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Ever noticed stock market commentators referring to ‘ASX 200 futures’ prior to market open? It sounds as though these mystical things act as a crystal ball, indicating whether the market will open higher or lower. However, there’s more to this financial instrument than being a mistaken fortune teller.

Let’s demystify ‘futures’ and establish what they really are.

Defining this derivative

Futures contracts, such as ASX 200 futures, are a type of derivative that is often used for speculation or hedging. When we are talking derivatives, we are talking about financial instruments that ‘derive’ their value from another underlying asset.

Essentially that means the derivative has no value on its own, other than being an agreement. Instead, the value is perceived from the corresponding asset that it is tied to. Whether that is an index, commodity, or share.

In a futures contract, a buyer agrees to buy a certain asset or instrument at some point in the future from a seller (and vice versa) for a predetermined price agreed upon from the outset. In essence, this allows participants to take a stance on the direction of an investment without holding the underlying asset.

Futures are quite popular with fund managers for ‘hedging’ their portfolios in times of volatility. For example, a fund heavily exposed to ASX shares might sell futures in the S&P/ASX 200 Index (ASX: XJO) if concerned about a near-term market crash. By selling the futures (short shorting), the fund would offset losses in its shares with gains from its ASX 200 futures.

On the other hand, speculators take advantage of futures to make leveraged returns on their bullish or bearish sentiment towards an asset.

It is important to know that futures have inherent risks and function quite differently from shares. For that reason, it is important to fully understand the risks when investing in any type of financial instrument.

ASX 200 futures before the open

When ASX 200 futures are used to forecast the direction of the market ahead of open, it is the ASX SPI 200 Index being referenced. This futures contract operates nearly 24 hours a day, 5 days a week.

Hence, traders will be buying and selling contracts for hours ahead of the open. This often gives a reasonable indication as to where the market will open. However, ASX 200 futures are not always on the money.

In summary, futures can be used for short-term trading strategies to ‘predict’ market trends. However, futures contracts can be much riskier than investing in quality companies due to leverage and the short-term time horizons.

The post What are ASX 200 futures and how do they work? appeared first on The Motley Fool Australia.

More reading

• 2 excellent ASX 200 dividend shares that could be buys
• 2 ASX 200 blue chip shares that might be the best to buy
• 5 things to watch on the ASX 200 on Tuesday
• These 3 ASX 200 shares were big movers this Monday
• Why Telstra (ASX:TLS) and this dividend share could be buys

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

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Luckily for income investors in this low interest rate environment, the ASX 200 is home to a number of quality shares that are forecast to pay generous dividends in the near term.

Two ASX 200 dividend shares that could be in the buy zone are listed below:

BHP Group Ltd (ASX: BHP)

The first ASX 200 dividend share to look at is this mining giant. The Big Australian could be a top option due to its world class operations, favourable commodity prices, and strong balance sheet. The latter means the company is likely to return the vast majority of its free cash flow to shareholders through dividends. And with iron ore currently trading close to US$120 a tonne, there certainly will be a lot of free cash flow being generated.

Macquarie is very bullish on BHP and currently has an outperform rating and $63.00 price target on its shares. The broker is also forecasting fully franked dividends of ~$4.07 and $3.82 per share in FY 2021 and FY 2022, respectively. Based on the latest BHP share price of $51.05, this will mean generous yields of 8% and 7.5% over the next two years.

Coles Group Ltd (ASX: COL)

Coles could be an ASX 200 dividend share to buy. This is thanks to its strong market position, defensive qualities, positive growth outlook, and favourable dividend policy. The latter sees the supermarket giant aim to pay out upwards of 90% of its earnings to shareholders each year as dividends.

Goldman Sachs remains very positive on Coles. It currently has a buy rating and $19.40 price target on its shares. The broker is also forecasting fully franked dividends of 62 cents per share in FY 2021 and then 67 cents per share in FY 2022. Based on the current Coles share price of $16.65, this represents yields of 3.7% and 3.9%, respectively, over the next two years.

The post 2 excellent ASX 200 dividend shares that could be buys appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Why is the Mineral Resources (ASX:MIN) share price up 4% today?
• Why this sector is lifting the ASX 200 higher today
• ASX 200 midday update: Wesfarmers makes API takeover bid, BHP & Rio Tinto rising
• Why the BHP share price is charging higher on Monday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COLESGROUP DEF SET. 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 some S&P/ASX 200 Index (ASX: XJO) blue chip shares that might make good long-term investments.

Businesses that have a strong market share and good competitive position have the potential to keep doing well.

The below two businesses are among the leaders at what they do:

Wesfarmers Ltd (ASX: WES)

Wesfarmers is a diversified company with a number of businesses including Bunnings, Kmart Group and Officeworks. Those three businesses may be the leaders of their respective categories in Australia.

The company recently announced a potential diversification move with an offer for Australian Pharmaceutical Industries Ltd (ASX: API) at $1.38 cash per share.

Wesfarmers said that if the takeover is successful, API would form the basis of a new healthcare division of Wesfarmers and a base from which to invest and develop capabilities in the health and wellbeing sector.

Management said the combination is a compelling opportunity to capitalises on API’s strength in the growing health, wellbeing and beauty sectors, whilst drawing on Wesfarmers’ capabilities in retail and distribution.

This is the latest move by Wesfarmers to grow and diversify its business. It wasn’t long ago that the ASX 200 blue chip share announced it would be expanding into lithium mining.

Bunnings is one of the leading retail businesses in Australia with a very high return on capital. Wesfarmers has been looking to grow its hardware segment with both Adelaide Tools and the acquisition of Beaumont Tiles. It’s also looking to improve its commercial offer to better service builders, tradespeople and organisations.

At the current Wesfarmers share price it’s valued at 28x FY22’s estimated earnings according to Commsec.

Magellan Financial Group Ltd (ASX: MFG)

Magellan is one of the largest asset managers in Australia.

It’s currently rated as a buy by the broker Morgans with a price target of around $58 over the next 12 months.

The broker pointed to the growth of its funds under management (FUM) as a reason to be positive about the business.

The ASX 200 blue chip share recently announced that it finished June 2021 and FY21 with total FUM of $113.9 billion. Average FUM for the year ending 30 June 2021 was $103.7 billion, up from $95.5 billion from FY20.

However, for the quarter ending 30 June 2021, Magellan experienced net outflows of $351 million which comprised of net retail outflows of $260 million and net institutional outflows of $91 million.

The broker also noted that the fund manager’s starting FUM for FY22 is around 10% higher than the average FY21 figure.

Magellan has been investing in external businesses to achieve growth away from its funds management business. Two of the investments include Barrenjoey and Guzman y Gomez.

According to Morgans, Magellan is priced at 21x FY22’s estimated earnings with a forward projected partially franked dividend yield of 4.5%.

The post 2 ASX 200 blue chip shares that might be the best to buy appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 rises, API soars, Wesfarmers up
• Why is the Soul Patts (ASX:SOL) share price down this Monday?
• ASX 200 midday update: Wesfarmers makes API takeover bid, BHP & Rio Tinto rising
• Australian Pharmaceutical (ASX:API) share price soars 18% on Wesfarmers bid

Motley Fool contributor Tristan Harrison owns shares of Magellan Financial Group. 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 Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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On Monday the S&P/ASX 200 Index (ASX: XJO) started the week in a very positive fashion. The benchmark index finished the day 0.8% higher at 7,333.5 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set to push higher again this morning. According to the latest SPI futures, the ASX 200 is expected to open the day 22 points or 0.3% higher. This follows a positive start to the week on Wall Street, which saw the Dow Jones rise 0.35%, the S&P 500 climb 0.35%, and the Nasdaq push 0.2% higher.

Oil prices soften

Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could come under pressure today after oil prices softened overnight. According to Bloomberg, the WTI crude oil price is down 0.5% to US$74.17 a barrel and the Brent crude oil price has fallen 0.4% to US$75.26 a barrel. Oil prices slipped after economic worries weighed on sentiment.

Wesfarmers given buy rating

The Wesfarmers Ltd (ASX: WES) share price could be in the buy zone according to analysts at Goldman Sachs. In response to the company’s takeover approach of Australian Pharmaceutical Industries Ltd (ASX: API), Goldman has held firm with its buy rating and $59.70 price target. It said: “In the event of a successful completion, the business would offer WES exposure to another staple retailing business.”

Gold price falls

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) will be on watch after the gold price weakened. According to CNBC, the spot gold price is down 0.2% to US$1,806.4 an ounce. Traders were selling the precious metal ahead of the release of US inflation data this week.

Iron ore price rises

It could be a positive day for iron ore miners such as BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG). This follows a solid night of trade for the steel making ingredient. According to Metal Bulletin, the spot iron ore price has risen 1.4% to US$217.85 a tonne.

The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares were big movers this Monday
• ASX 200 rises, API soars, Wesfarmers up
• Why is the Mineral Resources (ASX:MIN) share price up 4% today?
• The Fortescue (ASX:FMG) share price is surging, but what’s next for iron ore?
• Why is the Soul Patts (ASX:SOL) share price down this Monday?

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

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The S&P/ASX 200 Index (ASX: XJO) is having a pretty decent start to the trading week. At the close of trade on Monday, the ASX 200 is up a healthy 0.83% to 7,333 points. But let’s take a look at which ASX 200 shares are on the move today in terms of trading volume.

3 ASX 200 shares on the move today

Bingo Industries Ltd (ASX: BIN)

Waste management company Bingo is our first ASX 200 share on the move today. A substantial 9.47 million BIN shares traded by market close. That’s despite the Bingo share price not doing a whole lot today. It finished exactly where it started at $3.43 a share.

There has been no major news or announcements out of the company this Monday. Having said that, we received notice last week that Bingo’s days on the ASX boards are numbered. Following the successful takeover offer from Macquarie Infrastructure and Real Assets back in April, Bingo will delist from the ASX on the morning of 16 July (this Friday).

It’s possible that investors took note, and are trading their Bingo shares around before they disappear.

Pilbara Minerals Ltd (ASX: PLS)

Yes, ASX 200 lithium miner Pilbara is back on the list today, with 12.14 million shares swapping owners today. This is probably the result of the healthy gains Pilbara shares have enjoyed on the share market today. Pilbara Minerals closed the day up 2.69% to $1.53 after rising as high as $1.56 (up 3.7%) earlier in trade.

As my Fool colleague, James discussed earlier today, this might be a consequence of Pilbara’s fellow lithium miner Orocobre Limited (ASX: ORE) releasing a positively-received trading update last Friday. In conjunction with broker bullishness as well.

Boral Limited (ASX: BLD)

This ASX 200 construction company has been heavily traded ever since the saga involving Seven Group Holdings Ltd (ASX: SVW) started back in May. Seven has now acquired more than 40% of Boral following its rejected takeover offer of $6.50 a share (followed by $7.40). The latest takeover offer ends on 15 July.

Today, 12.86 million Boral shares traded hands, with perhaps Seven Group being on one side of the trade in many cases. We can probably expect heightened trading volumes all the way up to 15 July on this one. Even so, the Boral share price is flat today at $7.39 a share.

The post These 3 ASX 200 shares were big movers this Monday appeared first on The Motley Fool Australia.

More reading

• ASX 200 rises, API soars, Wesfarmers up
• Why is the Mineral Resources (ASX:MIN) share price up 4% today?
• Why is the Soul Patts (ASX:SOL) share price down this Monday?
• Galan Lithium (ASX:GLN) share price surges to record on positive results
• Why this sector is lifting the ASX 200 higher today

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

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Are you looking for some quality ASX dividend shares to add to your income portfolio this week?

Then you might want to look at the ones listed below. Here’s what you need to know about these ASX dividend shares:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share to look at is Accent Group. It is a growing retail conglomerate with a focus on the leisure footwear market.

Among Accent’s portfolio of brands are HYPE DC, Platypus, Sneaker Lab, Stylerunner, and The Athlete’s Foot. It has also just acquired Glue Store and launched the 4workers brand, which sells tradie clothing and footwear.

Accent has been growing at a consistently solid rate in recent years and appears well-placed to continue this trend. This is thanks to its strong market position, exclusive brands, and store expansion plans.

Bell Potter is confident its growth will continue and expects this to lead to increasing dividends. It is forecasting dividends per share of 11.7 cents in FY 2021 and then 12.3 cents in FY 2022.

Based on the current Accent share price of $2.66, this will mean fully franked yields of 4.4% and 4.6%, respectively. Bell Potter currently has a buy rating and $3.30 price target on the company’s shares.

Telstra Corporation Ltd (ASX: TLS)

Another ASX dividend share to look at is Telstra. It has been tipped as a dividend share to buy by a large number of brokers. This is due to its increasingly positive outlook thanks to its leadership position with 5G, cost cutting, its corporate restructure and asset monetisation plans, and rational competition.

One of those brokers is Goldman Sachs. It believes that Telstra is well-placed to maintain its current 16 cents per share fully franked dividend until FY 2023, after which it is forecasting an increase to 18 cents per share in FY 2024.

With the Telstra share price currently fetching $3.73, this will mean yields of 4.3% until FY 2023 and then 4.8% a year later. Goldman Sachs currently has a buy rating and $4.20 price target on the company’s shares.

The post Why Telstra (ASX:TLS) and this dividend share could be buys appeared first on The Motley Fool Australia.

More reading

• ASX 200 Weekly Wrap: COVID wobbles ASX as shares retreat
• 2 high yield ASX dividend shares that could be buys
• These 3 ASX 200 shares were the most heavily traded today
• The Telstra (ASX:TLS) share price is now up 24% so far in 2021
• Expert says more ASX shares to follow Sydney Airport (ASX:SYD) takeover trend

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 owns shares of and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended Accent Group. 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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Home Consortium Ltd (ASX: HMC) shares have walked through today’s session in the green. HomeCo’s share price has closed at $5.40, 0.75% higher than Friday’s closing price.

This comes after the company announced this morning it has increased the value of its HealthCo portfolio to around $1 billion.

Let’s take a closer look at what the property group announced.

What is HealthCo?

HomeCo is a managed property group that has interests in the development, management and ownership of property in Australia.

HealthCo is HomeCo’s planned asset establishment to increase its exposure to the health and wellness industry.

The company proposed the initiative in April 2021 and has since completed several acquisitions.

Today’s announcements build on previous language outlining HomeCo’s strategy in establishing two HealthCo-specific fund alternatives by the end of this calendar year.

These include an ASX-listed HealthCo real estate investment trust (REIT) and an unlisted HealthCo institutional fund.

In today’s announcement, the company detailed transactions in its HealthCo portfolio that include the acquisition of “8 private oncology assets” at a value of $110.3 million.

It also stated HealthCo had established a joint venture with operator Acurio Health to develop an integrated private hospital in Camden, New South Wales.

The company stated this private hospital initiative has the potential to “create a $500+ million health and innovation precinct” in the area.

According to HomeCo, these acquisitions will be funded from available cash and “undrawn debt commitments” which it defines as HomeCo’s “existing senior debt credit”.

What now?

Announcements regarding HealthCo have been reflected in HomeCo’s share price over this year to date.

Following the key announcement back in April, the HomeCo share price jumped from $4.68 to $5 a piece.

Moreover, following a similar update in May, HomeCo shares spiked from $4.65 to a high of $5.80 on 21 June.

According to the company, both of HealthCo’s ASX-listed and unlisted fund alternatives remain on track for establishment by the proposed deadline.

The initial listing process for HealthCo will look to raise $500 million of equity and aims to list in the first half of 2022.

The unlisted HealthCo fund is also on track to meet this deadline and is seeking to raise $1 billion.

Speaking on today’s announcement, HomeCo managing director and chief executive David Di Pilla said:

Today’s acquisition update further demonstrates our ability to source high quality healthcare assets which
align to the model portfolio strategy for HealthCo. We are pleased to establish strategic partnerships with
both GenesisCare and Acurio. In particular, we look forward to the development at Camden as part of our
significant broader involvement in the Western Sydney growth corridor.

HomeCo share price snapshot

HomeCo shares have gained 35% year-to-date, which builds on a 12-month return of 111%.

These returns have outpaced the S&P/ASX 200 Index (ASX: XJO)’s return of 23.8% over the previous year.

At the current market price, HomeCo has a market capitalisation of $1.56 billion and pays a dividend of 13.5 cents per share, fully-franked.

The post Why is the Home Consortium (ASX:HMC) share price up today? appeared first on The Motley Fool Australia.

More reading

• The 5 best ASX real estate shares of the 2021 financial year unmasked

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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Motley Fool Australia Chief Investment Officer Scott Phillips joined Nine’s Late News on Sunday night to discuss the economic impact of the COVID lockdown, the potential policy responses, and the day ahead for the ASX.

The post The economic impact of the COVID lockdown, and what can be done to help. Scott Phillips on Nine’s Late News appeared first on The Motley Fool Australia.

More reading

• Why is the Home Consortium (ASX:HMC) share price up today?
• Swoop (ASX:SWP) share price storms 8% today on company takeover
• ASX 200 rises, API soars, Wesfarmers up
• Here’s why the Rumble Resources (ASX:RTR) share price fell 5% today
• Another lockdown. Will the RBA move? Plus, making sure you have the best credit card

Motley Fool contributor Scott Phillips 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 Swoop Holdings Ltd (ASX: SWP) share price is breaking ranks today following the company’s latest announcement.

Earlier today, the telecommunications company’s shares were up 12.22% to an intraday high of $1.01. This means since its Initial Public Offering (IPO) in late May, the Swoop share price more than doubled.

At market close, however, the share price has dropped somewhat, now up 7.78% at $0.97.

What’s pushing the Swoop share price higher?

Investors are fighting to get a hold of Swoop shares today following the company’s proposed acquisition.

According to its release, Swoop announced that it has agreed to acquire 100% of Wan Solutions (trading as Beam Internet).

Founded in 2015, Beam Internet is the largest privately-owned and operated, fixed wireless network in South Australia. The company offers fast and affordable high-speed wireless broadband on its network of more than 60 towers and masts.

Under the terms of the deal, Swoop will pick up Beam Internet for a total purchase price of $6.7 million. This will consist of $6 million in cash and $700,000 in Swoop shares. However, $1.3 million of the cash will be held back for 12 months for any potential claims or adjustments.

Beam Internet is forecasted to have earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.6 million in FY22. It’s expected that this will be materially earnings accretive.

The company expects the transaction to be completed within the next 4 weeks.

Interestingly, Fortescue Metals Group Limited (ASX: FMG) boss, Andrew ‘Twiggy’ Forrest backed the deal. Tattarang, a holding company for the Forrest family, is a substantial shareholder of Swoop, owning 20% of its shares.

It’s also worth noting that Airtasker Ltd (ASX: ART) chair, James Spenceley also sits as chair for Swoop.

Swoop CEO, Alex West made comment on the takeover, saying:

Acquiring Beam is another fantastic opportunity for Swoop to expand our infrastructure coverage into regions we do not have infrastructure. Beam has a recently upgraded and well-built modern network which aligns with our own national network and gives us a strong springboard for growth into the SA market.

We look forward to the opportunities this acquisition provides in establishing a South Australian presence for the Swoop brand.

About the Swoop share price

Since its debut on the ASX boards for a price of 50 cents, Swoop shares have more than doubled. The company’s share price hit an all-time high of $1.33 on the day of listing (27 May 2021).

Based on today’s price, Swoop has a market capitalisation of roughly $116 million, with approximately 116 million shares on issue.

The post Swoop (ASX:SWP) share price storms 8% today on company takeover appeared first on The Motley Fool Australia.

More reading

• Why Boral, Integrated Research, Swick, & Swoop shares are pushing higher
• Swoop (ASX:SWP) share price up 5% after telco acquisition

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 recommended Airtasker Limited. 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) rose by 0.8% today to 7,334 points.

Here are some of the highlights from the ASX:

Wesfarmers Ltd (ASX: WES) offer for Australian Pharmaceutical Industries Ltd (ASX: API)

Wesfarmers announced today a non-binding, indicative proposal to buy the entire API business.

This offer was a 21% premium to API’s last closing price.

API’s largest shareholder, Washington H. Soul Pattinson and Co Ltd (ASX: SOL), which owns 19.3% of API, has agreed to vote in favour of the proposal and has granted a call option in respect of its API shares in favour of Wesfarmers.

Wesfarmers said it’s well positioned to bring capital and unique capabilities to support investment that will strengthen the competitive position of API and its community pharmacy partners.

The Wesfarmers managing director Rob Scott said:

If the proposal is successful, API would form the basis of a new healthcare division of Wesfarmers and a base from which to invest and develop capabilities in the health and wellbeing sector.

The combination of Wesfarmers and API is a compelling opportunity to capitalise on API’s strengths and positioning in these markets while drawing upon Wesfarmers’ capabilities in retail and distribution, our strong balance sheet and our willingness to invest in our businesses for growth over the long-term.

API’s board pointed out that the offer has been made at a time when COVID-19 restrictions have resulted in store and clinic closures and these have significantly affected operational performance. The board is undertaking an analysis on whether the offer is reflective of the long-term growth prospects of API and the expected short-term impacts of the pandemic lockdown restrictions.

Indeed, in a trading update that was also released today, it said that lockdowns in the current form beyond the end of July would impact profit by approximately $1 million of earnings before interest and tax (EBIT) per week of extension.

API is now expecting that its full year underlying EBIT will be in between $66 million to $68 million and its reported EBIT to be in the range of $31 million and $33 million.

The company also said that the build of its new Marsden Park distribution centre in north-west Sydney, at a cost of $50 million, remains on time and within budget. That automated distribution centre is expected to deliver a 20% improvement in cost per unit with annualised savings of around $8 million at the earnings before interest, tax, depreciation and amortisation (EBITDA) level, flowing from the start of FY23.

Healius Ltd (ASX: HLS)

The Healius share price rose slightly today. It announced an acquisition.

It is buying Axis Diagnostics, which the ASX 200 company described as a high-quality Queensland-based imaging business with EBITDA of approximately $2 million, consisting of three radiology practices located in growth areas near Brisbane and one practice in the Whitsundays.

Healius managing director and CEO Dr Malcolm Parmenter said:

The acquisition is in line with our business’ network optimisation strategy, has been funded from cash and is earnings per share accretive. It complements and extends our existing footprint, grows revenue and capabilities, and deliver synergies with our facilities and national contracts.

The post ASX 200 rises, API soars, Wesfarmers up appeared first on The Motley Fool Australia.

More reading

• Why Bell Financial, Sayona Mining, Strike, & Soul Patts are sinking
• Why is the Soul Patts (ASX:SOL) share price down this Monday?
• Galan Lithium (ASX:GLN) share price surges to record on positive results
• These 3 ASX 20 shares are up more than 60% in a year
• What’s with the Nuix (ASX:NXL) share price today?

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. 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 Washington H. Soul Pattinson and Company Limited and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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