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There are some ASX shares that are still generating high levels of growth through this period of the COVID-19 pandemic.

These are businesses that are growing revenue rapidly and are expecting to be able to continue achieving strong levels of demand.

In FY21, these companies saw high levels of growth:

Sonic Healthcare Limited (ASX: SHL)

Sonic is one of the world’s biggest pathology healthcare businesses.

It has operations in Australia, New Zealand, North America and Europe. Sonic has been doing millions of COVID tests – it has done around 30 million so far. COVID-19 PCR test volumes were lower in the second half of FY21 compared to the first half, but it’s increasing again with the spread of the Delta variant.

The COVID-19 ASX share is also involved with the vaccination efforts. It has become Australia’s largest non-government COVID vaccination provider.

In FY21, Sonic saw revenue growth of 28% to $8.8 billion. But profit grew even faster as the company utilised its existing infrastructure which helped improve profit margins. Earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 81% to $2.6 billion and net profit after tax (NPAT) soared 149% to $1.3 billion.

The Sonic CEO Dr Colin Goldschmidt had some comments about the company’s core business performance and ongoing acquisition strategy:

Whilst a huge amount of time and effort has gone into combating the pandemic, we have never lost sight of the importance of continuing to provide our usual high quality medical diagnostic services. Whilst our total revenue grew 28%, our base business revenue grew by 6% on a like for like basis. The base business has become increasingly resilient to impacts of pandemic waves and benefits from our geographical and business diversification.

In addition to organic growth, Sonic continues to focus on synergistic acquisitions and other growth opportunities…We are actively considering further acquisition opportunities, as well as bidding for a number of outsourcing contracts.

Temple & Webster Group Ltd (ASX: TPW)

This ASX share is one of the leading e-commerce retailers in Australia with its furniture and homewares products. It’s growing quickly during this COVID-19 period.

FY21 was a record year for the business as it demonstrated high levels of revenue growth and increasing operating leverage. Temple & Webster’s FY21 revenue grew 85% to $326.3 million whilst EBITDA jumped 141% to $20.5 million. Active customers increased 62% to 778,000.

The trade and commercial division saw even faster revenue growth, with an increase of 110% year on year.

Management said that whilst lockdowns have accelerated the underlying shift from offline to online, it’s continuing to see “strong growth” even when comparing against COVID-19-impacted numbers.

This can be seen in the period from 1 July 2021 to 24 July 2021 where revenue increased by 39% year on year.

Over the long-term, Temple & Webster believes it can capture much more market share and grow its margins after a period of heavy investment.

The company said:

We will continue reinvestment strategy, investing into growth areas of the business to grow our online market leadership position with the ultimate goal of becoming the largest retailer (online and offline) for furniture and homewares in our home market.

The post 2 ASX COVID-19 shares reporting big growth appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• Why Ampol, NIB, Redbubble, & Sonic shares are dropping
• Sonic Healthcare (ASX:SHL) share price down 3% despite surging FY21 profits
• ASX 200 midday update: NIB sinks and Sonic falls on full year results
• Sonic Healthcare (ASX:SHL) share price on watch after 149% profit boost in FY21

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 Temple & Webster Group Ltd. The Motley Fool Australia has recommended Sonic Healthcare Limited and 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 Pilbara Minerals Ltd (ASX: PLS) share price is bouncing strongly on Monday, up 7.92% to $2.18.

This is an encouraging sign of strength following a sharp 17.5% pullback from a record high of $2.46 on 11 August to a close of $2.02 on Friday, 20 August.

Why did the Pilbara Minerals share price fall last week?

Profit taking on the cards

To be fair, Pilbara Minerals had surged 180% year-to-date by 11 August. Such a strong gain would likely attract some selling pressure, especially when its shares surged 38.4% between 1 and 11 August.

Broader weakness among resources

The S&P/ASX 200 Materials (INDEXASX: XMJ) index has tumbled 11.05% in August, predominately driven by weakness in iron ore miners BHP Group Ltd (ASX: BHP), Fortescue Metals Group Ltd (ASX: FMG) and Rio Tinto Ltd (ASX: RIO).

A potential drag on the broader resources sector could be linked to the US Federal Reserve’s July meeting minutes released last week. The minutes flagged that “several participants noted that an earlier start to tapering could be accompanied by more gradual reductions in the purchase pace…”.

The proposed reduction in stimulus witnessed a sharp selloff across major US indices with the Dow Jones Industrial Average, S&P 500 and Nasdaq falling 1.16%, 1.07% and 0.89% respectively on Wednesday, 18 August.

The broader weakness amongst peers and macro concerns could be another factor weighing on the Pilbara Minerals share price.

Bearish broker commentary

According to The Motley Fool US, Bank of America released a report last week reiterating an underperform rating on two of the biggest names in the lithium industry, Albemarle and Livent.

The report warned investors about a near-term increase in lithium supply as miners invest heavily to ramp up production.

“Such a rapid increase in lithium supply threatens to overwhelm even rising lithium demand, and depress the stock prices of Albemarle and Livent.”

Pullback? What pullback?

The Pilbara Minerals share price has rebounded strongly and is 12% away from its 11 August all-time highs.

Encouragingly, lithium spot prices have remained strong, with the latest update from Fastmarkets citing: “Domestic prices for battery-grade lithium in China rose on strong momentum in technical-grade carbonate market and tight supply in spot market.”

It also reported: “Battery-grade lithium prices in Europe and the United States rose on tight availability despite summer lull.”

The post Pilbara Minerals (ASX:PLS) share price bounces back, up 8% on Monday appeared first on The Motley Fool Australia.

More reading

• Which ASX companies are the top movers in the ASX 300 today?
• Just how dependent is Fortescue Metals (ASX:FMG) on China?
• What’s moving the ASX 200 Index (ASX:XJO) on Monday?
• ASX 200 Weekly Wrap: Miners drag ASX back to earth
• Can the Western Areas (ASX:WSA) takeover prompt BHP (ASX:BHP) to go nickel shopping?

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 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 the start of each week I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

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

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

• Webjet Limited (ASX: WEB) continues to be the most shorted ASX share after its short interest rose to 11.4%. Short sellers have been going after the online travel agent due to fears over the spread of the Delta strain of COVID-19 and the impact this will have on travel markets.
• Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest rise to strongly to 11.4%. This travel agent’s shares are being targeted by concerns over longer than expected delays in the travel market recovery.
• Zip Co Ltd (ASX: Z1P) has seen its short interest fall again week on week to 9.3%. Short sellers continue to close positions amid recent M&A activity in the BNPL industry. There is speculation Zip could be a potential takeover target of larger rival Klarna.
• Kogan.com Ltd (ASX: KGN) has short interest of 8.6%, which is down week on week. Short sellers may have been closing positions amid optimism that lockdowns will boost this ecommerce company’s sales.
• Inghams Group Ltd (ASX: ING) has 8.3% of its shares held short, which is down week on week. Short sellers were targeting the company due to fears over its supply contract with Woolworths Group Ltd (ASX: WOW). It accounts for around 50% of its Australian poultry volumes and was due to expire this month. Unfortunately for short sellers, the two parties have agreed in principle to a renewal on broadly similar terms.
• Electro Optic Systems Hldg Ltd (ASX: EOS) has 8.3% of its shares held short, which is down week on week. Concerns over accounting methods, cash flow generation, and supply chain fears are weighing on sentiment.
• Tassal Group Limited (ASX: TGR) has short interest of 7.3%, which is down notably week on week. Recent M&A activity in the industry appears to have led to short sellers closing positions.
• PolyNovo Ltd (ASX: PNV) has seen its short interest edge lower to 6.9%. This medical device company’s share are trading close to a 52-week low. This has been driven by its disappointing finish to FY 2021.
• Temple & Webster Group Ltd (ASX: TPW) is back in the top ten with short interest of 6.7%. Short sellers aren’t giving up on this furniture and homewares retailer despite the expectation that lockdowns will boost its sales.
• Resolute Mining Limited (ASX: RSG) has also returned to the top ten with short interest of 6.5%. This gold miner has underwhelmed in FY 2021 due to production and regulatory issues. Also, last week it announced that it expects to recognise a non-cash impairment charge in the range of US$165 million to US$175 million during the first half of the financial year.

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

More reading

• Here’s how the Kogan (ASX:KGN) share price responded last reporting season
• What Sydney Airport’s results could mean for Flight Centre (ASX:FLT) shares
• What could Sydney Airport’s results mean for Webjet (ASX:WEB) shares?
• ASX 200 Weekly Wrap: Miners drag ASX back to earth
• Why Zip (ASX:Z1P) and these growth shares could be buys

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 Electro Optic Systems Holdings Limited, Kogan.com ltd, POLYNOVO FPO, Temple & Webster Group Ltd, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Electro Optic Systems Holdings Limited, Kogan.com ltd, and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and 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 S&P/ASX 300 Index (ASX: XKO) is pushing higher on Monday, regaining lost ground from last week’s consecutive negative run.

During mid-afternoon trade, the ASX 300 is up 0.37% to 7,484 points. It’s worth noting that the index is around 2% from its record high of 7,625 points.

Let’s take a look at which ASX companies are the strong performers today.

The top movers on the ASX 300 today

Z Energy Ltd (ASX: ZEL)

The Z Energy share price is rocketing 15.22% to $3.33 following a takeover proposal from retail fuels and distribution business Ampol.

Z Energy shareholders have been offered $3.78 per share. This represents a 22% premium to the last closing price on 12 August 2021 (before receipt of the proposal).

The Z Energy board advised it’s in the best interests of the company and shareholders to grant Ampol a 4-week period of exclusivity. This will allow the company to undertake due diligence to finalise the proposal for negotiating the transaction.

Pilbara Minerals Ltd (ASX: PLS)

Another strong mover for the start of the week is the Pilbara Minerals share price, up 8.42% to $2.19. Despite no news coming out of the company, it appears investors are buoyant on Pilbara Minerals’ prospects.

Last week, Macquarie raised its price target for the company’s shares by 35% to $2.70. Based on the current share price, this implies an upside of around 23%.

Nearmap Ltd (ASX: NEA)

The Nearmap share price is rebounding after Friday’s sell-off, with a 7.38% gain to $2.11. While the aerial imagery specialist hasn’t released any market sensitive news, it did report its FY21 results last week.

Nearmap cited robust growth across key metrics, and is planning for an even bigger year ahead.

And which ASX 300 companies are heading the other way?

NIB Holdings Limited (ASX: NHF)

Deep in negative territory is the NIB share price, down 9.02% to $7.26. The steep decline follows the private health insurer’s FY21 full-year results provided to the ASX today.

NIB reported a large increase in net profit after tax (NPAT), however investors seem to be concerned about the near term. The company acknowledged market conditions to have mixed consequences as a result of COVID-19.

TPG Telecom Ltd (ASX: TPG)

Also being weighed down by investors today is the TPG share price, down 6.53% to $6.15. The telco released its half-year results for FY21 with a mostly positive performance.

However, today’s decline can be attributed to a couple of brokers cutting their rating on TPG shares. Macquarie reduced its rating by 6.1% to $7.70, with Morgans following suit, taking off 0.8% to $7.11 per share.

The post Which ASX companies are the top movers in the ASX 300 today? appeared first on The Motley Fool Australia.

More reading

• Why Ampol, NIB, Redbubble, & Sonic shares are dropping
• Z Energy (ASX:ZEL) share price surges 15% on acquisition news
• TPG (ASX:TPG) share price sinks on broker note
• ASX 200 midday update: NIB sinks and Sonic falls on full year results
• NIB (ASX:NHF) share price sinks 11% despite profit surge

Motley Fool contributor Aaron Teboneras owns shares of NIB Holdings Limited and Nearmap Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Nearmap Ltd. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. The Motley Fool Australia has recommended NIB Holdings Limited and 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 Santos Ltd (ASX: STO) share price has struggled on the charts since we commenced the month of August.

Whereas the S&P/ASX 200 Index (ASX: XJO) has climbed around 1.4% this month, Santos shares are approximately 8% in the red.

Let’s peel back the layers to uncover why this may be so.

What headwinds has the Santos share price faced in August?

Although potentially positive for the Santos share price, the market did not embrace its FY21 half-year results.

To illustrate, although the company grew revenue, net profit after tax (NPAT) and free cash flow considerably from the year prior – and increased its dividend by 162% – its share price sunk on the day of the earnings announcement.

Moreover, oil spot prices have undergone a correction towards the end of last week. The majority of the ASX-listed hydrocarbons basket saw selling pressures last week, Santos included.

With WTI crude oil trading at around US$62 a barrel, this signifies a 2% drop on the day and another sequential decline over the entire month of August.

Some pundits estimate the volatility in oil prices stems from fears regarding the successful reopening of economies around the globe.

Furthermore, the Intergovernmental Panel on Climate Change (IPCC) released its scathing report on the state of global warming. In it, the IPCC was critical of fossil fuel producers and their contribution to climate change.

Undoubtedly, the Santos share price has faced selling pressures since the report’s release on 6 August.

In addition, Santos shares started the month off under this downward pressure. To illustrate, reports surfaced in early August that the company was preparing to sell its share in the Dorado project in WA.

It was reported that Mitsui and Mitsubishi were both interested in acquiring 20% of the project, diluting Santos’ holding to 60%.

Moreover, the acquisition may extend to the company’s Van Gogh and Pyrenees sites as well, according to media reports.

Together, these three factors have coincided with a decline in the Santos share price since August 1.

Santos share price snapshot

The Santos share price has had a choppy year to date, posting a loss of 5% since January 1. Despite this, Santos shares are still 3% in the green over the last 12 months.

However, these returns have lagged the broad index’s gain of around 25% over the past year.

The post August hasn’t been a great month for the Santos (ASX:STO) share price appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• Why Cochlear, Santos, St Barbara, & TPG shares are dropping
• Here’s why the Santos (ASX:STO) share price is down 8% in a week
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Wednesday

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 Kalium Lakes Ltd (ASX: KLL) share price is soaring today, up 14% in early afternoon trade.

Below, we take a look at this morning’s investor presentation that appears to be driving interest in the ASX resource share.

What di Kalium report today?

Kalium Lakes’ share price is leaping higher after the company reported it’s on the brink of becoming a long life, low cost, high-grade SOP (Sulphate of Potash) producer at its Beyondie SOP Project in Western Australia.

SOP is an agricultural fertiliser and is the preferred form of potassium to use on high-salinity soils. Currently, there is no SOP production in Australia.

According to Kalium’s presentation, construction at its Beyondie project is almost finished and within budget. Kalium is forecasting its first SOP production in September.

The company said it has significant inventories of some 90,000 tonnes of potassium salts produced and waiting on run of mine (ROM) stockpiles, ready for the production start-up. That’s equivalent to approximately 9,000 tonnes of SOP production.

The statement on its Beyondie SOP production expansion plans is also likely stoking the Kalium Lakes share price today. Kalium said it has completed a feasibility study on the immediate expansion from 90 kilo-tonnes per annum (ktpa) to 120 ktpa, a level it can reach by the fourth quarter of 2022.

The study revealed the company can deliver the additional 30 ktpa for a capital cost of $45 million. That works out to $1,513/tonne compared to the $3,113/tonne for the initial 90 ktpa production capacity.

The gas supply infrastructure in place is sufficient to supply the expanded production, while “only a small upgrade to the power station” will be needed to increase production to 120ktpa of SOP.

Kalium also cited a “buoyant SOP market”, forecasting year-on-year price increases. It estimates Beyondie to have a 50-year mine life, with significant expansion opportunities ahead.

Kalium Lakes share price snapshot

Kalium Lakes’ share price has gained 37% over the past 12 months, compared to a gain of 23% on the All Ordinaries Index (ASX: XAO).

Year-to-date, Kalium shares are up by more than 5%.

The post Why Kalium Lakes (ASX:KLL) share price is rocketing 14% today appeared first on The Motley Fool Australia.

More reading

• What’s happening with the Kalium Lakes (ASX:KLL) share price?

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) is on course to start the week on a positive note. In afternoon trade, the benchmark index is up 0.35% to 7,487.7 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Ampol Ltd (ASX: ALD)

The Ampol share price is down 4.5% to $26.25. This follows the release of the fuel retailer’s half year results. Although Ampol achieved strong first half profit growth, management’s outlook may have spooked investors. It warned that lockdowns were impacting fuel and convenience sales in July and August. Also failing to support the Ampol share price was news that it has made a non-binding indicative proposal to acquire Z Energy Ltd (ASX: ZEL) for NZ$3.78 cash per share. This values Z Energy’s equity at NZ$2 billion.

NIB Holdings Limited (ASX: NHF)

The NIB share price has fallen 10% to $7.19. This follows the release of full year results that fell short of the market’s expectations. In FY 2021, NIB reported a 2.9% increase in revenue to $2.6 billion and an 84.5% lift in net profit after tax to $160.5 million. A note out of Goldman Sachs reveals that it was expecting the private health insurer to report a 92.2% increase in net profit after tax to $171.4 million.

Redbubble Ltd (ASX: RBL)

The Redbubble share price has tumbled 8.5% to $3.85. This is despite there being no news out of the ecommerce company today. However, with its shares rocketing higher last week, this decline could have been driven by profit taking. After all, the Redbubble share price is still up 22% over the last five days after today’s decline.

Sonic Healthcare Limited (ASX: SHL)

The Sonic share price is down 3% to $41.64 after its full year results fell short of the market’s lofty expectations. For the 12 months ended 30 June, Sonic Healthcare reported a 28% increase in revenue to $8.8 billion and a 149% lift in net profit to $1.3 billion. However, as strong as this result was, it was lower than Goldman Sachs’ estimates for revenue of $9,352 million and net profit of $1,327 million.

The post Why Ampol, NIB, Redbubble, & Sonic shares are dropping appeared first on The Motley Fool Australia.

More reading

• Z Energy (ASX:ZEL) share price surges 15% on acquisition news
• Sonic Healthcare (ASX:SHL) share price down 3% despite surging FY21 profits
• ASX 200 midday update: NIB sinks and Sonic falls on full year results
• NIB (ASX:NHF) share price sinks 11% despite profit surge
• Ampol (ASX:ALD) share price sinks on half year results and acquisition 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. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended NIB Holdings Limited and Sonic Healthcare 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 Z Energy Ltd (ASX: ZEL) share price is soaring after the company received an acquisition offer from Ampol Ltd (ASX: ALD).

According to Z Energy, Ampol has proposed to pay $3.62 (converted from New Zealand dollars at the current exchange rate) for each share in Z Energy, valuing the business at $1.88 billion.

Right now, the Z Energy share price is $3.32, 14.88% higher than its previous close. However, earlier today, the Z Energy share price reached $3.40 – a new 52-week high and 17.6% higher than Friday’s close.

Let’s take a closer look at today’s news from the New Zealand-based business-to-business fuel supplier.

Acquisition proposal

Z Energy’s shares are gaining on the back of a new acquisition offer.

According to the company, Ampol’s offer of $3.62 per share represents a 22% premium on Z Energy’s shares’ closing price on 12 August and a 26% premium on their 30-day volume-weighted average price.

Ampol’s bid is said to be the fourth the company has made for Z Energy. Initially, it offered Z Energy $3.21 per share.

Z Energy’s board had previously determined Ampol’s bid hadn’t sufficiently valued Z Energy. However, Ampol’s $3.62 bid will pass to a four-week period of exclusivity, within which Ampol will properly develop its proposal.

In discussing the acquisition, Z Energy and Ampol are said to be considering including a partial Ampol share consideration or a secondary listing of Ampol on the New Zealand Stock Exchange.

Additionally, because the bid involves regulatory approvals, if agreed to, it would restrict the payment of dividends. To accommodate delays, Ampol proposed Z Energy pay its shareholders a 5.3-cent dividend per calendar day beyond 31 March 2022 in which the scheme has not financially closed. Though, the dividends will be capped at NZ 9.8-cents per share.

While Z Energy’s shares have been boosted by the potential acquisition, those of Ampol are floundering.

Right now, Ampol’s shares are trading for 4.49% less than they were at Friday’s close.

Ampol announced the acquisition proposal alongside its half-year results this morning.

Z Energy share price snapshot

Including today’s boost, the Z Energy’s shares have gained 11.8% year to date. They are also 33% higher than they were this time last year.

At its current share price, Z Energy has a market capitalisation of around $1.72 billion. It has approximately 520 million shares outstanding.

The post Z Energy (ASX:ZEL) share price surges 15% on acquisition news appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: NIB sinks and Sonic falls on full year results
• Ampol (ASX:ALD) share price sinks on half year results and acquisition news
• What could the latest climate report mean for ASX 200 shares?
• Here are the top movers in the ASX 300 today
• 43% surge: ASX 200 shares that could rake it in this year

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

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Last year, the Kogan.com Ltd (ASX: KGN) share price was a bellwether of Australia’s consumption habits throughout the pandemic.

Leading into 2020’s reporting season, shares in the online retailer had bolted more than 167% for the year.

Let’s take a look at how the Kogan share price responded last reporting season.

Kogan share price catapults after FY20 results

The Kogan share price actually dropped lower after the company released its results for FY20.

However, as investors digested the company’s results, shares in the online retailer bolted to record highs in the following days.

For the 12 months ending 30 June 2020, Kogan reported blockbuster growth as consumers flocked online.

Highlights from the company’s performance in FY20 included;

• Gross sales of  $768.9 million, up 39.3% on the prior corresponding period (pcp)
• Reveune of $497.9 million, up 13.5% year on year
• 35.7% increase in its active customer base to 2,183,000 
• Gross profit of $126.5 million, a up 39.6% on pcp
• 57.6% increase in adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $49.7 million
• Net profit after tax of $26.8 million, up 55.9% on pcp.  

Kogan shared the wealth with investors, declaring a fully franked final dividend of 13.5 cents per share.

Kogan’s management highlighted the changing nature of retail consumption and noted the company planned on continuing investment in increasing its active customer base.

Snapshot of shares in Kogan

Leading into this year’s reporting season, the Kogan share price has bolted more than 24% since the start of August.

However, despite its stellar performance this month, shares in the online retailer have struggled this year.

In fact, Kogan shares have nearly halved since surging to all-time highs of around $25 per in October last year.

There have been several catalysts that are likely to have caused the Kogan share price to plunge in 2021.

The initial catalyst can be traced back to late January when the company released a business update for the first half of FY21.

In the update, Kogan flagged a slower rate of growth than expected.

The second catalyst prompting investors to sell their Kogan shares was another update from the company in late May.

In that update, Kogan informed shareholders that it expected to report adjusted EBITDA of $58 million to $63 million in FY 2021.

In comparison, market consensus estimated Kogan’s EBITDA for FY21 to be around $70 million.

Investors will be keeping a keen eye on the Kogan share price with the eCommerce company scheduled to report its results for the full year tomorrow.

The post Here’s how the Kogan (ASX:KGN) share price responded last reporting season appeared first on The Motley Fool Australia.

More reading

• ASX 200 Weekly Wrap: Miners drag ASX back to earth
• These were the best performing ASX 200 shares last week
• Kogan.com (ASX:KGN) share price jumps ahead of full-year results
• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares

Motley Fool contributor Nikhil Gangaram owns shares of Kogan.com ltd. 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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The prospect of chronic post-COVID inflation dominated discussion and behaviour in share markets for months earlier this year.

But now that the nasty delta variant of the virus is ravaging Australia, there is very little talk or anxiety about it. The Reserve Bank even hinted this month that the resurgence of the pandemic could force it to extend support rather than withdraw it.

One expert warns though that “anyone feeling sceptical about inflation would be wise to tune in to the final week of the August reporting season”.

“If the first 3 weeks are any guide, inflation is no longer on the horizon,” said Yarra Capital Management head of Australian equities Dion Hershan.

“It’s here.”

ASX reporting season shows inflation not temporary

According to Hershan, it was easy enough to label the current inflation as ‘transitory’ when it popped up in a few specific products like timber and airfreight.

“But company results confirm just how far-reaching it appears to have become,” he said in a memo to clients.

“This has significant implications for rates and the margins of public companies. As one company reprices to recover input cost inflation, it can become self-perpetuating.”

Hershan is nervous that the market is not aware of this.

“Our strong sense is most investors are either complacent or dismissive of the issue, and only when they start to see margins and earnings decline will the issue come into sharper focus,” he said.

“Although COVID and lockdowns — quite rightly — dominate headlines and short-term thinking, inflation and the consequent margin pressure it can create will be an important issue in the years ahead.”

Some signs of chronic cost rises

Hershan cited some examples that tipped him off to the likelihood that inflation was here to stay.

Firstly, mining and construction companies like BHP Group Ltd (ASX: BHP), Bluescope Steel Limited (ASX: BSL), Mineral Resources Limited (ASX: MIN) and Oz Minerals Limited (ASX: OZL) were feeling the pinch.

“BHP, best-in-class in cost containment, cited production costs would be going up by 17% in iron ore, 21% in coal and 11% in oil,” said Hershan.

“Cost blowouts have been reported so far by Bluescope Steel (+5-10% to accelerate its North Star expansion), Mineral Resources (+24% across its business) and Oz Minerals (+13% relating to growth capex).”

Insurance companies revealed they were raising premiums like there was no tomorrow.

“Surging pricing evidenced by premium rate rises. QBE Insurance Group Ltd (ASX: QBE) delivered +10%, Suncorp Group Ltd (ASX: SUN) passed through +7% in home and +6% in motor, and Insurance Australia Group Ltd (ASX: IAG) announced +8%.”

And despite lockdowns affecting so much of the nation, the labour market seems to be tightening. This could lead to inflation from higher wages.

“Labour shortages were a theme across a number of results, including Domino’s Pizza Enterprises Ltd (ASX: DMP), Downer EDI Limited (ASX: DOW), Brambles Limited (ASX: BXB), ARB Corporation Limited (ASX: ARB), BHP Group and Commonwealth Bank of Australia (ASX: CBA) (referring to Construction),” said Hershan.

“Even CSL Limited (ASX: CSL) saw blood collection costs skyrocket by over 30%, with rising employment and lingering COVID hesitancy forcing it to move its donor incentive fees higher.”

How do investors combat persistent inflation?

So if inflation is whacking public companies, where do investors put their money?

“The issue only reinforces our preference to skew our portfolios towards high-quality companies, in attractive industry structures with strong pricing power such as Ansell Limited (ASX: ANN), James Hardie Industries PLC (ASX: JHX), Aristocrat Leisure Limited (ASX: ALL) and Resmed CDI (ASX: RMD).”

The advantage of pricing power has already been witnessed this year.

For example, Microsoft Corporation (NASDAQ: MSFT) announced last week that it would raise prices for its popular Office 365 business subscriptions.

The hike is the first major change in price structure since the launch of the cloud productivity suite in 2011, according to CNBC.

The post Revealed: The biggest shocker from results season appeared first on The Motley Fool Australia.

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Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tony Yoo owns shares of CSL Ltd. and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia owns shares of and has recommended Insurance Australia Group Limited. The Motley Fool Australia has recommended ARB Corporation Limited, Ansell Ltd., Dominos Pizza Enterprises Limited, and ResMed Inc. 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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