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The Rhythm Biosciences Ltd (ASX: RHY) share price is on the move during late morning trade on Thursday.

This comes after the medical device company provided an update in regards to its colorectal cancer test kit product, ColoSTAT.

At the time of writing, the Rhythm share price is up 10% to $1.32 apiece.

Rhythm progresses towards commercialisation of test kit

In today’s release, Rhythm advised it has continued to conduct confirmatory testing on its ColoSTAT proprietary medical device.

Previously, Rhythm achieved positive results from its Study 6 findings in mid-March. It stated that the ColoSTAT prototype test kit demonstrates an accuracy of 84% sensitivity at 95% specificity.

This means the ColoSTAT blood test is 33% more accurate than the current market standard faecal tests.

Rhythm stated that it is advancing its approval process with the Therapeutic Goods Administration (TGA) for ColoSTAT. Achieving regulatory approval is the final hurdle for entering the Australian market.

In Europe, Rhythm has submitted its CE Mark application and is anticipating approval by end of the year. The company notes that the recent confirmatory testing is designed to support the criteria required to obtain a CE Mark.

A final study is underway following the completion of the patient recruitment phase last month. Rhythm expects to deliver the report in the first half of 2022.

Rhythm CEO, Glenn Gilbert, said:

Our visible path to market is emerging as our ongoing testing program continues to provide the company with confidence moving through the regulatory phase. The high accuracy of our cancer diagnostics technology has the potential to deliver positive outcomes for millions of people around the world. This is an exciting time for all stakeholders as we focus on the massive global market opportunity ahead of us.

More on ColoSTAT and colorectal cancer

ColoSTAT is an experimental test kit being trialled as a low-cost and easy-to-use blood test that detects colorectal cancer.

An estimated 850,000 people lose their lives from colorectal cancer each year.

In the United States, Europe, and Australia, more than 130 million people aged 50-74 years have not been tested for colorectal cancer. This represents an addressable market opportunity worth more than $6.5 billion.

Rhythm share price snapshot

The Rhythm share price has accelerated by 500% in the past 12 months, reflecting positive investor sentiment.

The shares reached an all-time high of $1.675 in March before some profit-taking investors swooped in.

At today’s price, Rhythm presides a market capitalisation of roughly $281.9 million with 208.8 million shares on issue.

The post Why is the Rhythm (ASX:RHY) share price climbing 10% today? appeared first on The Motley Fool Australia.

More reading

• Rhythm Biosciences (ASX:RHY) share price jumps 12% on key milestone

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 Pure Hydrogen Corporation CDI (ASX: PH2) share price is surging higher on news the company is branching into hydrogen-powered vehicles.

Pure Hydrogen is acquiring an interest in a hydrogen fuel cell company and plans to make hydrogen-powered trucks and buses for use on Australian roads.

The announcement has spurred excitement from a market that’s recently been spoilt for hydrogen news.

At the time of writing, the Pure Hydrogen share price is 30 cents, 5.17% higher than its previous close.

Let’s take a closer look at what could be the future of Australia’s transport industry.

Pure Hydrogen branches into transport

The Pure Hydrogen share price is gaining after the company announced it’s acquiring a 24% stake in H2X Global Limited.

H2X is a hydrogen-powered vehicle manufacturer with plans to sell hydrogen fuel cell electric utes, vans, SUVs, and minibuses in Australia in the coming years. It’s also developing a range of industrial vehicles.

Together, the companies plan to bring hydrogen-powered trucks and buses to Australia. Pure Hydrogen will be the preferred supplier of H2X’s hydrogen fuel cell powered vehicles.

Additionally, Pure Hydrogen plans to establish Pure X Mobility Pty Limited. Pure X Mobility aims to bring trucks for back-to-base operations such as garbage disposal and concrete delivery to Australia.

Pure Hydrogen’s managing director Scott Brown said of the company’s plan:

These industries are logical ‘starters’ for Pure X Mobility as they are short run operators where refuelling can be managed at back-to-base locations. Targeting sectors where we can rapidly bring heavy vehicles to market will be Pure X’s focus and makes logical commercial sense.

Pure Hydrogen has already begun working with truck and bus manufacturers.

The company is planning to announce several off-take and supply arrangements shortly. It also plans to release news of additional partners to help the development and commercialisation of its hydrogen solutions.

As the Motley Fool Australia recently reported, hydrogen could potentially decarbonise an extra 15% of the global economy.

Further, Fortescue Metals Group Limited‘s (ASX: FMG) green-energy subsidiary, Fortescue Future Industries, is working to create one the world’s largest hydrogen equipment manufacturing facilities in regional Queensland.

Pure Hydrogen share price snapshot

The Pure Hydrogen share price has been soaring alongside many of its ASX-listed hydrogen-focused peers lately.

Including today’s gains, it’s about 30% higher than it was at the start of October. It has also gained a whopping 240% since the start of 2021.

The post Pure Hydrogen (ASX:PH2) share price jumps 5% on hydrogen vehicle plans appeared first on The Motley Fool Australia.

More reading

• Why are ASX hydrogen shares in the spotlight on Monday?
• These were the best performing ASX hydrogen shares of September

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 Healius Ltd (ASX: HLS) share price has been a strong performer on Thursday.

In morning trade, the healthcare company’s shares are up 7% to $4.90.

Why is the Healius share price surging higher?

The Healius share price is storming higher today after investors responded very positively to a first quarter trading update.

According to the release, the company has continued to experience strong demand for COVID-19 testing during the first quarter. So much so, Healius was averaging 40,000 COVID tests per working day during the period.

As you might have guessed from the Healius share price performance, this has underpinned stellar revenue and earnings growth so far in FY 2022.

The release explains that the company’s first quarter revenue increased 43.7% over the prior corresponding period to $689.9 million. And thanks to effective cost control from Phase 1 of the Sustainable Improvement Program, its underlying earnings before interest and tax (EBIT) grew 159% to $201.9 million.

What else did the company say?

While COVID testing was the biggest driver of its strong growth, it wasn’t the only part of the business performing positively.

Management advised that its non-COVID revenue was stronger than expected during the quarter despite the various lockdowns.

Healius’ CEO, Dr Malcolm Parmenter, commented: “For our communities, over and above the COVID testing efforts, Healius continues to deliver essential frontline healthcare services safely, efficiently and effectively through lockdowns and as restrictions lift.”

“With communities now learning to live with COVID and adjusting for the new normal, we expect PCR testing to continue to be pivotal to Australia’s COVID response and the gold standard for testing. As restrictions ease, even with high vaccinations levels, it is expected that the Delta strain will continue to circulate, as evidenced in other international settings. To that end, Healius has invested in additional testing equipment to meet demand for PCR testing and ensure turnaround times are as short as possible, keeping our communities safe,” he added.

What about the future?

Dr Parmenter expects COVID testing to be necessary for the foreseeable future but acknowledges that demand will fluctuate. As a result, no guidance is possible at this point.

He explained: “Looking to the remainder of FY22, we believe COVID PCR testing will be part of the health landscape for years, however, we expect that testing levels will fluctuate. There is also a level of uncertainty in relation to the impacts of economies and borders reopening. Our revenue streams may be affected, both positively and negatively, by government responses to further community outbreaks, including lockdowns, restrictions on clinical activity and the level of funding for COVID testing.“

“Given this uncertainty, we will continue to update the market periodically on our results, rather than provide profit guidance for FY22,” Dr Parmenter concluded.

The post Healius (ASX:HLS) share price jumps 7% following huge Q1 earnings growth appeared first on The Motley Fool Australia.

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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. 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 Kogan.com Ltd (ASX: KGN) share price might be worth a look after the company’s latest update.

Kogan is one of Australia’s largest e-commerce retailers, and now also includes the New Zealand Mighty Ape business.

Here are some reasons why Kogan shares could be worth considering:

Return to growth

Earlier in the 2021 calendar year, the business was experiencing a drop off of demand.

However, in the three months to September 2021, Kogan reported that its gross sales were 21.1% higher than the prior corresponding period. Quarter on quarter, gross sales were 23.2% higher to $330.5 million.

Within the gross sales, the company said that Kogan Marketplace gross sales rose by 68.8% quarter on quarter to $110.4 million.

The performance of gross profit was more varied. The gross profit of $52.5 million declined 1.7% year on year, but it was an increase of 31.6% quarter on quarter.

Customer base still increasing strongly

Customers are the driver of more demand for products and services. This is what drives the network effects and can be a help for growing profit, as well as helping the long-term direction of the Kogan share price.

Kogan.com saw active customers increase 30.7% year on year to 3.35 million. Meanwhile, Mighty Ape had 748,000 active customers at 30 September 2021.

The ASX tech share also has a membership service called Kogan First. The number of Kogan First members grew by 171.1% year on year and 64.4% quarter on quarter to 197,000. At the date of the announcement, it had grown to over 210,000 members.

Kogan said that in the first quarter of FY22, it was focused on scaling Kogan First (and Kogan Marketplace).

Continuing to improve

Whilst the second half of FY21 was difficult, Kogan is continuing to work on various parts of its business to capture the large e-commerce opportunity.

Kogan said that it has been trying to improve its logistics and customer service, whilst also driving synergies with the integration of Mighty Ape.

Management said that the company has finally resolved the previous inventory pressures, whilst also closing a number of inefficient overflow warehouses. This reduction in inventory levels led to the company significantly reducing its warehousing costs, delivering an average variable cost saving $0.8 million per month in the first quarter of FY22, compared to the last quarter of FY21.

Inventory reduced from $227.9 million (comprising $191.8 million in the warehouse and $36.1 million in transit) at 30 June 2021, to $194.3 million (comprising $154.2 million in the warehouse and $40.1 million in transit) as at 30 September 2021.

Whilst adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of $10.8 million was a decline of 57% year on year, it was a 240.7% increase quarter on quarter.

What is the Kogan share price valuation?

According to Commsec, the Kogan share price is valued at around 27x FY23’s estimated earnings.

The post Why the Kogan (ASX:KGN) share price could be a top buy appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of PayPal (NASDAQ: PYPL) stumbled on Wednesday, falling as much as 6.8%, though the stock recovered a bit, ending the trading day down 4.7%. The catalyst that sent the fintech leader lower were reports that it might be expanding into new markets via a massive acquisition.

So what

Reports surfaced early in the day that PayPal had made overtures to acquire social-media site Pinterest (NYSE: PINS). Bloomberg dropped the story, citing the oft-quoted “people with knowledge of the matter,” which sent Pinterest stock soaring. 

The report had the opposite effect on PayPal. Investors were likely concerned about the proposed acquisition price for Pinterest of roughly $70 per share.

As of Jul. 23, 2021, Pinterest had more than 555 million shares of Class A common stock outstanding and more than 89 million shares of Class B shares, which, taken together, would value Pinterest at more than $45 billion. For context, PayPal currently has a market cap of roughly $300 billion, so an acquisition of this magnitude could have a significant impact on PayPal’s business — particularly if things go south.

The report didn’t specify when these discussions happened, though an updated version of the report said, “Terms of a transaction could still change, and there’s no certainty the talks would lead to an agreement.” 

Now what

PayPal has been looking to expand beyond its digital-payments business and has been working to become a “destination app” as a way to help users take control of their financial lives. Last month, the company added a host of new features and services, taking it one step closer to what some are calling a “super app.”

The added functionality includes a high-yield savings account, in-app shopping tools, up to two-day early access to direct deposit funds, bill pay, and deals and rewards for users. In the coming quarters, PayPal plans to expand its features even more, adding investment capabilities and purchasing with cryptocurrency.

By joining forces with Pinterest, PayPal would establish a sizable beachhead in social commerce, a natural extension of its payments business.

Thus far, neither PayPal nor Pinterest has confirmed the reports. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why PayPal investors got nervous on Wednesday appeared first on The Motley Fool Australia.

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Danny Vena owns shares of PayPal Holdings and Pinterest and has the following options: long January 2022 $85 calls on PayPal Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended PayPal Holdings and Pinterest. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia has recommended PayPal Holdings and Pinterest. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Metalstech Ltd (ASX: MTC) share price is leaping higher in morning trade today. At the time of writing, it is up by 7.14% to 45 cents. However, earlier in the day it was as high as 49 cents, a 16% gain on its previous closing price.

Below we look at the ASX resource explorer’s latest gold update that looks to be spurring investor interest.

What gold update was announced?

The Metalstech share price is surging after the company reported it had identified visible gold at its 100%-owned Sturec Gold Mine, in Slovakia.

The explorer is engaged in phase 2 of a diamond drilling campaign. During geological logging and sampling it said visible gold was identified at 97.6 metres “within a quartz filled vein/stockwork/breccia zone, variably rich in fine to very fine grained sulphides and hosted within variably argillic altered andesite host rock from approximately 75 metres to 120 metres down hole in the drill core…”

The hole in question, UGA-20, was completed to a depth of 140.5 metres.

Metalstech said the core from UGA-20 is currently being sampled and will be dispatched to a lab for analysis “as soon as possible”. The company will provide a market update once those results are in.

October tailwinds for the Metalstech share price

Gold prices have been edging higher in October, up 1.3% so far this month to US$1,782 per troy ounce.

But the Metalstech share price enjoyed an even bigger boost earlier this month from another positive gold announcement out of Sturec.

On 4 October its shares surged 17% intraday after the company reported it had encountered “bonanza gold” at the project.

Following the bonanza gold strike, Metalstech chairman Russel Moran said:

Sturec is shaping up to be an extraordinary deposit with bonanza grade potential … we are hopeful we will continue to hit these incredible mineralised zones, which can expand on and help grow what is already a very exciting and significant gold resource.

Metalstech share price snapshot

The Metalstech share price has been a standout performer over the past full year, up around 180% in 12 months. For comparison, the All Ordinaries Index (ASX: XAO) gained 21% over that same time.

Over the past month, Metalstech shares have gained 12%.

The post Why the Metalstech (ASX:MTC) share price is climbing 7% today 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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The Transurban Group (ASX: TCL) share price has been off to a troubling start to commence the walk through October.

At the time of writing, shares in the road toll operator are changing hands at $13.78, a corresponding 0.15% drop from the market open today.

Transurban shares are on the move as the company released its quarterly update for the quarter ending September 30 2021.

Transurban share price slips as average daily traffic pulls back

Key investment takeouts for Transurban coming out of the latest quarter include:

• Significant decrease in overall average daily traffic year on year, due to Government enforced lockdowns
• Melbourne and Brisbane traffic increased, whereas Sydney traffic volumes were 44% down year on year
• Recovery of traffic numbers in some jurisdictions like Montreal and Washington are balanced by uncertainties from the Federal and State Governments in Australia
• WestConnex Tunnel excavation is now basically complete, with 11km of road pavement now laid down
• First cars expected at WestConnex in FY23.

What did Transurban get up to this quarter?

In its report, Transurban explained that overall average daily traffic (ADT) volumes came in 12.4% behind this same time last year and 34.5% when compared to 2019.

The company advised the down-step in ADT is primarily the result of government mandated lockdown restrictions, particularly in Melbourne and Sydney – two cities critical for Transurban’s Australian operations.

This effect was made clear as ADT in Brisbane actually increased this quarter, as case numbers there remained low and restrictions on mobility were light throughout the last three months.

However, irrespective of this, Melbourne ADT actually managed to reclaim 30.7% towards its pre-COVID levels, with a large uptick in weekend/public holiday traffic.

Sydney traffic was the offsetting factor, driven by a 44% decrease in ADT from the year prior, with the shutdown of the construction industry certainly not helping the outcome.

In both Montreal in Canada and the Greater Washington Area in the US, traffic numbers are showing signs of recovery with a 39% increase in ADT this quarter. However, they are still not at pre-pandemic volumes just yet.

Perhaps the key takeout from the quarter was Transurban’s confirmation that its 50% strategically-owned subsidiary, Sydney Transport Partners, will acquire the remaining stake in the WestConnex project.

The 49% stake was purchased from the NSW Government at auction last month after the company successfully raised $4.22 billion from an equity raise to fund the transaction.

As a result of the deal, Sydney Transport Partners is now the 100% owner of WestConnex, meaning Transurban shareholders are also effectively part-owners of the project.

Per the release, tunnel excavation is now 99% complete at the project, whereas 11km of road pavement has now been laid.

The company anticipates the project to accept its first run of cars and be fully operational by FY23.

Transurban share price snapshot

The Transurban share price has had an incredibly difficult year to date, leaving much to be desired for shareholders.

It’s posted a return of just 1.7% since January 1 and is in the red by about 0.4% over the last 12 months.

These results have lagged the S&P/ASX 200 index (ASX: XJO)’s return of around 19% in that time.

The post Transurban (ASX:TCL) share price slides as traffic volumes push lower appeared first on The Motley Fool Australia.

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The author Zach Bristow has no positions 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 Centrex Metals Limited (ASX: CXM) share price is having an incredible day on Thursday.

In morning trade, the phosphate explorer’s shares are up 200% to a record high of 13 cents.

Why is the Centrex share price tripling in value today?

The catalyst for the rise in the Centrex share price on Thursday has been the release of a promising announcement.

According to the release, the company’s wholly owned Agriflex business has executed a conditional term sheet with Samsung C&T Corporation.

Samsung C&T is a subsidiary of global behemoth Samsung and one of the world’s largest traders in fertilisers. It has representatives in 73 offices in 43 countries around the world.

The release explains that the term sheet outlines the appointment of Samsung as its sole and exclusive marketing representative for sales into Korea, Japan, Indonesia, India and Mexico. The initial term is for the first three years of production from the company’s planned 800,000 tonnes per annum at the Ardmore Phosphate Project.

Samsung will provide marketing services for sales of an annual quantity equal to the lesser of 20% of the product from the Project or 160,000MT. In addition, Samsung may also assist the company with sales of any additional quantity of product not taken by other off-takers.

The price to be paid by Samsung will be the market netback price. This is defined as the actual sales price minus direct costs and a marketing service fee.

The conditions precedent for the agreement include Agriflex’s final board approval to proceed with the construction of the Ardmore Phosphate Project’s 800ktpa plant, Samsung’s internal corporate approvals, Agriflex’s financial close in relation to the financing arrangements for the Project, and the commencement of production from the plant.

Centrex also revealed that it is in advanced discussions with a number of other Australian and international potential customers. It intends to keep the market informed as these develop.

The post Centrex (ASX:CXM) share price rockets 200% on Samsung deal appeared first on The Motley Fool Australia.

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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. 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 Flight Centre Travel Group Ltd (ASX: FLT) share price has been on a jagged ride lately.

At the time of writing, shares in the travel retailing giant are changing hands at $20.28, down 6.33% on yesterday’s close.

Flight Centre shares are on the move today after the company successfully priced an issue of convertible debt overnight.

What was announced?

Flight Centre advised it had successfully issued an offering of $400 million in senior unsecured convertible debt for maturity in 2028.

The convertible notes (or bonds, as they are also known) will pay a coupon of 1.625% per annum, paid semi-annually.

This means bondholders will receive two payments at an interest rate of 0.8125% on their principal per year.

Flight Centre intends to use the net proceeds – about $393 million – to pay down existing debt and take advantage of the current ultra-low rates on fixed-rate debt financing to help fund its growth vision into the future.

A part of the debt repayment is allocated to the Bank of England Covid-19 Corporate Financing Facility.

This facility was afforded to the company last year and comes due in March 2022.

What is a convertible bond?

A note or bond is a type of debt instrument that is issued by a company to investors in order to raise money.

When executives are faced with financing decisions to grow the company or stay solvent, they generally have three choices: use cash on the balance sheet, issue more or new shares, or undertake a debt load.

Corporate bonds and notes are just a way for investors to lend a company money by purchasing the bonds. They then receive interest payments and their money back in full when the debt matures in 7 years.

Issuers must be of a high credit rating, and also have sufficient operating cash flows to service the debt obligations when they fall due.

Convertible notes are a particular type of bond that has a special option embedded into its fine print.

It allows investors the option to ‘convert’ their debt asset into equity if Flight Centre’s share price hits a certain level.

With this particular note issue, the conversion price is $27.30 per share. At that point, bondholders will have the opportunity – but not the obligation – to obtain Flight Centre shares at that price.

What does it mean for the Flight Centre share price?

Generally, all parties involved are fans of convertible debt.

For companies, it provides a lower-cost financing solution, as investors will accept a lower rate of interest for the chance to convert their bonds to equity later.

Companies also love convertible debt because when bonds convert, the debt is wiped clean off the balance sheet.

For investors, convertible notes are a very cheap way of obtaining equity, whilst providing some cover over the downside risk.

If Flight Centre’s shares don’t perform well, investors don’t have to convert and they will still earn a 1.625% return and receive their principal back in full.

This equates to a gross return of $2,985 at the tenor. However, if the share price does take off, then investors can convert at a ratio of 1:27.50, meaning if the share price hits $40, they can purchase the shares at a 31% discount.

Unlike fixed income, the upside potential in shares is unlimited, meaning the gross return is infinite (in theory).

However, conversion can dilute the holdings of other shareholders, as more individual shares are issued.

Flight Centre share price snapshot

The Flight Centre share price has gained 27% this year to date and 47% over the past 12 months.

This is well ahead of the 19% gain of the S&P/ASX 200 index (ASX: XJO) over 12 months.

The post Why is the Flight Centre (ASX:FLT) share price down 6% today? appeared first on The Motley Fool Australia.

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The author Zach Bristow has no positions 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 Flight Centre Travel 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 SILK Laser Australia Ltd (ASX: SLA) share price is in the red on Thursday morning after the company announced a resilient first-quarter trading update.

At the time of writing, the SILK Laser share price is down 0.75% to $4.61.

SILK Laser share price down as COVID-19 restrictions bite

SILK Laser delivered a resilient performance over the first quarter ended 30 September. Some highlights include:

• Network cash sales adjusted for lost trading days up 14% to $23.5 million;
• Unadjusted network cash sales down 4%;
• Like-for-like sales adjusted for lost trading days up 2% to $20.4 million; and
• Unadjusted like-for-like sales down 14%.

SILK was pleased with its FY22 year-to-date performance considering the lost trading days due to closed clinics during COVID-19 lockdowns. It also comes against the backdrop of an exceptionally strong comparable period last year.

The trading update highlighted strong growth across body and injectable categories, with its overall service mix evolving, as planned.

Online sales for SILK’s skincare brands surged by 700% to about $189,000, although this came off a low base.

Back in September, the company announced it had completed the acquisition of Australian Skin Clinics (ASC), which pushed the SILK Laser share price higher at the time. The company advised the integration of ASC is on track.

ASC’s financial performance was not included in SILK’s Q1 sales metrics given its 4 weeks of ownership.

Management commentary

SILK founder and managing director Martin Perelman commented on the first-quarter results, saying:

We are pleased with how the business has performed over the first three months of FY22. While COVID lockdowns again held back sales growth as clinics were forced to close, on an adjusted basis we saw strong momentum in key growth categories, resulting in overall positive like-for-like sales growth. In particular, SILK experienced strong growth across its body and injectables categories, and exceptional growth in online sales of our skincare brands.

What’s next for SILK?

SILK is positive on its outlook, citing the majority of NSW clinics achieved the equivalent of approximately two weeks’ worth of trading within the first week of opening after lockdowns.

“Cosmetic Injectables, as has happened previously, performed far above expectations driven by strong waitlists and the strength of SILK’s injecting teams.”

Its service and earnings mix is expected to continue to evolve with a growing position in injectable and body categories. SILK said it will continue to roll out these service offerings across its network.

Despite a challenging trading environment so far in 2021, the SILK Laser share price is up 29% year-to-date.

The post SILK Laser (ASX:SLA) share price edges lower on quarterly update appeared first on The Motley Fool Australia.

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended SILK Laser Australia Limited. The Motley Fool Australia has recommended SILK Laser Australia 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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