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Things got ugly for the Adairs Ltd (ASX: ADH) share price today.

The homewares retailer’s shares dived 10.97% to close the day at $4.06.

Why did the Adairs share price fall?

Yesterday, Adairs announced that it was going to bring forward the settlement of its Mocka acquisition.

In the initial purchase agreement, the company split its deferred 35% interest in Mocka into two tranches. The first tranche payable by 30 September 2021 (15%) and the second by September 2022 (20%).

According to yesterday’s announcement, the company will pay NZ$48 million (~A$45 million) in September to acquire the entire 35% stake.

Today’s sharp decline could be driven by a broker downgrade, covered by my colleague, James Mickleboro. One of the reasons given for the downgrade was the broker’s belief that the Mocka business could be underperforming against expectations.

Lockdowns in Australia resulting from the COVID-19 pandemic have helped drive Adairs sales. The company’s FY20 results highlighted a 12.9% increase in group sales to $388.9 million. The FY20 results also saw a 19% increase in statutory net profit after tax of $35.3 million.

Adairs’ solid growth trajectory has continued into FY21. The retailer’s half-year results revealed a 34.8% increase in group sales to $243 million and a 233.4% surge in statutory net profit after tax to $43.9 million.

At the time of writing, the Adairs share price is $4.06, putting its year-to-date returns at around 23%.

The post Why the Adairs (ASX:ADH) share price tumbled 10% today appeared first on The Motley Fool Australia.

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• Which ASX 200 shares are winners from the latest retail trade figures?
• Why the Adairs (ASX:ADH) share price is edging higher today

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. owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended ADAIRS FPO and 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 travel/tourism sector was one of the hardest hit by the pandemic last year. As international travel grounded to a halt, and even domestic restrictions put in place, ASX-listed travel shares wound down.

While 2021 has had its share of lockdowns and restrictions, things are starting to look up again for the travel industry.

At the time of writing, Australia has administered 6.59 million COVID-19 vaccine doses. Currently, 3.4% of the population is fully vaccinated.

We now have the Trans-Tasman travel bubble with New Zealand, and Singapore is already slated to form a travel bubble with Australia in the future.

In saying that, now seems like a good time to look at the ASX travel shares delivering so far in 2021.

Top 3 ASX travel shares

Alliance Aviation Services Ltd (ASX: AQZ)

Alliance Aviation is a Queensland-based airline that specialises in charter and group travel. The airline operator provides transport to a range of customers spanning the resources sector, government, tourism, etc.

The disruptions to the aviation industry from COVID-19 opened an opportunity for Alliance over the last 18 months.

With essential services pushing forward, this ASX travel share plugged the hole in the demand for essential transport, for example, FIFO workers. Unsurprisingly, Alliance reported a 176.4% increase in charter revenue for the first half of FY21.

Since then, Qantas has signed a wet lease agreement for up to 14 of Alliance’s aircrafts commencing from mid-2021. Other catalysts include Santos Ltd (ASX: STO) and BHP Group Ltd (ASX: BHP) signing contract renewals for charter services.

The Alliance Aviation share price has netted shareholders 17.7% so far this year… Not too shabby.

Corporate Travel Management Ltd (ASX: CTD)

Picking up silver for the best performing travel share so far in 2021 is business travel solution provider, Corporate Travel Management (CTM).

Although the company’s revenue fell off a cliff following border closures, Corporate Travel Management is staging a comeback with a focus on domestic activity. In the FY21 first half report, CTM indicated it could return to profitability solely on domestic travel.

Additionally, over the years CTM has grown its presence in the United States beyond that of Australia. The northern hemisphere represents 80% of group revenue, which bodes well when the US has fully vaccinated 45.7% of its population.

This ASX-listed travel share is riding the reopening rebound. At the time of writing, the Corporate Travel Management share price is up 20.9% so far this year.

Sealink Travel Group Ltd (ASX: SLK)

SeaLink might just be the only ASX-listed travel share that experienced a substantial revenue increase from January 2020. The company provides transport and tourism experiences across its bus and ferry services which operate internationally.

A well-timed acquisition of Transit Systems Group (TSG) in January 2020 de-risked the company’s exposure to the pandemic. TSG brought onboard established public bus services in Australia, in addition to international bus operations in London and Singapore.

The acquisition took SeaLink’s annualised non-discretionary revenue to 91%. Furthermore, the company went on to win, commence, and renew more contracts throughout 2020.

As a result, total revenue climbed 329.5% to $570.8 million in the first half of FY21. Meanwhile, net profit after tax increased 266.4% to $32 million.

Shareholders have clearly been flocking to SeaLink Travel Group this year. At the time of writing, this ASX travel share is up 40.5% so far in 2021. Pretty good for a travel stock during a global pandemic.

The post Here are the best performing ASX travel shares so far in 2021 appeared first on The Motley Fool Australia.

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• Leading brokers name 3 ASX shares to buy today

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 owns shares of and has recommended Corporate Travel Management 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) fell 0.60% to 7,299 points.

Here are some of the highlights from the ASX today:

Woolworths Group Ltd (ASX: WOW)

The supermarket giant announced some significant items that are expected to be recognised in the FY21 result.

The total is a $57 million pre-tax gain. This has been driven by a $220 million gain on the equity value of its interest in Quantium.

It’s recognising $69 million of transaction costs in FY21 relating to the demerger of Endeavour Group as well as the costs associated with buying its stake in PFD Food Services.

Woolworths is going to include a $50 million asset impairment charge for its Metro Food stores. This is due to the COVID-19 impact on sales on key transit traffic locations such as CBD and public transit sites. The impairment charge is for store and lease assets across 13 stores of its network. However, most Metro locations have not been impacted by a decline in customer foot traffic. Management said most stores continue to perform well.

The ASX 200 supermarket giant also said it’s going to recognise $44 million of supply chain redundancy costs relating to the closure of a distribution centre in NSW. Woolworths is investing in a new large 76,000 square metre facility to be built in Wetherill Park to service over 280 stores in NSW and replace its fragmented temperature controlled network. The new facility will cost $400 million, with completion expected in FY24. Benefits will be felt from FY25 onwards.

The Woolworths share price fell around 2% today in response.

Costa Group Holdings Ltd (ASX: CGC)

Costa shares went into a trading halt today after announcing an acquisition. It’s going to do a capital raising to fund it.

The agricultural giant announced it’s going to spend approximately $219 million on buying 2PH Farms, which is the largest citrus grower in northern Australia. Its farming operations are in Central Queensland.

It will also pay an additional $31 million in July 2023 for the purchase of ‘Conaghans’ property, where a new citrus crop is currently being planted by 2PH.

Costa is expecting to realise a number of benefits from the deal, including greater export supply to key Asian markets, exclusive rights to selected proprietary varieties, scale benefits and an extended variety and early season timing.

Debt will fund part of this deal. But the capital raising is a $190 million 1 for 6.33 pro rata accelerated renounceable entitlement offer at $3 per new share.

The ASX 200 share also revealed that it’s expecting underlying net profit after tax (NPAT-S) to be marginally ahead of what was generated in the 2020 calendar year (which was $55.1 million), before taking into account the effects of the acquisition of the capital raising.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

The Soul Patts share price rose by 8.5% in response to yesterday’s news of the planned takeover of Milton Corporation Limited (ASX: MLT), which is an old listed investment company (LIC). Soul Patts was the best performer in the ASX 200.

Soul Patts said in a presentation yesterday that this deal would provide additional liquidity to pursue investment opportunities across multiple asset classes and fund further diversification.

Some of the assets that Soul Patts could look at includes private equity, direct credit, emerging companies, global equities and property.

The post ASX 200 down, Woolworths falls, Costa acquires more farms appeared first on The Motley Fool Australia.

More reading

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• Woolworths (ASX:WOW) share price slides following update
• Why are Soul Patts (ASX:SOL) shares surging 9% today?
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• Why the number of Aussie millionaires is skyrocketing

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 COSTA GRP FPO and Washington H. Soul Pattinson and Company 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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If you’re an income investor looking for some new options for your portfolio, then you might want to take a look at the shares listed below.

Here’s why brokers believe they are in the buy zone:

Coles Group Ltd (ASX: COL)

Goldman Sachs is very bullish on the Coles share price at the current level. The broker currently has a buy rating and $19.40 price target on its shares. This implies potential upside of 17% over the next 12 months excluding dividends.

In respect to dividends, Goldman Sachs is expecting Coles to pay 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, this will mean yields of 3.75% and 4%, respectively, over the next two years.

Goldman commented: “…the longer term outlook remains intact, with Coles remaining well poised to benefit from reinvestment of the smarter selling savings to drive topline growth ahead of market, the launch of the Ocado offering and strong efficiency gains from supply chain investments are expected to come through from FY24.”

Westpac Banking Corp (ASX: WBC)

Analysts at Citi are positive on this banking giant. They currently have a buy rating and $29.50 price target on the company’s shares. Based on the latest Westpac share price, this implies potential upside of 13% over the next 12 months.

Citi is also forecasting generous dividends in FY 2021 and FY 2022 that will enhance the total return on offer. The broker has pencilled in fully franked dividends of 116 cents per share this year and the 118 cents per share next year. This represents yields of 4.4% and 4.5%, respectively.

Citi commented: “The premise of multi-year core earnings upgrades, layered on sector-wide asset quality improvements, leave WBC with a differentiated investment thesis. It remains our sole Buy in a sector that has rallied strongly in the COVID recovery.”

The post Brokers name 2 ASX dividend share to buy appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro owns shares of Westpac Banking Corporation. 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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The S&P/ASX 200 Index (ASX: XJO) is having a bit of a down day today. At the time of writing, the ASX 200 has lost 0.54% and is sitting at 7,301.7 points. Let’s take a look at some of the ASX 200 shares that have been on the move today in terms of trading volume.

3 ASX 200 shares on the move today

Oil Search Ltd (ASX: OSH)

ASX energy share Oil Search is one of the ASX 200 shares on the move today. A hefty 10.5 million Oil Search shares have currently traded hands so far. There have been no major news or announcements out of the company today. However, Oil Search shares are currently down a not-insubstantial 1.4% today so far and are currently trading at $3.86 a share. This might be the cause of the high volume of shares that have swapped owners today.

Vocus Group Ltd (ASX: VOC)

Another ASX 200 share making moves today is the telco Vocus Group. A rather large 16.16 million Vocus shares have changed hands on the ASX today. That’s despite the Vocus share price remaining flat so far at $5.49 a share.

Another factor may be at play here though. As we covered yesterday, Vocus looks set to leave the ASX in its own right soon, with 99.84% of shareholders recently voting in favour of the Macquarie Infrastructure and Real Assets consortium’s takeover bid of $5.50 a share. Such a development easily has the potential to up trading volume, which is what we might be seeing today.

Pilbara Minerals Ltd (ASX: PLS)

Once again, the ASX 200’s most active satire in terms of trading volume is this lithium producer. A whopping 24.8 million Pilbara shares have traded so far today. That coincides with Pilbara shares hitting a new 52-week (and all-time) high today. As we covered earlier, Pilbara released a drilling update to the markets this afternoon, which seems to have gotten investors hot and bothered. The Pilbara share price has retreated from its new all-time high of $1.55 this afternoon but is still trading at $1.52 a share, up 4.48% for the day.

The post Here are 3 ASX 200 shares that are on the move today appeared first on The Motley Fool Australia.

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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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Shares in Little Green Pharma Ltd (ASX: LGP) were flying high today on news of an acquisition. By the market’s close, the Little Green Pharma share price was trading at 78 cents ­– 8.33% higher than yesterday’s closing price.

The medical cannabis company is purchasing a world-class cannabis cultivation and production facility in Denmark through the acquisition of a subsidiary of Canopy Growth Corporation.

Little Green Pharma is undertaking a capital raise to pay for the acquisition. Let’s take a closer look at today’s news.

New acquisition

Little Green Pharma shares had a bumper day after the company advised its latest acquisition positions it as a leading, global, pure-play medical cannabis company.

The Denmark facility is one of the largest cannabis production assets in Europe. It can produce more than 20 tonnes of biomass, including around 12 tonnes of dried cannabis flower, each year.

It includes a 21,500 square metre cultivation site and a 4,000 square metre postharvest manufacturing site.

The facility will increase Little Green Pharma’s cultivation to eight times its current capacity.

The company also says that locating production in Europe means it avoids import and export restrictions when supplying to European markets.

The acquisition will cost Little Green Pharma around $21.4 million.

The first half will be paid when the acquisition is completed. The remainder will be paid 12 months later at an interest rate of 12.5%.

The company is looking to raise $27.2 million to pay for the acquisition. To do so, it will conduct a placement for institutional and sophisticated investors. The placement will see 45.3 million new Little Green Pharma shares offered at 60 cents apiece.

The company said it will continue with plans to purchase the land around its Australian facility, which it believes is beneficial for longer-term growth.

Commentary from management

Little Green Pharma managing director Fleta Solomon commented on the acquisition:

We have been speaking for some time about the need to increase our production capacity and the Denmark facility not only gives us the cultivation and manufacturing capacity we need but does so immediately. We won’t be constrained by the two-year build and permitting time required to expand our existing West Australian facility…

… the Denmark Facility [provides] immediate access to medical grade product at volumes that will allow us the opportunity to accelerate our growth strategy.

Little Green Pharma share price snapshot

It has been a good year for the Little Green Pharma share price so far.

Currently, the company’s shares are up nearly 40% year to date. They have also gained around 121% since this time last year.

The company has a market capitalisation of around $105 million, with approximately 187 million shares outstanding.

The post Why the Little Green Pharma (ASX:LGP) share price fired up 8% today appeared first on The Motley Fool Australia.

More reading

• Here’s why the Little Green Pharma (ASX:LGP) share price is down 5%

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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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.

Recent research by Morgan Stanley found that social media usage on some platforms has dropped sharply relative to levels at the end of 2020 when more consumers were staying at home. A reopening economy, therefore, may have an inverse relationship on some aspects of user engagement for some social media platforms. But one social media company, in particular, may actually benefit from a reopening economy: Snap (NYSE: SNAP) — the parent company of photo- and video-sharing app Snapchat.

Sure, Morgan Stanley did say in its report that it believed one of Snapchat’s in-app products — Snapchat Discover — saw a drop in engagement recently compared to levels in December 2020. But Discover, which helps keep users up-to-date on current events and find content from pop culture, influencers, and more, is just one feature of the Snapchat experience. Peer-to-peer engagement and total advertising revenue on the app, however, are likely both thriving.

Improving user engagement

Interestingly, Snap management said in the company’s first-quarter earnings call that it saw “inflection points” in story posting, engagement with its Snap Map, and the rate of new friendships as the economy started to reopen in February. “We designed Snapchat to be a useful complement to real-life friendships and are excited about these optimistic trends developing with our audience,” said Snap founder and CEO Evan Spiegel in the company’s earnings call.

While users may not be engaging as much with content in Snap’s Discover tab, increased stories from users will keep advertisers coming back to the platform.

Accelerating revenue growth

Further, though there may be some uncertainty about how a reopening economy will affect engagement across different aspects of the Snapchat experience, investors can expect one thing with near certainty: huge growth in advertising revenue. Snap’s first-quarter revenue soared 66% year over year to $770 million, helping the tech company generate positive free cash flow for the first time. And for Q2, management expects even stronger growth. The company guided for revenue to grow 80% to 85% year over year. Snap’s incredible top-line momentum represents both broad-based business momentum and a rebound from a period when marketers reduced or even paused ad spend as they dealt with uncertainties related to COVID-19.

A reopening economy is not only leading to an increase in Story postings from Snapchat users, but it is helping the company attract massive investment from advertisers as they try to capitalize on consumers’ return to more normalcy. It’s fair to say that while there may be some challenges for Snapchat as the economy reopens, it’s mostly a greenfield opportunity.

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

The post 1 social media stock likely to thrive in a reopening economy 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. 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.

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

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The Wide Open Agriculture Ltd (AXS: WOA) share price is on the move today following an initial purchase order for its OatUP product.

At the time of writing, the regenerative food and farming company’s shares are fetching for 89.5 cents, up 12.58%.

Wide Open Agriculture welcomes OatUP sales

Investors are buying Wide Open Agriculture shares after the company secured initial distribution across the southern states.

In today’s release, Wide Open Agriculture advised it has received its first OatUP purchase order from The Market Grocer. The products will be sent into New South Wales and Victoria for sale across its grocery portfolio.

Established in 2005, The Market Grocer is one of Australia’s largest grocery wholesalers servicing both independent grocers and major independent supermarkets. The company offers consumers imported and local products packaged & distributed throughout the country.

The purchase order follows an initial trial that evaluated potential customer interest and market opportunities earlier this month. After a successful run, both companies agreed to partner up to launch Dirty Clean Food’s OatUP across the southern states.

As such, The Market Grocer will be Wide Open Agriculture’s first major distributor in the New South Wales market.

The OatUP product has been shipped to the designated facilities and is expected to be available for retail by late June.

Wide Open Agriculture stated that the latest update represents a lucrative opportunity with its first presence across the East Coast. Based on the significantly larger population in those states, sales could potentially accelerate.

Dirty Clean Food CEO, Jay Albany commented:

After a strong launch in Western and South Australia only six months ago, we are excited to have another wonderful partner expanding the availability of OatUP into the Eastern States. OatUP is the world’s first regenerative and carbon neutral oat milk. This is a special distinction, which aligns with the values that underpin the larger trend of consumers evaluating a switch from dairy to plant-based milks.

About the Wide Open Agriculture share price

The Wide Open Agriculture share price has surged in the past 12 months, doubling in value. The company’s shares reached an all-time high of $1.85 in August 2020 before moving in circles.

Based on today’s price, Wide Open Agriculture presides a market capitalisation of roughly $84 million, with 93.6 million shares outstanding.

The post Why the Wide Open Agriculture (ASX:WOA) share price is racing 12% higher 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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The two ASX dividend shares in this article might be able to provide people in retirement a steady level of income.

Businesses with defensive cashflow and a history of consistent dividends might be able to continue that record. Though there’s no guarantee of that.

Here are two of those ideas:

Brickworks Limited (ASX: BKW)

Brickworks boasts about its dividend record where it hasn’t cut its dividend in over four decades. Not only that, but it has paid a dividend every year since listing on the ASX in 1962.

It describes itself as Australia’s largest and most trusted brick manufacturer. It has a diversified portfolio assets that, it says, provide shareholders with stability and long-term growth.

Brickworks’ building products division in Australia includes Austral Bricks, the country’s largest bricks producer, and other major brands such as Austral Masonry, Austral Precast and Bristle Roofing. The building products North American division is the leading brick producer in the north-east of the US and includes the flagship business Glen-Gery.

The ASX dividend share has had surplus land assets over the last couple of decades. It has developed those property assets into industrial buildings with the help of joint venture partner, Goodman Group (ASX: GMG). Brickworks says that it helps customers to meet the supply chain needs of the growing digital economy. Some of the latest properties it’s working on includes two huge warehouses for Amazon and Coles Group Ltd (ASX: COL). This property trust distributes its rental profit to Brickworks and Amazon each year.

Brickworks also owns a long-term holding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares, a diversified investment house. This investment has delivered long-term capital growth for the company. It has provided stability and growing cash dividends over the decades.

It currently has a trailing grossed-up dividend yield of 3.5%.

APA Group (ASX: APA)

APA has increased its distribution for every year for over a decade and a half.

It is a large Australia energy infrastructure business with a market capitalisation of $11 billion.

APA has a large gas transmission pipeline across every Australian mainland state and territory. It actually delivers half of the nation’s gas usage. The energy asset business has direct and operational control over its assets and the majority of its investments.

Whilst APA does own significant gas assets, including storage and energy generation, it’s also one of the largest owners and operators of renewable power generation assets. APA has wind and solar projects in WA, SA and Queensland.

APA has recently announced that it’s going to invest around $270 million to expand its east coast pipeline network which will increase the winter peak capacity by 25%, transporting gas from Queensland and the Northern Territory to southern markets.

At the current APA share price, it has a trailing distribution yield of 5.5%.

The post 2 ASX dividend shares that could provide steady income in retirement appeared first on The Motley Fool Australia.

More reading

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• Leading brokers name 3 ASX shares to buy today
• Why the Brickworks (ASX:BKW) share price is up more than 10% this week
• 2 high-quality ASX 200 shares that could be buys
• ASX 200 drops, Brickworks soars, Woolworths falls

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 APA Group, Brickworks, COLESGROUP DEF SET, and Washington H. Soul Pattinson and Company 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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Woolworths Group Ltd (ASX: WOW) shares are down today following an announcement of several big-ticket items to be included in the company’s 2021 financial year results. The company’s announcement also included a supply chain update.

At the time of writing, the Woolworths share price is trading at $42.49 – 1.98% lower than yesterday’s close.

Today isn’t a great day for the broader market either. The S&P/ASX 200 Index (ASX: XJO) is currently down 0.58%.

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

Significant items

Woolworths has unveiled the significant items it expects to include in its 2021 financial year results. Together, these items will see Woolworth’s report a pre-tax net gain of $57 million for its significant items.

Woolworths will be reporting a non-cash gain of $220 million from its investment in data science and analytics company Quantium in its upcoming financial year results.

Earlier this month Woolworths announced it increased its stake in Quantium from 47% to 75%.

The Quantium investment is the only non-cash gain from significant items Woolworths expects to include in its 2021 financial year results.

The company also expects to report $163 million of costs and impairments from significant items.

These will be resulting from transaction costs, its New South Wales fresh food supply chain, and a non-cash impairment charge due to a downturn in some of its Metro stores.

According to the company’s release, its acquisition of PFD Food Services and the Endeavour Group’s demerger will see Woolworths fork out around $69 million in transaction costs.

Additionally, due to a downturn in customer traffic caused by COVID-19, Woolworths will record a $50 million non-cash impairment charge for the leases of 13 Metro stores in CBD locations.

Woolworths CEO Brad Banducci said changing customer patterns over the last 15 months drove the need for the impairment charge.

Supply chain update

Woolworths also announced its fresh and chilled food supply chain in NSW is nearing capacity.

Currently, Woolworths’ fresh and chilled products sold in NSW are transported from a facility in Minchinbury and two third-party facilities. However, soon these won’t be large enough to house Woolworths’ operations.

As a result, Woolworths will build a new 76,000 square metre facility.

The facility will supply fresh and chilled food to more than 280 Woolworths supermarkets in NSW.

Woolworths will close the Minchinbury facility in 2024. However, it expects to recognise $44 million in redundancy costs in its 2021 financial year results due to the facility’s future closure.

The company won’t be reporting the cost of the new facility this financial year. However, it’s expected to cost $400 million. Construction of the facility is expected to begin in 2022 and to finish in 2024.

Woolworths share price snapshot

The Woolworths share price is up by around 8% year to date. It has also gained almost 17% since this time last year.

The retail giant has a market capitalisation of around $54 billion, with approximately 1.2 billion shares outstanding.

The post Woolworths (ASX:WOW) share price slides following 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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