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High-performing fund manager Wilson Asset Management (WAM) has revealed two ASX shares that it rates as buys within the WAM Research Limited (ASX: WAX) portfolio.

WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Leaders Ltd (ASX: WLE).

One of the LICs is called WAM Research, which looks at smaller businesses on the ASX.

WAM describes WAM Research as a LIC that invests in the most compelling undervalued growth opportunities in the Australian market.

The WAM Research portfolio has delivered gross returns (that’s before fees, expenses and taxes) of 15.7% per annum since the strategy changed in July 2010, which is superior to the S&P/ASX All Ordinaries Accumulation Index return of 8.9% per annum.

These are the two ASX shares that WAM outlined in its most recent monthly update:

Inghams Group Ltd (ASX: ING)

The focus of WAM Research this month was two food businesses. The first one, Inghams, is the largest chicken business in Australia and also in New Zealand. It supplies major retailers, food service distributors and wholesalers with chicken, turkey, stock feed and dairy feed.

WAM explained that the volume of demand for chicken and poultry products has remained high across Australia. The fund manager said that the price of chicken is more affordable compared to other protein sources like seafood and red meat.

One of the biggest costs for Inghams is the chicken feed, so the recent record crop in Australia is leading to higher grain volumes and could lower costs for the ASX share over the medium-term.

In November 2020, the company gave a trading update that said trading volumes in the first quarter of FY21 were up 6.3% year on year and up 7.5% quarter on quarter. There was growth in both Australia and New Zealand.

Bega Cheese Ltd (ASX: BGA)

Bega Cheese is the other business covered by WAM Research in the update.

WAM said that Bega is Australia’s leading dairy and food company, producing 236,000 tonnes of dairy products each year.

The fund manager is attracted to Bega’s shift of its production and volume to higher up the dairy value chain, which reduces the risks associated with commodity markets.

The acquisition of Lion Dairy & Drinks will double Bega’s annual revenue to $3 billion, strengthening the ASX share’s market position in the dairy market. It will also lead to a big increase of the Bega distribution network.

Lion Dairy & Drinks manufactures and sells many household brands in Australia including Dare, Farmers Union, Big M, Dairy Farmers, Yoplait and Pura. In the twelve months prior to September 2020, Lion Dairy & Drinks generated normalised earnings before interest, tax, depreciation and amortisation (EBITDA) of $56 million, excluding synergies.

Bega is expecting to be able to find at least $41 million of synergies per annum, primarily from milk network optimisation, indirect procurement and a corporate reorganisation. It’s expecting double digit earnings per share (EPS) accretion in FY22.

More reading

• The latest ASX shares upgraded by brokers to “buy” during the reporting season
• These are the 10 most shorted shares on the ASX
• Wilson Asset Management (WAM) thinks these 2 ASX shares are a buy
• Here are the 10 most shorted shares on the ASX
• Here are the 10 most shorted shares on the ASX

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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With the Reserve Bank recently reiterating that it doesn’t believe conditions will allow for a rate increase until 2024 at the earliest, it appears likely that low interest rates are here to stay for some time to come.

But don’t worry, because there are plenty of ASX dividend shares that can help you overcome low rates. Two that are highly rated are listed below:

Aventus Group (ASX: AVN)

The first ASX dividend share to look at is Aventus. It is the largest fully-integrated owner, manager, and developer of large format retail centres in Australia. It has a portfolio of 20 centres and a diverse tenant base of 593 quality tenancies. From these, national retailers such as ALDI, Bunnings, and Officeworks represent ~87% of the total portfolio.

One broker that is a fan of the company is Goldman Sachs. It currently has a buy rating and $2.79 price target on its shares. It notes that almost two-thirds of its tenants are exposed to the household goods sector, which has been performing strongly during the pandemic. Goldman also believes its bulky goods homewares tenant base is a natural resistance to online sales penetration.

The broker estimates that it will pay a ~16.5 cents per share distribution this year. Based on the current Aventus share price, this represents a 6% yield.

Telstra Corporation Ltd (ASX: TLS)

Another ASX dividend share to consider is Telstra. This telco giant has been tipped as a buy thanks to its improving outlook. This is being driven by its T22 strategy, the arrival of 5G internet, and its plan to split into three separate businesses.

The latter is expected to allow Telstra to take advantage of potential monetisation opportunities and unlock value for shareholders.

Goldman Sachs is also a fan of Telstra and recently reiterated its buy rating and lifted its price target to $4.00. The broker remains positive on its outlook and continues to forecast a 16 cents per share fully franked dividend for the foreseeable future. Based on the current Telstra share price, this will mean a 4.8% dividend yield.

More reading

• Telstra (ASX:TLS) full year dividend for 2021 expected to be 16 cents per share, fully franked
• Morgan Stanley: ASX earnings season is topping expectations
• 3 reasons the Telstra (ASX:TLS) share price is storming higher
• ASX 200 Weekly Wrap: ASX cools on earnings reality check
• 2 high quality ASX dividend shares with generous yields

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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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On Wednesday the S&P/ASX 200 Index (ASX: XJO) was out of form and ended its winning streak. The benchmark index fell 0.45% to 6,885.2 points.

Will the market be able bounce back from this on Thursday? Here are five things to watch:

ASX futures pointing lower

It looks set to be another tough day for the Australian share market on Thursday. According to the latest SPI futures, the ASX 200 is expected to open the day 23 points or 0.35% lower this morning. This follows another mixed night on Wall Street, which in late trade sees the Dow Jones up 0.2%, the S&P 500 down 0.2%, and the Nasdaq down 0.8%.

ANZ update

Hot on the heels of the Westpac Banking Corp (ASX: WBC) update on Wednesday, today it is the turn of Australia and New Zealand Banking GrpLtd (ASX: ANZ) to hand in its report card. Westpac impressed the market with its strong first quarter performance and the reversal of COVID-19 related bad debt charges. ANZ shareholders will be hoping for the same this morning.

Oil prices push higher

It could be a good day for energy producers such as Oil Search Ltd (ASX: OSH) and Santos Ltd (ASX: STO) after oil prices pushed higher. According to Bloomberg, the WTI crude oil price is up 1.4% to US$60.82 a barrel and the Brent crude oil price is up 1.3% to US$64.13 a barrel. Oil prices are being supported by supply disruptions in Texas falling a winter snap.

Gold price sinks again

Gold miners Northern Star Resources Ltd (ASX: NST) and Resolute Mining Limited (ASX: RSG) could come under pressure again today after the gold price dropped again. According to CNBC, the spot gold price fell 1.4% to US$1,773.40 an ounce. A stronger US dollar and rising US treasury yields are weighing on the safe haven asset.

CSL half year results

The CSL Limited (ASX: CSL) share price will be on watch this morning when it releases its half year results. According to CommSec, the biotech giant is expected to report a net profit after tax of US$1.4 billion and declare an interim dividend of 97 U.S. cents. All eyes will be on its outlook and particularly its comments regarding challenging plasma collections. As these are a vital ingredient in many key therapies, there are concerns that input costs could rise and weigh on margins.

More reading

• ASX 200 dips, EML soars after reporting, Appen sinks
• 3 fantastic ASX shares to buy for strong returns
• 2 high-yielding ASX 200 shares
• Westpac (ASX:WBC) share price jumps after Q1 54% profit growth
• ASX 200 down 0.5%: Domino’s delivers, Westpac impresses, Coles sinks

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. 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: XJO) fell by around 0.5% today to 6,885 points.

It was one of the busiest days of reporting season so far, with some major movements in both the gains and declines sections of the market.

Here are some of the highlights from today:

EML Payments Ltd (ASX: EML)

The EML share price was the best performer in the ASX 200 today after it reported its FY21 half-year result.

It reported that gross debt volume (GDV) increased by 54% to $10.2 billion, which drove revenue higher by 61% to $95.3 million.

The earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 42% to $28.1 million and underlying net profit rose 30% to $13.2 million. The ASX 200 share also reported underlying operating cash inflows grew by 68% to $35.1 million.

EML re-instated its EBITDA guidance range, it’s expecting EBITDA to be between $50 million to $54 million (up 48% to 56%) for FY21 whilst underlying net profit is expected to be between $30 million to 33.5 million (up 25% to 40%).

The company ended the period with $136.5 million of cash.

Webjet Limited (ASX: WEB)

The Webjet share price rose by 5% today after the travel business reported its FY21 half-year result.

The ASX 200 travel business reported that its total transaction value (TTV) was down 89% to $267 million because of COVID-19 impacts. Revenue declined by 90% to $22.6 million.

A focus on expenses and reducing the cash burn saw underlying costs fall 52% to $62.7 million. The monthly cash burn is down to $4.8 million, the company had a cash balance of $283 million.

Reducing costs by around half wasn’t enough to stop underlying EBITDA plunging to a loss of $40.1 million. The underlying net loss was $60.5 million, with the statutory net loss being $132.2 million which included a number of non-cash items.

Webjet revealed that its online travel agency (OTA) business has returned to profitability due to its focus on the domestic leisure market and the ability to utilise its variable cost base.

Rio Tinto Limited (ASX: RIO)

The big ASX 200 miner reported its FY20 result this afternoon.

It reported that it generated US$15.9 billion of net operating cashflow, an increase of 6%. Rio Tinto also made US$9.4 billion of free cashflow, up 3%. Net earnings rose 22% to US$9.8 billion.

The high level of profit and cashflow allowed Rio Tinto to declare a 26% increase to the annual dividend to US$5.57 per share. It also declared a special dividend worth US$0.93 per share for investors. Including the special dividend, the FY20 dividends represented a 72% dividend payout ratio.

Rio Tinto was also able to reduce its net debt by US$3 billion to US$0.7 billion during the year.

Heavy declines in the ASX 200

There were some big declines today in the ASX 200.

The worst performer was the Zip Co Ltd (ASX: Z1P) share price which fell 14% after yesterday’s price query from the ASX.

Gold miner Evolution Mining Limited (ASX: EVN) suffered a 10% share price decline after reporting its result.

The Appen Ltd (ASX: APX) share price fell more than 9% after it was on the receiving end of a negative broker report.

More reading

• Share prices of travel shares soar, Corporate Travel (ASX:CTD) and Webjet (ASX:WEB) report
• Webjet (ASX:WEB) share price soars to 5% increase in late trade
• Rio Tinto (ASX:RIO) share price on watch after announcing special dividend
• Here’s why the Appen (ASX:APX) share price is sinking
• 2 high-yielding ASX 200 shares

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends EML Payments. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended EML Payments. 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 Eagers Automotive Ltd (ASX: APE) share price could be on watch tomorrow, following the circulation of plans to start selling cars at shopping centres and airports. The car sales conglomerate, formerly known as AP Eagers, closed down 2.2% today at a price of $13.87.

Cars in a mall, get ready for it

Reportedly, the Eagers conglomerate that delivered 10% of new cars sold in Australia last year plans to open showrooms in shopping centres by the end of this year. Multiple stores are being removed and made way for the supermarket-sized display area expected at the Indooroopilly shopping centre.

On top of this, Eagers will also begin construction of a 90,000 square metre complex near the Brisbane airport that will be accompanied by a 2.5-kilometre test track. The mega facility will also have over two dozen showrooms and service centres. This development would be one of the biggest in the world.

The airport facility is anticipated to be operational in 2023, with preparations already underway to begin construction.

The rationale behind this new approach explained by COO, Keith Thornton, is to engage potential customers in new ways in a stress-free environment. Adding, “The great thing about a shopping centre showroom is our customers are already going there.”

A shift in shopping centre utilisation

Following the aftermath of COVID-19 on traditional bricks-and-mortar stores, as well as the continued digitisation of shopping in general, businesses are finding new ways to adapt. It is becoming a common theme that shopping centres are shifting towards a more experiential destination.

Many shoppers probably weren’t thinking of trying their next car as part of the new mall experience, but who’s complaining?

AP Eagers share price snippet

It has been a solid 12 months for Eagers shareholders, witnessing the share price rise 51.4% over the period. It hasn’t been without its nail-biting times though. Shares in the auto group fell to a 52-week low of $2.50 in March, before steadily climbing to today’s $13.87 price point.

The company’s market capitalisation is now $3.64 billion.

More reading

• ASX 200 down 0.3%: Crown CEO hasn’t resigned, Mirvac update, Nearmap remains halted
• 3 forgotten ASX stocks left behind in the car sales recovery
• Why these brokers think today’s Eagers Automotive (ASX:APE) share price is a bargain
• Brokers list the latest ASX shares to buy in this market meltdown
• Why the Eagers Automotive (ASX:APE) share price is on watch 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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In what may be a catalyst for ASX cannabis shares, a private company today gained approval to grow medicinal cannabis in Western Australia.

As reported by the ABC, the private medicinal cannabis company Elite Cannabinoids has received approval for growing a range of different cannabis strains at a secluded location 800km north of Perth.

High-level details for Elite Cannabinoids

Elite Cannabinoids recently gained its license for growing medicinal cannabis. The company will now be able to utilise 46 hectares of land in the production of cannabis. Additionally, the company expects to have an onsite pharmaceutical manufacturing facility. The combined enterprise should generate more than 60 jobs for the Gascoyne region.

In the words of Elite Cannabinoids CEO Sebastian Cox, “It will be one of the biggest medicinal cannabis facilities in the southern hemisphere.”

Mr Cox further explained that the Gascoyne region was exceptional for the operation due to the high solar exposure, low biosecurity risks, and good water security.

The facility will be positioned to accommodate the demand of patients throughout Australia, with the added potential of expanding to international markets. As such, the company will begin with 253,000 cannabis plants in the first stage of operations. Production is anticipated to be in the works by 2023.

What does this mean for ASX cannabis shares?

Any correlation between Elite Cannabinoids approval and other companies is speculation. However, it does indicate there is still an existing demand for medical uses of cannabis. As mentioned in the ABC report, the Australian Institute of Health and Welfare estimates 600,000 Australians currently use it for medical purposes.

Australia legalised production and cultivation in 2016, which invoked pot stock mania in 2017. Since then, the sector has been rather quiet, with many shares falling back to reality. The big potential yet to be unlocked is legalisation for recreational use in Australia.

A few ASX-list players in the game include Ecofibre Ltd (ASX: EOF), Cann Group Ltd (ASX: CAN), Zelira Therapeutics Ltd (ASX: ZLD), and Althea Group Holdings Ltd (ASX: AGH).

Notably, the best performers in the last year have been Zelira and Althea. Shareholders would be happy with appreciations of 38% and 47% respectively. In contrast, the others have experienced falls of 40% or more. Internationally it is a very competitive landscape for these companies, but the market is still budding.

More reading

• Here’s why the Cann Group (ASX:CAN) share price is in a trading halt
• How did ASX cannabis shares perform in 1H FY21?
• Why the Cann (ASX:CAN) share price is pushing higher
• Why the Ecofibre (ASX:EOF) share price is crashing 16% lower today
• Why AMP, Ecofibre, Magellan, & Vita shares are sinking 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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The Wesfarmers Ltd (ASX: WES) share price will be on watch for a couple of reasons on Thursday.

As well as releasing its half year results, the conglomerate has just provided an update on its lithium operations.

What did Wesfarmers announce?

After deferring its final investment decision (FID) for the Mt Holland lithium project in January 2020, Wesfarmers and its joint venture partner, Sociedad Quimica y Minera de Chile S.A. (SQM), have now come to a final decision on the project.

According to the release, full funding will be committed upon receiving environmental approvals for the Kwinana refinery, which are anticipated in early FY 2022.

The company also advised that it has completed an updated definitive feasibility study (UDFS) for the Mt Holland lithium project.

The UDFS has provided greater certainty regarding the project’s engineering design and capital and operating costs. Furthermore, it has led to an increase in concentrator and refinery production capacity from 45,000 tonnes per annum to approximately 50,000 tonnes per annum of battery grade lithium hydroxide.

In addition, the UDFS includes increased flexibility to provide for a second phase of the project to expand production capacity at Mt Holland and the Kwinana refinery. Management advised that preliminary work to evaluate expansion options will commence in parallel with the construction of the first phase of the project.

Wesfarmers’ share of capital expenditure for the development of the project is estimated at approximately $950 million and will be funded using existing cash and debt facilities.

When will Wesfarmers be producing lithium?

Following receipt of all relevant approvals, construction of the mine, concentrator, and refinery are expected to commence in the first half of FY 2022.

After which, the first production of lithium hydroxide is expected in the second half of the 2024 calendar year.

Wesfarmers’ Managing Director, Rob Scott, is very positive on the project and expects it to create value for shareholders.

He said: “The development of the Mt Holland lithium project presents an attractive investment for Wesfarmers shareholders. The project capitalises on our Chemicals, Energy and Fertilisers divisions’ chemical processing expertise and Western Australia’s unique position to support growing global demand for electric vehicle battery materials which will make a crucial contribution to global efforts to reduce greenhouse gas emissions.”

“We have been pleased with progress of discussions with key battery manufacturers, which reflect a positive outlook for battery quality sustainably sourced lithium hydroxide,” he concluded.

More reading

• ASX 200 Weekly Wrap: ASX cools on earnings reality check
• Wilson Asset Management thinks these 2 ASX shares are a buy
• 2 blue chip ASX dividend shares to buy today
• ASX 200 Weekly Wrap: RBA unleashes ASX’s inner animal
• 2 super ASX 200 shares to buy for your retirement portfolio

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers 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 BPH Energy Ltd (ASX: BPH) share price saga continues today after the company’s shares were placed in a trading suspension, soon followed by a trading halt.

BPH shares started the trading day at 13 cents apiece and dipped to 12 cents soon after. But someone lit a rocket under the company around 1pm which saw the BPH share price explode up 73.6% all the way to 22 cents each by 2pm. But that’s where it ended for BPH for the day.

At 2.56pm, the company released a market announcement that told investors trading would be suspended pending a further announcement. Then at 3.38pm, another update was released. This told investors that the ASX would suspend BPH shares from trading until at least Friday 19 February, or whenever this announcement is finally… announced.

Today’s move is just the latest chapter in what has been a very dramatic saga to watch. Back on 21 January, BPH shares were only 5 cents each. But by 28 January, the company was asking as much as 33 cents a share, a 560% surge in around a week. The catalyst?

Well, it’s a little unclear. But soon after this move (on 1 February), BPH Energy announced it proposed to use the drilling program in the Sydney Basin to investigate the potential for a carbon, capture and storage (CCS) project with partner, Bounty Oil & Gas NL (ASX: BUY). It also announced a capital raise program to help fund this endeavour. The shares were placed in a trading halt. After it completed the capital raise, BPH shares rose 31% on its return to market trading.

BPH on a rollercoaster

However, soon after this, the company fell sharply (around 21%) following comments from the New South Wales Deputy Premier John Barilaro. Mr Barilaro stated that he was not in favour of the PEP11 oil project that BPH is aiming to deploy its CCS project within, and the application should be rejected. Mr Barilaro also reportedly stated that he would “refuse further applications to extend the life of PEP11”.

It’s these comments that have likely sparked the surge in BPH shares we have seen today. This morning, before market open, BPH issued an announcement which clarified that its PEP11 project was subject to approval from both the NSW government and the Federal government.

The release points out that, under the relevant legislation, if the state and the Commonwealth disagree on a permit, it’s the Commonwealth opinion that prevails. That essentially renders Mr Barilaro’s comments impotent regarding PEP11.

Thus, investors who might have assumed that PEP11 would be cancelled (meaning BPH had raised capital for nothing) are possibly breathing easier today. Or at least they were before the trading halt. We shall have to wait until (probably) Friday to see what BPH has up its sleeves for investors next.

More reading

• Why the BPH Energy (ASX:BPH) share price is crashing 21% lower today
• Why the BPH Energy (ASX:BPH) share price rocketed 32% higher today
• BHP Energy and Zip were among the most traded ASX shares last week
• Why BPH Energy (ASX:BPH) shares are in a trading halt

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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The share prices of ASX travel shares have flown higher today, including Corporate Travel Management Ltd (ASX: CTD) and Webjet Limited (ASX: WEB).

The Corporate Travel share price went up almost 5%, the Webjet share price rose 5%, the Flight Centre Travel Group Ltd (ASX: FLT) share price rose almost 3%, the Helloworld Travel Ltd (ASX: HLO) share price rose 3.6% and the Qantas Airways Limited (ASX: QAN) share price went up 0.6%.

It has been a busy period of announcements for the travel industry. Not only were there a couple of reports today, but Victoria’s has lockdown ended and the COVID-19 vaccine rollout is about to start.

Profit results

Webjet released its FY21 half-year result today. It said that total transaction value (TTV) was down 89% to $267 million, revenue fell 90% to $22.6 million and underlying earnings before interest, tax, depreciation and amortisation (EBITDA) was down by 146% to a loss of $40.1 million. Underlying net profit dropped to a loss of $60.5 million.

However, Webjet said that its OTA (online travel agency) business returned to profitability as domestic borders started to reopen, driven by its strength in servicing the domestic leisure market, as well as leveraging its highly variable cost base.

Corporate Travel said that the FY21 first half revenue was ahead of expectations, despite the worsening COVID-19 situation in the second quarter. December 2020 had the highest revenue of the half despite being seasonally the quietest month for corporate travel in the first half.

Despite that, it still generated an underlying EBITDA loss of $15.7 million for the half, including a two-month loss contribution from the Travel and Transport acquisition. The underlying net loss for Corporate Travel shareholders was $26 million and the statutory net loss was $36.4 million.

The company said it was positioned for the recovery in corporate travel activity in the northern hemisphere where the COVID-19 vaccination efforts continue.

Victoria ends lockdown

Victoria’s 5-day snap lockdown is going to end today, rather than be extended as some had feared. The state recorded 0 new COVID-19 cases today.

The four reasons to leave the home will no longer apply and the 5km travel limit will be lifted. There will still be a 5-visitor limit to homes and public outdoor gatherings are limited to 20 people. Crowds will be able to return to the Australian Open from Thursday.

The borders have already started opening up again. South Australia has announced that it’s open again to regional Victoria, though there’s going to be a 14 day wait for no community cases before Melbournians can visit SA.

Vaccinations start

Over 140,000 BioNTech – Pfizer vaccine doses arrived in Australia this week and they will start to be administered on 22 February according to reporting by media such as The Guardian.

Various groups will receive the COVID-19 vaccine including quarantine and healthcare workers, people in aged care settings and disability care.

Travel businesses are hoping that as more vaccines are distributed, it could lead to stronger conditions for the travel sector.

More reading

• Webjet (ASX:WEB) share price soars to 5% increase in late trade
• One year on and 50% up, the All Technology Index is booming
• Webjet (ASX:WEB) share price edges lower on H1 FY21 results
• Why the Corporate Travel Management (ASX:CTD) share price is trading lower
• 5 things to watch on the ASX 200 on Wednesday

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 Helloworld Limited. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and Helloworld 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 Webjet Limited (ASX: WEB) share price finished strongly today after the company presented its half-year results. It was a tale of two halves for the company as shares in the travel agent rebounded strongly after a disappointing start.

The Webjet share price finished the day strongly rising 5.02% to $5.02.

Why the Webjet share price is flying

Despite the poor first half result, investors bid up the Webjet share price late on signs of growth. According to the AFR, the arrival of COVID-19 vaccines will provide more clarity about the triggers for opening domestic and international borders.

Speaking to the AFR, Webjet Managing Director, John Guscic, argued that it was realistic to seek clear policies. Especially given the ever-changing nature of the coronavirus. 

Gusic stated:

I appreciate that the environment changes quickly, but you don’t make policy up on the fly.

Mr. Guscic was speaking after the travel booking company announced its results for the first half of FY21. For the period, revenue plummeted to $22.6 million. This was a 90% drop from the same time last year. Overall, the company posted a hefty loss of $132.2 million down from the profit recorded last year.

Nonetheless, there were some positives in the result. Webjet retained a strong cash position of $283 million after its large capital raising last year. The current loss rate of $4.8 million gives the company just under 5 years before it will run out of cash.

What Now

Regarding the company’s future, Webjet noted that it is focused on capitalising on the impending market recovery. Moreover, it is hoping that the structural shift from offline to online will provide the company with tailwinds moving forwards.

Commenting on the future and dividends, Chairman Roger Sharp said:

Given the uncertainties inherent in the current travel environment, Webjet is not providing earnings guidance for FY21, and has not declared an interim FY21 dividend. Further, the Company has deferred payment of its FY20 interim dividend payment, which was due to be paid on 16 April 2021. It will be reviewed again following 1H22 results later this year.

Webjet shareholders will now be looking forward to the company’s FY21 results, which will be announced on May 19.

More reading

• One year on and 50% up, the All Technology Index is booming
• Webjet (ASX:WEB) share price edges lower on H1 FY21 results
• 5 things to watch on the ASX 200 on Wednesday
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• Why ASX travel shares were smashed on Friday

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Webjet (ASX:WEB) share price soars to 5% increase in late trade appeared first on The Motley Fool Australia.

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