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The Province Resources Ltd (ASX: PRL) share price is going gangbusters right now, currently up by a whopping 253% to 9.2 cents a share.

The Province Resources share price caught fire this morning after the gold and nickel exploration company announced its intention to acquire Ozexco Pty Ltd. Ozexco has 7 exploration licences in the Gascoyne region in Western Australia for areas considered prospective for salt, potash and mineral sands.

Here’s what we know.

Province Resources share price soars on green hydrogen news

Earlier today, Province Resources announced that it has entered a conditional agreement to acquire all of the shares of Ozexco. 

According to the release, the acquisition brings “potential for multiple projects and commodities focusing on Industrial Minerals and Renewable Green Hydrogen.”

Through the successful acquisition of Ozexco, Province Resources will inherit the company’s Gascoyne project and its HyEnergy renewable hydrogen project.

The Gascoyne project’s Carnarvon Basin project will produce salt and potash by using an “inexhaustible seawater resource” to be concentrated through solar and wind evaporation.

According to the announcement, the HyEnergy project is projected to generate 1GW (1,000MW) of renewable energy using wind and solar and to produce ~60,000t of green hydrogen or up to ~300,000t of green ammonia.

The company appointed Viaticus Capital to drive the strategy and execution of the deal.

Management commentary

Commenting on the acquisition and the strategic importance of the green hydrogen space, Viaticus Capital principal Gavin Rezos said:

I am very pleased to support the Company’s capital raise given their mission and stated objective is to be part of the solution for decarbonisation of the global economy. Western Australia has all the attributes required to be a world class producer of green hydrogen utilising renewable energy sources and Carnarvon is the most ideal area to make the best advantage of those attributes.

He added:

Green Hydrogen will be an increasingly important future energy source, developing alongside the Lithium industry. Rapid advances in Hydrogen Fuel Cells are now demonstrating that Green Hydrogen will have a major role to play in the areas of mass transport, shipping, trucking, and eventually in homes, helping the world reach targets of being net zero carbon by 2050.

The Province Resources share price was up approximately 160% just minutes after the opening bell this morning, demonstrating the news was well received by investors. 

Today’s gains put the Province Resources share price up 360% in the past month and 820% year to date.

More reading

• Why the Coles (ASX:COL) share price is sinking 6% today
• The Moelis (ASX:MOE) share price is up today. Here’s why
• All eyes on the Reject Shop (ASX: TRS) share price
• You need an investing roadmap
• Why the Zip (ASX:Z1P) share price is crashing 19% lower today

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It has been a disappointing day of trade for the Coles Group Ltd (ASX: COL) share price on Wednesday.

At one stage today, the supermarket operator’s shares were down as much as 6% to $17.04.

The Coles share price has recovered slightly but remains 5% lower at $17.27 at the time of writing.

Why is the Coles share price deep in the red?

Investors have been selling Coles shares today following the release of its half year results.

For the six months ended 31 December, the supermarket giant delivered an 8% increase in revenue to $20,569 million and a 14.5% increase in net profit to $560 million. This was driven by solid growth across all segments.

Given that this result was largely ahead of the market’s expectations, investors may be wondering why the Coles share price is tumbling lower today.

Well, that appears to be down to management’s commentary regarding its outlook.

Coles’ cautious outlook

While the company has started the second half positively and delivered comparable store sales growth across both its Supermarket and Liquor segments, management’s outlook has spooked investors and put pressure on the Coles share price.

Coles warned: “Depending on COVID-19, vaccine roll out and efficacy, and other factors, sales in the supermarket sector may moderate significantly or even decline in the second half of FY21 and into FY22.”

The company also notes that it will soon be cycling elevated sales from COVID-19 late in the third quarter. This was a time when panic buying, pantry stocking, and toilet roll hoarding swept the nation. Given that these factors are (hopefully) unlikely to repeat, it will have a tough time outperforming those sales figures.

What about the future?

Looking beyond the short term headwinds that Coles is about to face, CEO Steven Cain remains very positive.

He commented: “Whilst COVID-19 will continue to present challenges it will also continue to present opportunities for change. With a strong balance sheet and team, Coles is well placed to continue delivering on our vision of becoming the most trusted retailer in Australia and grow long-term shareholder value.”  

As positive as Mr Cain is, that hasn’t been enough to stop the Coles share price from tumbling today. Though, tomorrow could be better depending on how brokers react to the result. Tune in on Thursday for that.

More reading

• Why Coles, Netwealth, Pro Medicus, & Zip shares are sinking
• ASX 200 down 0.5%: Domino’s delivers, Westpac impresses, Coles sinks
• Coles (ASX:COL) share price on watch following half year update
• 5 things to watch on the ASX 200 on Wednesday
• The latest ASX shares upgraded by brokers to “buy” during the reporting season

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

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The Moelis Australia Ltd (ASX: MOE) share price shot up 6.7% to $4.80 in strong trading this morning. This comes after the financial services company released its results for the full 2020 financial year.

The Moelis share price has retreated somewhat this afternoon and is trading at $4.70 at the time of writing, up 2.84%. Let’s take a look.

What did Moelis Australia report?

In today’s ASX release, Moelis Australia announced a 4.7% decrease in its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to $60.5 million.

The company incurred a 5% increase in expenses, including $3 million in one-off costs due to the impacts of COVID-19, and investment in platform capabilities.

Assets under management (AUM) grew by 11% to $5.4 billion, supporting asset management revenue growth of 10%.

Underlying revenue of $161.1 million represented an increase of 1.1% over the 2019 financial year. Underlying earnings per share (EPS) were 25.1 cents, down 5.3% from the 26.5 cents reported in the previous year.

The company reported it had $112 million in operating cash and $200 million in investment assets available.

Moelis will pay a dividend of 10 cents per share (cps), fully franked. That’s the same dividend it paid in 2019.

Commenting on the results, Moelis’ joint CEOs Julian Biggins and Chris Wyke said:

The operating performance of the business strengthened appreciably as the year progressed and this momentum has been carried into a strong start to 2021.

Going forward, our strategy remains unchanged as we continue to look to scale our investment strategies, expand our distribution channels and leverage our specialised capabilities in corporate advisory and equities.

The company said it was in a strong position heading into 2021. It forecasts a 10-20% increase in underlying EPS from the 2020 financial year.

Moelis share price snapshot

After getting hammered during the wider COVID-fuelled market panic last year – falling 79% from 21 February to 25 March –the Moelis share price has recovered strongly, up 277% from the March low.

Over the past 12 months, its shares are still down 18%. Year-to-date the Moelis share price is up 3%. That’s right in line with the gains on the All Ordinaries Index (ASX: XAO).

More reading

• All eyes on the Reject Shop (ASX: TRS) share price
• You need an investing roadmap
• Why the Zip (ASX:Z1P) share price is crashing 19% lower today
• Why the Fatfish (ASX:FFG) share price is diving 21% today
• Here’s why the Amplia (ASX:ATX) share price is up 9% today

Motley Fool contributor Bernd Struben 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 Reject Shop Ltd (ASX: TRS) could be poised to fly after releasing a promising half-year report for FY21. At the time of writing, the Reject Shop share price is trading slightly higher for the day at $7.55, up 1.9%. 

What did the Reject Shop announce?

Earlier today, Reject Shop released its financial report for the first half of FY21.

The report was highlighted by a 46.5% increase in net profit after tax (NPAT) of $16.3 million. In addition, Reject Shop reported a 20.8% increase in Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITA) of $31.1 million for the half-year.

Despite a surging net profit, the company reported sluggish sales for the first half. Consequently, for the 6 months to 31 December 2020, Reject Shop reported a 0.3% dip in sales of $434.3 million.

Reject Shop also acknowledged the company’s strong balance sheet, boasting $107.6 million in cash on hand. In addition, the company highlighted that no JobKeeper wage subsidies were received by the company despite pandemic restrictions.

Reject Shop cited the company’s strong cash position was driven by prudent cost reduction, business simplification, and operational efficiency. Despite a strong cash position, Reject Shop did not declare an interim dividend.

What is the outlook for the Reject Shop?

The company highlighted that performance in the first half of FY21 should not be used as an indicator for the second half. Reject Shop acknowledged that a higher proportion of sales are generated in the first half. Historically, the company has reported EBIT losses in the second half over the past 2 financial years.

Despite the dour outlook, Reject Shop noted that management will continue to focus on cost reduction, business simplification, and operational efficiency.

Reject Shop also noted that stores in CBD locations and large shopping centres could suffer from reduced foot traffic. In addition, the company highlighted further challenges to its international supply chain which could impact stock availability and increase costs.

Reject Shop Chief Executive Officer, Andre Reich, noted that:

Once the cost base is optimised, we expect to be well-place to pursue longer-term growth via store network expansion and by growing our online presence.

Reject Shop Share Price Outlook

With 354 stores, Reject Shop is Australia’s largest discount variety store. Despite uncertainty over short term growth, the company maintains that it is well-positioned to capture a growing market share.

This optimism has been reflected in the Reject Shop share price which has surged more than 78% in the last year.

More reading

• 3 ASX shares rated as strong buys by brokers
• 3 compelling ASX shares rated as buys by brokers
• Brokers think these 3 top ASX shares are buys in February 2021
• 2 ASX shares rated as strong buys by brokers

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

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I caught up with a mate for a beer last night.

Oh, the beer was incidental. Promise! 

See, we got together to start planning our mid-year holiday.

For the past couple of years, my family has used the winter school holidays to head bush for a driving holiday.

Last year, COVID-restricted, we did the Darling River Run — visiting the Menindee Lakes, Broken Hill, White Cliffs, Bourke, Brewarrina and Dubbo.

The prior year — when state borders were more curiosity than checkpoint — we went to Birdsville (for the Big Red Bash) via Bourke, Thargomindah and Innamincka, heading home via the Birdsville Track and Adelaide.

We did the Bash trip by ourselves, but last year’s holiday was with another family — good friends who also have similar-aged kids to our youngest.

We all had so much fun, we decided to travel together again this year.

Turns out there are two types of people: people like my mate and me who absolutely love the planning and anticipation, almost as much as the trip… and those like my wife, who, well, are just pleased that someone else is happy to take care of all that stuff.

Which is completely fine by me.

I’ve got maps, lists, more maps and more lists.

So last night, over a couple of beers, we sat down to think about what a trip might look like.

Places to visit.

Places to camp.

The best way to get there (usually, given our druthers, via the roads less travelled).

I’m already counting the days.

Don’t get me wrong; I love the idea of just heading in a given direction and seeing where the mood takes us.

But when you’ve got families with kids to cater for, and limits on how long you can be away, time is precious.

As is balancing the desire to see as much as possible with the need to just stop for a few days every now and then to actually soak up what those destinations have to offer.

Yes, how’s the serenity, indeed.

So, while I like the romantic notion of floating on the breeze, we’ll plan, instead.

Not too strictly; we’ll leave room for the possibility of wanting to stay somewhere a little longer — or shorter — as well as taking the advice of the locals for things to see and do.

But we’ll have a rough idea of where we’ll need to be, and by when, to make sure we hit the highlights and still make it home on time for work and school.

I seriously cannot wait.

Campfires, outback sunrises and sunsets. Nature at its best — and most raw, including a landscape carved by millions of years of natural forces.

But you’re ahead of me already, aren’t you?

Yes, planning a holiday is a lot like investing.

You’ve got the whole ‘where do you want to go’ thing.

And the map metaphor.

Good. Nice work.

I want to spend just a few lines on the ‘planning’ thing, though.

Because it’s one thing to know where you want to go (financial independence, a comfortable retirement, money for the kids etc), but you really have to know whether it’s possible.

I have a lot of destinations on my bucket list. More than I can reasonably get to, even in a decade of holidays.

Wanting to go to Uluru, Broome and Cape York is one thing. But expecting to visit them all in a few weeks is more than just a little optimistic.

Not only is trying guaranteed to be futile, because it’s an impossible goal, but you also run the very real risk of vehicle damage and potentially injury or death — not to mention stress and dissatisfaction as you drive 16 hours a day for weeks trying to make it all happen.

A poor analogy? Obviously silly?

No, and yes.

There are a lot of investors throwing Hail Mary passes, in the hope that they might win the share market lotto.

There are many punting on big wins on cryptocurrencies or the latest hot stock.

Day trading.

Expensive ‘trading courses’ and software.

Even as I write this, I’m reminded again of Aesop’s fable of the Tortoise and the Hare. 

I understand the impatience of the investor who can’t or doesn’t want to think in terms of two or three-decade returns.

I get it.

But there is no reasonable alternative.

As soon as you give in to the impulse that says “I can’t do that so I’ll…” you’re on a very slippery slope.

I desperately wish I could see and do more when we head off in June.

I’d love to add more destinations. Tick more things off the bucket list.

But I know, to my own chagrin, that to try that risks ‘seeing’ things without really experiencing them, and, worse, ending up with a deeply unsatisfying, stressful and tiring ‘holiday’.

Albert Einstein apparently (there are far more quotes attributed to him than he actually uttered) said that things should be made ‘as simple as possible, but no simpler’.

The investing parallel (as well as the best advice for the traveller) is to aim for the best returns you can reasonably achieve, but no more.

Because once you start to ratchet up the risk, past a reasonable level, your building gets too tall, your foundations too shallow, and your odds of disaster increase, out of proportion to the potential return.

You never, ever, want to wreck a holiday by being overambitious.

The same goes for investing.

Fool on!

More reading

• Why the Zip (ASX:Z1P) share price is crashing 19% lower today
• Why the Fatfish (ASX:FFG) share price is diving 21% today
• Here’s why the Amplia (ASX:ATX) share price is up 9% today
• Why is the Paladin Energy (ASX:PDN) share price heating up today?
• Readytech (ASX:RDY) share price slides despite strong growth

Motley Fool contributor Scott Phillips 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 meteoric rise of the Zip Co Ltd (ASX: Z1P) share price has come to an abrupt end on Wednesday.

In afternoon trade the buy now pay later provider’s shares are down 15% to $11.83.

This is a slight improvement on earlier in the day when Zip’s shares were down as much as 19% to $11.27.

Why is the Zip share price crashing lower today?

There appear to have been a few potential catalysts for the decline in the Zip share price today. One of those is general weakness in the tech sector.

It isn’t just Zip shares that are under pressure today. The likes of Afterpay Ltd (ASX: APT) and Appen Ltd (ASX: APX) are also trading notably lower following a weak night of trade on the tech-focused Nasdaq index.

At the time of writing, the S&P/ASX All Technology Index (ASX: XTX) is down 2%.

What else is weighing on the Zip share price?

Profit taking could also be weighing on the company’s shares today. As I mentioned here earlier, prior to today, the Zip share price was up an incredible 143% in the space of a month.

Given that this gain has taken the Zip share price well beyond any broker price targets that I have seen, it would not be overly surprising for a profit taking pull back to occur.

Those strong gains have been driven by its impressive second quarter update, a general re-rating of buy now pay later shares, and speculation that Zip could be planning a secondary listing in the United States.

The latter would allow US fund managers with strict investment mandates to invest and give the company easier access to capital markets in the country.

Anything else?

This leads us nicely onto the third potential catalyst for today’s weakness in the Zip share price.

Speculation that the company was going to list in the United States appears to have given its shares a real lift over the last week or so.

However, in response to an ASX price query yesterday, management made no mention of this speculation when quizzed about what was driving its shares higher.

Investors may be interpreting this as a sign that a secondary listing is not being considered, causing a reversal on some of the gains the speculation has generated.

More reading

• Why Coles, Netwealth, Pro Medicus, & Zip shares are sinking
• ASX 200 down 0.5%: Domino’s delivers, Westpac impresses, Coles sinks
• Why the Evolution (ASX:EVN) share price crashed despite record results
• Why is the Splitit (ASX:SPT) share price underperforming Afterpay and Zip?
• Payright (ASX:PYR) shares get speeding ticket after 32% surge

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 Appen Ltd and 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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Fatfish Group Ltd (ASX: FFG) shares are plummeting today with no news out from the company. At the time of writing, the Fatfish share price has plummeted 21.15% to 20.5 cents.

It is, however, important to view today’s falls within the context of the 195% gain the tech venture investment firm notched up yesterday.

Why has Fatfish been so volatile lately?

There are a few recent news items that have drawn focus to the Fatfish share price recently. Firstly, on Monday iCandy Interactive Ltd (ASX: ICI) announced its intentions of selling iCandy digital for $4.8 million to Rightbridge Ventures. Rightbridge is a subsidiary of Abelco, and Abelco is a subsidiary of Fatfish.

This news item, in reality, has no material impact on Fatfish, as it holds a stake in both iCandy and Abelco. Nevertheless, the announcement sent the Fatfish share price soaring.

Secondly, Fatfish appears to have entered the buy now, pay later (BNPL) space through its 78.7% ownership of Smartfunding. The newly developed BNPL offering by Smartfunding is expected to launch on 18 February in South-East Asia.

Lastly, Fatfish has exposure to Bitcoin (CRYPTO: BTC) through the Sweden-based Abelco. Given the momentous rally in the price of the digital currency, the market is all eyes on the speculative potential.

Perfect storm for the Fatfish share price

When you combine the hype of the BNPL sector with the immense speculation surrounding Bitcoin, the rocket ship emoji starts getting plastered all over it. The speculation reaches far and wide with huge inflows of interest. Today alone, Fatfish shares have seen five times their monthly average trading volume in a single day.

The question is whether today marks a reprieve as speculators take profit before pushing the Fatfish share price further upwards. Or whether it is the beginning of a longer downward trend. The answer to this may be largely influenced by how Smartfunding’s roll-out evolves and where the Bitcoin price goes from here.

The Fatfish share price has returned an insane 2400% to shareholders over the last 12 months. Furthermore, the returns delivered by Fatfish have even outperformed Bitcoin itself.

More reading

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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 Amplia Therapeutics Ltd (ASX: ATX) share price is running higher today following the initiation of a multiple-dose study using AM945.

During late-morning trade, shares in the Australian pharmaceutical company are up 7% to 29 cents.

Amplia is an Australian pharmaceutical company. The company is focusing on the development of Focal Adhesion Kinase (FAK) inhibitors for cancer and fibrosis. It’s lead novel oral molecule, AMP945, is a “pure-play” inhibitor. This targets the formation of scar tissue (fibrosis) both in cancer and diseases such as idiopathic pulmonary fibrosis.

AMP945 is aimed at blocking FAK’s activity which lessens scar tissue. Thus, AMP945 allows cancer treatments to be more effective without fibrosis.

What did Amplia announce?

The Amplia share price is on the move today. This comes after the report that it has progressed in the development of its novel inhibitor.

According to its release, Amplia advised that it has commenced a multiple ascending dose (MAD) study in its phase 1 clinical trial of AMP945. The decision to advance the FAK inhibitor was based on the positive results seen to date.

Amplia stated that during phase 1 trial, healthy volunteers undertook a single ascending dose (SAD) of AMP945. Patients were carefully monitored to gain a better understanding of the safety and tolerability parameters. As the initial study nears completion, it was revealed that no health issues were identified regarding the SAD administered to volunteers.

In light of the positive developments, Amplia decided to begin a MAD study involving 3 cohorts of subjects. The first lot of patients will be receiving their doses sometime this week. Different amounts will be administered to each group. The MAD study will run for a period of 7 days.

The data from both the SAD and MAD studies will help Amplia establish the desired dose of AMP945. This will be important for its future phase 2 clinical trial. Amplia is expecting that phase 2 will be commencing at the end of the 2021 calendar year.

Additionally, Amplia noted that it was also studying the impact of food on the absorption of AMP945. Amplia is currently analysing results after the separate trial concluded last month.

Words from the CEO

Amplia CEO, John Lambert, welcomed the company’s progress, saying:

We are delighted that we have been able to advance AMP945 into our MAD study on the basis of the positive data seen so far in the SAD study. AMP945 is a very specific inhibitor of the FAK enzyme and has very little off-target activity. The excellent safety profile that we have seen in our SAD study to date is consistent with data from our preceding non-clinical studies.

We are very encouraged by the data that we have seen from the trial so far and look forward to reporting headline results from this Phase 1 clinical trial in Q2 2021.

About the Amplia share price

In the past 12 months, the Amplia shares have risen close to 200% reflecting positive investor sentiment. During March, its shares dipped to a 52-week low of 4.5 cents before storming higher to 37 cents in October.

Swapping hands for 29 cents today, the company’s shares are only 25% away from its multi-year high.

More reading

• Why the Fatfish (ASX:FFG) share price is diving 21% today
• Why is the Paladin Energy (ASX:PDN) share price heating up today?
• Readytech (ASX:RDY) share price slides despite strong growth
• Why Coles, Netwealth, Pro Medicus, & Zip shares are sinking
• Vicinity Centres (ASX: VCX) share price remains resilient

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.

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Volatility has accompanied the Paladin Energy Ltd (ASX: PDN) share price trading today. The uranium producer’s shares sprinted to a 5-year high of 40 cents on open. After pulling back to 38.5 cents, the Paladin share price has since regained its high of 40 cents, up 6.76%.

There’s no news from the company, so what’s cooking in the uranium sector for this stock to be getting so hot?

Uranium gaining appeal in climate fight

With US President Joe Biden now in the Oval Office, action already is being taken on new climate policies. President Biden was quick to re-join the Paris Agreement and stop the $9 billion Keystone XL oil pipeline project.

However, the fact is the population needs energy, and at a growing pace in demand. The Biden administration is planning to address this with its $2 trillion… Yes, TRILLION… climate plan. Nuclear power is included in this plan, and Biden has called for the development of small modular reactors.

Nuclear energy was once an exciting and growing sector. In 1996, ‘atomic’ energy reportedly supplied 17.6% of the world’s electricity. By 2015, that number had fallen to a paltry 10.8% – demand ravaged by disasters and contamination concerns.

However, with the evolution of nuclear energy technology over the years, the benefits are beginning to balance the risks once more.

Where is Paladin Energy situated?

Paladin Energy is a uranium producer that holds multiple tenements across Australia, Canada, and Namibia. Paladin owns a 75% stake in the Langer Heinrich uranium mine in Namibia, which is currently being restarted. The mine originally launched production in 2007 before being shut down in 2018 due to low uranium prices.

It is expected that Paladin will need to spend US$81 million to restart operations at Langer Heinrich. Once reopened, the company anticipates a 17-year mine life for the site.

Currently, Paladin holds leases over an estimated 203 million tonnes of uranium mineral resources. These tenements are scattered between Manyingee (Australia), Michelin (Canada) and Mount Isa (Australia).

Paladin Energy share price heating up

As uranium is revisited as an alternative energy resource, supply and demand concerns have increased the radioactive rock’s price. 

Latest Red Book projects that #uranium demand will continue to rise in the next several decades with increasing electricity demand and a growing need for clean air electricity generation 👉 https://t.co/nBSqMyA7KW pic.twitter.com/Djt9TAF8lf

— OECD NEA ⚛️ Nuclear Energy Agency (@OECD_NEA) January 29, 2021

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

Hence, the Paladin Energy share price has taken a ride on the upside of its own. Shares have increased by nearly 300% in the last 12 months, minting an exceptional return. The company’s share price hit a 52-week low of 3.8 cents on 23 March 2020, which equates to more than 10X today’s current price of 40 cents. 

More reading

• Readytech (ASX:RDY) share price slides despite strong growth
• Why Coles, Netwealth, Pro Medicus, & Zip shares are sinking
• Vicinity Centres (ASX: VCX) share price remains resilient
• Westpac (ASX:WBC) share price jumps after Q1 54% profit growth
• Why the Asaleo Care (ASX:AHY) share price is up 5% 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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Readytech Holdings Ltd (ASX: RDY) shares are dropping today after the company released its FY21 first-half report and investor presentation. At the time of writing, the Readytech share price is slumping 4.48% to $1.92.

Readytech share price fails to ignite

Reporting strong growth in key metrics has not stopped the Readytech share price from sliding lower today along with a wider market sell-off. The software-as-a-service (SaaS) education and workforce technology solutions provider reported that it is on track to achieve its FY21 guidance.

Over the first half of FY21, Readytech saw its revenue grow 13.4% to $21.8 million. The increase was driven by a combination of new customer wins and cross-selling to existing customers. Pleasingly, recurring revenue grew 15.6%, comprising 89% of total revenue. According to Readytech, this indicates the movement of customers looking to replace legacy technology with the company’s next-generation cloud-based platform.

The Readytech share price is on the slide after the tech company also reported on its continued investment in future growth. This was seen as operating expenses grew by 24.2% to $13.6 million. Sales and marketing costs also increased as the push for market share increased. On this front, these costs now make up 9.6% of revenue. The company’s spend on R&D came in at $11.8 million.

Management comments

Readytech CEO Marc Washbourne welcomed the results, saying:

Our continued top line growth reflects the team’s focus on winning higher value customers and upselling existing customers into new feature sets. On the back of this positive revenue outcome, we have been able to reinvest back in the business as planned, both in terms of people and technological innovation, which will underpin future growth.

Open Office acquisition

As stated, a key part of the company’s growth strategy is to explore and enter new verticals through acquisitions.

In line with this strategy, Readytech has committed to acquiring government SaaS provider, Open Office. It will pay $54 million upfront with an additional $26 million being paid based on performance.

It should be noted that the takeover is still subject to shareholder approval. This vote will take place at an extraordinary general meeting on 19 March.

What now?

Readytech generated operating cash flow of $7.2 million during the period. As such, the company retains a net cash balance of $33.2 million post the capital raising associated with the proposed Open Office acquisition.

Regarding the company’s earnings guidance, management is confident that demand for its software will remain high in the period ahead, commenting:

Positive outlook and strong momentum in 1H FY21 allows ReadyTech to reaffirm the previously provided earnings guidance. ReadyTech expects FY21 revenue growth rate in the mid-teens, with EBITDA margin in the range of 37%-39%, excluding the Open Office transaction.

Readytech share price snapshot

The Readytech share price is trading flat when compared to this time 12 months ago. Readytech shares fell as low as 96 cents in March 2020 and have since surged by nearly 100%. However, the Readytech share price is still trading nearly 12% below its 52-week high of $2.18. 

Based on the current share price, Readytech commands a market capitalisation of around $187 million.

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Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Readytech Holdings Ltd. The Motley Fool Australia has recommended Readytech Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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