company hit a low of $96.29 a share earlier this afternoon. As you might have gathered, that’s a new 52-week low for Xero, and more than 37% away from the company’s all-time high of $156.65 that we saw only back in November. But to put things in context, Xero only hit these sorts of levels for the first time in mid-2020.

Wesfarmers Ltd (ASX :WES)

The giant ASX 200 industrial and retailing conglomerate Wesfarmers is next up. This blue chip stalwart of the ASX also had a clanger today. It closed the session down 3.86% at $48.40 a share.

But Wesfarmers went as low as $48.14 soon after market open this morning, the company’s new low watermark. Again, we’ve come a long way from Wesfarmers’ last high of over $67 that we saw in August last year. Today’s fall has pushed the Wesfarmers dividend yield over 3.5%.

Zip Co Ltd (ASX: Z1P)

The ASX’s largest buy now, pay later (BNPL) pureplay, Zip Co was also in the doldrums today. This ASX 200 share saw a horrible 9.7% wiped off its share price today. It closed at $2.14.

But Zip went as low as $2.12 this afternoon, which is the company’s new 52-week low. What a year it’s been for Zip. The company is now down close to 83% from this time last year when Zip was commanding a share price north of $13.

Washington H. Soul Pattinson and Co Ltd (ASX: SOL)

Soul Patts is our final share that got washed today. The company’s losses were not too steep though, down 0.35% at $25.63 a share.

Saying that, this morning was more brutal, seeing this conglomerate descending as low as $25.21 a share — you guessed it, a new 52-week low. It was only in September last year that Soul Patts was more than $40 a share, so this has been a sharp fall from grace for this company. 

The post Opportunity? 5 ASX 200 shares that traded at 52-week lows today appeared first on The Motley Fool Australia.

More reading

• Why Nanosonics, Superloop, Uniti, and Zip shares are tumbling today
• These 3 ASX 200 shares are topping the volume charts on Tuesday
• Here’s why Mike Cannon-Brookes isn’t giving up on AGL (ASX:AGL)
• Think VAS is the best ASX index fund? These ETFs have beaten it over the past decade…
• The Wesfarmers (ASX:WES) share price just hit a new 52-week low. Is the smart money buying?

Motley Fool contributor Sebastian Bowen owns Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Washington H. Soul Pattinson and Company Limited, Xero, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Washington H. Soul Pattinson and Company Limited, Wesfarmers Limited, and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Yesterday we looked at three ASX shares brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below. Here’s why these brokers are bearish on these ASX shares:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of Macquarie, its analysts have retained their underperform rating but lifted their price target on this infant formula company’s shares to $5.60. While Macquarie acknowledges that A2 Milk performed better than it was expecting during the first half of FY 2022, it isn’t enough for a change of rating just yet. Particularly given that the company’s improved revenue outlook is largely being offset by higher marketing costs. The A2 Milk share price was trading at $5.70 on Tuesday.

Altium Limited (ASX: ALU)

Another note out of Macquarie reveals that its analysts have retained their underperform rating and cut their price target on this electronic design software company’s shares to $25.90. This follows the release of Altium’s half year results, which were better than Macquarie was anticipating. However, the broker expects the company’s growth to moderate in the second half. As a result, it isn’t in a rush to change its rating. The Altium share price was fetching $31.43 today.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Analysts at Credit Suisse have retained their underperform rating but increased their price target on this pizza chain operator’s shares to $89.24. The broker has lifted its valuation after upgrading its growth estimates for the coming years. However, even after these upgrades, Credit Suisse believes Domino’s shares are expensive on current multiples. The Domino’s share price was trading at $99.73 on Tuesday afternoon.

The post Leading brokers name 3 ASX shares to sell today appeared first on The Motley Fool Australia.

More reading

• Is the Altium (ASX:ALU) share price in the buy zone following its results?
• ‘The sleeper has awakened’: Top broker gives its verdict on the A2 Milk (ASX:A2M) share price
• ASX 200 shares stage comeback amid Russia optimism
• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts this Monday

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. owns and has recommended Altium. The Motley Fool Australia has recommended A2 Milk and Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Best & Less Group Holdings Ltd (ASX: BST) share price is in the green after the company released its earnings for the first half of financial year 2022.

At the time of writing, the Best & Less share price is $3.68, 8.88% higher than its previous close.

Best & Less share price surges on half year earnings

• $287.5 million of revnenue – down 13.8% on that of the first half of financial year 2021
• Net profit after tax (NPAT) of $20 million – down 21.3%
• Pro forma earnings before interest, tax, depreciation, and amortisation (EBITDA) of $30.6 million – down 20.3%
• 11 cent fully franked interim dividend announced

Best & Less delivered what the company described as a “robust” performance over the first half, despite loosing 9,437 trading days – representing 21.3% of total trading days – due to COVID-19 lockdowns and restrictions.

While the company’s revenue fell, its like-for-like sales increased 0.1% and its online sales were boosted 24%.  

Additionally, its gross profit margin recorded a 210-basis points improvement, reaching 50.8%. Meanwhile, its EBITDA margin was strong at 10.6%.

Best & Less’ pro forma operating cash flow came to $16.4 million. Its net cash position at the end of the half was $31.1 million.

Finally, it has announced its maiden 11 cent dividend in line with its policy to pay out 60% to 80% of NPAT.

What else happened during the half?

As COVID-19 outbreaks raged, Best & Less’ stores struggled with lower foot traffic ahead of the peak December holiday trading period.

In response, the company right sized and moved inventory to offset the impact of sales fall out from lost trading days.

It also lowered its cost of doing business by 7% compared to that of the prior comparable period.

On top of that, it onboarded more than 500 new staff, opened 2 new stores, and renewed 41 leases last half.

The company also successfully trialled baby non-apparel lines and launched its Product Lifecycle Management (PLM) system.

What did management say?

Best & Less CEO, Rodney Orrock commented on the company’s first half results, saying:

To have achieved our [calendar year 2021] prospectus profit forecasts is a great outcome in challenging conditions and is the result of a relentless focus on managing gross margin and costs across the business.

Our omni-channel model continues to provide us with flexibility and our ongoing investment in online is paying off, with online sales rising significantly and conversion rates continuing to improve. We have managed our supply chain and inventory well and are in a strong position heading into the second half as trading conditions strengthen.

What’s next?

Best & Less has declined to give guidance for the remainder of financial year 2022, citing ongoing market uncertainty.

However, it did look back at the first 8 weeks of 2022 and forwards at its strategies for the near future.

Over the first 8 weeks of the second half, the company’s total sales were down 7.6% on those of the second half of financial year 2021.

Though, January and February are normally the retailer’s quietest months of the half.

The Omicron outbreak impacted traffic and purchasing behaviour in January, as did delays to the restart of school.

The company expects such impacts will lessen this month and continue improving through the remainder of the financial year.

With a strong inventory position and supply chain, its ready to trade through the busy Easter and Mother’s Day periods.

It will look to grow its market share in baby and kids clothing and its store numbers in the current half. It’s also working to improve its womenswear offerings and its online capabilities.

Best & Less is aiming to hold its operating profit margin amid the inflationary environment, supply chain challenges, and workforce pressures.

Best & Less share price snapshot

2022 hasn’t been good to the Best & Less share price.

Today’s gains included, it has fallen 11% since the start of the year. Though, it’s still 53% higher than it was this time last year.

The post ‘Great outcome’: Best & Less (ASX:BST) share price rockets 9% on maiden dividend appeared first on The Motley Fool Australia.

More reading

• ASX retail shares have slumped in 2022. Could there be more pain to come?
• 2 ASX retail shares going cheap: Fund manager

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 Bruce Jackson.

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Concerns over rising tensions in the Ukraine have hit the S&P/ASX 200 Index (ASX: XJO) on Tuesday. In afternoon trade, the benchmark index is down 1.2% to 7,144.5 points.

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

Nanosonics Ltd (ASX: NAN)

The Nanosonics share price is down 13% to $4.11. This follows the release of the infection prevention company’s half year update. Although Nanosonics reported strong growth over the COVID-impacted prior corresponding period, things weren’t so positive compared to the previous half. Nanosonics reported a 45% reduction in profit half on half. It also warned that its full year operating expenses would be up markedly year on year.

Superloop Ltd (ASX: SLC)

The Superloop share price is down 12.5% to 94 cents. This morning the telco released its half year results and revealed a 125% increase in revenue to $119.8 million. However, due to extreme margin weakness, its underlying EBITDA only grew 12.2% to $9.1 million.

Uniti Group Ltd (ASX: UWL)

The Uniti share price has fallen 11% to $3.30 following the release of the telco’s half year results. Superloop reported a 98% increase in revenue to $109.5 million and a 140% jump in underlying EBITDA to $70.5 million. As strong as this was, it was still short of the market’s expectations. This was due to weaker margins in the Wholesale & Infrastructure segment.

Zip Co Ltd (ASX: Z1P)

The Zip share price has continued its slide and is down 9% to $2.15. Investors have been selling this buy now pay later provider’s shares since the release of its half year trading update on Monday. The larger than expected loss appears to have sparked fears that Zip may need to raise capital again in the near future.

The post Why Nanosonics, Superloop, Uniti, and Zip shares are tumbling today appeared first on The Motley Fool Australia.

More reading

• Uniti (ASX:UWL) share price tumbles 10% despite revenue surging 98%
• ASX 200 (ASX:XJO) midday update: Coles and Cochlear impress, Nanosonics sinks
• Own Zip (ASX:Z1P) shares? Rumours are circulating the company may be set for a capital raise
• Nanosonics (ASX:NAN) share price sinks amid 45% half-on-half profit decline
• 5 things to watch on the ASX 200 on Tuesday

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. owns and has recommended Nanosonics Limited, SUPERLOOP FPO, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Nanosonics Limited. The Motley Fool Australia has recommended Uniti Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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