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As one of the largest blue chip shares on the S&P/ASX 200 Index (ASX: XJO), the Woolworths Group Ltd (ASX: WOW) share price is one of the most-watched metrics on the share market. The fact that Woolies is one of the most prominent and popular brands in Australia wouldn’t hurt either.

So Woolworths shares have had a pretty decent run over 2021 so far, despite the big dip we saw last week.

Investors have gotten the jitters over Woolies shares over the past week or so. The company gave the market a trading update last Tuesday, and the fallout wasn’t pretty. The update covered the first half of FY2022. Despite recording modest growth across most of its business divisions (including a 2% increase in Australian Food sales), investors seemed to be concerned over Woolworths’ cost base. Higher costs related to COVID-19 dragged on the Group’s earnings before interest and tax (EBIT) over the period. By the end of that Tuesday’s training, the Woolworths share price had fallen close to 8%.

As it stands today, Woolworths shares have risen a touch over 12.6% year to date. That doesn’t include the company’s dividend either. This would have added another 2%-3% to investors’ returns. Compared to the ASX 200’s 9% return year to date, that looks pretty pleasing. Also consider that Woolworths spun off Endeavour Group Ltd (ASX: EDV) this year as well. Seeing as investors received one Endeavour share for every Woolworths share owned, this would have boosted investors’ returns even further.

So now Woolworths investors are about to put a relatively successful (touch wood) 2021 behind them, what does 2022 hold in store?

What does 2022 hold in store for the Woolworths share price?

Well, as my Fool colleague James covered last week, one broker who isn’t too keen on Woolworths going into next year is Morgans. Morgans took a look at the update Woolies gave, and wasn’t too impressed.

This broker maintained its hold rating on Woolworths shares, and shaved its 12-month share price target to $36.65. That implies a potential future downside of roughly 3.73% over the next 12 months. The broker stated, “we think the 7.7% fall in the share price today reflects the disappointing trading update and WOW’s elevated trading multiples, notwithstanding long term fundamentals remaining sound.”

Of course, Woolworths shareholders might spend the first few months of the year finding out whether Woolworths will be successful in its pursuit of Priceline owner Australian Pharmaceutical Industries Ltd (ASX: API). Woolies is currently locked in a battle to take over API with its old rival Wesfarmers Ltd (ASX: WES). This could well dominate investors’ attention next year.

For now, the Woolworths share price is trading at $38.17 a share, up 1.35% for the day so far this Monday. At this share price, Woolworths has a market capitalisation of $46.26 billion. It also offers a price-to-earnings (P/E) ratio of 31.3 and a dividend yield of 2.83%.

The post What experts are saying about the Woolworths (ASX:WOW) share price in 2022 appeared first on The Motley Fool Australia.

More reading

• Wesfarmers (ASX:WES) share price rises amid latest push for API
• ASX 200 (ASX:XJO) midday update: Magellan shares crash 28%, CIMIC tumbles
• How will ASX retail shares go in 2022?
• 5 things to watch on the ASX 200 on Monday
• The ASX 200 Index could be set for a huge makeover in 2022. Here’s why

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 owns and has recommended Wesfarmers 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 Cimic Group Ltd (ASX: CIM) share price tumbled today amid reports the company underpaid workers by millions of dollars and a broker downgrade of its stock.

The construction, mining, and services company froze the trading of its stock shortly after midday on Monday.

At the time of writing, the Cimic share price is halted at $15.51. That’s 15.38% lower than it was at its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is down 0.32% right now.

Let’s take a look at what might be weighing on the company’s stock today.

Cimic share price flops amid underpayment reports

The Cimic share price has slumped amid reports from the Australian Financial Review (AFR) claiming the company could be facing the beginnings of a wage scandal.

According to the publication, the claims stem from the company’s decision to sell its 45% holding in Middle East-based BIC Contracting (BICC). It was sold to SALD Investment.

However, Cimic is now facing backlash from former BICC employees. They’re claiming Cimic failed to pay their wages, entitlements, or compensations after making them redundant earlier this year.

Others reportedly claim BICC cancelled their health insurance, placing them in a precarious position during the pandemic.

Former employees have recently approached Cimic’s CEO Juan Santamaria on LinkedIn.

Santamaria has personally responded to some messages from former employees, stating BICC’s acquirer was meant to provide the contended wages.

It’s a story that’s been brewing for a number of weeks now, with The Australian reporting on the LinkedIn messages in late November.

According to today’s reports by the AFR, more have now signed letters to the Australian Securities and Investments Commission, the Fair Work Ombudsman, and the Australian Ambassador to the United Arab Emirates (UAE).

The AFR quoted a letter to the Australian Ambassador to the UAE as saying:

We find ourselves at the centre of a deep David and Goliath crisis involving high level corporate misconduct.

The matter involves some complexity due to a Sale and Purchase Agreement (SPA) with a local company named SALD, wherein CIMIC has endeavoured to assign all management control to SALD upon announcement of the proposed sale even though the company trade licenses remain in CIMIC’s holding company’s name and the sale itself is not completed, due to many of the conditions stipulated in the SPA not having being fulfilled to date.

On top of that, the AFR reports some former employees have filed legal cases in the United Arab Emirates.

Cimic is said to have responded to AFR‘s request for comment, saying:

BICC has never been and is not currently controlled by CIMIC… We are always concerned as to the fair treatment of individuals and we have requested, through BICC management, that they investigate the claims and meet their commitments to their employees where applicable. This is a matter for the acquirer.

Broker downgrade

The Cimic share price might also be feeling the impact of a downgrade from Credit Suisse.

According to reporting by the Sydney Morning Herald, Credit Suisse analyst William Park dropped the company’s target price to $17.16 and slapped it with a ‘neutral’ rating.

That’s a 21% drop on the broker’s previous target for the Cimic share price.

What’s next?

Whether the AFR‘s reporting or the broker’s downgrade directly resulted in Cimic’s tumble is unknown.

Cimic has told the market it paused the trading of its shares while it gets ready to make an announcement.

Right now, the Cimic share price is 39% lower than it was at the start of 2021. Its value has also fallen 16% over the last 30 days.

The post Cimic (ASX:CIM) share price dumps 15% before being halted. Here’s why appeared first on The Motley Fool Australia.

More reading

• Why Audio Pixels, CIMIC, Magellan, and St Barbara shares are tumbling
• ASX 200 (ASX:XJO) midday update: Magellan shares crash 28%, CIMIC tumbles
• Here’s why the Cimic (ASX:CIM) share price popped 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) looks set to start the week with a decline. At the time of writing, the benchmark index is down 0.3% to 7,280.8 points.

Four ASX shares that have not let that hold them back are listed below. Here’s why they are pushing higher:

Australian Clinical Labs Ltd (ASX: ACL)

The Australian Clinical Labs share price is up 2.5% to $5.05. This morning the pathology company announced the successful completion of the acquisition of Medlab Pathology for $70 million. It is a leading Australian privately-owned independent pathology provider, with two laboratories and 288 collection centres across NSW and QLD.

Humm Group Ltd (ASX: HUM)

The Humm share price has jumped 20% to 89 cents. This morning the financial services company revealed that it has received approaches from third parties to acquire all or part of it. No details on the approaches have been provided. However, the Humm Board intends to engage with these potential suitors to determine whether their proposals are capable of becoming definitive offers.

Neometals Ltd (ASX: NMT)

The Neometals share price is up 1% to $1.05. Earlier today Neometals advised that its joint venture company, Primobius, has successfully commissioned its commercial shredding plant in Hilchenbach, Germany. From early next year, up to 10 tonnes per day of battery-grade metal sulphate chemicals will be able to be safely recycled into new battery production.

Viva Energy Group Ltd (ASX: VEA)

The Viva Energy share price is up 3.5% to $2.23. This follows the release of guidance for FY 2021 from the fuel retailer. According to the release, the company expects its operating earnings to almost double to between $470 million and $490 million. Viva achieved strong fuel sales growth across both Retail and Commercial segments in FY 2021.

The post Why Australian Clinical Labs, Humm, Neometals, and Viva Energy are rising appeared first on The Motley Fool Australia.

More reading

• Neometals (ASX:NMT) share price jumps on battery recycling update
• ASX 200 (ASX:XJO) midday update: Magellan shares crash 28%, CIMIC tumbles
• Why is the Humm (ASX:HUM) share price jumping 16% today?
• ASX shares that could be impacted by AdBlue shortage
• Here’s why the Neometals (ASX:NMT) share price is surging 6% today

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 recommended Australian Clinical Labs Limited and Humm 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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The Poseidon Nickel Ltd (ASX: POS) share price is soaring on Monday following the mining company’s latest drilling assay results.

At the time of writing, the nickel miner’s shares are swapping hands for 9.9 cents a pop, up 8.79%.

What did Poseidon announce?

In today’s statement, Poseidon advised that its latest infill drilling assay results have identified high-grade intersections at the Silver Swan project.

The company’s infill drilling program completed 23 holes, logging well-developed massive nickel sulphides deposits within the Tundra Mute Resource. The recent holes drilled came back with the following results:

• 12.9 metres at 10.63% of nickel (Ni) from a depth of 241.1 metres (PTMD005)
• 6 metres at 11.36% Ni from a depth of 257 metres (PTMD007)
• 11 metres at 13.26% Ni from a depth of 288 metres (PTMD014)
• 3.5 metres at 16.30% Ni from a depth of 287.9 metres (PTMD015)
• 15 metres at 17.92% Ni from a depth of 265 metres (PTMD018)

Poseidon noted that a downhole electromagnetic survey discovered seven plates that are considered highly conductive. These readings often suggest the presence of massive sulphides which are located within the area of known existing mineralisation intersections.

While the results are positive, the company will conduct further electromagnetic surveys in the near future. The information will guide additional drill testing in the area.

Poseidon Nickel managing director and CEO, Peter Harold commented:

We are delighted that the recent Silver Swan drilling has returned a series of high-grade results which will most certainly add tonnes to the resource base at Tundra- Mute.

While these results are very significant on their own, the fact that the down hole EM survey has returned strong EM conductors is a good indication that there is additional high-grade mineralisation in the vicinity of the existing know mineralisation.

These are fantastic results and demonstrate the perspectivity of the Silver Swan Channel.

About the Poseidon share price

Over the past 12 months, Poseidon shares have rallied almost 40% higher, reflecting positive investor sentiment. Since the start of 2021, the company’s share price is up around 50% alone.

On valuation grounds, Poseidon presides a market capitalisation of roughly $300.27 million, with more than 3.06 billion shares outstanding.

The post Here’s why the Poseidon Nickel (ASX:POS) share price is climbing 8% today appeared first on The Motley Fool Australia.

More reading

• Poseidon Nickel (ASX:POS) share price booms 17% on ‘exceptional’ drilling results

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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The S&P/ASX 200 Index (ASX: XJO) has started the week in a disappointing fashion. In afternoon trade, the benchmark index is down 0.2% to 7,288.6 points.

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

Audio Pixels Holdings Ltd (ASX: AKP)

The Audio Pixels share price is down 10.5% to $21.65. This has wiped out most the gains made last week following an announcement. Investors may be concerned why if the company’s digital speaker technology is so revolutionary it has had to resort to signing a fabrication agreement with an unknown Chinese company with no track record.

CIMIC Group Ltd (ASX: CIM)

The CIMIC share price sank 15% to $15.51 before being placed in a trading halt. This follows allegations reported in the AFR of broken promises, extreme personal and financial hardship, and millions of dollars in unpaid wages from Australia’s biggest construction company.

Magellan Financial Group Ltd (ASX: MFG)

The Magellan share price has crashed 30% to a multi-year low of $20.62. This morning the fund manager announced the termination of the St James’s Place mandate. The release notes that the mandate represents approximately 12% of the company’s current annual revenues. As a result, the termination of the mandate at this point in the financial year is anticipated to impact its FY 2022 revenues by 6%.

St Barbara Ltd (ASX: SBM)

The St Barbara share price is down 8% to $1.35 after announcing the acquisition of Bardoc Gold Limited (ASX: BDC). St Barbara has offered 0.3604 new St Barbara shares for each Bardoc share. Based on the St Barbara share price at the close of play on Friday, this values Bardoc at approximately $157 million and each Bardoc share at 53 cents. Investors appear to believe St Barbara is overpaying to expand its footprint in the Leonora Province.

The post Why Audio Pixels, CIMIC, Magellan, and St Barbara shares are tumbling appeared first on The Motley Fool Australia.

More reading

• Here’s why the Bardoc Gold (ASX:BDC) share price is rocketing 12% today
• ASX 200 (ASX:XJO) midday update: Magellan shares crash 28%, CIMIC tumbles
• St Barbara (ASX:SBM) share price tumbles after announcing Bardoc Gold acquisition
• Magellan (ASX:MFG) share price crashes 23% after losing major contract
• 5 things to watch on the ASX 200 on 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. 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 Lithium Energy Ltd (ASX: LEL) share price is plunging today after a company update on its operations in Argentina.

Shares in the exploration company are trading hands at 70 cents on Monday afternoon, down 6%.

Let’s take a look at what may be impacting the Lithium Energy share price today.

What did the company announce?

In today’s release, Lithium Energy advised that COVID-19 travel restrictions were delaying public consultation at its Solaroz Lithium Project in Argentina.

The company advised the market back in September that approval for the project would be imminent.

Despite obtaining regulatory approval on the technical aspects of the exploration, the company wants to ensure the public consultation is complete before drilling for lithium.

The mining director has initiated follow-up public meetings with the two relevant community groups. This is now possible after COVID-19 restrictions were recently relaxed in the Argentinian province of Jujuy.

In consultation meetings in late July, the company said there were no significant community or landowner objections to the exploration.

Lithium Energy mines for battery minerals at both the Argentina mine and the Burke Graphite Project in Queensland.

Management comment

In a statement authorised by the executive chairman and director, the company said:

Whilst this has caused a delay to the planned exploration activities, Lithium Energy is fully supportive of the request made by the mining director.

Lithium Energy anticipates that such engagement will foster more positive long term community engagement and collaboration moving forward.

Lithium Energy said it would hold these community meetings in the new year and was not expecting any objection to the exploration.

The company is currently engaging with local geophysics and drilling contractors amid the pending approval and hopes to start exploring by early February 2022.

Share price snapshot

The Lithium Energy share price has surged a mammoth 250% in the past 12 months.

Despite this, the company’s shares have dropped by 21% in the past month and 4% in the past week.

The lithium miner has a market capitalisation of nearly $32 million based on the current share price.

The post Here’s why the Lithium Energy (ASX:LEL) share price is tumbling 6% today appeared first on The Motley Fool Australia.

More reading

• Why Audio Pixels, CIMIC, Magellan, and St Barbara shares are tumbling
• 2 ASX dividend shares that could provide steady income in retirement
• Magnis (ASX:MNS) share price leaps 6% on new supply deal
• OFX (ASX:OFX) share price surges 18% on first major acquisition
• Origin (ASX:ORG) share price slips on $42 million acquisition

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 dividend shares could be the answer for investors who are looking for steady income in retirement.

Some businesses may be known for paying large dividend yields, but they haven’t built a reputation of reliability.

That’s why these two compelling investments could be top ideas:

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

Soul Pattinson is one of the oldest businesses on the ASX. It has been a listed business since 1903 and it has paid some sort of dividend every year since then.

The investment house has held some of its largest investments for many years, including Brickworks Limited (ASX: BKW), TPG Telecom Ltd (ASX: TPG) and New Hope Corporation Limited (ASX: NHC).

Soul Pattinson has grown its dividend every year since 2000. It has grown the dividend through the GFC, the COVID-19 pandemic and every other problem that has happened in the last two decades.

It funds its growing dividend from its operating cashflow, after paying for operating costs. The cashflow comes from the portfolio’s dividends and distributions. Some of the ASX dividend share’s other investments includes Pengana Capital Ltd (ASX: PCG), Bki Investment Co Ltd (ASX: BKI), Pengana International Equities Ltd (ASX: PIA), agriculture, Round Oak and Ampcontrol.

The business is looking to increase its diversification and growth prospects by focusing on a number of investment themes including health and ageing, the energy transition, agriculture, financial services and education.

At the current Soul Pattinson share price of $30.22, it has a trailing grossed-up dividend yield of 2.9%. However, if the business grows its annual dividend per share by another 2 cents in FY22, it has a forward grossed-up dividend yield of 3%.

APA Group (ASX: APA)

APA is one of the largest energy stocks, with a market capitalisation of $11.6 billion according to the ASX.

This ASX dividend share is another one that has a long record of income growth for investors. It has increased its distribution every year for more than a decade and a half.

APA owns a vast pipeline across Australia, which transports huge quantities of gas. It supplies half of Australia’s natural gas usage.

The business also has stakes in other gas-related assets and also renewable energy assets.

Indeed, last week it announced it had reached a final investment decision to build stage two of the Mica Creek Solar Farm in Mount Isa. This includes the supply of electricity for 15 years, requiring additional capital expenditure by APA of around $70 million. It comprises 44 megawatts of additional solar power generation. There is continued strong interest from customers, so it’s investigating a potential expansion for a third stage.

Referencing the long-term shift to greener energy, APA has said that existing gas infrastructure may also play a critical role in supporting the delivery of ‘clean molecules’ to homes and businesses, such as biogas and hydrogen, which APA said are likely to be critical additions to the future energy mix.

In terms of distribution expectations, APA is guiding a 4% distribution increase in FY22 to $0.53 per security. That translates to a forward distribution yield of 5.3%.

The post 2 ASX dividend shares that could provide steady income in retirement appeared first on The Motley Fool Australia.

More reading

• Are these 2 leading ASX 200 shares worth buying?
• Soul Pattinson (ASX:SOL) share price dips as investors digest AGM
• 5 things to watch on the ASX 200 on Friday
• APA (ASX:APA) share price leaps 5% amid hydrogen disruption plans
• Here are the top 10 ASX shares today

Motley Fool contributor Tristan Harrison owns Pengana International Equities Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Brickworks. The Motley Fool Australia owns and has recommended APA Group, Brickworks, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended TPG Telecom 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 Magnis Energy Technologies Ltd (ASX: MNS) share price has come out of a trading halt to power ahead today. This comes after the company announced it has entered into a binding offtake agreement.

At the time of writing, the battery technology company’s shares are up 6% to 46.5 cents. In the first 15 minutes after market open when the news broke, the Magnis share price reached as high as 49.5 cents.

Magnis signs supply agreement

The Magnis share price is on the move on Monday as investors appear upbeat following the company’s latest update.

In its announcement, Magnis reported it has signed a legally binding offtake agreement with physical commodity trader and merchant Traxys.

This will see the future supply of natural graphite concentrate from Magnis’ wholly-owned Nachu Graphite Project in southeast Tanzania.

Under the terms, the delivery of the product is valid for a period of 6 years from the commencement date. It’s expected orders will begin to be fulfilled sometime in the second half of 2024.

The sales volume must be 50,000 tonnes of natural graphite concentrate within the first 12 months of the commencement date. In each of the following five delivery years, the sales volume increases to 110,000 tonnes. This equates to a total of 600,000 tonnes of natural graphite covering all flake sizes.

The pricing of the product will be set at the current market rate at the time of the delivery.

Magnis chair Frank Poullas commented:

We are really excited to have signed the binding offtake with a group of the calibre of Traxys which is a supplier of materials to many industries including lithium-ion battery manufacturers. Today’s announcement follows months of providing flake graphite samples from Nachu and is a major step in securing funding for Magnis’ Nachu Graphite Project.

About the Magnis share price

In the past 12 months, Magnis shares have boasted a gain of around 140% from continued positive investor sentiment. The company’s share price charged higher in late October following an update on its New York Lithium-ion Battery Plant.

Although the short-term picture appears rosy, looking over a longer time period, the Magnis share price is down more than 40% across the past 5 years.

Based on today’s price, Magnis has a market capitalisation of around $455.03 million, with roughly 978.56 million shares on issue.

The post Magnis (ASX:MNS) share price leaps 6% on new supply deal appeared first on The Motley Fool Australia.

More reading

• Why have Magnis (ASX:MNS) shares just entered a trading halt?
• Magnis (ASX:MNS) share price slips after retracting $10b ‘potential’ valuation
• Here’s why the Magnis (ASX:MNS) share price is rocketing 21% today

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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The OFX Group Ltd (ASX: OFX) share price is taking off today after the company announced that it’s agreed to acquire a Canadian foreign exchange service provider.

The company is set to purchase Firma Foreign Exchange Corporation, which offers its services to corporations, for $98 million.

At the time of writing, the OFX share price is $2.20, 17.65% higher than its previous close.

Let’s take a look at today’s news from the multicurrency payment services and solutions provider.

OFX share price soars on $98 million acquisition

The OFX share price is roaring higher on news of the company’s first major acquisition – set to increase its revenue from North America by 121%.

Firma has around 9,600 corporate customers and 9 offices in Canada, Australia, the United Kingdom, and New Zealand.

According to OFX, the acquisition will significantly increase its volumes in major currency pairs. Such pairs include United States Dollars to Canadian Dollars and United States Dollars to Great British Pounds.

OFX expects it will also bump its underlying earnings per share (EPS) by more than 20% in the first year of ownership and by more than 30% in the second year.

Additionally, it should bring at least $5 million of pre-tax cost and revenue synergies in financial year 2025.

OFX will partly fund the takeover with cash and partly use an underwritten debt facility.

It expects to pay the debt back in less than 4 years. To do so, it will be putting its share buy-back program on hold.

The acquisition should be finalised in the first quarter of financial year 2023.

Firma’s $98 million price tag represents 9 times its earnings before interest, tax, depreciation, and amortisation (EBITDA) for the 12 months before 30 September 2021.

What did management say?

OFX CEO and managing director, Skander Malcolm commented on the news driving the company’s share price today, saying:

This is our first major acquisition and very much aligned with our strategy of building scale in the corporate segment and growing the North American region. Firma generates strong earnings from a high-quality customer base and has an excellent service culture, so there is a lot of alignment with OFX…

Our business is continuing to perform well, with the positive trends we drove in the first half continuing into the third quarter. With the addition of Firma we can accelerate that growth by combining our infrastructure and risk culture with their customer base and service excellence, delivering further profitable growth, and value accretion for OFX shareholders.

The post OFX (ASX:OFX) share price surges 18% on first major acquisition appeared first on The Motley Fool Australia.

More reading

• Origin (ASX:ORG) share price slips on $42 million acquisition
• Wesfarmers (ASX:WES) share price rises amid latest push for API
• Leading brokers name 3 ASX shares to buy today
• Angel Seafood (ASX:AS1) share price rockets 44% on takeover news
• Here’s why the Bardoc Gold (ASX:BDC) share price is rocketing 12% 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 Origin Energy Ltd (ASX: ORG) share price is struggling to gain momentum on Monday. This follows an announcement from the energy provider revealing it is acquiring community energy services business WINconnect Pty Ltd.

At the time of writing, Origin’s shares are swapping hands for $5.05, down 0.98% from its previous closing price.

Today’s fresh acquisition announcement follows reports last week from the energy producer and retailer. Origin Energy was showing interest in potentially investing more in its highly successful venture in British renewable energy company Octopus Energy.

Expanding through acquisition

It seems investors aren’t too thrilled with Origin Energy’s latest acquisition news. The announcement has been met with some selling pressure on the ASX’s third-largest-listed utility company.

According to the release, one of Origin’s subsidiaries has entered into an agreement to acquire WINconnect. The Hawthorn-based company operates embedded networks mainly in Victoria and New South Wales. These services essentially involve the onselling of utilities to residents of apartment blocks, retirement villages, etc.

Furthermore, the deal will see changes made to Origin Energy’s master services agreement with Intellihub — a provider of metering solutions. The changes involved most notably include an increase in meter volumes. In addition, Intellihub will acquire both Origin’s and WINconnect’s electricity embedded network meters.

Both Intellihub and WINconnect are majority-owned by Pacific Equity Partners, making it the primary party involved in the transaction with Origin.

With both parties acquiring assets from each other, the best way to look at the transaction is from a net perspective. As such, the net amount payable by Origin Energy is slated to be $42.4 million post-tax. Yet, the deal has failed to excite the Origin share price today.

Following the deal, the energy provider will boast an additional 87,000 customers. A further 36,000 contracted apartments await connection in the pipeline. On completion of the acquisition, Origin’s community energy services business will total 367,000 customers.

Origin CEO Frank Calabria commented on the announcement:

The acquisition of WINconnect is a strong fit for Origin, aligning to our retail strategy to expand our existing presence in the embedded networks market. Since 2018, Origin’s CES [community energy services] business has experienced strong growth with customer accounts increasing by 78 per cent.

Origin Energy share price recap

The Origin Energy share price has managed to keep itself in the green since the beginning of this year. However, it has failed to outperform the S&P/ASX 200 Index (ASX: XJO). The nearly $9 billion energy giant has experienced a share price gain of 5.2% so far this year. Meanwhile, the benchmark index is up 8.9%.

Though, the company has dished out 20 cents per share in dividends in 2021. This equates to a dividend yield of 3.96% based on the current share price.

However, Origin Energy’s 12-month trailing revenue has been in a state of decline since the end of 2018. Shareholders might be cautiously waiting to see a return to growth.

The post Origin (ASX:ORG) share price slips on $42 million acquisition appeared first on The Motley Fool Australia.

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• The Origin (ASX:ORG) share price has only gained 1% so far this year. Is it a buy?
• Is something big about to go down with Origin Energy (ASX:ORG) shares?
• Why is the Origin (ASX:ORG) share price outperforming AGL in November?

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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