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The Brainchip Holdings Ltd (ASX: BRN) share price has taken a hit today. While the S&P/ASX 200 Index (ASX: XJO) managed to inch up 0.80%, the Brainchip share price was down 4.95%, trading at 48 cents at the market close.

With no new announcements out today, let’s recap the artificial intelligence (AI) developer’s annual report released on Friday.

Brainchip FY20 wrap

Brainchip reported a net loss after income tax of US$26.8 million for the year ended 31 December 2020. This compares to a loss of US$11.3 million in the previous year.

The company pumped up its research & development (R&D) spending by 14% to reach $5.2 million during FY20.

It also jacked up its selling & marketing (S&M) expenditure to $1.4 million, a 34% increase compared to FY19.

At the end of the FY20 period, Brainchip held consolidated net assets valued at $17.7 million, a jump from the $9.1 million held at the end of FY19.

Strong start, then a slide

The Brainchip share price got off to a strong start in January 2021 and is up 11.6% year to date. However, it has fallen 7.3% over the past month.

The company lists a number of risk factors in its FY20 report. A few examples include the risk of delays in new product development, intellectual property infringements, and risks associated with information technology breaches.

Other risks were in recruiting and retaining the right people, competition and lack of the company’s products being adopted.

Despite the challenges, Brainchip believes it finished off FY21, having made “significant strides in the development of our technology and commercialisation of Akida…”

Akida is the artificial intelligence (AI) company’s primary hardware product. Brainchip said its purpose was “to provide a complete ultra-low power and fast AI Edge Network for vision, audio, olfactory and smart transducer applications”.

Snapshot of the Brainchip share price

The Brainchip share price has gained 860% over the past year.

The company has a market capitalisation of $823 million, and there are presently 1.6 billion shares outstanding.

More reading

• Brainchip (ASX:BRN) share price slides on bigger loss

Motley Fool contributor Gretchen Kennedy 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 Flexiroam Ltd (ASX: FRX) share price was up as much as 35% today. The rise coming after the mobile network operator announced a partnership allowing it to offer Buy-Now-Pay-Later (BNPL) technology.

At the time of writing, the share price did come down from today’s high of 6.9 cents. It is currently sitting at 5.8 cents per share — still up 13.73% on yesterday’s close.

What did Flexiroam announce?

In a statement to the ASX, Flexiroam announced its partnership with Singapore/Malaysian BNPL provider, Split. Flexiroam stated that Split will be offered as a BNPL option via its Flexiroam Wallet product. Customers will be able to make purchases over three interest-free instalments.

However, the offer is only for Malaysian and Singaporean Flexiroam mobile users. The product will be free to download into Flexiroam Wallet. Split will also charge a transaction fee on sales generated.

Words from the executives

Commenting on today’s announcement, Flexiroam managing director, Jef Ong said:

The signing of our agreement with Split is an important development as the BNPL space is rapidly gaining traction in South East Asia…

He added:

[We] see the potential to offer further BNPL options to users outside of Malaysia and Singapore, in the future. Out of the 670 million people in South East Asia, only 27% have bank accounts, which means that there are hundreds of millions of unbanked and underbanked individuals who would require support using non-bank payment methods to purchase our products.

Split CEO, Dylan Tan, also gave his thoughts on today’s announcement, stating:

We are delighted to be offering Split as a payment option on the Flexiroam Wallet and look forward to giving our userbase a budget-friendly way to buy mobile data.

The huge growth of BNPL shares on the ASX

Flexiroam’s latest venture is another addition to the growing list of companies offering BNPL services. Afterpay Ltd (ASX: APT) share price has gone from $2.95 on its initial public offering (IPO) to nearly $120 at the time of writing.  Zip Co Ltd (ASX: Z1P) similarly, has seen remarkable growth. The share price in the company has gone 39 cents just 5 years ago to $10.45 as of writing.

Afterpay has a market capitalisation of $34.1 billion, while Zip’s is $5.8 billion.

Flexiroam share price snapshot

Today’s phenomenal rise is not out of the ordinary for Flexiroam. This time last year, the Flexiroam share price was sitting at 2 cents — a 155% increase. As recently as 8 February this year, shares in the telecom company were trading for as high as 9 cents each.

Flexiroam’s market capitalisation is $29 million.

More reading

• Here’s why brokers like these 2 small cap ASX tech shares
• 5 things to watch on the ASX 200 on Wednesday
• How did WAAAX shares perform this reporting season?
• ASX 200 slides lower, A2 Milk surges, Gold Road sinks
• Why February was a shocker for ASX 200 tech shares

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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) went up today by 0.8% to 6,818 points.

Australian GDP was in focus today as it rose by 3.1% in the fourth quarter of 2020.

Here are some of the highlights from the ASX today.

Rio Tinto Limited (ASX: RIO)

The ASX 200 miner announced today that the Chair Simon Thompson has informed the board will not seek re-election as a non-executive director at the 2022 annual general meeting (AGM).

Sam Laidlaw, senior independent director of Rio Tinto plc, and Simon McKeon, senior independent director of Rio Tinto Limited, will lead the search for Mr Thompson’s successor.

It was also announced that Michael L’Estrange, a non-executive director, will retire from the board at the conclusion of the 2021 AGMs.

Mr Thompson spoke about the company’s successes and failure with the Juukan Gorge rock shelters:

I am proud of Rio Tinto’s achievements in 2020, including our outstanding response to the COVID-19 pandemic, a second successive fatality-free year, significant progress with our climate change strategy, and strong shareholder returns. However, these successes were overshadowed by the destruction of the Juukan Gorge rock shelters at the Brockman 4 operations in Australia and, as Chairman, I am ultimately accountable for the failings that led to this tragic event.

Over the past eight months, we have engaged extensively with investors, government, civil society, indigenous leaders and, most importantly, traditional owners to learn the lessons from Juukan Gorge. We have taken decisive action to address the weaknesses identified in our risk management and governance, while also acknowledging the need to improve our work culture and to rebuild relationships. In January, we appointed a new chief executive, Jakob Stausholm, who has moved swiftly to appoint his new executive team and has identified his key priorities to rebuild the trust that we have lost.

The Rio Tinto share price went up 2% today.

Nine Entertainment Co Holdings Ltd (ASX: NEC)

The Nine share price fell by 1% today.

The diversified media business announced that it has appointed Mike Sneesby as the new CEO, effective 1 April 2021, following the decision of Hugh Marks, the current CEO, to step down.

Who is Mr Sneesby? He has been the CEO of Stan Entertainment since its creation. Mr Sneesby was formerly the CEO of an e-commerce joint venture between Microsoft and Nine Entertainment called Cudo.

The chair of Nine Entertainment, Peter Costello, said:

We are pleased to make such a significant appointment. Under Mike’s leadership, Nine will be able to maintain the strong momentum it has built in audience, subscribers, content, revenue and earnings. Mike is well placed to continue to drive Nine’s transformation as a digitally led business which is actively adapting to meet the contemporary media consumption habits of Australians.

Mr Costello also pointed out that under Mr Mark’s leadership, the market capitalisation of the business grew from $1.3 billion to $5 billion.

Macmahon Holdings Limited (ASX: MAH) and St Barbara Ltd (ASX: SBM)

The two resource-related businesses announced that Macmahon has been selected as the mining contractor for the Gwalia underground gold project.

Macmahon will provide all underground mining services to the mine in Western Australia from May 2021. Those services include mine development, ground support, production drilling and blasting, loading and trucking, shotcreting and paste fill reticulation.

The initial contract term will be for five years, with St Barbara having the option to extend for a further 3-year period. Macmahon estimates that the contract will generate approximately $500 million in revenue over the initial 5-year term, which will require capital expenditure of around $40 million over FY21 and FY22.

Macmahon managing director and CEO Michael Finnegan said:

We are delighted to be selected for the Gwalia operation by St Barbara, a well-established and responded gold producer. We will work very closely with our new client to ensure continuity of operations during the transition period. This new project will make an important contribution to our strategic objective to diversify and expand our underground business.

More reading

• Aussie GDP numbers deliver a nice 3.1% surprise
• These ASX 200 shares are trading at near 52-week highs
• Is investing in ASX shares better than property?
• Why the Nine (ASX:NEC) share price hit another 52-week high
• 2 ASX 200 shares to buy for growth

Motley Fool contributor Tristan Harrison 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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Due to the strong potential returns on offer at the small side of the market, having a little exposure to it can be a good thing for a portfolio. However, not all small caps are investment grade, so investors do need to be careful.

With that in mind, I have picked out two small cap ASX shares that have been named as buys. They are as follows:

Bigtincan Holdings Ltd (ASX: BTH)

Bigtincan is an artificial intelligence-powered sales enablement automation platform provider. Its platform is currently used by 7 of the top 10 companies on the Fortune 500.

Last week Bigtincan released its half year results and revealed that its strong growth has continued in FY 2021. It advised that its annualised recurring revenue (ARR) reached $48.4 million at the end of the half. This was a 50% increase over the prior corresponding period.

Looking ahead, management expects its growth to continue, albeit at a slower rate, in the second half. Management expects to hit the top end of its FY 2021 ARR guidance of $49 million to $53 million.

Another positive was that the company ended the period with a cash balance of $65 million. This gives it plenty of firepower to boost its growth through earnings accretive acquisitions.

Analysts at Ord Minnett were happy with its performance. Earlier this week, they put a buy rating and $1.08 price target on its shares. The broker believes Bigtincan has a long runway for growth in a large addressable market.

SILK Laser Australia Limited (ASX: SLA)

Another small cap ASX share to look at is SILK Laser. It is a laser, skin care, and cosmetic injections company.

SILK has continued its strong growth in FY 2021 despite the pandemic. The company recently released its half year results and revealed a 62% increase in network sales to $44.9 million and a 78% lift in revenue to $30.6 million.

This was driven by strong like for like sales and the addition of four new clinics to its growing network. SILK now has a total of 56 clinics across the country. This is still well short of its current target of 150 clinics.

And thanks to margin expansion, on the bottom line, the company’s net profit after tax came in 305% higher than the prior corresponding period at $4.7 million.

Ord Minnett was also pleased with this result. In response, it retained its buy rating and lifted its price target to $5.06.

More reading

• Here’s why brokers like these 2 small cap ASX tech shares
• Silk Laser (ASX:SLA) share price hits record high on stellar first half growth
• Why Appen, Bigtincan, Humm, & Nanosonics are tumbling lower
• The Bigtincan (ASX:BTH) share price is down 6%, despite strong growth
• These ASX shares are helping this fund manager smash the market

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends BIGTINCAN FPO. The Motley Fool Australia owns shares of and has recommended BIGTINCAN FPO. 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 Nufarm Ltd (ASX: NUF) share price is rallying higher today. At the time of writing, the Nufarm share price was trading at $5.24, up 7.6%. Despite the strong rise in crop protection and seed producers’ share price, no news is out from the company today. 

However, macro conditions for the agricultural sector continue their favourable trend. This is supported by government data and information posted recently.

More money in the pockets of farmers

Today, the lift in the Nufarm share price appears to be centred around the stellar season for farmers.

Yesterday, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) noted that the average income from farming is expected to jump 18% to $184,000.

I come from a farming background myself. So it is a great feeling to see hard work and honest living being rewarded. Especially after a challenging year.

The ABARES 20201 outlook cited a record winter crop in NSW, after years of poor conditions. Furthermore, dairy farm income is projected to increase by 2%.  Lower feeding costs will assist this.

How does all this influence Nufarm? Well, if there are good conditions for crops, and farmers have the money, it’s possible it will be spent on products to protect those crops. Also, if the weather permits, farmers will be buying more seeds to grow their next season of crops.

Nufarm’s share price rebuilding alongside the company

It has been a challenging 12-18 months for Nufarm and its share price. The weather abides by no one and it certainly wasn’t favourable not too long ago. Dry seasons throughout the various locations in which Nufarm operates heavily impacted the business.

Unfortunately, when the rain started coming down, COVID-19 was ramping up. The supply chain impacts of this event meant the company couldn’t meet the demand.

Since then, supply chains have settled and Nufarm has benefitted from the demand. In an update in February, the company reported revenue growth of 46% on the prior 4 months in the Asia Pacific Region. Other operational regions also fared reasonably well with growth.

The Nufarm share price has managed to recover 21% in the last 6 months during the optimal conditions. This places the 12 month gain in share price at 2.4%.

More reading

• All eyes on ASX agriculture shares as farm incomes tipped to grow by 18%
• Why the Nufarm (ASX:NUF) share price finished 7% higher today

Motley Fool contributor Mitchell Lawler 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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Piedmont Lithium Ltd (ASX: PLL) shares were racing higher today following news of a recent court decision involving the company.

At the close of trade today, the Piedmont share price was trading 12.77% higher at $1.06. In earlier trade, Piedmont shares reached an intraday high of $1.085 – a new all-time high for the company.

Let’s take a look at what the company announced.

What did Piedmont report?

In a statement released to the ASX last night, Piedmont announced the Supreme Court of Western Australia had approved its decision to re-domicile in the United States. The planned move is set to take place via a newly formed company, Piedmont Inc, acquiring Piedmont shares.

Piedmont is a dual-listed company – it trades on both the ASX and NASDAQ. The company intends to list the new Piedmont Inc on the NASDAQ. Piedmont Inc will then buy all shares, on both markets, under the scheme.

Shareholders will receive either: one US Chess depository interest (CDI) or one share in Piedmont Inc for every share they own. Shareholder allotment of either CDIs or Piedmont Inc shares will depend on whether they own shares on the ASX or NASDAQ, respectively.

The CDIs can be traded on the ASX when available.

As part of the court’s decision, Piedmont will send a booklet containing all relevant information to shareholders. Owners will then decide whether or not to approve the move. The lithium company will also send the booklet to the ASX for publication.

Due to the COVID-19 pandemic, electronic voting will be available for shareholders.

How has the Piedmont share price been performing?

As previously reported, demand for lithium has been surging in recent months. And higher demand means higher prices. One of the main drivers of this demand is the increasing uptake of electric vehicles, which require the use of lithium in the manufacture of their batteries.

As a result, the Piedmont share price has been going gangbusters. Only six months ago, Piedmont shares were selling at just 9 cents. Investors who bought in at that time would now be sitting on gains of more than 1,000%.

Similarly, the NASDAQ Piedmont share price has also been performing well. It jumped by around 9.5% on today’s news and is up more than 40% in the last five days of trading.

Based on the company’s current ASX share price, it has a market capitalisation of $1.5 billion.

More reading

• Did you know Piedmont (ASX:PLL) and Mesoblast (ASX:MSB) are listed on the NASDAQ?
• The Piedmont (ASX:PLL) share price surged 12% today. Here’s why

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: JXO) is having a fairly nice day today, up 0.82% at the time of writing to 6,818 points. And understandably so. The Australian Bureau of Statistics (ABS) has just released its economic data, including gross domestic product, (GDP) for the quarter ending 31 December 2020. And it was a pleasing read.

The Australian economy grew by 3.1% over the quarter, in what was a nice beat on expectations. AMP Capital analysts had been expecting a lift of 2.5% for the quarter. Therefore, the 3.1% figure is a very healthy number indeed.

The short but sharp coronavirus-induced recession is now firmly in the rear-view mirror. Household consumption was the largest driver of GDP over the quarter, rising a healthy 4.3%. This contributed 2.3% to the total figure of 3.1%. Even so, annual spending in the hardest-hit areas of the economy is still reportedly depressed. Spending on transport services is still down 78.1% per annum. Additionally spending on hotels, cafes and restaurants is still down 29.8% per annum.

Household cash contributes to GDP

But the overall GDP rise was helped by the household savings rate dropping. Significantly, this figure dropped from the historic highs of 22% that we saw in the midst of the 202 lockdowns. Finally landing at 12% for the quarter. That’s a large drop. However, it still puts the savings rate well above the ~5% levels we saw prior to the pandemic.

That leaves plenty of cash in the bank for households that can be used for further consumption. AMP Capital notes that this is positive for household incomes. Especially as the labour market is also improving. On these numbers, AMP Capital is also estimating that Australian GDP will return to pre-COVID levels by the June quarter this year. It is possible these might return even by the end of the current quarter (ending 31 March).

However, it is also noted that the Australian economy is still around 3% below what it would have been without the pandemic.

The state of the states

In terms of individual states, Victoria was the standout performer.  Significantly, it grew 6.8% over the quarter. This, of course, was coming off of a low base. Especially as Victoria was the only state in a rolling lockdown over the previous quarter. Aside from Victoria, Tasmania, and the Northern Territory were the strongest performers, growing 3.3% and 4.1% respectively.

Queensland and New South Wales also had strong growth at 2.9% and 2% apiece. The Australian Capital Territory and South Australia were the laggards, but still managed 0.6% and 1.3% each. Western Australia managed 1.5%.

To conclude, AMP Captial commented the following on today’s numbers:

The positive outcomes in GDP activity are unlikely to shift the dial on the [Reserve Bank of Australia] policy response for now… there is still some spare capacity in the economy as GDP growth would have been much stronger if COVID-19 never happened and the unemployment rate is at least 1% above its pre-COVID levels. So, expect the low interest rate environment to persist over 2021 and 2022 despite the recent back up in bond yields.

More reading

• Is investing in ASX shares better than property?
• 2 ASX 200 shares to buy for growth
• 3 reasons why Brickworks is a great ASX dividend share
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 slides lower, A2 Milk surges, Gold Road sinks

Motley Fool contributor Sebastian Bowen 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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Investors are talking about the 3D MetalForge (ASX: 3MF) share price following yesterday’s initial public offering (IPO) and ASX debut.

Listing at 12noon yesterday, the 3D printing company debuted at 35 cents a share and quickly plummeted 24.29%, closing its first trading day at 27 cents. Despite a minor lift in trading today, the 3D MetalForge share price dropped even lower, trading at 26 cents at the close.

Let’s review what the business does and how the 3D MetalForge IPO went down.

3D MetalForge IPO at a glance

On 21 December 2020, Singapore-headquartered 3D MetalForge Limited lodged a prospectus with the Australian Securities and Investment Commission (ASIC) regarding the company’s IPO and admission to the Australian Securities Exchange, ASX Ltd (ASX: ASX).

According to the prospectus, the company set out to raise a minimum of $8 million and a maximum of $10 million through the issue of shares at an issue price of $0.20 per share under the public offer.

The 3D MetalForge IPO stopped accepting applications from investors after achieving its maximum subscription of $10 million.

So what exactly does 3D MetalForge do?

3D MetalForge specialises in additive manufacturing production, better known as 3D printing. 

The company produces additively manufactured parts at scale and provides a suite of additional business services. These include consulting, engineering, design optimisation as well as printing and production services.

3D MetalForge claims to offer an advanced range of printing equipment. Its Directed Energy Deposition (DED) printers can produce high-quality metal parts of up to 1.5m in size at a speed of up to 750 grams per hour.

Since 2012, the business says it has printed more than 20,000 parts on its 26 printers. The work extends across 1,300 projects for clients in 20 countries.

Looking ahead

Following the 3D MetalForge IPO, the company plans to proceed with its business and expansion strategy. 

This includes expanding the production capacity at its current Additive Manufacturing Centre in Singapore and upgrading its office in Houston to a production centre. 3D MetalForge will also open sales and marketing centres in Australia, the Middle East and Europe.

The Singapore expansion and Houston upgrade are targeted for completion by 30 June 2021. Sales and marketing activities will continue over a 24-month period.

More reading

• Why is the ASX Ltd (ASX:ASX) share price slipping today?
• 5 things to watch on the ASX 200 on Thursday
• How to turn $20,000 into $1 million in 10 years with ASX shares

Motley Fool contributor Gretchen Kennedy 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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ASX dividend shares may be interesting to some income investors right now with how low interest rates are at the moment.

The Reserve Bank of Australia (RBA) official interest rate is now just 0.10%, which means that it’s hard to make a high level of income from some rate-linked investments.

ASX dividend shares may be an answer to grow income, such as these two:

Charter Hall Long WALE REIT (ASX: CLW)

This entity is a real estate investment trust (REIT) that’s managed by Charter Hall Group (ASX: CHC), one of the largest property managers in Australia which runs a variety of property strategies.

A few different brokers rate the Charter Hall Long WALE REIT share price as a buy, such as Citi which has a price target of $5.30.

Charter Hall Long WALE REIT runs a diversified property strategy. It isn’t just about retail properties, office properties or any particular sector.

WALE stands for weighted average lease expiry (WALE), which is how long its tenants are signed up for on the rental contracts.

The ASX dividend share has a portfolio of properties worth around $4.5 billion, with $1.5 billion in long WALE retail, $1.1 billion in industrials and logistics, $1 billion in office buildings, $643 million in telecommunications exchanges and $241 million in agri-logistics.

Some of the tenants at the REIT include Wesfarmers Ltd’s (ASX: WES) Bunnings, Westpac Banking Corp (ASX: WBC), Metcash Limited (ASX: MTS), David Jones, Coles Group Ltd (ASX: COL), Woolworths Group Ltd (ASX: WOW), BP and Telstra Corporation Ltd (ASX: TLS).

Management reaffirmed that the target distribution payout ratio remains at 100% of operating earnings, which is expected to be at least 29.1 cents per security (up at least 2.8%). It was one of the few REITs that grew the dividend in 2020 during the COVID-19-affected year.

At the current Charter Hall Long WALE REIT share price, it has a distribution yield of 6.1%.

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

Soul Patts is the ASX dividend share with the longest dividend growth streak. The investment conglomerate has grown its dividend every year since 2000. Over the last 20 years, total ordinary dividends have grown at a compound average growth rate of 9.2%.

The company is focused on two main elements for shareholders. The first focus is growth in the capital value of the portfolio (measured by growth in the net asset value (NAV)). The other element is steady and growing dividends, paid from cash generation of the portfolio.

It owns a number of different sectors and businesses including telecommunications like TPG Telecom Ltd (ASX: TPG) and Tuas Ltd (ASX: TUA), building products and property with Brickworks Limited (ASX: BKW), resources with Round Oak Minerals and New Hope Corporation Limited (ASX: NHC) and financial services including Bki Investment Co Ltd (ASX: BKI), Pengana Capital Group Ltd (ASX: PCG) and 360 Capital REIT (ASX: TOT).

Some of the ASX dividend share’s recent investment focuses are agriculture and retirement living. In FY20 it invested $150 million into agriculture and it’s looking for more opportunities, current commodities include citrus, macadamias, table grapes, stone fruit and water. Soul Patts said that there’s strong demand globally for good quality Australian food products. The country has a global competitive advantage in agriculture according to management.

Regarding retirement living, it’s continuing to progress the Cronulla development and it’s working with Provectus to examine new opportunities for luxury independent living developments.

At the current Soul Patts share price, it has a grossed-up dividend yield of 2.9%.

More reading

• 3 reasons why Brickworks is a great ASX dividend share
• No ASX dividend share is perfect, but Soul Patts (ASX:SOL) is more perfect than most
• 3 ASX shares that keep growing the dividend every year
• 2 high-yielding ASX 200 shares
• 2 ASX dividend shares rated as strong buys by brokers

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, Telstra Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Wesfarmers Limited, and Woolworths 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 Enero Group Ltd (ASX: EGG) share price is trading lower in late afternoon trade. This comes after the company announced that it has divested Frank PR (Frank) from its brand portfolio. At the time of writing, the marketing and communication services company’s shares are down 1.16% to $2.99.

Let’s take a look at what moved the Enero share price below the $3 barrier today.

Sale of Frank

The Enero share price is in the red after investors appear displeased with the company’s offloading of Frank.

According to its release, Enero advised that it has sold off its 75% interest in Frank. The move was a part of a management buyout. Moreover, the deal was facilitated between Enero and Frank’s management team, chair and founder, Graham Goodkind, and managing director, Alex Grier.

Together, both Mr. Goodkind and Mr. Grier hold the other remaining 25% stake in Frank.

Enero will recognise a non-cash loss of $9.5 million to $10 million from the sale of Frank. This is before the impact of income tax, after receiving a cash consideration payment of $1.5 million for the 75% interest in Frank.

In FY20, Frank delivered $9.3 million in revenue to Enero, representing 6.8% of total group net revenue. More recently, the company reported $4.3 million for the first-half of FY21, reflecting 5.3% of Enero’s total earnings.

Management commentary

Enero Group CEO Brent Scrimshaw commented on the sale. He said:

Enero continues to sharpen its focus on the core agencies of the Group in line with its strategy announced at the 2020 AGM. The Frank sale will provide additional capital to allocate to high growth opportunities across the global network of the Hotwire & Orchard brands along with BMF in Sydney, in addition to future acquisitions that accelerate capability across the Group.

Frank chair and founder Graham Goodkind added:

Enero has been a great owner, shareholder, partner and friend of Frank and the advice and support that we’ve received over the last 14 years has been tremendous.

…I am grateful to Brent Scrimshaw and the Enero board for the way in which they have conducted negotiations and wish the Group every success in the future.

About the Enero share price

Despite today’s fall, the Enero share price has accelerated over the last 12 months, gaining more than 110%. The company’s shares took off strongly at the start of last month from around the $2 mark to almost $3 today.

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Motley Fool contributor Aaron Teboneras 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.

The post Enero (ASX:EGG) share price falls despite being up over 45% in a month appeared first on The Motley Fool Australia.

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