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The Family Zone Cyber Safety Ltd (ASX: FZO) share price is rising. At the time of writing, shares in the cyber safety company are trading for 65 cents each – up 14.04%.

The massive price rise comes after the company announced “significant growth” and a “record quarter”.

Let’s take a closer look at today’s news.

Company Profile

Family Zone Cyber Safety is engaged in developing a universal cyber safety and parental control platform in the fast-growing cyber safety industry. Its platform allows for secure collaboration between “schools, parents, and cyber safety educators”.

Why the Family Zone share price is rising

In a statement to the ASX, Family Zone says its June quarter was a record for the company. There was 128% growth year-on-year (YoY) in student numbers to total 3 million. Around 2,000 schools were added to its platform, taking the total to 5,600 schools. The company now services approximately 5% of all US school districts.

In the last quarter, $5.8 million worth of contracts were signed plus an extra $1 million acquired through the purchase of NetRef. According to Family Zone, in annual value terms, this converts to roughly $3.3 million in contracts plus $630,000 through NetRef.

Investors are enjoying today’s news, judging by the rise in the Family Zone share price.

Management commentary

Family Zone Managing Director Tim Levy:

This was a breakthrough quarter. We added over 1 million students and 2,000 schools and now service more than 3 million students and 5% of US school districts. We broke sales records and most encouragingly ended the quarter with ~1,500 schools in trials.

Family Zone share price snapshot

Over the past 12 months, the Family Zone share price has increased by 120%. Last month, shares in the company jumped 7% on the news it had signed a contract with the largest school district in the US state of Texas.

Family Zone’s surge comes after its previous 52-week high achieved just 10 days ago on a capital raising announcement.

Family Zone has a market capitalisation of $273 million.

The post Family Zone (ASX:FZO) share price jumps 14% after record quarter appeared first on The Motley Fool Australia.

More reading

• 4 fast-growing ASX small cap shares that you may have overlooked
• Family Zone (ASX:FZO) share price jumps 8% after $23m capital raising

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 some good ASX share candidates that might be worth considering in July 2021.

We are already halfway through the 2021 calendar year. Share prices are changing all the time, so that can lead to different businesses being potential opportunities at different times.

The two ASX shares in this article are growing quickly and might be worth looking at for the longer-term:

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is an electronic donation business. It processes electronic payments for large and medium US churches.

It has large long-term goals, but in FY21 it processed approximately US$7 billion (which was up 39%). This led to operating revenue increasing by 40%.

The company deliberately chose the best tools when it first set up its systems. Not only did that mean that clients get the best software to use, but it also meant Pushpay had very scalable technology. This is translating into operating leverage for the business.

In FY21 alone, the earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) increased by 133% to US$58.9 million. As readers will see, that growth was quite a bit more than the operating revenue growth. The EBITDAF margin increased from 22% to 34% over the financial year.

Pushpay is expecting more operating leverage and growth in the future.

It’s also pursuing growth in other areas.

The company said that it’s investing between US$6 million to US$8 million in FY22 in the Catholic segment. It’s focused on establishing relationships and increasing engagement with key stakeholders. Two thirds of that money will be spent on product design and development expense, with the rest spent on sales and marketing.

The ASX share has a goal of acquiring more than 25% of the Catholic church management system and donor management system market over the next five years.

Pushpay also pointed out that the Catholic church is closely associated with many education providers and non-profit organisations, which presents further opportunities within the US and other international jurisdictions.

Adore Beauty Group Ltd (ASX: ABY)

UBS is one of the brokers that likes Adore Beauty at the current share price. It has a price target on Adore Beauty of $5.60, which suggests a potential upside of around 20% over the next 12 months.

The broker points to growth themes and growing market share where the business can grow. Returning customers also helps things.

In May, the company announced its FY21 third quarter highlights, which included revenue growth of 47% to $39.4 million. Adore Beauty also reported “strong” retention and re-engagement rates for new customers acquired during the COVID-19 period. It also launched its loyalty program in March, with signups ahead of expectations.

The ASX share said it’s on track to achieve FY21 revenue growth of between 43% to 47%.

Adore Beauty is seeing a structural shift in consumer behaviour towards online retail, based on continued strong retention of customer acquired during the COVID-19 lockdown.

The company is continuing to pursue disciplined investment to drive revenue growth and expand its online position. Its FY21 EBITDA will reflect the company’s continued investment, including in marketing and advertising.

Adore Beauty is investing in things like its range, adjacency expansion opportunities and private label development.

The post 2 impressive ASX shares that could be buys in July 2021 appeared first on The Motley Fool Australia.

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45Motley 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 PUSHPAY FPO NZX. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. 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 West African Resources Ltd (ASX: WAF) share price is climbing following a production update for the month of June.

During late morning trade, the gold miner’s shares are swapping hands for $1.03, up 1.98%.

How is West African Resources performing?

Investors are snapping up West African Resources shares after the company provided a strong result.

According to its release, West African Resources advised it achieved gold production of 63,610 ounces for the June quarter. This represents another record quarter for the company’s operations at the Sanbrado mine in Burkina Faso.

The increase is primarily from the company’s key M1 South underground mine, yielding 33,480 ounces of gold from 103,550 tonnes of ore. Pleasingly, the gold mined reflected a 116% increase on the previous March 2021 quarter.

West African Resources stated that 855 meters of horizontal development was completed, providing ore access on several levels. A 182-meter decline was also developed, increasing the vertical depth by 26 meters to 341 meters below the surface.

Open pit production for the quarter stood at 738,000 tonnes at 1.7 grams per tonnes for 39,790 ounces. This includes the company’s M5, M1 South and M1 North pits.

A maintenance shutdown and mill reline was also finished during the quarter.

West African Resources executive chair and CEO, Richard Hyde commented:

The Sanbrado mine completed another record quarter of production with 63,610 ounces of gold produced.

The underground ramp-up continued to plan, with gold mined up 116% from the previous quarter to 33,480 ounces of gold from 103,550t of ore.

Solid progress was also delivered by open pit mining and processing under pinning the quarterly production result.

The company will release its June Quarterly Activities Report with production cost information before the end of this month.

About the West African Resources share price

Over the past 12 months, West African Resources shares have moved in circles, posting a gain of 15%. However, for 2021 alone, the company’s share price is down around 3%.

At current, West African Resources shares are sitting in the middle of its 52-week range of 72 cents to $1.23.

West African Resources has a market capitalisation of roughly $891 million, with more than 883 million shares on its registry.

The post Why the West African Resources (ASX:WAF) share price is rising today appeared first on The Motley Fool Australia.

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

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

Rewind just five years, and many people doubted whether electric-car maker Tesla (NASDAQ: TSLA) could ever even get to the point that it was building 500,000 vehicles per year, let alone achieve it by 2020. Yet now Tesla’s doing such a good job ramping up production that we’re already talking about when the automaker could be building one million vehicles annually, and it may be coming sooner than you think. In fact, the company could potentially pull this off as early as this year — one year after its annualized production crossed 500,000 for the first time.

Here’s a closer look at Tesla’s stunning progress with building out its electric-vehicle production capacity recently — and why the company could potentially double its vehicle production this year.

Expanding production capacity

Tesla’s vehicle production capacity has expanded by leaps and bounds over the last two years. Size, it turns out, has not been a limiting factor for Tesla. Indeed, it has arguably been an accelerant recently.

The automaker’s aggressive capacity expansion started kicking up a notch in 2019, when the company broke ground, built, and started producing cars in a new factory in Shanghai — all in less than 12 months. By the end of the year, a factory less than 12 months old had a production capacity of 150,000 vehicles, increasing Tesla’s production capacity by nearly a third.

But Tesla’s capacity expansion really got aggressive in 2020, as Tesla’s newfound ability to generate positive cash flow seemed to inspire the company to take even bolder expansion bets. Throughout the year, Tesla installed enough new production lines and tooling to increase its production capacity by more than 60%. This came from a slight increase in production capacity at the company’s factory in Fremont, California and a tripling of its capacity at its new factory in Shanghai.

Of course, investors should note that production capacity doesn’t immediately translate to respective production levels. It takes time for production lines to ramp up to fully utilize installed tooling. Still, Tesla notably kicked off 2021 with production capacity for 1.05 million vehicles, setting the stage for some incredible growth.

It gets better in 2021

Of course, Tesla isn’t stopping at a production capacity of 1.05 million, particularly with deliveries more than doubling year over year for two quarters in a row. To capitalize on the growing demand for its vehicles, Tesla has two more new factories where it is building out even more capacity: one in Berlin, Germany, and another in Texas. Production is expected to start at both factories this year.

Considering this capacity buildout alongside the fact that Tesla has already produced about 387,000 vehicles during the first six months of 2021, it wouldn’t be surprising to see Tesla build close to one million vehicles this year. Even if production is closer to 900,000 by the end of the year, it’s highly likely Tesla will at least finish the year with an annualized production rate of one million vehicles on a run-rate basis.

All of this begs the question: With staggering growth like this, could we be underappreciating Tesla’s growth prospects for the next five years once again? Based on the stock’s pricey valuation, investors may be embracing the fact that that the company seems to be a growth machine better than they were five years ago. But it wouldn’t be surprising if Tesla continues to outperform expectations — particularly over the long haul.

How many new factories will Tesla build over the next five years?

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

The post Could Tesla build 1 million vehicles this year? appeared first on The Motley Fool Australia.

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Daniel Sparks 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 Tesla. 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.

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

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The REA Group Limited (ASX: REA) share price is pushing higher on Monday.

In morning trade the property listings company’s shares are up 1% to $172.03.

This leaves the REA Group share price trading just a touch short of its record high of $173.11.

Can the REA Group share price go even higher?

One leading broker that believes the REA Group share price can keep on climbing is Goldman Sachs.

According to a note out of the investment bank this morning, its analysts have retained their buy rating and lifted their price target on its shares to $198.00.

Based on the latest REA Group share price, this implies potential upside of 15% over the next 12 months.

Why is the broker bullish?

Goldman Sachs made the move after REA Group announced the completion of its acquisition of Mortgage Choice Limited (ASX: MOC) and a 34% stake in mortgage software company Simpology.

Commenting on the acquisitions, Goldman said: “We believe the increased focus on finance makes strategic sense for REA, as it looks to capitalize on its strong brand, digital traffic and property data to take share of the sizable, but fragmented mortgage broking industry in Australia. This market has strong near-term volume tailwinds, but also faces some potential regulatory headwinds relating to the proposed changes to trailing commission.”

Goldman also likes the company due to its “hybrid model”, which it expects to support significant market share gains in the future.

It explained: “REA is running a hybrid model, with a strong digital offering (consistent with local and global peers), but combining this with an extensive, offline broker network. This ensures REA can capture the full value of the leads generated on its portal, given a significant share of consumers do not want a digital-only experience.”

“We believe that through building out its network and investing heavily into digital tech, REA can substantially improve the overall consumer experience, with its broker network ‘competing‘ for the leads that it generates (similar to Opcity).”

Overall, it feels this “creates an opportunity for REA to grow its share of the A$2.4bn Mortgage Broker pool (FY20). We forecast REA’s share to grow from 3% in FY21E (excl. MOC) to 10% in FY25E, and generate A$41mn of EBITDA, or 5% of group EBITDA.”

In light of this, Goldman believes the REA Group share price is trading at an attractive level relative to its growth potential.

The post Top broker tips REA Group (ASX:REA) share price to hit $198 appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA 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 Oil Search Ltd (ASX: OSH) share price continues to edge upwards this year-to-date, outpacing the Australian broad energy index since January 1.

The Oil Search share price has finished the last 5 trading sessions around 3% in the green to close last week at $3.86. It is up 0.13% to $3.87 in early trading today.

Let’s dive into what’s been happening in Oil Search’s growth story of late.

What has Oil Search been up to lately?

Back in late May, Oil Search shares surged following announcements the company was seeking a beneficial outcome with PNG Power Limited (PPL), after it had received an “unforeseen notice of termination” on 27 May 2021.

The termination notice concerned a PNG Biomass Purchase Agreement (PPA) which was signed between the two companies in 2015. It included the construction of a power plant and solar farm in a bid to add more renewable energy to the country’s Ramu power grid.

Oil Search said the PPA was aligned with the PNG government’s aim to diversify Papua New Guinea’s energy mix and contribute to sustainable, long-term job creation.

In the notice, Oil Search country manager Leon Buskens stated:

We intend to work with PPL to find a resolution to move forward together. We are ready to build the power plant and solar farm. We have met all obligations in the PPA under our control in order to reach Financial Close and we have strong funding support from international agencies who recognise the social benefits of this project.

We have a dedicated team ready to work with PPL to support them to meet their obligations. We are ready to be part of the power solution and the energy mix and help the country transition to 100% renewable by 2050.

Oil Search shares jumped from $3.64 to $4.21 in the 5 days following the announcement.

Mubadala divestiture

On June 25, Bloomberg LP reported Emirati sovereign wealth fund Mubadala sold 4.5% of its stake in Oil Search for a total of $362.8 million.

According to Bloomberg, Mubadala had originally acquired a 17.6% stake back in 2008 and the sale of 94 million shares in Oil Search lowered its stake to 4.94%. The shares were offered for $3.86 or best via broker Citi Group.

The company’s share price held up well following the sell-off, posting a 2.17% gain in the days following the announcement.

Oil Search share price snapshot

Having posted a year-to-date return of 2.39% in the green, the Oil Search share price has beaten the S&P/ASX 200 Energy Sector Index (ASX: XEJ)’s return which is up 2.17% at the time of writing.

Over the previous 12 months, Oil Search has posted a 20% return versus the Energy Index’s return of 8.85%.

Despite these returns, Oil Search shares have lagged behind the S&P/ASX 200 Index (ASX: XJO)’s 12-month return of 21.5%.

Over the previous 1 month, the company’s shares are in the red by 6.42% at the time of writing, whereas the S&P/ASX 200 Index has posted a return of about 0.3% in the green over this time.

At a share price of $3.87, Oil Search has a market capitalisation of $8 billion and pays a dividend of 7 cents per share.

Currently, the Oil Search share price is trading off its 52-week high of $4.62 but is above its 52-week low of $2.50.

The post Why the Oil Search (ASX:OSH) share price is beating the energy index appeared first on The Motley Fool Australia.

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Tabcorp Holdings Ltd (ASX: TAH) shares are sinking this morning following the announcement of a demerger. At the time of writing, the Tabcorp share price is trading hands at $4.99, down 4%.

Today’s announcement follows months of speculation regarding the potential for the gaming giant to split up its wagering and lottery divisions.

Big news for the Tabcorp share price

This morning Tabcorp announced the conclusion of its strategic review, with the decision to demerge the lotteries and keno business.

As a result, two separate ASX-listed companies will emerge. Those being a standalone lotteries and keno business (Lotteries & KenoCo), in addition to the existing listed Tabcorp. The Tabcorp that we know today will retain the wagering, media, and gaming services businesses (Wagering & GamingCo).

At this stage, the company is targeting demerger completion by the end of June 2022. Current chief executive officer David Attenborough will stay on until the demerger is completed.

Following that, Lotteries & Keno managing director Sue van der Merwe will become CEO of the lottery company. Meanwhile, Wagering & Media managing director Adam Rytenskild will become CEO of the existing Tabcorp business.

Tabcorp determined the demerger to be the best option to unlock value for shareholders. The company had engaged with all bidders for its Wagering & Media business, with both parties confirming their respective previously indicated bids.

Additionally, the company noted it would continue discussions in relation to potential commercial opportunities in international markets with Betmakers Technology Group Ltd (ASX: BET).

Demerged details

The company foresees the demerger giving the benefit of focused management and optimised capital structures, increased scale, the ability to participate in future merger and acquisition activity, and access to new investors with different investment preferences and ESG criteria.

Furthermore, Tabcorp expects the separation to allow investors to value each business independently. Which might increase the likelihood of a Tabcorp share price re-rating.

Tabcorp chair Steven Grigg said:

The two businesses are expected to be leaders in their respective markets, creating great experiences for millions of customers. They will both build on their heritage of sharing the benefits of their commercial success with governments, the racing industry, licensed venues, newsagents and other retail and business partners.

What it means for shareholders

If the demerger goes ahead, current Tabcorp shareholders can expect to receive shares in the Lotteries & KenoCo business proportional to their existing shareholding. This will be in addition to retain their existing holding Tabcorp.

The next step in the process for the company is engaging with the necessary regulatory bodies.

Lastly, Tabcorp estimates the demerger process will incur between $225 million to $275 million in one-off separation costs. On top of this, the company estimates $40 million to $45 million per year of ongoing incremental costs, pre-mitigation.

The Tabcorp share price is up 55% over the past year.

The post Tabcorp (ASX:TAH) share price drops on demerger news appeared first on The Motley Fool Australia.

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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. owns shares of and has recommended Betmakers Technology Group Ltd. The Motley Fool Australia has recommended Betmakers Technology 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 Airtasker Ltd (ASX: ART) share price has started the week in a very positive fashion.

In morning trade, the online marketplace for local services has seen its shares shoot over 5% higher to $1.18.

Why is the Airtasker share price charging higher?

Investors have been bidding the Airtasker share price higher following the release of a positive trading update this morning.

According to the release, the company’s marketplace performance was very strong in the fourth quarter of FY 2021. This was despite a softer end to the period due to COVID-19 related restrictions and lockdowns in major capital city markets across Australia.

For the three months ended 30 June, Airtasker reported Gross Marketplace Volume (GMV) of $39.4 million. This represents a 39.1% increase compared to the prior corresponding period.

In light of this strong quarterly performance, the company has outperformed its guidance in FY 2021.

Management advised that it expects to report GMV of $153.1 million for the full year. This exceeds both its prospectus forecast of $143.7 million and April’s upgraded guidance of $148 million to $152 million.

Another positive that may be supporting the Airtasker share price is that this has all been achieved while maintaining costs below prospectus forecast levels for the full year.

What about FY 2022?

The company notes that the recent lockdowns in Sydney and other capital cities are expected to have a temporary impact on first quarter GMV in FY 2022.

However, due to the company’s strong performance going into the lockdowns and sharp marketplace recoveries previously seen, it is confident that there will be no impact to Airtasker’s full year FY 2022 outlook. Further details will be provided on the company’s expectations for FY 2022 next month when it release its first full year results as a listed company.

The Airtasker share price is now up 81% since its IPO in March.

The post Airtasker (ASX:ART) share price storms 5% higher after smashing FY 21 guidance appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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 HomeCo Daily Needs REIT (ASX: HDN) share price won’t be going anywhere on Monday.

This morning the convenience-focused retail property company’s shares were placed in a trading halt.

Why is the HomeCo Daily Needs share price halted?

The HomeCo Daily Needs share price was halted this morning after it announced a new acquisition and accompanying placement.

According to the release, the company has acquired Town Centre Victoria Point in Queensland for a total purchase price of $160 million. This price represents a fully leased yield of 4.75%.

The release advises that Town Centre Victoria Point is anchored by highly productive major national and ASX-listed tenants. These include Woolworths Group Ltd (ASX: WOW), Bunnings, Healius Ltd (ASX: HLS), and Endeavour Group Ltd (ASX: EDV).

Management notes that the acquisition is aligned to its target model portfolio of 60% Neighbourhood, 22% Large Format Retail, and 18% Health & Services.

Placement

In order to fund the acquisition, the company is undertaking a fully underwritten institutional placement to raise $70 million at an issue price of $1.45 per new share. This represents a discount of just 3% to its last close price.

Positively, management expects the acquisition to be immediately accretive to earnings in FY 2022. Furthermore, it notes that its balance sheet gearing is expected to be at the mid-point of target 30–40% gearing range post-transaction.

Another positive is that, post-transaction, management sees increased potential for inclusion in both the S&P/ASX 300 Index and FTSE EPRA NAREIT’s Global Real Estate Index at the September 2021 rebalance.

Fund Portfolio Manager Paul Doherty said: “Opportunities to acquire an asset of this quality and scale are rare, particularly one which complements our strategy and existing portfolio so strongly. This well-located flagship convenience property is anchored by high quality, strongly performing tenants on long term leases with attractive organic growth. In addition, the property offers significant long-term potential to drive enhanced returns through development by capitalising on the property’s significant expansion potential.”

The post HomeCo Daily Needs (ASX:HDN) share price halted for placement and major acquisition appeared first on The Motley Fool Australia.

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

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Shares in Qube Holdings Ltd (ASX: QUB) are slightly higher today following news the company’s set to sell property assets for $1.67 billion. The Qube share price is currently trading at $3.20 – 0.79% higher than Friday’s close.

Today, the import and logistics service provider announced it has entered a commercial term sheet to sell warehouses and property at Moorebank Logistics Park.

However, Qube also said its automation of Moorebank’s IMAX Terminal was likely to be an ongoing weight on the company’s overheads.

Let’s take a look at today’s news from Qube.

Offloading Moorebank assets

Qube announced today it has entered agreements to sell assets at the Sydney logistics park to LOGOS Property Group, part of the LOGOS Consortium.  

The sale will see LOGOS paying $1.36 billion upfront, while another $312 million will be deferred. The payment is subject to numerous conditions.

Qube says the price reflects the park’s strategic value and its future rental value. Not included in the sale, is Qube’s intermodal rail terminals at Moorebank.

The logistics company said the sale would allow it to focus on its core logisitics business. It will use the proceeds to pay off debt, pursue growth opportunities, and explore capital management initiatives.

Qube believes, following the sale, it will benefit from future logistics activity at Moorebank, without needing to fork out for its development.

Subject to the Foreign Investment Review Board’s approval, the sale will be completed in the final quarter of 2021. 

Following the sale, LOGOS is responsible for funding the development of the logistics park. This includes the development of Woolworths Group Ltd‘s (ASX: WOW) warehouse distribution facilities.

Qube advised it would still pay for the automation of Moorebank’s IMEX Terminal and the development of its Interstate Terminal. The company expects to spend between $200 million and $300 million on works at the terminals.

Part of the deferred $312 million will fund the first stage of construction of the Interstate Terminal.

Qube also announced the IMEX Terminal’s automation will be finished years before it is required. This means Qube is unlikely to quickly recover its costs.

So far, Qube has spent around $305 million on the terminal’s automation. It still needs to spend around $80 million to finish the upgrade.

Qube’s upcoming full year results will discuss the long-term cost of the automation.

Commentary from management

Qube managing director Paul Digney commented on the planned sale, saying:

We believe that the transaction with the LOGOS consortium allows Qube to realise a strong value for the [Moorebank] property assets, de-risks delivering the leasing and development of future warehouses and significantly reduces Qube’s ongoing capex requirements.

Further, the transaction positions Qube strongly to focus on growing its core logistics business, while retaining exposure to long-term growth in container volumes at [Moorebank] through terminal and logistics activities.

Qube share price snapshot

The Qube share price is doing well on the ASX – it’s gained 6% year to date.

It is also 15% higher than it was this time last year.

The company has a market capitalisation of around $6 billion, with approximately 1.9 billion shares outstanding.

The post Qube (ASX:QUB) share price lifts on $1.67 billion asset sale update appeared first on The Motley Fool Australia.

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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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