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The Syrah Resources Ltd (ASX: SYR) share price has returned to trading following a company announcement.

At the time of writing, the graphite producer’s shares are swapping hands for $1.46, down a sizeable 11.52%. This means the company’s shares have fallen almost 20% in the past month alone.

What’s causing the sell-off?

It’s been a disappointing day for the Syrah share price, with investors heading for the hills following the company’s capital raise.

According to its release, Syrah advised it has successfully completed its fully underwritten institutional placement and the accelerated institutional component. The latter is comprised of a 1 for 5.9 pro rata accelerated non-renounceable entitlement offer.

Both existing shareholders and new investors supported the company’s accelerated institutional component, with 76% of entitlements taken up.

Under the placement, 84 million shares are expected to be issued on 17 February. In regards to the institutional entitlement offer, 45 million new shares will be allocated on the same date.

The price set to eligible investors across the capital raise stood at $1.48 per new share. This represented a 10.3% discount to Syrah’s last closing price of $1.65 per share on 4 February.

In total, the placement raised approximately $125 million, and the institutional entitlement offer raised around $67 million.

In addition, Syrah launched a $58 million retail entitlement offer which is scheduled to open on 14 February.

Eligible retail shareholders will have the opportunity to apply for 1 new share for every 5.9 existing Syrah shares owned.

The closing date for the retail offer is 28 February.

Proceeds of the equity raising, combined with Syrah’s existing cash balance, will be used to:

• Fully fund the remaining US$165 million (A$230.92 million) of estimated installed capital costs of the Vidalia initial expansion;
• Fund estimated Vidalia operating costs, expansion studies and product development for 2022;
• Transaction costs of the offer; and
• Fund Balama tailings storage facility expansion and sustaining capital costs.

About the Syrah share price

Over the past 12 months, the Syrah share price has gained 25% but is down almost 20% year to date. The company’s shares reached a 52-week high of $2.56 earlier this year, before being heavily sold off.

Based on today’s price, Syrah commands a market capitalisation of around $735.63 million, with approximately 498.73 million shares outstanding.

The post Syrah Resources (ASX:SYR) share price sinks 11%. Here’s why appeared first on The Motley Fool Australia.

More reading

• Why is the Syrah (ASX:SYR) share price frozen?
• Why did the Syrah (ASX:SYR) share price jump 12% to a multi-year high today?
• Why BrainChip, PointsBet, PolyNovo, and Syrah shares are pushing higher

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 Bruce Jackson.

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As most investors would be aware by now, much of the talk of the financial town over this year so far has revolved around inflation and interest rates. We’ve seen some pretty unusual (by modern standards) inflation figures come out of both the Australian economy and around the world over the past few months.

Just last week, our own Reserve Bank of Australia (RBA) told the public that CPI inflation was running at 3.5%. The RBA also stated that it is expecting wage growth to hit a multi-year high of 3% next year in 2023.

Much was made of the current monetary policy and what it meant for ASX bank shares like Commonwealth Bank of Australia (ASX: CBA). So what would higher interest rates mean for the ASX banks? Let’s dig in.

The record low cash rate of 0.1% that we’ve been living with ever since the onset of the coronavirus pandemic has resulted in a squeezing of most ASX bank shares’ margin spread. That’s the difference between the interest a bank pays on deposits and the interest they charge on loans. It’s harder for a bank to attract new capital when it is only paying a pittance in interest. Many investors would probably rather have their money in the property or share markets than in a bank account earning an interest rate of say 0.2% per annum.

How are ASX bank shares affected by higher interest rates?

So it’s arguably a good thing for ASX banks if inflation picks up and the RBA raises interest rates. A higher cash rate means that the banks can start lifting the interest they pay on their deposits. It also means that they can raise their loan and mortgage rates, probably by more than the RBA’s cash rate increases over time. In this scenario, this will help restore the banks’ squeezed margin spreads over time, and help boost profitability.

In this way, many investors are expecting ASX banks to whether a high inflation/high interest rate environment with relative ease.

That all sounds fine. However, there is one other factor to consider. Rising interest rates means that anyone who already has a non-fixed mortgage will have to pay higher interest on their mortgage. According to a recent report from the ABC, there are more than a million homeowners who have never experienced an interest rate rise on their loans. That’s because the last time the RBA raised rates was back in November 2010. And a lot of mortgages (more than a million) have been written since then.

Don’t forget about mortgages

What’s also happened since then is that the average mortgage has almost doubled in size. According to the report, the average mortgage back in 2011 was around $363,421. Today, it’s at $602,035. Thus, if interest rates were to rise back to the levels we saw 11 years ago, investors would be paying almost twice as much interest as they were back in 2011 when the cash rate was around 5%.

If interest rates do go up, even if not back to 5%, it would mean a massive increase in the mortgage bills of millions of mortgage holders. Now even if most of those investors can meet their new, higher repayments, there’s a chance that some won’t be able to manage. And that would be very bad news for the banks. Customers defaulting on mortgages is the last thing a bank wants. That’s because it could result in written-off loans, which badly damage a bank’s balance sheet.

So higher rates might not be as good for ASX bank shares as one might initially think.

Either way, the new era of rising interest rates that we seem poised to enter could bring a lot of uncertainty to the Australian economy, and to ASX bank shares. A Brave New World indeed.

The post Are interest rate rises really good for ASX 200 bank shares? appeared first on The Motley Fool Australia.

More reading

• Everything you need to know about the CBA (ASX:CBA) interim dividend
• Own Suncorp (ASX:SUN) shares? Here’s what analysts are saying about the company’s latest results
• Both have had a bumper start to the year. But which is the better buy, AGL (ASX:AGL) or Origin (ASX:ORG) shares?
• ASX 200 (ASX:XJO) midday update: CBA impresses, Mineral Resources delivers a shocker
• Here’s what is moving the CSR (ASX:CSR) share price today

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 Bruce Jackson.

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It has been an excellent day for the Commonwealth Bank of Australia (ASX: CBA) share price. In afternoon trade, the banking giant’s shares are racing higher after it delivered strong earnings and dividend growth during the first half of FY 2022.

At the time of writing, the CBA share price is up 4.5% to $98.37.

What’s the go on the CBA dividend?

The good news for shareholders, is that as well as seeing their shares increase in value today, they will soon be receiving a dividend that is up materially on the same period last year.

In case you missed it, this morning Australia’s largest bank reported a cash net profit after tax of $4,746 million. This was up 23% over the prior corresponding period and well-ahead of consensus estimates.

As a comparison, Goldman Sachs was forecasting cash earnings of $4,295 million, Morgans expected $4,320 million, and the consensus estimate stood at ~$4,500 million.

This allowed the CBA board to declare a $1.75 per share fully franked interim dividend. And while this is a touch short of the consensus estimate of ~$1.80 per share, it is still a sizeable increase of 17% over last year’s interim CBA dividend.

This slight miss appears to have been driven by the bank’s decision to payout 62% of cash earnings instead of its target range of 70% to 80% of earnings. Though, management highlights that this dividend represents a payout ratio of 70% after adjusting for long run loan loss rates.

Looking ahead, the board advised that the CBA dividend will continue to be 70% to 80% of cash earnings where possible.

It explained: “The Bank will continue to target a full year payout ratio of 70-80% of cash NPAT and an interim payout ratio of ~70% of cash NPAT. In considering the sustainability of dividends, the Board will continue to take into account a number of factors, including long term average loss rates.”

When is payday?

This latest CBA dividend will be paid to eligible shareholders next month on 30 March.

To be eligible, you’ll need to own CBA’s shares at the close of play the day before the ex-dividend date of 16 February. This means you have until next Tuesday to buy shares if you want to receive it.

As for shareholders, the bank is offering a dividend reinvestment plan (DRP). However, on this occasion there will be no discount applied to the shares allocated under the plan.

The post Everything you need to know about the CBA (ASX:CBA) interim dividend appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: CBA impresses, Mineral Resources delivers a shocker
• Analysts forced to eat humble pie as CBA (ASX:CBA) share price soars 5%
• The ASX 200 just hit 3-week highs. What’s next?
• CBA (ASX:CBA) share price on watch after smashing first half estimates
• 5 things to watch on the ASX 200 on Wednesday

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 Bruce Jackson.

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Shares in banking giant Suncorp Group Ltd (ASX: SUN) are rangebound today after stumbling lower from the open. At the time of writing, the Suncorp share price is edging less than 1% higher at $12.09.

Following the bank’s earnings update yesterday, analysts have chimed in with their outlook on the stock and most of the sentiment appears to be positive. Let’s take a closer look.

What are analysts saying about the Suncorp share price?

The team at Jarden were first to chime in with their analysis, noting that Suncorp’s 1H FY22 cash profit was a positive surprise and was 26% ahead of consensus estimates.

The results were underpinned by lower catastrophe costs and a larger than expected one-off net Covid claim benefit.

Not only that, but gross written premium (GWP) was almost 7% and well ahead of Jarden’s internal forecasts, leaving the broker bullish and holding its price target of $12.40.

Macquarie also chimed in and noted that Suncorp’s results were filled with pockets of goodness, especially the lower hazards costs and better than expected GWP.

It was also happy with the bank’s dividend payout ratio, which rests near the top end versus the other banking majors.

However, the broker also pointed out Suncorp’s net interest margin (NIM) contracted by around 197 basis points throughout the half. But this was expected and in line with expectations for the banking sector.

It retained an overweight rating today and values its fellow ASX banking fellow at $14.40 per share.

Meanwhile, analysts at Morgan Stanley reckon Suncorp has handled recent challenges thrown its way better than expected.

The investment bank notes that “Suncorp delivered stronger margins and top-line growth in the insurer, and investment yields are rising, making the path to more than 10% margins more visible”.

It isn’t as rosy as its broker peers, however, noting that Suncorp still has a number of headwinds on the horizon. These are namely catastrophe costs and other earnings pressures – especially with the bank’s NIM compression.

It remains equal weight on the stock even after raising its price target by 3% to $12.25 per share. Each of Morgans, UBS and Citi also raised their valuations on Suncorp as well to $13.19, $14 and $13.60 per share respectively.

Suncorp share price summary

In the last 12 months, the Suncorp share price has climbed 13% and is up 9% for the year to date.

Over the previous month, it has climbed 4% into the green and investors are showing support these last few days as shares have jumped another 8%.

The post Own Suncorp (ASX:SUN) shares? Here’s what analysts are saying about the company’s latest results appeared first on The Motley Fool Australia.

More reading

• The ASX 200 just hit 3-week highs. What’s next?
• Why Flight Centre, Macquarie, Super Retail, and Suncorp shares are racing higher
• ASX 200 (ASX:XJO) midday update: Macquarie and Suncorp impress
• Suncorp (ASX:SUN) share price spikes after ‘strong underlying momentum’ in 2021
• 5 things to watch on the ASX 200 on Tuesday

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

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ASX 200 shares have had a jittery start to the year as a number of macroeconomic crosscurrents begin to meet in 2022. The benchmark S&P/ASX 200 Index (ASX: XJO) has fallen more than 3% since January 1 and some sectors have been hit worse than others.

Not the energy sector, however. ASX energy shares are still partying in 2022, yet to feel any sort of hangover.

The S&P/ASX 200 Energy index (XEJ) has climbed 12% this year to date, holding gains of roughly 6% over the previous 12 months.

That’s a much better result than the high-beta technology sector has recorded. The S&P/ASX All Technology Index (XTX) has now plunged more than 16% for the year.

With this outsized performance, we check in with two ASX energy giants in AGL Energy Ltd (ASX: AGL) and Origin Energy Ltd (ASX: ORG) to see how they are faring in 2022 so far.

Both are well into the green since trading began this year – AGL is up 20%, whereas Origin has spiked just over 15% since January 4.

But which is the better choice for investors right now, or into the future? Here’s what the team at JP Morgan had to say in its outlook on the Australian utilities sector.

Origin or AGL – what to do, who to choose?

JP Morgan is neutral on Origin even though its December 2021 quarterly production update “outperformed expectations”, according to a recent note.

The broker notes that the global rally in energy commodity prices continued throughout 2021, “driving a 30% increase in Origin’s realised [liquified natural gas] LNG prices to A$11.80/mmBtu”.

However, analysts at the firm also pointed out that Origin’s realised LNG prices were “noticeably below peers”. It believes the variance stems from a lower level of cargoes sold on the spot, versus the company’s competitors.

Not only that, but energy markets continue to face a shake-up amid more competition from renewables. As well, an unusual summer cold streak has meant spot energy prices had fallen 15% since late last year to $58/MWh at the time of the broker’s release.

Electricity demand also remains 4% below pre-COVID times, “weighing on electricity prices which have been the cause of earnings downgrades for the company”, according to the broker.

Even still, JP Morgan had thought increased commodity prices would be a positive catalyst for Origin’s share price. But Origin’s management guidance “implies Energy Markets’ contribution will be the lowest in FY2022 in more than a decade”, striking a downbeat tone to Origin’s outlook.

“With no discernable catalysts for price improvement and with the stock close to our revised valuation, we remain Neutral,” the broker says, valuing the company at $6.05 per share in the process.

What about AGL?

With AGL on the other hand, JP Morgan is overweight and sees the company in a new light following its assessment of its proposed demerged businesses.

The broker makes several observations in a recent note, urging clients to consider buying AGL in the process.

Analysts noted that “AGL no longer trades at less than the value of the retail business alone, which may mean the opportunity for corporate appeal ahead of the demerger has passed”.

It also points out that the newly formed Accel Energy is now a “far more palatable entity” with an estimated net present value (NPV) of A$2.2 billion. That’s not too far off AGL’s current market capitalisation of $4.8 billion.

The broker also sees the opportunity for energy spot prices to jump further, which could lead to guidance upgrades from management.

“Notwithstanding reduced corporate appeal, we remain positive on AGL given much better electricity prices and compelling value,” analyst Mark Busuttil remarked, smacking an $8.70 price target on the energy giant.

“While we remain concerned over the proposed demerger, [AGL’s] stock price is now below our estimated value for the retail business.”

Head to head though, what’s the picture?

When it comes to estimates, JP Morgan reckons Origin will post earnings 8% below consensus whereas it tips AGL to beat consensus by 2%.

AGL’s main drag is “corporate appeal with interest in energy retailing companies in Australia”, according to the broker. However, it expects “increasing Brent and LNG spot prices to support higher free cash flow generation and strong cash distributions from APLNG” in Origin’s case.

Not only that, but the broker values AGL at the deepest discount to the consensus price target versus its ASX energy peers. It values AGL 13% below the consensus price target provided by Bloomberg Intelligence, but notes this “is skewed due to two outliers”.

Origin on the other hand is valued on par with the consensus price target by the broker, in line with its neutral view.

Hence, from this rudimentary analysis, it’s clear that JP Morgan prefers AGL over Origin right now and is particularly bullish on the former.

However, if you’re wondering what JP Morgan’s favourite pick in the entire space is, it is Santos Ltd (ASX: STO) in the large cap space and Cooper Energy Ltd (ASX: COE) followed by Beach Energy Ltd (ASX: BPT) and Carnarvon Energy Ltd (ASX: CVN) respectively.

The post Both have had a bumper start to the year. But which is the better buy, AGL (ASX:AGL) or Origin (ASX:ORG) shares? appeared first on The Motley Fool Australia.

More reading

• These 3 ASX energy shares just hit 52-week highs
• Could AGL (ASX:AGL) be gearing up for a major capital raise?
• Own AGL (ASX:AGL) shares? Here’s what to look for when the company reports next week
• Origin (ASX:ORG) share price hits 52-week high before slumping. What’s going on?
• AGL (ASX:AGL) share price withstands healthcare pressure to exit coal ASAP

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

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At lunch on Wednesday, the S&P/ASX 200 Index (ASX: XJO) is fighting hard to stay in positive territory after giving back most of its early gains. The benchmark index is currently up 0.2% to 7,201.5 points.

Here’s what is happening on the ASX 200 today:

CBA’s half year result smashes expectations

The Commonwealth Bank of Australia (ASX: CBA) share price is charging higher today after smashing the market’s expectations with its half year results. Australia’s largest bank reported a 23% increase in cash earnings to $4,746 million. This compares to Morgans’ estimate of $4,320 million and the market consensus estimate of $4,500 million. CBA also declared a $1.75 per share interim dividend and announced a $2 billion on-market share buyback.

Computershare jumps on guidance upgrade

The Computershare Limited (ASX: CPU) share price is surging higher today after its first half update impressed the market. For the six months ended 31 December, Computershare reported a 4.6% increase in management revenue to US$1.2 billion and a 4.5% lift in management earnings per share to 22.76 US cents. But best of all, management is upgrading its full year earnings per share guidance from 2% growth to 9%.

Mineral Resources predictably disappoints

The Mineral Resources Limited (ASX: MIN) share price is sinking today after its half year results unsurprisingly fell short of expectations. As mentioned here earlier this week, Mineral Resources had been tipped as a potential candidate for a negative earnings surprise by Goldman Sachs. This turned out to be the case, with the mining and mining services company’s underlying net loss after tax of $36 million missing the consensus estimate of a $105 million profit by a whopping 134%.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Wednesday has been the Computershare share price with a 9.5% gain following its first half results and guidance upgrade. The worst performer has been the Mineral Resources share price with a 7% decline following its half year shocker.

The post ASX 200 (ASX:XJO) midday update: CBA impresses, Mineral Resources delivers a shocker appeared first on The Motley Fool Australia.

More reading

• Mineral Resources (ASX:MIN) share price slides as lower iron ore prices bite
• Analysts forced to eat humble pie as CBA (ASX:CBA) share price soars 5%
• Computershare (ASX:CPU) share price jumps 12% after strong half and guidance upgrade
• 3 ASX tech shares to pounce on NOW while they’re cheap
• The ASX 200 just hit 3-week highs. What’s next?

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 Bruce Jackson.

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The CSR Limited (ASX: CSR) share price is slipping in late morning trade, down 0.35% at the time of writing. This comes after shooting 1.2% higher on opening.

CSR shares are currently trading for $5.68.

Below we take a look at the building product supplier’s property sale update.

What property sale was announced?

In this morning’s ASX release, CSR reported the sale of 4.6 hectares of land on the outer edge of its 200-hectare site at Badgerys Creek, NSW. The total proceeds are $20.7 million, which works out to be $450 per square metre for the asset.

The company’s Badgerys Creek property borders the new Western Sydney Airport, which is due to open in 2026.

CSR said it is currently rehabilitating the former quarries at the location, which was confirmed for industrial zoning in September. The company won’t have to do any more work on the 4.6 hectares it is selling.

CSR CEO Julie Coates commented on the sale:

CSR’s Badgerys Creek site is one of the largest properties adjacent to the new Western Sydney Airport which will bring significant growth to the region.

The company’s chief financial officer, David Fallu added:

With approximately 140 hectares of developable land at Badgerys Creek, we are continuing to invest in the extensive rehabilitation and reconstruction of the former quarries at Badgerys Creek, which will be continuing over the next few years.

CSR expects to complete the transaction within its current financial year, which ends on 31 March. The sale will see earnings before interest and taxes (EBIT) for the financial year come in at approximately $46 million. That’s up from the company’s prior EBIT estimate for the year of $34 million.

CSR share price snapshot

Over the past 12 months, the CSR share price is up 1.4%, trailing the 5.6% gain posted by the S&P/ASX 200 Index (ASX: XJO).

So far in 2022, CSR shares are down 5%.

The post Here’s what is moving the CSR (ASX:CSR) share price today appeared first on The Motley Fool Australia.

More reading

• Why the CSR (ASX:CSR) share price is on this broker’s top 2022 buy list
• ASX 200 (ASX:XJO) midday update: Wesfarmers’ update, energy shares rise

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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Australia – and, perhaps as an extension, the ASX – could set to be a major player in the global hydrogen industry.

Goldman Sachs predicts our island home could tap in as a key exporter of the commodity.

Additionally, it expects the hydrogen market could be worth more than US$1 trillion ($1.4 trillion) by 2050.

Let’s take a look at what might be in store for Australia’s – and the ASX’s – future in the green hydrogen space.

Could Australia host a prime spot in a $1.4 trillion industry?

According to analysts by Goldman Sachs, Australia could be up against regions including the Middle East, North Africa, and Latin America in the race to supply hydrogen to potential major importers in Central Europe, Japan, Korea, and East China.

And we’re going about it differently than other regions.

Australia’s hydrogen strategy focuses on its ambition of becoming a global hydrogen hub – using its natural gas and access to low-cost renewable power to produce the energy commodity.

Australia’s hydrogen industry is expected to ramp up from 2025, alongside that of Latin America, Europe, and Africa.

However, Australia and Europe have the lead in planned electrolyser capacity additions. They also offer the most funding for green hydrogen projects, such as those in the sights of many ASX shares.

Australia’s National Hydrogen Strategy aims to place the nation as a key hydrogen exporter by 2030.  

Looking to the future of the global industry, Goldman Sachs predicts up to 30% of hydrogen could be exported across borders – creating a new major international trade. For context, that’s more than the amount of natural gas currently traded between nations.

It also believes the average size of hydrogen projects could increase more than 100 times over by 2025, while the cost of electrolysers needed to produce the energy commodity could drop 40%.

Making the case more exciting, the price of hydrogen could be par with that of diesel in long-haul heavy road transport by as early as 2027.

So, which ASX shares have the potential to be involved in the upcoming export commodity? Let’s take a look.

What ASX shares are involved in hydrogen?

There are plenty of ASX shares already on the hydrogen bandwagon.

Of course, the most notable is Fortescue Metals Group Limited (ASX: FMG) and its green energy leg, Fortescue Future Industries (FFI).

It’s creating a major electrolyser manufacturing facility in Queensland, as well as engaging in green hydrogen production and hydrogen-fuelled transport initiatives.

Meanwhile, Hazer Group Ltd (ASX: HZR) is working to create hydrogen and synthetic graphite using its HAZER Process.  

Province Resources Ltd (ASX: PRL) is one step ahead with its HyEnergy Project, creating green hydrogen in Western Australia.

Speaking of the HyEnergy Project, Global Energy Ventures Ltd (ASX: GEV) recently began a feasibility study looking at transporting hydrogen from the project to key markets in Asia using its propriety compressed hydrogen ship.

Other ASX shares involved in hydrogen include Pure Hydrogen Corporation CDI (ASX: PH2) and Sparc Technologies Ltd (ASX: SPN).

The post Can Australia win the $1.4 trillion global hydrogen race? appeared first on The Motley Fool Australia.

More reading

• The ASX 200 just hit 3-week highs. What’s next?
• ‘Cringe-inducing’: Fortescue (ASX:FMG) boss takes aim at ScoMo over clean hydrogen claims
• Is now the time to buy shares of ASX 200 iron ore giants? Expert weighs in
• Why this broker thinks the Fortescue (ASX:FMG) dividend will come under significant pressure
• Top brokers name 3 ASX shares to sell 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 Bruce Jackson.

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The Centuria Capital Group (ASX: CNI) share price is slipping in morning trade on Wednesday. This follows the release of the property funds manager’s half-year results.

In early morning trade, shares in the group are fetching $3.03 apiece, down 0.66% from their previous close.

Centuria share price scores with impressive half-year earnings

• Group total operating revenue up 26% to $139.4 million
• Operating profit after tax up 73% to $58.7 million
• Statutory earnings per share (EPS) of 13.8 cents per security, up 84%
• Reaffirmed FY22 distribution guidance of 11 cents per security
• Cash and undrawn debt finished at $241 million
• Net asset value of $2, up from $1.92 in the prior corresponding period
• Distribution of 5.5 cents per stapled security (cps) for the half, compared to 4.5 cps in HY21

What happened during the half?

It was an extremely busy six-month period for the real estate funds manager. During HY22, the group undertook multiple property acquisitions. As a result, Centuria’s real estate funds management platform increased 17% to $19.3 billion.

Additionally, unlisted and listed assets under management (AUM) organically grew by 15% and 22% respectively. This took the total value of these assets to $12.6 billion and $6.7 billion. Centuria fuelled this solid growth by acquiring $2.5 billion worth of real estate during the half, including:

• $63 million for a commercial office building at 21-25 Nile Street, Port Adelaide
• $83 million for a commercial office building at 25 Grenfell Street, Adelaide
• $88 million for prime agriculture real estate at 264 and 318 Copelands Road, Warragul
• NZ$291 million in aged care real estate across Australia and New Zealand

In particular, the Centuria share price rallied in response to the expansive asset acquisitions across the healthcare sector in December. In total, 38 aged care assets in New Zealand were purchased — all of which are operated by Heritage Lifecare.

What did management say?

Centuria Capital Group joint CEO Jason Huljich commented:

HY22’s performance is a clear example of utilising our in-house management expertise across Australasia and servicing our expanded investor distribution network to execute on several funds management initiatives. Centuria’s growth for the half has delivered more than the AUM of the entire Group’s platform around 5 years ago. Our strategies for each of our real estate verticals complement our specialist approach to actively managing our real estate funds.

Meanwhile, Centuria’s other joint CEO, John McBain, said:

It has been particularly pleasing to witness the consolidation of revenue streams from recently acquired business units in combination with a very strong contribution from organic property fund acquisitions, both listed and unlisted. Centuria’s unlisted retail investors have continued to invest strongly and we have been active in placing new assets with our institutional mandate partners, making HY22 a very successful period.

What’s next?

On the topic of future outlook, both joint CEO’s reflected a drive to continue consolidating Centuria’s leading position. To do this, the group plans to take advantage of its “significant deal flow”. This may include the group’s off-market opportunities and its active development pipeline.

In addition, Centuria noted an expectation to pull multiple growth levers on its real estate funds management platform. This will play an important role in generating future performance fees growth for the group.

Centuria share price snapshot

Lastly, it has been a challenging start to the year for the Centuria share price. So far in 2022, shares are down 13.4%, despite the group upgrading its earnings guidance in January.

Fortunately, on a one-year timeline, ASX-listed Centuria remains 22.2% ahead. Given the recent dent in the valuation, Centuria is now boasting a dividend yield of 3.6%.

The post Slam dunk: Centuria (ASX:CNI) share price slips amid growth-filled half-year appeared first on The Motley Fool Australia.

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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 Bruce Jackson.

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The BWP Trust (ASX: BWP) share price is down 1.5% at time of writing after opening up 1.9% this morning.

BWP Trust shares closed yesterday at $4.01 and are currently trading at $3.95 per share.

Below we take a look at the highlights from the real estate investment trust’s (REIT) financial results for the half-year ending 31 December 2021.

BWP Trust share price falls with flat dividend outlook

• Revenue from ordinary activities of $75.9 million, equivalent to the corresponding half year
• Profit before gains on investment properties of $56.5 million, down 1% from the prior corresponding half year
• Profit from ordinary activities attributable to shareholders increased 142% year-on-year to $348.3 million
• Dividend of 9.02 cents per share, unfranked, equivalent to the corresponding half year

What else happened during the half year?

The big variance profit before gains on investment properties and profits attributable to shareholders stems from the $291.8 million gains in fair value of investment properties for the REIT during the half year.

That also saw net tangible assets per share increase 17% to $3.75 per share, up from $3.20 per share in the half year ending 31 December 2020.

The interim dividend was paid on 30 December 2021 and the Distribution Reinvestment Plan (DRP) was in effect during this time. Management expects the DRP to remain in place.

BWP Trust also reported like-for-like rental growth of 2.2% for the full 2021 calendar year. And the weighted average lease expiry (WALE) stood at 4.3 years as at 31 December, with 97.6% of assets leased.

The REIT’s gearing as at 31 December was 15.5%, measuring its debt to total assets. The portfolio is valued at $2.9 billion.

What did management say?

Commenting on the revaluation of the portfolio, management wrote:

During the half-year, the Trust’s entire investment property portfolio was revalued. Property revaluations were performed by independent valuers for 10 properties during the period. The remaining 63 properties were subject to directors’ valuations…

The value of the Trust’s portfolio increased by $280.6 million to $2,916.7 million during the half-year following capital expenditure of $2.3 million and revaluation gains of $291.8 million, after adjusting for the straight-lining of rent of $1.0 million and less net proceeds from divestments of $14.5 million.

What’s next?

BWP Trust intends to focus on filling any vacancies in its portfolio, progress store upgrades, and extend its Bunnings leases through the exercise of options. It will also keep searching for new assets “where there is good potential for value creation”.

Investors can expect a dividend for the year ending 30 June 2022 in line with the current payout, so long as there are no major COVID-19 or other economic disruptions. Judging by the sliding BWP Trust share price, investors may have been hoping for more.

BWP share price snapshot

Over the past 12 months the BWP Trust share price is up 1%, trailing the 6% gains posted by the S&P/ASX 200 Index (ASX: XJO) over that same time.

So far in 2022, BWP Trust shares are down 5%.

The post Dividend downer? BWP (ASX:BWP) share price slips following first-half results appeared first on The Motley Fool Australia.

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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 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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