The Fletcher Building Limited (ASX: FBU) share price will be in focus on Wednesday following the release of its half year results.

In early trade in New Zealand, the company’s NZX-listed shares are up 3%.

How did Fletcher Building perform in the first half?

For the six months ended 31 December, Fletcher Building reported a 1% increase in revenue over the prior corresponding period to NZ$3,987 million.

Positively, things were much better for the building products company’s earnings.

It reported earnings before interest and tax (EBIT) growth of 47% to NZ$323 million. And on the bottom line, Fletcher Building reported a 48% jump in net profit after tax to NZ$121 million.

Management advised that this improvement in its profitability was the result of initiatives undertaken to improve operating disciplines and efficiencies.

The company’s operating cash flows were also strong and came in at NZ$428 million. This allowed the Fletcher Building board to declare an interim dividend of 12 NZ cents per share.

Management commentary

Fletcher Building’s Chief Executive, Ross Taylor, commented: “Our strong HY21 results reflect good progress made on our strategy to drive consistent performance and growth. The improved earnings and profitability are the outcome of initiatives undertaken over the past three years to improve operating disciplines and efficiencies across the Group.”

The Chief Executive revealed that trading conditions have been mixed but stable.

He explained: “We have seen a broadly stable market environment. Growth in the New Zealand residential sector has been offset by softer demand in Commercial and mixed conditions in infrastructure in both New Zealand and Australia.”

“In all businesses, we have remained focused on executing our strategy, especially improving the underlying disciplines and efficiencies of our operations. The sustainable improvement in margins was achieved through pricing disciplines; targeted share gains; consolidation and automation of manufacturing and supply chains; and a more efficient overhead cost base,” he added.

Outlook

Management appears confident there will be more of the same in the second half.

Mr Taylor said: “Current indicators point to core volumes in NZ and Australia remaining at present levels through the second half, with robust demand for Residential housing in NZ. This market outlook assumes no material impact from COVID-19.”

It has provided FY 2021 EBIT before significant items guidance of NZ$610 million to NZ$660 million. This compares very favourably to EBIT before significant items of NZ$160 million in FY 2020.

More reading

• Wilson Asset Management (WAM) thinks these 2 ASX shares are a buy

Motley Fool contributor James Mickleboro 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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Last week on Tuesday 9 February, Bikeexchange Ltd (ASX: BEX) listed on the ASX for the first time.

The company reaches 29 million consumers each year. It provides a global online cycling marketplace, allowing brands, retailers and distributors to connect with their customers worldwide.

BikeExchange had raised $20 million at 26 cents per share as part of its initial public offering (IPO), and the BikeExchange share price reached 28 cents on its first day. At the time of writing, shares are up 4% in intraday trading, at 26 cents per share.

With the company now 1 week into its publicly listed status, the Motley Fool reached out to Mark Watkin, Global CEO of BikeExchange.

Read on for the full interview…

BikeExchange one week in…

What are your thoughts following the first week of trading as an ASX listed company?

We have been very excited to reach the milestone of listing on the ASX, after raising $20 million at the issue price of 26 cents. Up until this point, we had been building our global marketplace on a capital-light basis, and the IPO was an opportunity to scale and build off the strong foundations we have created over the past 13 years.

Our significant shareholders include the BikeExchange founders, Gerry Ryan (JAYCO founder) and high-quality institutional investors such as Bombora and SG Hiscock & Company.

The growth opportunity is significant for BikeExchange and the ASX listing provides a great growth platform, though the hard work starts now. We are committed to a transparent and regular dialogue with our shareholders on this journey and excited about the possibilities.

You currently operate in Australia, Europe, North America and Latin America. Are there expansion plans into Asia or elsewhere?

The business is currently focused on the significant runways we have already established in the key regions of North and South America, the EU, Australia and New Zealand. We will consider appropriate country market expansion, predominantly building in the regions we are already currently present. Such as entering more hubs/countries in Latin America.

Making the best use of the footprint we have created at this time is key and we see great opportunity to increase our market share through strategic partnerships, such as our recent partnership with Trek, one of the largest bike brands in the US and the world.

Competitive advantage

What types of ‘moats’ or barriers to entry are there with would-be competitors?

BikeExchange considers that it has a competitive advantage in being the leading bicycle marketplace in the industry. The online marketplace model is difficult to replicate and requires a lot of time and investment, creating a high barrier to entry for competition.

To put it into context, after establishing the business in Australia, BikeExchange has spent the last 6 plus years creating and scaling a single category marketplace in multiple countries to lay the foundations for the business as it is today. It is not a business model you can simply “turn the lights on” to in a new country.

Building a marketplace also requires two sides – attracting business customers and consumers. The marketplace needs to be ready to offer the right products and importantly ensure there is the breadth of choice. So you really need to get that right through building strong customer relationships with retailers and brands around the world.

Looking ahead

What’s the biggest risk for BikeExchange in the year ahead?

In the short term, the biggest risk would be global stock pressures fuelled by demand during the coronavirus pandemic. We are confident that all the hard work we did pre-COVID on enhancing the quality of our offering to the market will stand us in good stead, supported by the breadth of choice we offer to help consumers navigate the market. This is coupled with the continuation of trends favouring cycling that we have seen through FY20.

For example, site traffic increased by more than 77% and e-commerce transactions increased 154% globally on BikeExchange sites across the first half of FY21 against the previous corresponding period. While the pandemic accelerated growth in the market due to increased leisure and exercise cycling, we are seeing strong trends continue.

Having covered the risk, what’s the most significant opportunity ahead for BikeExchange?

The marketplace generated over $1.5 billion in sales leads and enquiries value, annualised from H1 FY21 – all off product listings on the sites. We see a significant opportunity to convert the number of sales leads into transactions on-site through full e-commerce, deposit payments and click and collect in the retailers.

This is one of the growth initiatives planned for the second half of FY21. We are currently running global trials around targeting and converting existing audiences on-site across multiple channels, such as Google and Facebook, with positive results.

Another focus area is growing the number of retailers on the marketplace through strategic partnerships in key regions, such as the US and Europe. We see a significant opportunity in increasing market coverage from less than 10% in both regions to 60% and 40% respectively in each market in the short-medium term.

More reading

• BikeExchange (ASX:BEX) share price jumps 23% on ASX IPO

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 great news for growth investors is that there are a good number of quality companies on the Australian share market with strong growth potential.

Three that could be worth considering are listed below. Here’s what you need to know about these ASX growth shares:

Kogan.com Ltd (ASX: KGN)

The first ASX growth share to look at is Kogan. This ecommerce company has been tipped as a great buy and hold option due to the structural shift to online shopping and the growing popularity of its website. In addition to this, management has bolstered its offering with value accretive acquisitions recently. If these are successful, they could accelerate its growth in the coming years. Analysts at Credit Suisse are positive on the company. The broker currently has an outperform rating and $21.08 price target on its shares.

Pushpay Holdings Group Ltd (ASX: PPH)

Another ASX growth share to look at is Pushpay. It is leading donor management and community engagement platform provider with a keen focus on the faith sector. While this might appear to be a bit of a niche market, it certainly is a lucrative one. Pushpay has been winning market share over the last few years, which has underpinned stellar earnings growth. This is expected to continue in FY 2021, with management guiding to operating earnings of between US$56 million and US$60 million. This will be an increase of 123% to 139% year on year. Positively, this is still only a small slice of the overall market, which gives it a long runway for growth. Goldman Sachs is a fan of the company. The broker currently has a conviction buy rating and $2.59 price target on its shares.

ResMed Inc. (ASX: RMD)

A final ASX growth share to consider is ResMed. It is a medical device company which has a focus on sleep treatment solutions and ventilators. ResMed has been growing strongly in recent years and appears well-placed to continue this positive form in the future. This is thanks to its world-class products and the massive number of undiagnosed sleep apnoea sufferers globally. The company also has a rapidly growing digital health ecosystem, which reached over 12 million cloud connectable medical devices in 2020. This provides ResMed with strong recurring revenues and a material amount of high quality data. Morgans currently has an add rating and $30.99 price target on ResMed’s shares.

More reading

• Got money to invest? Here are 3 ASX shares to buy
• 2 fantastic ASX growth shares that could be market beaters
• Here’s why the Altium (ASX:ALU) share price could be a buy
• 2 of the best ASX growth shares to buy now
• 2 high quality blue chip ASX shares to buy

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 Kogan.com ltd and PUSHPAY FPO NZX. The Motley Fool Australia has recommended Kogan.com ltd, PUSHPAY FPO NZX, and ResMed Inc. 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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Over the last few weeks the buy now pay later (BNPL) industry has been an incredible place to be invested.

During this time a number of BNPL shares have recorded mouth-watering gains for their shareholders.

How are the BNPL shares performing?

Since this time last month:

• The Afterpay Ltd (ASX: APT) share price is up 16%.
• The Openpay Group Ltd (ASX: OPY) share price is up 33%.
• The Sezzle Inc (ASX: SZL) share price has gained 57%.
• The Zip Co Ltd (ASX: Z1P) share price has rocketed 143% higher.

What about the Splitit Ltd (ASX: SPT) share price?

Well, over the last 30 days the Splitit share price has not only underperformed its peers, it has also underperformed the S&P/ASX 200 Index (ASX: XJO) and its 3.8% gain.

During this time the Splitit share price has lost 10% of its value.

Why is the Splitit share price underperforming?

Splitit never really seemed to capture the imagination of investors in the same way that Afterpay and Zip did. This may be due to its different (or unusual?) choice of business model.

The BNPL industry is aiming to replace credit cards and is doing a great job at it. Credit card usage is declining as younger consumers turn away from them in their droves.

However, Splitit uses an existing credit card to turn a payment into smaller interest free instalments. This appears to be potentially missing out on arguably the most important BNPL demographic that don’t want credit cards.

What else is weighing on its shares?

Also weighing on the Splitit share price this month could be news that its co-founder, Alon Feit, has been selling down his stake.

According to a notice, between 14 January and 9 February, Mr Feit sold 13,861,730 shares through on-market trades for a total consideration of approximately $20.3 million.

However, given how Mr Feit was voted off the board along with another long time director Mark Antipof late last year, it may not be overly surprising to see him selling down his stake.

More reading

• Payright (ASX:PYR) shares get speeding ticket after 32% surge
• The Cirralto (ASX:CRO) share price is hitting 52-week highs today
• What’s going on with the Zip (ASX:Z1P) share price?
• Why the Openpay (ASX:OPY) share price is up 17% and could go higher
• ASX 200 up 0.5%: BHP impresses, NAB rises, Zip rockets

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 ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. 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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Some of the most exciting businesses on the ASX are tech shares. They could be worth thinking about for your portfolio.

Due to the fact that many technology businesses offer an intangible product, it can mean that their gross profit margins may be very high and growth can be quicker.

Technology businesses are attracting a lot of investor intention and these two ideas could be ones to look out for:

Xero Limited (ASX: XRO)

Xero is one of the world’s largest cloud accounting software providers. Over the last decade it has taken the approach of heavily re-investing profit and cashflow back into the business to generate more long-term growth.

Over the last five years, Xero has been one of the best performing S&P/ASX 200 Index (ASX: XJO) shares. The ASX tech share has seen its share price grow by 843%. According to the ASX, it now has a market capitalisation that’s north of $19 billion.

The company has generated a lot of business growth to get this far. In the FY21 half-year result it said that it had increased its subscriber numbers by another 19% to 2.45 million.

Those subscribers come from all over the world, though Australia is still the biggest market, which saw 21% growth of subscribers to 1.01 million in the latest result. UK subscribers rose 19% to 638,000, New Zealand subscribers increased 13% to 414,000, North American subscribers went up 17% to 251,000 and rest of the world subscribers grew 37% to 136,000.

The global subscriber growth helped operating revenue rise by 21% to NZ$410 million. At 30 September 2020, its annualised monthly recurring revenue had increased to US$877.5 million.

Xero said that it was being disciplined with its financial management during the uncertain COVID-19 period, which led to “strong” growth of net profit, free cash flow and earnings before interest, tax, depreciation and amortisation (EBITDA). The NZ$71.2 million increase in operating revenue led to a NZ$49.4 million increase in free cashflow for the ASX tech share. This is helped by the fact that Xero’s gross profit margin is now 85.7%.

In a signal that Xero isn’t anywhere near finished with its growth journey, it stated that it still has ambitions for high growth and it intends to continue to innovate, invest in new products and customer growth, and respond to opportunities.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara is a business that provides an integrated breast health platform which helps provide feedback and also aims to help prevent advanced-stage breast cancer.

This business is another one with a very high gross profit margin. In the FY21 half-year result it reported that its gross margin was 92%. That report showed that revenue rose by 38%, subscription revenue increased 71% and gross profit increased by 43%.

At the time of the half-year result, it had NZ$19.9 million of annual recurring revenue (ARR) and approximately 27% of women in the US had a Volpara product applied on their images and data.

The ASX tech share then released its FY21 third quarter result which showed ARR had risen to NZ$20.7 million and its average revenue per user (ARPU) grew 5% to US$1.22.

A couple of weeks ago, Volpara announced it was acquiring CRA Health in the US for an upfront payment of US$18 million. This acquisition increases Volpara’s market share to over 30% of US breast screenings, it increases the ARR to NZ$26.9 million and is likely to increase the ARPU of the business as well.

Management believe that this deal has elevated the company to be a leader in personalised breast care and could spur more growth because CRA’s software is integrated with the major electronic health record (EHR) as well as with genetics companies.

More reading

• 3 of the best ASX shares you can buy right now
• 3 reasons why the Xero (ASX:XRO) share price could be a buy
• Take a look at the ASX’s new cloud ETF
• 2 extraordinary ASX shares to buy in 2021
• What’s with the Xero (ASX:XRO) share price drop today?

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 VOLPARA FPO NZ. The Motley Fool Australia owns shares of Xero. The Motley Fool Australia has recommended VOLPARA FPO NZ. 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 interest rates unlikely to go higher anytime soon, ASX dividend shares look set to remain the best place to earn a passive income.

But which ASX dividend shares should you buy? Here are two that are highly rated:

BHP Group Ltd (ASX: BHP)

This mining giant could be a good option for income investors that don’t mind investing in the resources sector. On Tuesday the Big Australian released its half year results and reported a 15% increase in revenue to US$25.64 billion and a 21% jump in underlying EBITDA to US$14.7 billion.

And thanks largely to sky high copper and iron ore prices, BHP generated significant free cash flow.

Positively, the company elected to return almost all of its US$5.2 billion free cash flow to shareholders through dividends. BHP declared a fully franked interim dividend of US$1.01 per share (~A$1.30 per share), which was up 55% on the prior corresponding period.

Analysts at Goldman Sachs expect similar in the second half. Based on the current BHP share price, they estimate that it offers investors a 5.9% full year dividend yield. The broker currently has a buy rating and $47.50 price target on its shares.

Transurban Group (ASX: TCL)

Another ASX dividend share to consider buying is Transurban. This leading toll road operator is the owner of a collection of key roads in Australia and North America.

While times have been hard over the last 12 months, traffic levels are improving and are likely to continue doing so as vaccines are rolled out.

Looking ahead, due to the quality of its roads, the time savings they offer, and their strong pricing power, Transurban appears well-placed to increase its distribution at a solid rate over the next decade, just like it has in the past.

One broker that is positive on the company is Ord Minnett. It currently has a buy rating and $16.50 price target on its shares. The broker is forecasting a 42.8 cents per share distribution in FY 2021 and then a 56.9 cents per share distribution in FY 2022. 

Based on the latest Transurban share price, this will mean forward yields of 3.2% and 4.25%, respectively.

More reading

• Here’s why the BHP (ASX:BHP) share price is closing in on its record high
• ASX 200 rises 0.7%, Redbubble sinks, BHP dividend jumps
• 2 ASX dividend shares rated as buys by brokers
• ASX 200 up 0.5%: BHP impresses, NAB rises, Zip rockets
• Why BHP, Codan, Seven West Media, & Zip shares are charging higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Transurban Group. 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 Redbubble Ltd (ASX: RBL) share price dropped 18% yesterday after the e-commerce business released its FY21 half-year result.

What is Redbubble?

Redbubble owns two of the world’s largest global online marketplaces for artist-produced products. Various products are sold on those websites including apparel, stationery, housewares, bags, wall art and so on.

What were the main highlights of the Redbubble FY21 result?

The Redbubble report included a lot of growth. It said it generated $353 million dollars of marketplace revenue, up 96% compared to the prior corresponding period.

Gross profit went up even faster, rising by 118% to $144 million. Redbubble generated $42 million of earnings before interest and tax (EBIT), compared to a loss of $2 million in the first half of FY20.

Operating cash flow of $80 million was up almost 100% from the $41 million generated in the prior corresponding period.

The company benefited from a positive delivery date adjustment during this period. Excluding this adjustment, in the six months to 31 December 2020, marketplace revenue grew 90% to $343 million, gross profit rose 102% to $138 million and it made $35 million of EBIT – up from $0.2 million last year.

The company reported that the number of artists using the marketplaces increased to 659,000 – up from 511,000 in FY20.

3 things you may have missed:

1: The trading update

Management said that healthy demand continued into January, with marketplace revenue (paid) rising by 66% (or 82% in constant currency terms) compared to the prior corresponding period.

Investors like to know what the recent trading of a business has been to see if trends are continuing or not. For Redbubble, it was able to tell investors about the first month of the second half of FY21.

The growth rate of 62%, or 82% in constant currency terms, was a slower growth rate than what the company had experienced in the first half of the financial year.

2: Mask sales are now a smaller part of the overall sales picture

In the last few months of FY20, Redbubble was selling large numbers of masks to consumers who wanted a product to protect themselves against COVID-19. The addition of the mask product line amounted to millions of dollars of extra revenue for Redbubble.

Redbubble said that high growth rates continued across all geographies and product categories. The company revealed that mask demand moderated to 7% of the overall product mix for the second quarter.

3: Rising profit margins

The ASX technology share revealed that all of its profit margins improved compared to the first half of FY20.

The gross profit margin increased by 4.1 percentage points to 40.8%, up from 36.7%. The gross profit after paid acquisition, or marketing, (GPAPA) margin improved by 2.6 percentage points to 28.3%.

The earnings before interest, tax, depreciation and amortisation (EBITDA) margin rose significantly after an increase of over 1,000% to $48.8 million of EBITDA.

The EBIT margin is now positive. Last year there was a $2 million EBIT loss, in this result EBIT was positive at $41.8 million.

More reading

• ASX 200 rises 0.7%, Redbubble sinks, BHP dividend jumps
• Why ARB, Domain, Redbubble, & Treasury Wine shares are sinking today
• Redbubble (ASX:RBL) share price sinks 13% despite strong H1 FY21 results
• Got money to invest? Here are 3 ASX shares to buy
• 3 reasons why the Redbubble share price could be a buy

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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There are a number of ASX dividend shares that have dividend yields of more than 4%.

The Reserve Bank of Australia (RBA) has pushed the official interest rate down to just 0.1%, which makes it difficult to generate any meaningful income from interest.

Dividend yields from some shares are relatively quite a bit higher. These two businesses have dividend yields materially more than 4%:

Nick Scali Limited (ASX: NCK)

Nick Scali is one of the biggest furniture-selling businesses on the ASX. It imports over 5,000 of containers of furniture per year.

The company has been a beneficiary of the large amount of consumer spending that has occurred in Australia over the last year. This was evident in the company’s most recent result for the half-year to 31 December 2020 where sales increased by 24.4%.

Not only is the sales revenue continuing to increase, but profitability is increasing even faster. The gross profit margin went up by 180 basis points to 64%, whilst the earnings before interest, tax, depreciation and amortisation (EBITDA) and earnings before interest and tax (EBIT) margins both improved by 1,270 basis points to 35.2% and 33.6% respectively.

The ASX dividend share reported that its underlying net profit after tax grew 99.5% to $40.5 million and the underlying earnings per share (EPS) rose 99.5% to 50 cents. Operating cashflow before interest and tax rose 222.3% to $53.5 million.

This result allowed the company’s board to increase the interim dividend per share by 60% to 40 cents.

Brokers at Citi, which rate Nick Scali shares as a buy, think the company will pay an annual dividend of 80 cents per share, equating to a grossed-up dividend yield of 10%.

Centuria Industrial REIT (ASX: CIP)

As the name suggests, this is a real estate investment trust (REIT) which invests in and owns industrial property. It describes itself as Australia’s largest domestic pure play industrial property investment vehicle.

It owns 59 properties with a total value of $2.4 billion, which are in prime locations and situated close to important infrastructure.

The ASX dividend share owns manufacturing facilities, with tenants like Arnott’s and Visy. It has distribution centres with tenants such as Woolworths Group Ltd (ASX: WOW) and Australian Pharmaceutical Industries Ltd (ASX: API). The REIT owns transport logistics with tenants such as Australia Post and DHL. Centuria Industrial REIT also owns data centres, tenanted by Telstra Corporation Ltd (ASX: TLS), and it also owns cold storage facilities.

In terms of the geographical location of these buildings, 89% of the portfolio is weighted to the eastern seaboard. Occupancy currently sits at 97.7% with a weighted average lease expiry (WALE) of 9.8 years. Less than 8.5% of the portfolio has a lease expiry date within the next 18 months.

In terms of the balance sheet, it had a gearing ratio of 29.6% at the time of the half-year result.

For FY21, the ASX dividend share upgraded its funds from operations (FFO) – its rental profit – expectations to be no less than 17.6 cents per unit, with a distribution of 17 cents per unit. The guidance of an annual 17 cents per unit distribution equates to a current yield of 5.5%.

UBS currently has a buy rating on Centuria Industrial REIT with a share price target of $3.38.

More reading

• Here’s what’s likely to supercharge ASX logistics demand in 2021: fundie
• ASX retail shares show strong signs of resurgence 
• Nick Scali (ASX:NCK) returns half the JobKeeper it received
• How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?
• ASX stock of the day: Temple & Webster (ASX:TPW) goes from strength to strength

Motley Fool contributor Tristan Harrison 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 owns shares of Woolworths Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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On Tuesday the S&P/ASX 200 Index (ASX: XJO) was on form again and stormed higher. The benchmark index rose 0.7% to 6,917.3 points.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX futures pointing lower

The Australian share market looks to have run out of steam. According to the latest SPI futures, the ASX 200 is expected to open the day 20 points or 0.3% lower this morning. This follows a mixed start to the week on Wall Street following the President’s Day holiday. In late trade the Dow Jones is up 0.25%, the S&P 500 is flat, and the Nasdaq is down 0.4%.

Oil prices flat

Energy producers Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) will be on watch today after a subdued night for oil prices. According to Bloomberg, the WTI crude oil price is flat at US$59.95 a barrel and the Brent crude oil price is flat at US$63.27 a barrel. Oil prices have been climbing this week after a deep freeze in the US shut oil wells.

Coles half year results

The Coles Group Ltd (ASX: COL) share price could be on the move today when it releases its half year results. According to a note out of Goldman Sachs, its analysts are expecting Coles to report group sales of $20,585.9 million for the half. This will be an increase of 9.2% on the prior corresponding period. On the bottom line, the broker is expecting a 10.5% increase in underlying net profit after tax to $540.4 million. This is forecast to lead to an interim dividend of 34 cents per share being declared.

Gold price sinks

Gold miners Evolution Mining Ltd (ASX: EVN) and Resolute Mining Limited (ASX: RSG) could come under pressure after the gold price sank overnight. According to CNBC, the spot gold price dropped 1.4% to US$1,798.00 an ounce. Rising US treasury yields are weighing on the safe haven asset.

Webjet half year results

All eyes will be on the Webjet Limited (ASX: WEB) share price this morning when it releases its half year results. The online travel agent is expected to report a material loss due to the impacts of COVID-19 on its operations. Investors will no doubt be paying close attention to commentary around its current cash burn and when it expects to be profitable again.

More reading

• The latest ASX shares upgraded by brokers to “buy” during the reporting season
• ASX 200 rises 0.7%, Redbubble sinks, BHP dividend jumps
• Leading brokers name 3 ASX shares to sell today
• NRW (ASX:NWH) share price jumps on acquisition update
• ASX 200 up 0.5%: BHP impresses, NAB rises, Zip rockets

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. 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 sixth biggest ASX-listed company, Fortescue Metals Group Limited (ASX: FMG), suffered a $3.1 billion reduction in market capitalisation today, following the announcement of leadership changes. 

The Fortescue share price nosedived following the announcement of several resignations in the company’s leadership team, leaving Fortescue shares down 3% at the closing bell.

Losing sight of values and culture

The details are sparse at the moment, with little being divulged to the market ahead of the company’s half-year results expected on Thursday. What is clear is that the following members of the leadership and projects team have resigned:

• Greg Lilleyman – Chief Operating Officer
• Don Hyma – Director of Projects
• Manie McDonald – Director of the Iron Bridge project

In an interview conducted this evening by the Australian Financial Review, CEO Elizabeth Gaines reiterated that there are no suggestions of inappropriate behaviour, corruption, or the like. Rather, this is a result of cultural issues and communication failures.

Cost concerns were initially raised for the US$2.6 billion magnetite Iron Bridge project in January. Reportedly, Peter O’Connor of Shaw and Partners estimates these blowouts could range somewhere between $1.2 billion and $3.34 billion.

Taking into account this sudden hit to the Iron Bridge team, the project must now be in further doubt.

Where to from here for Fortescue?

Derek Brown, current General Manager Solomon, has been put in place as Acting Director of Projects. It’s likely Brown will assume the role of attempting to piece together the tattered pieces left behind from the abrupt exits of his predecessors.  

In an additional measure to take accountability for whatever events have transpired, Elizabeth Gaines and chief financial officer Ian Wells are forgoing all incentive payments during this financial year. Gaines commented on the events:

As CEO I must also take accountability and learn from this. Both Ian Wells, Chief Financial Officer and I will forego all incentive payments this financial year. We take this opportunity to reset the Company’s focus on our culture and values which defines us and makes Fortescue a truly great company.

Lustre lost for Fortescue’s earnings

What could have been a stellar earnings report will now have a dark cloud looming over its head. Many shareholders will be more transfixed on greater detail of the exacting events, than on any growth metric or dividend.

The Fortescue share price is currently sitting at $23.70, down 4.4% in 2021 but up a significant 117% on this time last year.

More reading

• Why the SRG Global (ASX:SRG) share price reached a 52-week high
• ASX 200 Weekly Wrap: ASX cools on earnings reality check
• Is the Fortescue (ASX:FMG) share price a buy for dividends?
• 5 things to watch on the ASX 200 next week
• 2 ASX dividend shares to boost your income

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 Fortescue (ASX:FMG) share price hit by a $3 billion cultural problem appeared first on The Motley Fool Australia.

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