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The Caravel Mineral Ltd (ASX: CVV) share price is heading south on Thursday’s market session. This comes after the Australian miner released its infill drilling results at the Bindi Copper Deposit.

At the time of writing, the Caravel shares are down 3.33% to 43.5 cents apiece.

What were the drilling results?

According to its release, Caravel announced that assay results for 22 recently completed reverse circulation (RC) percussion holes were received. The infill drilling campaign at Bindi intersected wide zones of high-grade copper mineralisation. This included the following:

• 34 meters to 42 meters at 1.75% copper (21CARC059)
• 40 meters to 54 meters at 0.77% copper (21CARC067)
• 40 meters to 60 meters at 0.59% copper (21CARC068)
• 140 meters to 168 meters at 0.56% copper (21CARC072)
• 104 meters to 138 meters at 0.96% copper (21CARC074)

Caravel stated that the results show a good correlation with field observations of mineralisation in drill chips. This helps define higher grade zones within the Bindi East Limb indicating a copper-molybdenum (Cu-Mo) rich zone.

Assay results are pending for another 47 RC percussion holes and are expected to arrive sometime in mid-September.

The company noted that a diamond core rig remains on site to improve geological confidence in the area. The rig will drill a series of 4 deep holes below the East Limb before moving onto the southern end to drill another hole.

Diamond drilling is a more efficient way for precise sampling and analysis, whereas RC drilling is used for extracting bulk samples. When it comes to speed, RC drilling is the faster method, however, diamond drilling is employed when seeking accurate results.

Caravel share price summary

It’s been a positive 12 months for Caravel investors, with the company’s shares accelerating almost 600%. When looking at the year to date, the Caravel share price has surged around 120%.

Based on today’s price, Caravel presides a market capitalisation of roughly $164.6 million, with approximately 378 million shares on hand.

The post Caravel (ASX:CVV) share price edges lower on infill drilling results appeared first on The Motley Fool Australia.

More reading

• Why BHP, NIB, Northern Star, & Redbubble shares are tumbling lower
• Jervois Global (ASX:JRV) share price up 5% on Freeport Cobalt acquisition
• 2 leading e-commerce ASX shares that could be buys in September 2021
• This leading broker tips Fortescue Metals (ASX:FMG) share price to rise by 42%
• The Novonix (ASX:NVX) share price surges another 5% on Thursday

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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is trading notably lower. At the time of writing, the benchmark index is down 0.9% to 7,458.5 points.

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

BHP Group Ltd (ASX: BHP)

The BHP share price is down 7% to $41.94. This decline is almost entirely attributable to the mining giant’s shares trading ex-dividend this morning. Last month BHP released its full year results and declared a record fully franked final dividend of 200 US cents or 273.6 Australian cents per share. Eligible shareholders can now look forward to receiving this dividend later this month on 21 September.

NIB Holdings Limited (ASX: NHF)

The NIB share price is down 3.5% to $6.55. This also appears to have been driven by its shares going ex-dividend this morning. The private health insurer declared a fully franked final dividend of 14 cents per share last month. NIB will be paying this dividend to eligible shareholders on 5 October.

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price has fallen almost 3% to $9.63. Investors have been selling the gold miner’s shares amid broad weakness in the gold sector today. For example, the S&P/ASX All Ordinaries Gold index is down a disappointing 2% this afternoon.

Redbubble Ltd (ASX: RBL)

The Redbubble share price is down 2% to $4.10. This morning the ecommerce company revealed that its Co-Founder, former CEO, and current Chairman, Martin Hosking sold 5 million Redbubble shares on-market on Wednesday. Mr Hosking received a total consideration of $21 million for the shares. However, it is worth noting that even after this sale he remains the largest shareholder with 39.5 million shares. This is the equivalent of a 14.4% stake.

The post Why BHP, NIB, Northern Star, & Redbubble shares are tumbling lower appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: BHP sinks, Flight Centre expansion
• Why the Redbubble (ASX:RBL) share price fell 8% today
• Why the BHP (ASX:BHP) share price is down 7% today
• Here’s why the BHP (ASX:BHP) share price is down 7% today
• 5 things to watch on the ASX 200 on Thursday

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 NIB Holdings 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 Jervois Global Ltd (ASX: JRV) share price has jumped 5% into the green during Thursday’s session.

Shares in the company — formerly Jervois Mining — are on the move after it made an announcement earlier today. They are now exchanging hands at 51 cents apiece, a 5.15% jump on the day.

Let’s investigate further.

What did Jervois announce?

In what investors deemed a positive for the Jervois Global share price, the company announced it had completed the “US$160 million acquisition of Freeport Cobalt”. It also nabbed four “affiliated entities” as a part of the transaction.

Total transaction costs came in at US$192 million when including working capital, to reflect the “higher cobalt inventory acquired”.

The acquisition “aims to consolidate the transformation” of the company into a “global, vertically integrated cobalt and nickel company of scale”.

In addition, the acquisition could potentially turn Jervois into the “second-largest producer of refined cobalt outside of China”.

To finance the transaction, Jervois completed a month-long “accelerated non-renounceable entitlement offer” on 25 August. There it raised a total of A$313 million when combined with both retail and institutional tranches of the placement.

In addition, Mercuria, “one of the largest energy and commodity traders” as per the release, invested AU$45.7 million according to the company. Australian Super also increased its investment by AU$73.9 million.

What did the company have to say?

In the announcement, Jervois Global said:

Jervois confirms it has closed its previously announced acquisition of 100% of Freeport Cobalt by purchasing all the shares of Freeport Cobalt Oy and four affiliated entities from Koboltti Chemicals Holdings Limited. Jervois has purchased an operating global leader in the cobalt industry, with an established market platform that is diversified by product and value chain segment.

Jervois Global share price snapshot

The Jervois Global share price has gained 44% this year to date, and 84% over the past 12 months.

These results have outpaced the S&P/ASX 200 index (ASX: XJO)’s climb of around 25% over the past year.

The post Jervois Global (ASX:JRV) share price up 5% on Freeport Cobalt acquisition appeared first on The Motley Fool Australia.

More reading

• Why BHP, NIB, Northern Star, & Redbubble shares are tumbling lower
• 2 leading e-commerce ASX shares that could be buys in September 2021
• This leading broker tips Fortescue Metals (ASX:FMG) share price to rise by 42%
• The Novonix (ASX:NVX) share price surges another 5% on Thursday
• ASX 200 midday update: BHP sinks, Flight Centre expansion

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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There are several leading e-commerce ASX shares that are available for Aussie investors to consider.

Businesses in the e-commerce space are exposed to tailwinds where more shopping is being done online rather than in-store. This is being accelerated by the impacts of COVID-19.

Some businesses are looking to capitalise on those trends significantly:

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster wants to become the largest retailer (online and offline) for furniture and homewares in its home market. It’s investing heavily into the business to grow the business and its online market position.

COVID-19 may have accelerated the growth, but the company continues to grow revenue rapidly. FY21 revenue increased by 85% to $326.3 million. FY22 has seen that growth continue, with year on year revenue growth of 49% for the period of 1 July 2021 to 27 August 2021.

Part of the e-commerce ASX share’s revenue growth came from revenue per active customer increasing by 12% year on year due to customers repeat buying more often and spending more when they do. Plus, the number of active customers surged 62% to 778,000.

Temple & Webster believes it has a large total addressable market. In Australia in 2020 it thinks the total market was worth around $16 billion, with online being between $1.1 billion to $1.4 billion of that.

Management point to its negative working capital to show that growth is good for operating leverage. Around 74% of sales are drop-shipped with no inventory risk, according to Temple & Webster.

Temple & Webster plans to maintain an earnings before interest, tax, depreciation and amortisation (EBITDA) margin of between 2% to 4% whilst heavily investing to drive “above market” growth.

Kogan.com Ltd (ASX: KGN)

Kogan is an e-commerce ASX share that has both Kogan.com and Mighty Ape as strong divisions in their respective markets of Australia and New Zealand.

The business can offer customers a wide array of products on its website like TVs, cars, phones, clothes, sports goods and so on. It also offers extra services like insurance, superannuation, energy, mobile plans and home internet.

Variable demand and excessive inventory has caused big impacts on Kogan over the last nine months. FY21 gross profit went up 61% to $203.7 million, but net profit fell 86.8% because of one-off inventory, logistics and Mighty Ape acquisition costs.

However, the business is starting to see a return of growth again. The first 18 days of August 2021 showed a “strong acceleration” above July 2021’s performance, with gross sales 24.5% above July and gross profit 25% above July.

In FY22, Kogan expects to deliver strong growth in Kogan First memberships, ongoing growth in exclusive brands, further enhancement and development of Kogan marketplace and the benefits from the full integration of the Mighty Ape business.

The e-commerce ASX share is also thinking about implementing logistics projects that would not require significant capital spending and can be supported by the company’s balance sheet.

According to Commsec, the Kogan share price is valued at 26x FY23’s estimated earnings.

The post 2 leading e-commerce ASX shares that could be buys in September 2021 appeared first on The Motley Fool Australia.

More reading

• Why is the Kogan (ASX:KGN) share price 7% higher today?
• Which ASX shares are leading the way on the ASX 300 today?
• 3 excellent ASX growth shares for September
• ASX 200 rises, Altium sinks, Fortescue climbs
• Which ASX companies are starting off the week as the top movers in the ASX 300 today?

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 and Temple & Webster Group Ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia has recommended Temple & Webster Group 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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The Fortescue Metals Group Limited (ASX: FMG) share price is wobbling today.

It jumped out of the starting blocks from the opening of trade to climb 0.44% to $20.42. However, at the time of writing, Fortescue shares are exchanging hands at $20.22 apiece, a 0.54% fall from yesterday’s closing price.

What’s been behind the Fortescue Metals share price lately?

Shares in Australia’s largest iron ore producer have been on the down lately due to a pullback in iron ore prices.

For instance, the spot iron ore price fell by 3.3% overnight on Tuesday, which resulted in broad weakness across the iron ore miners’ basket on the ASX.

Fortescue also reported a 74% year-on-year increase in revenue and grew net profit after tax (NPAT) by 115% to $10.3 billion in its FY21 results.

The company’s growth engine is backed by an uptick in global iron ore production that is forecast over the coming years.

Despite these points, the Fortescue Metals share price is down 18% over the last month, to coincide with weakening iron ore markets.

What are brokers saying?

One leading broker, JP Morgan, has reiterated its overweight rating on Fortescue shares, and believes there is still further gains imminent.

As such it has assigned a $29 per share price target for the Fortescue Metals share price. This implies an upside potential of approximately 42% from the current trading price.

Conversely, peer investment bank Goldman Sachs has a sell rating on Fortescue shares, with a $19.90 price target.

What did JP Morgan say about the Fortescue Metals share price?

JP Morgan believes the company “offers exposure to long life operations, with attractive margins and expansion optionality over the long term”.

Regarding the company’s FY21 results, the broker said “the earnings result and dividend were in line with JP Morgan and consensus. Earnings remained clean and predictable, with a strong EBITDA [earnings before interest, taxes, depreciation, and amortisation] margin of 73%, and enviable balance sheet position of $2.7 billion net cash”.

Regarding potential risks to the Fortescue Metals share price, its analysts added: “One of the key overhangs on the stock has been the announcement of a $500-$600 million spend on FFI (Fortescue Future Industries) in FY22. Unfortunately there is still a lack of detail on the breakdown. We have already captured the outflow in our model. However, it remains unclear how to generate a positive valuation on FFI at this stage. There is also no detail on the sequencing of projects on a multiyear look-ahead.”

Bringing it all together, JP Morgan’s overweight rating indicates it feels this could be a buying opportunity for investors.

Fortescue Metals share price snapshot

The Fortescue Metals share price has had a choppy year to date, posting a loss of around 13% since January 1. Despite this, Fortescue shares have climbed 12% into the green over the last year.

These results have lagged the S&P/ASX 200 index (ASX: XJO)’s return of around 25% over the past year.

The post This leading broker tips Fortescue Metals (ASX:FMG) share price to rise by 42% appeared first on The Motley Fool Australia.

More reading

• Why Blackmores, BWX, Fortescue, & Wesfarmers shares are dropping
• These were the worst performing ASX 200 shares in August
• ASX 200 miners beware as UBS warns iron ore will sink under US$100 in 2022
• Leading brokers name 3 ASX shares to sell today
• Top broker gives its verdict on the Fortescue (ASX:FMG) share price

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 Novonix Ltd (ASX: NVX) share price is continuing its upwards trajectory today despite the company’s silence.

The Novonix share price is currently $5.04, 5% higher than its previous close. However, earlier today it hit a new all-time high and – almost simultaneously – broke a milestone barrier by hitting $5.08, rising above $5 for the first time ever.

Right now, Novonix shares are trading for 23% more than they were at the start of this week.

Let’s take a look at the latest news from the battery metals and technology company.

Its a good day for Novonix shareholders

The last time the market heard from Novonix was a week ago today when the company released its earnings for financial year 2021.

While the Novonix share price initially slid 5% on the back of its earnings, it has evidently recovered.

Novonix brought in $5.2 million of revenue for FY21. Although, it reported an after-tax loss of $18 million.

The Novonix share price’s recent rallying could be a delayed reaction to its full year results.

Additionally, it could be a reflection of a strong sector and high demand for battery technology products.

As The Motley Fool Australia reported yesterday, the top performing ASX shares for the month of August all came from the lithium and battery sector.

While Novonix’s recent rallying could have been on the back of the materials sector, today’s gains are likely attributed to something else.

Right now, the S&P/ASX 200 Materials sector (ASX: XJM) is slipping 2.9%.

Novonix share price snapshot

This week’s gains are only the most recent boost the Novonix share price has experienced.

The company’s share price is currently 306% higher than it was at the start of 2021. It has also gained 209% since this time last year.

After today’s gains, Novonix has a market capitalisation of around $2 billion.

The post The Novonix (ASX:NVX) share price surges another 5% on Thursday appeared first on The Motley Fool Australia.

More reading

• These were the best ASX All Ordinaries performers in August
• Which shares on the ASX 300 are on the move today?
• Guess which sector August’s top performing ASX shares all came from
• Why the Novonix (ASX:NVX) share price is rocketing 20%
• Which ASX companies are starting off the week as the top movers in the ASX 300 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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At lunch on Thursday, the S&P/ASX 200 Index (ASX: XJO) is on course to record a sizeable decline. The benchmark index is currently down 1% to 7,452.2 points.

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

BHP shares go ex-dividend

The BHP Group Ltd (ASX: BHP) share price is falling heavily today after trading ex-dividend. Last month the Big Australian released its full year results and declared a record fully franked final dividend of 200 US cents or 273.6 Australian cents per share. This dividend will now be paid to eligible shareholders later this month on 21 September.

Flight Centre expansion

The Flight Centre Travel Group Ltd (ASX: FLT) share price is trading lower today despite announcing its expansion into the Japanese corporate travel market. According to the release, its leading FCM travel management business will enter Japan in January via a joint venture (JV) with Tokyo-based NSF Engagement Corporation. The company notes that the Japanese market is the world’s fourth largest corporate travel market.

UBS remains bearish on Zip

The Zip Co Ltd (ASX: Z1P) share price is pushing higher despite being the subject of a bearish broker note out of UBS. According to the note, the broker has retained its sell rating and trimmed its price target on the buy now pay later provider’s shares to $5.40. UBS has downgraded its earnings estimates to reflect higher operating costs.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Thursday has been the Nuix Ltd (ASX: NXL) share price with a 4.5% gain. This is despite there being no news out of the investigative analytics and intelligence software provider. The worst performer has been the BHP share price with a 7% decline after going ex-dividend.

The post ASX 200 midday update: BHP sinks, Flight Centre expansion appeared first on The Motley Fool Australia.

More reading

• Why the A2 Milk (ASX:A2M) share price has underperformed the ASX 200 in the last year
• Why the BHP (ASX:BHP) share price is down 7% today
• ASX energy shares on watch after OPEC’s latest move
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• Flight Centre (ASX:FLT) share price falls despite expansion news

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd. 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 Boss Energy Ltd (ASX: BOE) share price is soaring today, up 6% at time of writing.

Below we take a look at the ASX uranium explorer’s latest announcement.

What did Boss report?

Boss Energy’s share price is charging higher after the company reported it’s getting set to commence a seismic reflection program at its Honeymoon Uranium Project in South Australia.

While widely used in oil exploration, seismic surveying is only recently being employed to explore for shallow mineral deposits. Boss said the method will reduce exploration costs. It’s also faster than drilling with a lower environmental impact.

As part of its strategy to grow its uranium inventory, the company intends to survey 2 potential high-grade zones identified in its 2020 scout exploration drill program.

Commenting on the new exploration tactic, Boss Energy’s managing director, Duncan Caribe said:

The impending seismic reflection program, followed by drilling, is aimed at creating value by growing the mineral resource inventory for Honeymoon, where we believe there is substantial exploration upside.

Passive seismic helped to refine the palaeovalley geometry. The modern seismic reflection system will now add to that by enhancing the detail of likely permeable horizons within the palaeovalley fill.

The combined arsenal of the two seismic systems has the potential to create significant value for shareholders, as they allow better targeting of exploration drilling, which opens the door to increasing both Life of Mine and production rates, in turn growing the project’s NPV and free cashflow.

Citing the results of its recent Enhanced Feasibility Study, Caribe said that Boss is “well on track” to bring its Honeymoon project into production.

Boss Energy share price snapshot

Over the past 12 months, Boss Energy’s share price has gained an impressive 131%. By comparison the All Ordinaries Index (ASX: XAO) is up 24% in that same time.

Year-to-date the Boss Energy share price continues to charge ahead, up 85% in 2021.

The post Why the Boss Energy (ASX:BOE) share price is soaring 6% today appeared first on The Motley Fool Australia.

More reading

• Macquarie Bank (ASX:MQG) share price rises on build-to-rent housing plans
• Why the A2 Milk (ASX:A2M) share price has underperformed the ASX 200 in the last year
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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 Macquarie Group Ltd (ASX: MQG) share price had a strong start on Thursday, opening 0.41% higher at $167.49 and rising to $168.50 before pulling back to $166.96 at the time of writing.

Macquarie shares are on the move after news the company is looking to expand its presence in the build-to-rent property market.

Let’s investigate further.

What is Macquarie up to?

Let’s start this off by first defining the build-to-rent industry. For reference, it’s just as it sounds – when developers build or buy a property with the intention of renting it out as opposed to selling it. It isn’t a new concept, but it has been making headlines lately as more and more firms become invested in this space.

Macquarie’s entry into this property niche in Australia would build on its UK business that was established for the same reason, known as Goodstone Living.

Goodstone focuses on the development of “rental communities in urban locations, benefiting from a growing demand for rental housing and an undersupply of high-quality accommodation”. It sits under the wing of Macquarie Asset Management in the region.

In addition, there is a wave of interest in the build-to-rent market in Australia, with several participants now clearly visible in the space.

For instance, the Sydney-based firm ARBT Funds Management is set to list on the ASX to give investors exposure to this niche substrata of the property market. Not to mention the intentions of property giants Stockland Corporation (ASX: SGP), Mirvac Group (ASX: MGR) and Lendlease Group (ASX: LLC) to enter the space as well.

So, naturally one might see why Macquarie is seeking to profit from this recent market activity back on Australian shores as well. And from what it seems, it already has a new development in its sights.

A report in yesterday’s The Australian revealed the group is targeting a site at 346–350 Macaulay Road in Kensington, Sydney. The property is expected to sell for “close to $50 million”, according to the article.

Macquarie bank share price snapshot

The Macquarie bank share price has posted a year-to-date return of about 19%. It is up 30% on this time last year.

Over the past month alone, Macquarie shares have climbed 5.7% into the green.

These results have outpaced the S&P/ASX 200 index (ASX: XJO), which is up about 22% over the past year.

The post Macquarie Bank (ASX:MQG) share price rises on build-to-rent housing plans appeared first on The Motley Fool Australia.

More reading

• Top broker picks best ASX 200 bank shares to buy coming out of reporting season
• August has been a great month for the Macquarie (ASX:MQG) share price
• The latest ASX shares to be hit by a broker downgrade
• ASX 200 Weekly Wrap: A mixed bag of earnings dominates ASX
• The Macquarie Group (ASX:MQG) share price just hit an all-time high!

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 owns shares of and has recommended Macquarie 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 past year has not been kind to the A2 Milk Company Ltd (ASX: A2M) share price.

In the past 52-weeks, shares in the infant formula company have tanked more than 65%.

By comparison, the broader S&P/ASX200 Index (ASX: XJO) has powered 26% higher during the same period.

Let’s take a look at why the A2 Milk share price has underperformed in the last year.

Why has the A2 Milk share price struggled in the last year?

Shares in A2 Milk have had a spectacular fall from grace in the last year.

The one-time market darling has faced unprecedented challenges and uncertainty as a result of the COVID-19 pandemic.

With Australia’s international borders closed, A2 Milk’s vital daigou channels were crippled.

In addition to a halt in its key supply channel, the company has also faced waning consumer demand and competition in China.

As a result of subdued demand, A2 Milk has also had to overcome excess inventory problems.

The full effect of these challenges was reflected in the company’s recent full-year report for FY21.

How did A2 Milk perform in FY21?

Late last month, shares in A2 Milk continued their decline following a dour FY21 result.

For the full-year, the company reported a 30% decline in revenue to NZ$1.21 billion.

In addition, the former market darling noted a 77.6% reduction in earnings before interest, tax, depreciation and amortisation (EBITDA) to NZ$123 million.

Other highlights from A2 Milk’s report included;

• Stock write-downs of NZ$109 million
• Net profit after tax down 79.1% to NZ$80.7 million
• Cash balance of NZ$875.2 million

A2 Milk advised investors that the company would review its growth strategy, given the rapid changes to its market.

Outlook for the A2 Milk share price

A2 Milk’s management noted an uncertain outlook on the company’s growth.

With the Chinese formula market a key driver of A2 Milk’s earnings, management noted that falling birth rates could weigh heavily on the company’s outlook.

The company also cited the need to address its excess stock with inventory or FY21 sitting at $NZ112.2 million.

In light of these circumstances, its management stressed the importance of innovating and expanding its product portfolio.

As a result of these headwinds, A2 Milk expects revenue for the first half of FY22 (including MVM) to be marginally lower than the first half of FY21.

At the time of writing, shares in A2 Milk have bounced 2% higher today, trading at around $5.85.

The post Why the A2 Milk (ASX:A2M) share price has underperformed the ASX 200 in the last year appeared first on The Motley Fool Australia.

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Motley Fool contributor Nikhil Gangaram owns shares of A2 Milk. 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 A2 Milk. 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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