Tag: Motley Fool

It isn’t normally a record that miners would be happy with, but the surge in shipping costs have given ASX mining shares a major advantage.

The cost to hire a capesize bulk carrier hit an all time high as it went over US$40,000 a day, reported the Australian Financial Review.

The report quoted the Platts Cape T4 index. This index measures the hire cost for carriers that are typically used to ship iron ore from Australia to China.

ASX miners getting squeezed by record shipping costs

Depending on how contracts are structured, the increase hire costs could squeeze profit margins for ASX miners. These include the BHP Group Ltd (ASX: BHP) share price, Rio Tinto Limited (ASX: RIO) share price and Fortescue Metals Group Limited (ASX: FMG) share price.

ASX coal miners, like the Whitehaven Coal Ltd (ASX: WHC) share price, could also be feeling some heat.

When bad news is really good news

But everything is relative. The big increase in shipping costs is giving our iron ore producers an advantage over their Brazilian rivals.

This is because it takes around 10 to 15 days for ASX iron ore producers to ship the commodity to China over a distance of around 4,000 nautical miles.

The distance between Brazilian and Chinese ports are more than three times further!

Turning of the tides

Strong iron ore demand, especially from China, is driving up shipping costs. What’s more, experts say there is no sign that demand is waning.

The Platts Cape T4 index hit US$40,994 a day on Tuesday. It was at $US5711 a day on February 11, according to the AFR.

The index was launched in October 2019. The previous peak it hit was US$30,000 a day back in October 2020.

What’s driving record shipping hire costs

It isn’t only robust demand for iron ore that’s putting upward pressure on shipping costs. Other commodities from coal to grain are also providing a tailwind for ship owners.

Then there is also the restoration of supply chains from the COVID-19 outbreak that’s also adding to demand for bulk carriers.

Temporary advantage to ASX miners

But the high prices for both shipping and iron ore may not last. The AFR reported that Liberum Capital believes inventory levels for iron ore appear to have normalised and ore prices could fall this coming month.

This is partly because Chinese export rebates of 13% for some steel products expire from May. Demand for our iron ore may be peaking, although the outlook for most commodities remain strong.

More reading

• The ASX 200 is within an arms reach of all-time record highs
• These ASX uranium shares are surging this year. Here’s why
• a2 Milk and Zip were among the most traded ASX shares last week
• Is the Transurban (ASX:TCL) share price a buy for dividends?
• The ASX’s China problem is getting worse… and quickly

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited, Fortescue Metals Group Limited and Rio Tinto Ltd. Connect with me on Twitter @brenlau.

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 Alcidion Group Ltd (ASX: ALC) share price has continued its negative run this week and is again backtracking today. This comes despite the company announcing the completion of its Share Purchase Plan (SSP).

In mid-afternoon trade, the healthcare technology company’s shares are down 1.35% to 37 cents.

Why is the Alcidion share price on a downhill trend?

A possible catalyst for the fall of Alcidion shares is that investors are bracing for an impending share dilution.

According to Alcidion’s release, the company advised it has successfully completed its SSP following ‘very strong support’ from shareholders. Over 1,900 applications were received, totalling roughly $30 million. This represents a huge level of investment when compared to the company’s target of $2.5 million.

As a result, the board has decided to increase its SPP offer size to $3 million and scale back applications.

With the revised amount, roughly 9.37 million ordinary shares will be issued at a price of 32 cents apiece.

Most applicants will be allotted the minimum basic entitlement of 3,125 SPP shares (worth $1,000). Any remaining SSP shares will be issued on a pro-rata basis on the size of the applicant’s shareholding at the record date.

Investors who sold their parcel of shares between the record date and SSP closing date or held less than 1,471 shares will not receive any shares.

Alcidion expects the new shares to be issued and available for trading from next Tuesday.

The capital raising follows the successful institutional placement that was announced on 15 April 2021.

Together, the combined funds for both the placement and SSP will give Alcidion a cash injection of $18.4 million.

Comments from the CEO

Alcidion CEO, Kate Quirke commented on the result of the SSP:

The Company would like to thank all shareholders who participated in the Share Purchase Plan and the Placement for their continued support. We acknowledge that shareholders who subscribed may be disappointed by the scale back. Ultimately, balancing the strong SPP participation with the foreseeable capital needs of the business is in the best interests of all shareholders.

Alcidion share price review

Although Alcidion shares might be modestly lower today, for this week alone, shareholders have recorded a loss of almost 10%. However, when looking at the bigger picture, in year-to-date performance, the Alcidion share price has doubled.

The company has a market capitalisation of approximately $384 million, with more than 1 billion shares on issue.

More reading

• Alcidion (ASX:ALC) share price slumps despite ‘strong growth’
• Why the Alcidion (ASX:ALC) share price is up 32% this month
• Why the Alcidion (ASX:ALC) share price just hit an all-time high
• Alcidion (ASX:ALC) shares are in a trading halt. Here’s why.
• 4 exciting small cap ASX shares to watch

Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Alcidion Group Ltd. The Motley Fool Australia has recommended Alcidion 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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Shares in Emyria Ltd (ASX: EMD) are falling today after the company shared news of a psychedelic therapy program targeting post traumatic stress disorder (PTSD). At its intraday low, the Emyria share price has fallen by 5%.

At the time of writing, it has slightly recovered. Currently, the Emyria share price is down 3.85% – trading for 25 cents.

Let’s take a closer look at the drug development and clinical services company’s news.

Emyria’s MDMA-assisted therapy trial

Emyria – formerly known as Emerald Clinics Limited – is set to sponsor a clinical trial targeting treatment resistant PTSD with MDMA-assisted therapy.

The trial has been developed in partnership with Mind Medicine Australia, a charity working to help end suffering caused by mental illness by creating more treatment options

The trial, which is still pending ethics approval, will evaluate the safety, efficacy and cost benefits of MDMA-assisted psychotherapy.

While the company didn’t clarify how its trial will differ from others, it stated that most MDMA-assisted therapy involved 3 stages.

• Preparation – in this stage the therapist and patient get to know one another and build trust
• Administration and monitoring – the patient is given a dose of MDMA and supported by two therapists during a session which can last 6 to 8 hours
• Integration – the next day, and at an average of 3 weekly intervals, the patient and therapist discuss the experience and its outcomes.

A cohort of therapists trained for the trial will graduate this month from Mind Medicine Australia’s training course. Emyria has a facility ready for the trial.

Currently, the two bodies are working to create an ethics protocol to receive ethics approval.

Prior research on MDMA-assisted therapy

According to Emyria’s release, between 5% and 10% of Australians are likely to develop PTSD during their lifetimes. The rate of Australian veterans who will experience PTSD is estimated to be closer to 20%.

The former chair of the Australian Defence Force Admiral Chris Barrie recently encouraged the Australian Government to consider the clinical use of specific psychedelics to help those recovering from trauma.

Emyria stated there is a body of evidence showing that in a controlled environment and supported by psychotherapy, ketamine, psilocybin, and MDMA can help with treatment-resistant mental illnesses.

It pointed to a study by the Multidisciplinary Association for Psychedelic Studies that found that 67% of those who received MDMA-assisted therapy for PTSD didn’t qualify for a PTSD diagnosis after three treatments.

Further, MDMA-assisted therapy for PTSD has been granted ‘Breakthrough Therapy’ status by the US Food and Drug Administration.

Commentary from management

Emyria’s managing director Dr. Michael Winlo commented on the company’s involvement in the trial:

At Emyria, our strength is in providing safe access to unregistered treatments while also generating clinical evidence. To date, we have cared for over 4,000 patients with major unmet needs (including more than 80 patients suffering with treatment resistant PTSD) and collected high-quality Real-World Evidence. Emyria’s clinical advisory, site network and data infrastructure is uniquely positioned to support safe and scalable psychedelic-assisted therapy, much like we have demonstrated and accomplished with cannabinoid medicines.

Emyria share price snapshot

The drop experienced by the Emyria share price as a result of today’s news is unlikely to bother most investors. That’s because it’s a tiny bit of turbulence when compared to the its recent take off.

Despite today’s fall, the Emyria share price is up 150% year to date. It’s also up 257% over the last 12 months.

The company has a market capitalisation of around $40 million, with approximately 254 million shares outstanding.

More reading

• Dogecoin (CRYPTO:DOGE) leaps 54% higher and crashes Robinhood…what’s next?
• What’s happening with the Raiz Invest (ASX: RZI) share price?
• The Amcor (ASX:AMC) share price is lifting today. Here’s why
• ASX healthcare shares could be next to be hit by the digital disruption
• ASX stock of the day: Brickworks (ASX:BKW) shares top the ASX 200

Motley Fool contributor Brooke Cooper 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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Dogecoin (CRYPTO: DOGE) is going ballistic today.

One Dogecoin is currently worth 64.07 US cents (83.21 Aussie cents). That’s up more than 54% over the past 24 hours. It’s now gained some 13,828% from the 0.46 US cents it was trading for on 1 January this year.

Boom!

At the current price, Dogecoin – launched in 2013 as a lighthearted alternative to cryptos like Bitcoin (CRYPTO: BTC) – has a market cap north of US$83.2 billion. That makes the once laughed at Dogecoin the 4th largest cryptocurrency in existence. It trails only Bitcoin, Ethereum and Binance Coin.

In a sign of how much investor interest Dogecoin is getting, CoinMarketCap tells me more than US$44 billion of Dogecoin exchanged virtual hands over the past 24 hours.

Which, in turn, led to a few problems.

Dogecoin crashes Robinhood

With so many retail investors buying and selling Dogecoin, the crypto trading sector of Robinhood’s app couldn’t take it anymore. The system crash, which Robinhood described as a “partial outage”, has since been rectified.

Commenting on the crypto’s meteoric price rise, Chad Oviatt, director of investment management at Huntington Private Bank, said (quoted by Bloomberg):

You have money looking for a home and this is one of those areas of the market where there is speculation happening, there is significant appreciation happening in a short period of time. You get that excitement there.

Matt Maley, chief market strategist for Miller Tabak + Co added, “It’s pretty amazing that something that started out as a joke has become so popular.”

Don’t let the joke be on you

Whenever the price of an asset is shooting skywards, it’s tempting to join the party. If you get aboard at the right time, that could prove highly profitable. But if you get aboard too late you could lose some or all of your money.

Among those sounding words of caution on Dogecoin and other soaring cryptos is Edward Moya, senior market analyst at Oanda. In a note (sourced from Bloomberg) Moya wrote:

The Dogecoin bubble should have popped by now, but institutional interest is trying to take advantage of this momentum and that could support another push higher. Dogecoin is surging because many cryptocurrency traders do not want to miss out on any buzz that stems from Elon Musk’s hosting of Saturday Night Live.

Mike Bailey, director of research at FBB Capital Partners, concurs. According to Bailey:

It seems that investors are careening from one hot dot to another, like a pinball game. My sense is this speculative wave will suffer the same fate as the GME and other Robinhood ‘flash-in-the-pan’ stocks. Cryptocurrencies may have become a new asset class, like precious metals, but surges such as these seem unsustainable.

With prices broadly surging over the past year, the combined market cap of all the world’s cryptocurrencies now exceeds US$2.3 trillion.

More reading

• Is today’s soaring Dogecoin price an attractive bargain or a dangerous bubble?
• Is Dogecoin still a joke?
• Forget the Bitcoin price, the Dogecoin price is on fire!

Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Bitcoin. 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 Raiz Invest Ltd (ASX: RZI) share price fell today after the company released its monthly metrics for April.

At the time of writing, the Raiz share price has recovered slightly to be down 2% for the day, trading at $1.47. Here’s how Raiz performed in April and how the company’s share price has responded.

How did Raiz perform in April?

Earlier this morning, Raiz provided the market with an update on its performance for April 2021. The update provided an insight into the company’s Australia, Indonesian, and Malaysian operations for the month.

Raiz noted that funds under management (FUM) in Australia increased 6.2% for the month to $737.56 million. The company remains confident that $1 billion in FUM by the end of 2021 remains a realistic target.

In addition, Raiz reported that global active customers grew 2.4% for the month to a total of 429,827. The company’s management praised customer growth as a reflection of loyalty, despite an increase in monthly maintenance fees.

Raiz also highlighted a successful capital raise in April to accelerate growth and the acquisition of Superstate Pty Ltd.

More on the share price

Raiz is an Aussie fintech company that operates a mobile-focused, micro-investing platform in Australia, Indonesia, and Malaysia. The company’s platform enables users to micro-invest the remaining round-up of everyday purchases in exchange-traded funds (ETF). In addition, Raiz allows users to open a superannuation fund.

Raiz charges a flat monthly investment fee for each user which comprises more than 60% of the company’s revenue. As mentioned previously, Raiz recently increased its monthly maintenance fee from $2.50 to $3.50.

The company recently released its third-quarter update for the 3 months ended 31 March. Raiz reported total normalised revenue of $3.1 million for the quarter, up 39% compared to the prior corresponding period. 

Raiz also announced firm commitments to raise $10.2 million via an oversubscribed placement late last month. The capital raising followed the company’s proposed $9.5 million acquisition of fund manager Superstate. According to the company, the proposed acquisition of Superestate will allow Raiz to offer clients access to residential property as an asset class.

Since late April, the Raiz share price has tanked more than 11% following the capital raising.

More reading

• Why the Raiz Invest (ASX:RZI) share price has slumped 5%
• Raiz Invest (ASX:RZI) share price on watch after Q3 update
• The Raiz (ASX: RZI) share price is surging 9% higher today

Motley Fool contributor Nikhil Gangaram 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 Amcor PLC (ASX: AMC) share price is in the green today after the dual-listed company released its third-quarter results (Q3 FY21).

At the time of writing, shares in the packaging giant are trading for $15.91 – up 3.3%. By comparison, the S&P/ASX 200 Index (ASX: XJO) is 0.63% higher.

Let’s take a closer look at today’s news and what it means for the Amcor share price.

Quarterly results and the Amcor share price

In its statement to the ASX, Amcor advised net income (or profit) for the quarter was US$267 million, 47.5% higher than the prior corresponding period (pcp). For the first 3 quarters of the financial year, net income was US$684 million – up 58% on the pcp.

Net sales for the quarter were US$3.2 billion – up only 2.1% on the pcp. For the nine months ending 31 March 2021, net sales totalled US$9.4 billion – up 0.88%.

Cost of sales is up 1.4% in Q3 and down 1.2% for the three quarters combined. The company attributed the gap between gross and net profit largely to a US$44 million positive change in restructuring expenses for the quarter and a US$40 million change for all 3 quarters.

Amcor had a negative cash flow for the first 3 quarters of FY21 of US $53 million. This is down 17.2% on the pcp, however. Total cash on hand for the company is US$690 million – up 28.3% on the pcp.

Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) are 5.6% higher on the pcp to US $1.45 billion. Adjusted earnings per share (EPS) are 51.5 cents.

Due to today’s results, Amcor will pay shareholders an interim dividend of US11.75 cents a share. This is US 0.25 cents higher than the dividend payment for the pcp.

Investors are responding well to today’s results, judging by the Amcor share price rise.

Management commentary

Commenting on the update, Amcor CEO Ron Delia said:

Amcor is maintaining momentum and executing well in the face of a dynamic operating environment. As a result, we delivered strong year-to-date performance and we are raising our full year adjusted EPS growth outlook to 14-15% in constant currency terms.

The business delivered strong adjusted EBIT growth of 9% on a year-to-date basis and organic growth has continued to strengthen as we progress through the fiscal 2021 year. Delivery of cost synergies related to the Bemis acquisition continues to progress ahead of original expectations, leaving us well positioned to exceed the original target with at least $180 million of pre-tax benefits by the end of fiscal 2022.

Amcor share price snapshot

The Amcor share price has increased 18% over the last 12 months and is up nearly 5% year-to-date. Although, in an exclusive interview with Motley Fool Australia last month, a leading fund manager explained why the company has sold its Amcor shareholdings as the market progressed post-COVID.

Amcor has a market capitalisation of $18.2 billion.

More reading

• ASX 200 jumps 0.7%: ANZ half year results, Nearmap jumps
• These are the latest ASX shares to be downgraded by brokers today
• 2 ASX shares ready for a post-COVID rally: fundie

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Amcor 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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You might think ASX healthcare shares would be among the most insulated from the digital disruption, but that view doesn’t gel with all experts.

In fact, some are predicting that the healthcare sector could be next to be shaken by the digital and online revolution, reported the Australian Financial Review.

The news may worry many investors holding ASX healthcare shares. They only need to look at the media and retail sectors to see how significant the impact of this may be.

ASX medical shares and the digital disruption

The idea that some medical services could be heading online and away from brick-and-mortar outlets isn’t that preposterous. COVID-19 proved the benefits of telemedicine.

But before you equate the Myer Holdings Ltd (ASX: MYR) share price with the Ramsay Health Care Limited Fully Paid Ord. Shrs (ASX: RHC) share price, Sonic Healthcare Limited (ASX: SHL) share price or Healius Ltd (ASX: HLS) share price, consider these points.

The experts quoted in the AFR article spoke more about data collection than visits to doctors or hospitals.

More about data than visitation

The idea is that the pooling of non-identifiable patient data could help medical practitioners and patients make more informed decisions.

Such stats might be useful for Monash IVF Group Ltd (ASX: MVF) for instance where statistics could help improve the chances of a successful treatment.

But change never comes easy. This is especially so for the medical fraternity as these professionals are trained to avoid risk and to stick to tried and proven methods.

What’s needed to drive the digital change

The factor that could counteract the resistance for change is cost savings. This is one of the largest expenditure items for federal and state governments.

This provides a big incentive to embrace digital technologies, especially during these times when government budgets have blown out due to the pandemic.

If consumers believe that the digital disruption will also help them cut their bills, including health insurance bills, and speed up treatments, they could also be a powerful push factor.

Needless to say, the Medibank Private Ltd (ASX: MPL) share price and NIB Holdings Limited (ASX: NHF) share price would welcome anything that bolsters their margins.

Real risk to earnings from digital disruption

On the other hand, if digital medicine does lower costs, medical facility owners could feel the squeeze in parts of their operations.

Even if margins stay constant on a percentage of sales basis, profits will drop as the top-line drops.

Further, the digital revolution will provide opportunities for new rivals to challenge and beat the incumbents. We don’t need to list any examples here.

But there’s no need for ASX investors to panic. Even if there is a greater acceptance of telemedicine, changes come slowly. It took years for digital alternatives to dislodge newspapers and brick and mortar retailers.

This gives the sector precious reaction time to pivot and adapt.

More reading

• Healius (ASX:HLS) share price pushes higher on solid Q3 update
• Broker tips Ramsay Health Care (ASX:RHC) share price to shoot higher
• The Ramsay (ASX:RHC) share price is sliding on third quarter update
• Here’s why the NIB (ASX:NHF) share price is on the rise today
• Morgans just added these ASX shares to its “best ideas” buy list

Motley Fool contributor Brendon Lau owns shares of Sonic Healthcare Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia has recommended NIB Holdings Limited, Ramsay Health Care Limited, and Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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One of the best performing S&P/ASX 200 Index (ASX: XJO) shares today is Brickworks Limited (ASX: BKW). Brickworks shares are, at the time of writing, up a healthy (and mathematically pleasing) 3.69% to $21.06 a share. That makes brickwork the second-best performing ASX 200 share on the market today, just behind QBE Insurance Group Ltd (ASX: QBE). It also puts the Brickworks share price within a whisker of the company’s 52-week (and all-time) high of $21.29.

So who is Brickworks? And why is the Brickworks share price climbing so decisively today?

Working bricks

Brickworks is one of the oldest businesses on the ASX. It was founded way back in 1934, and it has been an ASX-listed company since 1960.

As its name implies, Brickworks is a manufacturer of building materials. These include (naturally) bricks, as well as pavers, cement, roofing products and masonry. Some of its brands include AustralPrecast, Bowral Bricks, Terracade and UrbanStone. Its primary market for building materials is Australia. But it has also been expanding into the United States, particularly after its 2018 acquisition of the US company Glen-Gery.

However, building materials are not the only area Brickworks trades in. The company also has a moderate property portfolio. The properties Brickworks owns are usually rezoned from old industrial uses within the business and redeveloped into long-term assets. Brickworks tells us that it aims to be “creating a stable, growing annuity style income stream” in doing this.

Brickworks also has a substantial portfolio of ASX share investments too. This consists mostly of a large chunk of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares (representing 29.4% of the entire company). Soul Patts itself has a large portfolio of ASX shares of its own, which, rather perplexingly, consists of a large chunk of Brickworks shares as well. This is an arrangement that has been grandfathered as a result of a deal in the 1980s. But Soul Patts also owns a significant share of other ASX companies, including TPG Telecom Ltd (ASX: TPM) and New Hope Corporation Limited (ASX: NHC). Brickworks has exposure to a reasonable diverse ASX hiding as a result.

Why are Brickworks shares rising today?

Well, there’s no official reason why Brickworks’ shares should be rising today. There are no major news or announcements out of the company since 3 May. And that was just some routine paperwork.

However, back on 25 March, Brickworks delivered its half-year earnings report for the 6 months ending 31 January 2021. This was well-received by investors, who sent the Brickworks share price up more than 2.5% after its release. Although Brickworks reported a net underlying profit fall of 10%, it also reported a statutory net profit of $71 million, which was a 22% increase over the previous corresponding period.

Importantly, Brickworks also raised its dividend by 5% to 21 cents per share. Brickworks is a rather special ASX dividend company. It has managed to either hold steady or increase its dividend every year since 1976. That’s a pretty impressive 45-year streak. Incidentally, Soul Patts is the holder of the ASX’s best dividend growth record. It’s delivered an increasing dividend every year since 2000. Brickworks doesn’t quite match that, but it has inarguably looked after its shareholders in the income department all the same.

On the current Brickworks share price, this dividend is worth a trailing yield of 2.85%.

It’s probably a culmination of these factors that are getting investors hot under the collar for Brickworks shares today.

More reading

• Here’s how much ANZ’s (ASX:ANZ) dividend is worth now
• ASX 200 jumps 0.7%: ANZ half year results, Nearmap jumps
• Why Soul Patts (ASX:SOL) is such a strong ASX dividend share
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 rises, Flight Centre drops, Super Retail grows

Motley Fool contributor Sebastian Bowen owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks 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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The Dicker Data Ltd (ASX: DDR) share price is slipping lower this afternoon after the wholesale distributor released its results for Q1 FY21.

At the time of writing, shares are swapping hands for $10.11, 0.69% lower for the day.

Hard to beat

Investors are putting some selling pressure on the computer hardware and software distributor today. The reason is likely related to the company’s decline in revenue compared to the same period last year.

Total revenue for the quarter slipped 3.5% to $447.7 million. Dicker Data quickly pointed out the high bar set by the March quarter last year. This was due to a surge in demand for computer-related products as work shifted to the home. 

Furthermore, revenues were hindered by the ongoing global chip shortage. This shortage inhibited vendors from supplying the necessary volume of stock to meet demand.

Global chip shortage hits Apple, BMW, Ford as crisis worsenshttps://t.co/JNKQ43eJhK pic.twitter.com/xSayc6kzxb

— Stuart Wallace (@StuartLWallace) April 29, 2021

https://platform.twitter.com/widgets.js

The constrained supply wasn’t all bad news for the company. Sustained demand meant Dicker Data could charge higher prices, aiding in an elevated gross profit margin of 10%. Consequently, profit before tax increased 5.7% to $19.4 million for the period.

Backlogs and dividends

Dicker Data expects global chip shortages to continue for the foreseeable future. Unfortunately for Aussies, the United States and Europe are receiving higher allocations than many countries across the Asia Pacific.

Although, the company stated it is leveraging its supply chain to meet current and growing market demand. As such, a large backlog of orders is expected to be fulfilled over the coming quarters.

In regard to dividends, the company has retained its current policy of paying quarterly dividends. The proposed rate for interim dividends for FY21 will be 9 cents per share fully franked — coming to 37.5 cents per share for the full year. That would mean an increase of 5.6% on FY20’s paid dividends.

Dicker Data share price outperforms

There is clearly a mix of headwinds and tailwinds ahead for Dicker Data. But looking to the past, the company managed to substantially outperform during the last year. 

While the S&P/ASX 200 Index (ASX: XJO) has bagged investors a tidy 31.5% return before dividends, Dicker Data has pulled 46.3%. 

More reading

• The Dicker Data (ASX:DDR) share price is eyeing a comeback in 2021

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data 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 Black Cat Syndicate Ltd (ASX: BC8) share price is slumping today after the company announced a successful share placement. Overall, it raised more than $20 million. At the time of writing, the Black Cat share price is trading 4.52% lower at 74 cents.

Black Cat is a goldfield project miner engaged in the exploration and development of the Bulong Gold Field project located to the east of Kalgoorlie.

Capital raising initiative

Black Cat’s capital-raising scheme wasn’t open to the public. Instead, the company raised its $20 million target via a placement to sophisticated and professional investors. 

It raised the $20 million (before costs), at a price of 67 cents per share. Black Cat stated the funds raised from the placement will be applied to extension and exploration drilling, mill equipment purchases, feasibility studies and other working capital projects.

The entire process was undertaken without the need for shareholder approval, including the issue of over two million additional shares.

The company is focusing on a “low-capex, rapid start-up” strategy for its Kalgoorlie East Gold Project. In March 2021, Black Cat acquired a 1.5 million-tonne-per-annum milling facility, including two ball mills and ~60% of the equipment required to run the facility, for $1.24 million.

Management comments

Black Cat managing director Gareth Solly welcomed the investment, saying:

We are delighted with the support for the Placement and welcome a number of highly credentialed Australian and offshore institutional investors to the register. On behalf of the Board I would also like to thank our existing shareholders for their ongoing support.

The Placement will allow the Company to progress its start-up strategy, targeting first production in the second half of 2022. In the June 2021 quarter, we will commence the removal and relocation of our 1.5Mtpa facility. In May 2021, we are anticipating announcing Resource upgrades from the Fingals Mining Centre. Furthermore, we look forward to updating investors with results from our extensive drilling programs and ongoing Resource extensions and upgrades.

Black Cat share price snapshot

Including today’s falls, the Black Cat share price is now down by more than 6% over the past week. The company’s shares are, however, up by almost 3% year to date and around 68% over the past year. 

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Motley Fool contributor Lucas Radbourne-Pugh 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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