Tag: Motley Fool

The S&P/ASX 200 Index (ASX: XJO) dropped by 0.9% today to 6,778 points.

Here are some of the highlights from the ASX:

Appen Ltd (ASX: APX)

Appen was the worst performer in the ASX 200 today, falling by 12% in response to its FY20 result.

The technology business reported that its revenue increased by 12% to $599.9 million. It said that it had a growing customer base including 136 new customer wins in 2020. There was also a 34% increase in the number of projects with its top five customers. It revealed that China revenue is growing by 60% quarter on quarter.

Appen’s committed revenue increased to 31% of the FY20 second half’s total revenue, up from 12% in the first half.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 8% to $108.68 million. The statutory EBITDA growth was stronger, rising by 23%. The underlying EBITDA margin declined by 70 basis points to 18.1%.

Whilst statutory net profit after tax grew 23% to $50.5 million, underlying net profit only rose by 1% to $64.4 million.

Appen decided to pay a final dividend of 5.5 cents, up 10% on the final FY19 dividend.

The company said that the FY21 year-to-date revenue plus orders is approximately $240 million. It’s expecting FY20 EBITDA to be between $120 million to $130 million, which is growth of 18% to 28% compared to FY20.

Nine Entertainment Co Holdings Ltd (ASX: NEC)

The Nine share price was the best performer in the ASX 200, rising by almost 10% after reporting.

The media company said that revenue was down 2% to $1.16 billion. It said that there was continued audience strength across all key platforms, with a marked improvement in advertisement markets through the second quarter, with strong growth in broadcast video on demand (BVOD) and free to air (FTA).

Whilst revenue dropped, Nine’s group EBITDA jumped 42% to $355.4 million and net profit after tax grew 69% to $177.7 million.

Looking at the broadcast segment, revenue fell 1% but costs declined 15%, leading to a 43% increase in EBITDA to $207.4 million. The EBITDA margin improved by 10.3 percentage points to 33.4%.

It was a similar story for publishing – revenue dropped 9%, but costs fell 17%, leading to EBITDA growth of 27% to $68.1 million. The EBITDA margin improved 7.3 percentage points to 25.9%.

Stan had a particularly strong half-year thanks to subscriber gains. Revenue grew 28% and costs only increased by 10%, leading to EBITDA growing by 161% to $36.5 million. The EBITDA margin increased by 12.5 percentage points to 24.5%. Stan recently launched Stan Sports as an additional plan to attract customers.

The company paid a half-year dividend of 5 cents per share, the same as last year.

Nine said that the advertising market continues to show strength right now, with television in-particular benefiting.

Other movements in the ASX 200

Looking at the green end of the share market, the Idp Education Ltd (ASX: IEL) share price rose 7.2% after reporting its result. The bronze medal went to the Platinum Asset Management Ltd (ASX: PTM) share price, rising by 6.4% after revealing its report.

At the red end of the ASX, the Nanosonics Limited (ASX: NAN) share price dropped 8.1% after reporting. The SEEK Limited (ASX: SEK) share price went down another 7.8% after revealing the sale of a large part of its Zhaopin stake.

More reading

• Here’s why the Clearview Wealth (ASX:CVW) share price rose 3% today
• Why is the Telstra (ASX:TLS) share price falling today?
• Top brokers name 3 ASX shares to buy today
• Why Appen, Bigtincan, Humm, & Nanosonics are tumbling lower
• Maggie Beer (ASX:MBH) share price surges on 20% sales growth

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd, Idp Education Pty Ltd, and Nanosonics Limited. The Motley Fool Australia has recommended Nanosonics Limited and SEEK Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post ASX 200 drops, Appen sinks, Nine jumps appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3pOQCiO

The FINEOS Corporation Holdings PLC (ASX: FCL) share price will be on watch tomorrow after the insurance software business released its FY21 half-year result. It also announced a new contract.

The FY21 half-year numbers

FINEOS told investors that its half-year revenue increased by 30.1% to €52.6 million. This was made up of 20.1% organic growth and 10% growth from acquisition.

Software revenue was €19.1 million. There was organic subscription recurring revenue growth of 35.1% year on year, or 51.5% growth including the contribution from a US acquisition called Limelight Health (LLH) which was acquired in August 2020. Initial license fee (ILF) revenue was down 16.8% to €1.5 million, reflecting a run off of the old pricing model revenue.

Services revenue was €33.4 million in the first half of FY21. There was organic services revenue growth of 15.9%, or 23.3% growth in the contribution from LLH.

Gross profit rose by 20.1% to €33.8 million.

The company reported that its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 42.8% to €5.1 million and its statutory EBITDA fell 53.6% to €3.2 million.

FINEOS showed that there was a sizeable increase in its various spending categories including research and development (up 29.9%), sales and marketing (up 41.2%), cloud operations and support (up 434.7%) and general and administration (up 116.2%). The company explained that it continues to invest for growth and some of the expenses increased because of the higher headcount (up 40.8% to 1,043) after the LLH acquisition, as well as some one-off costs.

The company reported an underlying loss after tax of €2.5 million and a statutory net loss after tax of €5.1 million.  

Recent FINEOS share price movements

Over the last year the FINEOS share price is up around 15.7%. However, over the last six months the FINEOS share price has dropped almost 25%. 

FY21 outlook

FINEOS is expecting the FY21 revenue contribution to be in the range of €102 million to €105 million, after the foreign currency exchange impact.

The company reaffirmed its guidance of 30% growth in subscription revenue, that’s before the contribution from LLH which is expected be approximately €4 million of subscription revenue in FY21.

The company also announced a new client in ANZ, representing the first in the region to feature on the FINEOS platform in the cloud.

New contract win

FINEOS said that Partners Life has selected the FINEOS platform for life insurance and medical claims after looking at a number of options.

The company said that the contract is a small-sized 5-year initial term software as a service (SaaS) contract. The expected revenue is already factored into the guidance.

Partners Life chief claims officer Tracey Lonergan said:

“It was important that the provider had the capability, experience and infrastructure to deliver and support a claims management system that would integrate into the Partners Life ecosystem. Also important to us was that the selected vendor come with a strong record of successful implementations and strong support of its claims management system within the New Zealand and Australian life and health insurance industry. FINEOS met those requirements. Our initial collaboration has been extremely positive, and we envisage that the project will deliver high quality results.

More reading

• 3 ASX shares rated as strong buys by brokers
• 3 ASX shares rated as strong buys by brokers

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

The post FINEOS (ASX:FCL) share price under spotlight with HY21 report, new contract win appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3uq2xa9

The Smartgroup Corporation Ltd (ASX: SIQ) share price dipped 2.1% lower today after the salary packaging and fleeting management provider reported its 2020 full year results.

Due to multiple factors impacting the company’s performance during 2020, most stemming from COVID-19, most metrics fell compared to the prior year. Subsequently, some shareholders appear to have been disappointed by the result.

The Smartgroup share price closed at $6.89 today.

What moved the Smartgroup share price today?

Salary packaging and high unemployment

Indeed, the two don’t go particularly well together. For much of 2020, the unemployment rate was above the average experienced throughout 2019. Due to this unprecedented period of COVID-induced redundancies and closures, demand for salary packaging was certainly impacted.

Compared to prior years, Smartgroup’s salary packaging customer numbers did not experience the same level of organic growth. However, the company did onboard a new health client in late 2020, resulting in an additional 3,500 packages, and added to the novated leasing panel for 4 government departments.

Speaking of novated leases, volumes of the vehicle leasing arrangement fell by 14% compared to the prior year as a result of the economic disruptions.

All of this equates to total group revenue declining by 13% to $216.3 million. On the bottom line, net profit after tax was impacted by 25%, falling to $22.9 million.

How is Smartgroup positioned now?

Smartgroup’s cash position at the end of December 2020 was $27.4 million. This is a decrease from $39.6 million at the end of 2019. However, it is worth noting that the company’s borrowings reduced from $60.4 million to $24.7 million. This places Smartgroup in a better position with respect to its debt leverage.

The company also achieved $4 million of annual cost savings following a restructure of its operational workforce.

Smartgroup remains optimistic on its 2021 outlook. The company noted its recent win of another health client, adding another 8,000 salary packages.

The company has also declared a fully franked final dividend of 17.5 cents per share, as well as a fully franked special dividend of 14.5 cents per share.

CEO Tim Looi provided the following statement on the full-year results:

As the pandemic took effect, we moved quickly to focus on providing high quality service to our customers remotely and implementing cost containment measures. This, combined with our simplification program, resulted in a good operational and financial performance for the year

The Smartgroup share price has fallen 5% in the last year. That means the S&P/ASX 200 Index (ASX: XJO) outperformed the company, with a fall of 1.3% over the same period.

More reading

• 3 forgotten ASX stocks left behind in the car sales recovery

Motley Fool contributor Mitchell Lawler owns shares of SMARTGROUP DEF SET. The Motley Fool Australia has recommended SMARTGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Smartgroup (ASX:SIQ) share price hit by 25% fall in profit appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3kjdnKD

The Service Stream Limited (ASX: SSM) share price could come under pressure on Thursday.

This afternoon the essential network services company released its half year results after the market close.

How did Service Stream perform during the first half?

Service Stream had a difficult six months and this was reflected in its results for the first half of FY 2021.

On the top line, the company posted a 17.7% reduction in revenue to $409.9 million.

This was driven by a small increase in Utilities revenue to $199.6 million and a 30% decline in Telecommunications revenue to $209.9 million. The latter was due to the conclusion of the NBN construction program last year and lower activation volumes. Wireless revenue also continued to track below expectations due to the slow ramp up of 5G expenditure.

This ultimately led to a 40.5% decline in first half net profit after tax to $16.2 million.

Positively, the company reported a strong cash flow result for the half year. It notes that its EBITDA to OCFBIT conversion ratio came in at 108%. This left it with a closing net cash balance of $10.5 million. This comprises cash-on-hand of $50.5 million and borrowings of $40 million.

However, in light of its profit decline, the Service Stream Board was forced to cut its fully franked interim dividend. It has reduced it by 37.5% to 2.5 cents. This will be payable to eligible shareholders on 14 April.

Outlook

Management has warned that the second half could be just as tough as the first. It expects COVID-19 related and client-initiated delays to work programs and shortages across client supplied materials, coupled with restrictions on movement and interstate travel bans, to continue for the reminder for the year.

In light of this, the higher contribution management had expected in the second half is unlikely to materialise. As such, it advised that it now expects the second-half result to be approximately in-line with the first half.

Management is, however, more positive on its long term prospects. It concluded:

“Whilst these results are subdued, the business continues to demonstrate strong fundamentals and has benefitted from our strategy to progressively diversify across critical utility infrastructure markets and to expand our service offerings.”

“These markets are well understood by Service Stream, and hold positive long-term outlooks associated with increased urbanisation and consistent expenditure associated with maintaining and upgrading critical infrastructure.”

“The business has a strong pipeline of organic growth opportunities linked to our core markets, and will continue to adopt a measured approach to assessing potential external growth opportunities, ensuring they will enhance the Group’s long-term performance.”

More reading

• These are the 10 most shorted shares on the ASX
• These are the 10 most shorted shares on the ASX
• ASX 200 Weekly Wrap: RBA unleashes ASX’s inner animal
• These were the worst performing ASX 200 shares last week
• ASX 200 rises, Worley dumped, Mesoblast rises

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

The post Why the Service Stream (ASX:SSM) share price could come under pressure on Thursday appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2ND4BuN

The Macquarie Telecom Group Ltd. (ASX: MAQ) share price will be on watch tomorrow after the telecommunications business released its FY21 half-year result.

This is a diversified technology business. It generates earnings from data centres, cloud, cybersecurity and telecommunications. The clients are mid to large business and government customers.

How did Macquarie Telecom do in the FY21 half-year result?

Looking at the top line, revenue increased by 9% to $143.6 million.

All business units grew revenue. Macquarie Telecom said that it achieved particularly strong growth in cloud services and government. It also revealed that the data centres business has sold 10MW of IT load to a leading corporation. The company boasted that hosting revenue has grown revenue at a compound annual growth rate of 22.3% over the last three years.

Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 15% to $36.4 million. Cloud services and government EBITDA grew the most, rising by 33.3% to $18 million, whilst the telecommunications EBITDA fell 3.2% to $9.1 million. Data centres EBITDA grew almost 7% to $9.3 million.

Macquarie Telecom highlighted that the EBITDA margin for the overall business has improved from 19.6% in the first half of FY18 to 25.3% in the first half of FY21.

Net profit after tax (NPAT) went up 5% to $7 million. The company generated total operating cash flows of $13.6 million during the half-year.

The telecom business continues to migrate services to the NBN in line with its plan and expects to complete this by late 2021.

Investing for growth

The company said that its data centre in Canberra (Intellicentre 5 – IC5) was completed on time and on budget. The Intellicentre 3 East (IC3 East) is on budget and will achieve practical completion in March 2021.

Capital expenditure for the first half of FY21 was $32.9 million, excluding IC3. Customer growth capex was $13.9 million, up 20%, reflective of its continued data centre sales success and product mix, according to the company.

The company said it has drawn down $93.5 million of debt to support its data centre developments in IC3 East and Intellicentre 5 South Bunker in Canberra.

Commentary from the CEO

Macquarie Telecom CEO David Tudehope said:

Macquarie’s 20-year strategy of investing in world-class data centres is based on strong demand for data centre capacity as customers migrate to cloud and co-location services. The win, of the 10MW of IT load sold to a leading corporation, recognises the world class investment we have made in the Macquarie Park Data Centres Campus in Sydney’s North Zone.

Macquarie Telecom share price recent performance

Over the last year the Macquarie Telecom share price has risen by 77% over the last year. However, since the start of 2021, the Macquarie Telecom share price has been largely flat so far. 

Macquarie Telecom Outlook

The company said that FY21 EBITDA is expected to be approximately $72 million to $75 million.

It also revealed that the telecom division continues to win customers from legacy data and IP carriers with its NBN and SD WAN solution.

Total capex is expected to be between $57 million to $66 million, excluding IC3. The IC3 expenditure is expected to be between $123 million to $126 million.

More reading

• Why the Service Stream (ASX:SSM) share price could come under pressure on Thursday
• Why you should think long-term when investing
• The Singular Health (ASX:SHG) share price launched 27% higher today
• What on earth happened with the Payright (ASX:PYR) share price today?
• NEXTDC (ASX:NXT) share price on watch after strong half and guidance upgrade

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.

The post Macquarie Telecom (ASX:MAQ) share price on watch with more growth in HY21 appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3qTaL8s

“How many millionaires do you know who have become wealthy by investing in a savings account ?” – Robert G Allen. 

 

Putting money away into a savings account means gains are guaranteed. But it can also mean investment returns are minimised.

Interest rates are at all-time lows so returns on savings accounts are minimal. A savings account is a good place for an emergency fund, but it won’t provide an outsize potential upside.

That’s where share market investing comes in. But share market investing is not a short-term game. It can take time to grow your portfolio. And thanks to the impact of compounding returns, growth can be impressive. 

Think the long game

One key to successful investing is to allow returns to compound over time. This means reinvesting the money that you earn on your investments. If you gain interest on a savings account, you leave that interest in the account and start earning interest on your interest.

With ASX shares, you can reinvest dividends into more ASX shares. This means over time, as your returns earn returns, the overall size of your investment can grow exponentially. The key thing to note is that the impact of compound returns increases over time. 

This means that you have to be willing to be patient when investing. It can take time for investments to pay off, and some may fail. This is why it is important to spread investments across a variety of ASX shares (and other asset types, if applicable).

Doing this is known as diversifying. Many investors spread their investments across dividend shares such as Coles Group Ltd (ASX: COL) or BHP Group Ltd (ASX: BHP), as well as growth shares such as Afterpay Ltd (ASX: APT). Because you can’t predict the future, diversification means that you don’t have all your eggs in one basket. 

Short-term pain for long-term gain

Compounding works to magnify returns on investment as interest is earned on interest. Over time this can have a significant impact on portfolio value.

By re-investing your investment earnings instead of spending them, you can start to build a larger overall portfolio. This may be painful in the short-term, but it can pay off in the long term with bigger overall returns.

That’s why it pays to think long-term when investing. 

More reading

• The IOUpay (ASX:IOU) share price is skyrocketing 30% today
• What’s happening with ASX 200 tech shares today?
• 2 high quality ASX dividend shares to buy now
• ASX 200 goes higher, Afterpay sinks, Adbri impresses
• Why the Afterpay (ASX: APT) share price is down 8% today

Motley Fool contributor Kate O’Brien owns shares of BHP Billiton Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO and COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why you should think long-term when investing appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3bAlHBr

The Singular Health Group Ltd (ASX: SHG) share price took flight today, increasing by 27.2% to 51.5 cents a share. However, the recently listed medical imaging technology company had no news out today.

Singular Health has gained a spot on plenty of watchlists over the last couple of weeks. It might be worth recapping what all the fuss is about.

What does Singular Health offer?

The proprietary technology developed by Singular Health enables the viewing of a 3D image, which is compiled of 2D medical images. More specifically, this technology is the company’s volumetric rendering platform.

Singular Health notes that this technology provides immersive viewing across a range of medical applications. Such applications include orthodontics, maxilla-facial surgery, oncology, general surgery, and orthopedics.

In addition to this, MedVR is Singular Health’s product which allows the viewing of scans through an interactive virtual reality experience.

The company derives its revenue from both initial hardware sales and subscription payments on an on-going basis for the use of software, commonly referred to a software-as-a-service (SaaS).

Recent Singular Health developments affecting the share price

With Singular Health being a small and upcoming player in a fairly competitive space, shareholders would be looking for progress. On Monday, shareholders got exactly that. The company announced that it had received a purchase order totalling $170,000 for development of GeoVR software.

The order was received from FlowCentric Technologies, with which Singular Health is also in the process of finalising a joint venture. The purchase order will enable FlowCentric to conduct a pilot program using Singular Health’s GeoVR software.

You might be thinking, well this a world away from medical imaging. And you’d be correct. But the volumetric rendering technology developed by Singular Health spans multiple use cases. In this instance, it will be used to develop a commercially viable product that utilises imaging and predictive technologies for mining and exploration.

FlowCentric currently services over 350,000 users with its business process management software. These include a number of global resource companies.

For further progress on the medical imaging front, shareholders will have to wait a little longer to see that play out.

More reading

• Why the Singular Health (ASX:SHG) share price is shooting 10% higher
• The Singular Health (ASX:SHG) share price is now up 140% since its IPO
• Singular Health (ASX:SHG) share price rockets 100% higher following IPO
• Why Novonix, Recce, Singular Health, & Starpharma shares are storming higher
• Singular Health (ASX:SHG) shares arrive on the ASX

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.

The post The Singular Health (ASX:SHG) share price launched 27% higher today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/37Hje7s

The Payright Ltd (ASX: PYR) share price certainly had a rather strange day today. Payright shares opened at 97 cents this morning after closing at 96 cents a share yesterday.

But soon after open, investors lit a rocket under the Payright share price, pushing it up to a high of $1.06 (a 10.43% rise). However, the share price subsequently cooled off, but still ended the day at $1.02 a share. That’s a rise of 5.73%.

Since we’re in the middle of the ASX earnings season, you might assume that this sharp bump might be due to Payright reporting its financial results. But you’d be wrong. 

The company last gave a market update on its business back on 15 January. And that was a quarterly business update. Indeed, there has been no major news out of this company since 3 February. That was when Payright detailed a loan facility that the company has entered into.

So what’s going on?

Well, it’s not exactly clear. Payright is an ASX buy now, pay later (BNPL) company. It provides higher-value BNPL services on the more expensive products that the ‘mainstream’ BNPL providers like Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) don’t cover.

It’s been growing at a healthy pace to be sure. Back in that quarterly update in January, Payright told investors that its gross merchandise value came in at $20.6 million, which was up 28% on the prior quarter. It also grew its customer base by 13% over the same period.

But the markets already knew that.

Could today’s lift be put down to speculation? That wouldn’t be a new scene that Payright investors. Just last week, the company got a ‘speeding ticket’ from the ASX after its shares raced 32% higher in one day, for no apparent reason at all. We saw a similar phenomenon occur in other ASX fintech and BNPL companies. That included Zip Co, as well as Novatti Group Ltd (ASX: NOV) and Douugh Ltd (ASX: DOU).

About the Payright share price

At today’s close, the Payright share price gives the company a market capitalisation of $90.44 million. Although the shares have given investors a lot of substantial gains over the past week or so, the current share price is actually the same as the price that Payright IPOed at back in December.

More reading

• Payright (ASX:PYR) shares get speeding ticket after 32% surge

Sebastian Bowen 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.

The post What on earth happened with the Payright (ASX:PYR) share price today? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/37ZxKHR

All eyes will be on the NEXTDC Ltd (ASX: NXT) share price on Thursday.

This afternoon the data centre operator released its half year results following the market close.

How did NEXTDC perform in the first half?

NEXTDC was a very strong performer during the first half thanks to the accelerating shift to the cloud. This has led to a sharp increase in demand for capacity at its data centres.

For the six months ended 31 December, NEXTDC reported a 27% increase in data centre services revenue to a record $121.6 million.

This was underpinned by a 33% lift in contracted utilisation to 71MW, a 16% lift in customers, and a 16% rise in interconnections.

In respect to earnings, NEXTDC delivered a 29% increase in earnings before interest, tax, depreciation and amortisation (EBITDA) to $65.7 million.

Also growing very strongly was its operating cash flow, which increased 219% over the prior corresponding period to $64.1 million.

This left NEXTDC with liquidity of $1.8 billion at the end of the period.

Management commentary

NEXTDC’s Chief Executive Officer and Managing Director, Craig Scroggie, was very pleased with the half.

He commented: “We are pleased to deliver another record result in 1H21, against a more difficult economic backdrop due to the COVID-19 global pandemic. Despite lockdowns and travel restrictions the Company delivered its largest historical contracted build capacity for customers in 1H21.”

“Whilst COVID-19 has presented headwinds for many globally, it continues to be a positive catalyst for digital services and technology providers supported by our data centre platform.”

Guidance upgrade

This strong first half and the favourable trading conditions has led to NEXTDC upgrading its guidance for FY 2021. This could be a big positive for the NEXTDC share price tomorrow.

Based on current billing and contracted utilisation levels, as well as expected new customer contracts, the company now expects full year data centre services revenue in the range of $246 million to $251 million. This compares to previous guidance of $242 million to $250 million.

Whereas underlying EBITDA is now forecast to be in the range of $130 million to $133 million. This is an increase from its previous guidance of $125 million to $130 million. It will also be a 19.5% to 24.3% increase on FY 2020’s underlying EBITDA.

NEXTDC’s capital expenditure guidance remains unchanged at $380 million to $400 million.

Mr Scroggie concluded: “During 1H21 we delivered our largest construction and development backlog of sold capacity to customers on time, on budget, giving us a high degree of confidence for a full year revenue and EBITDA upgrade. Second half sales in FY21 have already exceeded our expectations and we expect further strong demand for our premium data centre services into FY22.“

The NEXTDC share price is up 46% over the last 12 months. Shareholders will be hoping this strong result drives it even higher tomorrow.

More reading

• 3 of the best ASX shares you can buy right now
• Is HyperOne listed on the ASX?
• 2 ASX tech shares to buy for cloud computing exposure
• Millionaire maker! Rent.com.au (ASX:RNT) share price now up 300% in a week
• ASX stock of the day: Rent.com.au (ASX:RNT) shares explode 218%

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

The post NEXTDC (ASX:NXT) share price on watch after strong half and guidance upgrade appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3sqr6BQ

The Autosports Group Ltd (ASX: ASG) share price finished 7.3% down for the day at the closing bell. Early in trade, the automotive dealership owner provided its half-year results to the market.

It appears expectations were higher than what was delivered. The Autosports share price declined throughout the day, closing at $1.90.

What was moving the Autosports share price today?

It’s good, but concerns linger

Following a crippling crunch during the peak of COVID-19 shutdowns, Autosports had regathered itself with new-found demand. Due to the implications of the pandemic, people were concerned about public transparent, and others developed a desire to travel locally. These catalysts help lift the car market overall.

According to Vfacts data, December 2020 witnessed a growth of 13.5% in new car sales compared to December 2019.

All of these indicators point towards a great tailwind for Autosports, and so the share price ran to multi-year highs. Yesterday marked a new 52-week high for the share price, at $2.05. Hence, all this exuberance came with high expectations.

So, the results are in – total revenue grew by 7.8% to $903.7 million. This is despite a $48 million impact due to lockdowns in Victoria. Earnings before interest, tax, depreciation, and amortisation (EBITDA) pleasantly increased by 50.4% to $56.2 million. New vehicle sales outperformed used vehicle sales, with an increase of 22.3% compared to a decrease of 7%.

Flowing through to a bottom-line net profit after tax (NPAT) of $16 million. Autosports NPAT was a significant improvement on the $49.9 million loss in the prior period.

As a result of the profit, Autosports declared a dividend of 2 cents per share payable to shareholders.

Shareholders might remain concerned about the 4 dealerships and 2 collision repair sites generating 14% of ASG’s revenues being impacted. Lockdowns have resulted in a 30% reduction in revenues in Victoria compared to the prior period.

Supply and demand rebalancing?

The growth in revenue has largely been a story of supply and demand for many car dealerships. Demand had lifted due to the circumstances, and supply had been capped due to logistics being impacted.

Shareholders may be asking the question then, what happens when the demand returns to historical averages and supply chains get back on track. It’s a warranted question considering the vaccine rollouts and the promise of a ‘normal’ to return once more.

For now, Autosports has advised that January trading has been above expectations. However, revenue growth will be constrained by new vehicle supply.

More reading

• Why the Autosports (ASX:ASG) share price just smashed its 52-week high

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.

The post Why the Autosports (ASX:ASG) share price tumbled 7% today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3aLtFbY