Tag: Motley Fool

Despite the turbulence of the share market in 2020, there are some shares and sectors that have enjoyed tailwinds — ecommerce in particular.

Oracle Investment Management portfolio manager Luke Winchester runs the fund’s emerging companies portfolio. In an interview with Stockhead, he commented that “the fund has been happy to side on the sidelines of the ecommerce theme.”

However, in the context of ecommerce, Winchester thinks there are still businesses who are benefitting from the pandemic, even if their share prices don’t reflect that. Jumbo Interactive Ltd (ASX: JIN) is one of the names his fund considers a hidden COVID-19 winner.

Winchester points to the fact the online lottery ticket reseller enjoyed a tailwind amid COVID-19, with the pandemic acting as a customer acquisition tool given brick-and-mortar stores were shuttered.

“They have now kept a big chunk of customers who were forced to use their services,” Winchester commented.

How did Jumbo perform in FY20?

Jumbo recorded total sales of $349 million in FY20. The company also booked a 9.1% increase in revenue to $71 million for FY20. Earnings before interest, taxes, depreciation and amortisation (EBITDA) grew 7.7% to $43.2 million.

The company attributes this growth to the launch of Ozlotteries.com and its “Powered by Jumbo” software as a service (SaaS) business.

Online platforms open up UK market

Oz Lotteries is an accredited retailer of Australian lottery tickets while the “Powered by Jumbo” SaaS business is an online platform that provides lottery and gambling services to consumers.

Upon the launch of the new platforms, Jumbo successfully secured a licence from the United Kingdom (UK) Gambling Commission to operate in the UK charities market in November.

According to the UK Gambling Commission, there are 168,168 registered charities in England and Wales, with a target addressable market in the UK worth £775.62 million (as of September 2020).

Partnership with Lotterywest

Jumbo also announced a lucrative agreement with the WA Government-owned and operated Lotterywest in November. Under the terms of the deal, the digital lottery retailer will provide its online software platform for up to 10 years.

Commenting on the agreement, Jumbo Interactive CEO Mike Veverka said: “This is a major achievement for Jumbo Interactive securing our first government client setting up a solid long-term partnership and providing strategic opportunities for Jumbo.”

Based on the terms of the partnership, Jumbo Interactive will receive a 9.5% service fee for every transaction through a white label platform.

Lotterywest will oversee the marketing strategy, while Jumbo Interactor will manage the platform, taking care of customer on-boarding, customer service and after-sale support.

Jumbo share price summary

At the time of writing, the Jumbo share price is up 1.24% for the day at $13.92 per share. However, despite the pandemic tailwinds, Jumbo shares remain 7% down year to date.

On current prices, Jumbo has a market cap of $858 million.

More reading

• 2 ASX tech shares to buy for 2021
• Why Abacus, Emerge Gaming, Jumbo, & Woodside shares are dropping lower
• Top brokers name 3 ASX shares to buy next week
• Why the Jumbo (ASX:JIN) share price is rising again today

Miles Wu has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive 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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Despite its share price trading more or less sideways over the last couple of months, major broker Goldman Sachs believes retail property group Home Consortium (ASX:HMC) is a buy.

Goldman reinstated its coverage over the company last week and has slapped a 12-month price target of $4.20 on the company’s shares. This would represent more than an 8% upside on the company’s current share price of just $3.83.

What is Home Consortium?

Home Consortium manages a retail and commercial property portfolio valued at over $1.7 billion. After the Masters home improvement brand went belly-up back in 2016, Home Consortium purchased the Masters property portfolio from Woolworths Group Ltd (ASX:WOW). The group renovated the old Masters sites and transformed them into multi-brand shopping centres serving suburban and regional areas.

It has a number of leading Australian retail brands in its centres, including Woolworths, Coles Group Ltd (ASX:COL), Harvey Norman Holdings Limited (ASX:HVN), Chemist Warehouse, Spotlight, and many other sporting goods and outdoor brands. Its property portfolio currently consists of 35 centres spread across 5 Australian states.

What does Goldman like about it?

Home Consortium recently established the HomeCo Daily Needs REIT (ASX:HDN). The new REIT property portfolio is focussed primarily on more defensive retail brands that would generate lower churn, like supermarkets, large format retail shops, and health and wellness centres. The REIT offers a more dependable income stream and has a lower gearing ratio, meaning it is less risky.

Home Consortium is also planning on creating another standalone REIT for its health, wellness and government portfolio in the first half of 2021. It recently acquired 6 health, education and government properties at a cost of $131 million, bringing the total value of properties in this asset base to more than $400 million.

Goldman believes that the creation of the new Daily Needs REIT, as well as the possible establishment of the Health, Wellness and Government REIT, leaves the core Home Consortium business more capital light with greater earnings potential.

What are the risks?

Despite its bullish outlook on the company’s shares, Goldman does flag a number of potential risks to investing in Home Consortium.

Key among them is the company’s obvious exposure to the retail property market. An economic slowdown or declining consumer confidence can both hurt the brick-and-mortar retail sector leading to both lower property values and rents. This could be a key concern for Home Consortium over the next 12 months as the market closely monitors how the retail industry recovers from the damage inflicted by COVID-19.

More reading

• Here’s why the Home Consortium (ASX:HMC) share price is in a trading halt

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

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The AVZ Minerals Ltd (ASX: AVZ) share price has been a very strong performer on Thursday.

At one stage today the lithium-focused mineral exploration company’s shares were up as much as 27% to a 52-week high of 12.5 cents.

The AVZ Minerals share price has given back some of these gains but is still up 17% to 11.5 cents at the time of writing.

Why is the AVZ Minerals share price rocketing higher?

Investors have been buying the company’s shares today after the release of a very positive announcement.

According to the release, the company has secured a strategic, long-term offtake partner with GFL International Co. It is the subsidiary of China’s largest lithium compounds producer, Ganfeng Lithium.

The release explains that the two parties have signed an offtake agreement for spodumene concentrate (SC6) that will see Ganfeng Lithium purchase 160,000 metric tonnes per annum from its Manono Lithium and Tin Project.

The initial term is for five years but has an option to be extended for a further five years.

AVZ’s Managing Director, Nigel Ferguson, commented:

“We are very pleased to finalise these discussions with GFL and to sign our first lithium offtake agreement. The fact we have signed our first offtake agreement with China’s largest lithium compound producer just reinforces our belief that the Manono Project is world-class.”

“GFL has signed on to take 30% of the Manono Project’s initialsaleable SC6 yearly tonnage, which is a massive endorsement for our project. Over the coming months, I look forward to finalising other offtake agreements which are currently under negotiation, not only for our lithium products but also for our tin and tantalum materials.”

“This SC6 offtake agreement with GFL will also greatly assist the Company in meeting any conditions precedent that are required for our prospective financiers. I look forward to updating our shareholders and the market with respect to the Company’s financing options for the Manono Project early in the New Year.”

More reading

• Why AVZ Minerals, BrainChip, BSA, & Credit Corp shares are storming higher

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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In early afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to end the shortened week on a positive note. At the time of writing, the benchmark index is up 0.6% to 6,680.9 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower:

Mesoblast limited (ASX: MSB)

The Mesoblast share price is down almost 1% to $2.34. This is despite there being no news out of the biotech company today. However, its shares have been extremely volatile recently after revealing disappointing results from two key studies.

Monash IVF Group Ltd (ASX: MVF)

The Monash IVF share price has tumbled 4% lower to 76 cents. Investors have been selling the fertility treatment company’s shares after it revealed that proceedings have been filed against it in the Supreme Court of Victoria. These proceedings are in relation to the company’s non-invasive preimplantation genetic screening technology. The claim does not specify an amount of damages sought.

Netwealth Group Ltd (ASX: NWL)

The Netwealth share price has fallen almost 3% to $15.94. Investors have been selling the investment platform provider’s shares despite there being no news out of it. However, with its shares up over 100% since the start of the year, this decline could be due to profit taking from some investors.

Reece Ltd (ASX: REH)

The Reece share price is down 1.5% to $14.85. Once again, this is despite there being no news out of the plumbing parts company today. Though, prior to today the company’s shares were up strongly over the space of the month. This was driven partly by the company’s inclusion in the ASX 200 index at the quarterly rebalance. Reece joined the illustrious index on Monday.

More reading

• ASX 200 up 0.5%: BHP Samarco update, A2 Milk’s acquisition, Credit Corp rockets
• Why a2 Milk, Air New Zealand, Mesoblast, & Recce shares are storming higher
• 7 top ASX biomedical shares in 2020
• Why AGL, Mesoblast, WiseTech, & Woodside are dropping lower
• Why Elixinol Global, Flight Centre, Mesoblast, & WiseTech shares are dropping lower

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 Netwealth. 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 Resonance Health Limited (ASX: RHT) share price is soaring today after the company announced an agreement involving its flagship artificial intelligence (AI) device.

The Resonance Health share price has surged up 9.3% to trade at 23.5 cents at the time of writing.

What’s the deal?

In today’s release, Resonance Health advised that its HepaFat-AI device, which assesses fatty-liver using AI, was being incorporated into its Blackford Analysis Agreement.

The news comes as HepaFat-AI recently received regulatory clearance from the US food and drug administration (FDA) allowing Resonance to commercially sell its flagship product in the US.

Blackford delivers platforms and services for the use of medical imaging applications and AI – a perfect match for Resonance Health. As such, the agreement enables Blackford’s customers to access HepaFat-AI and other Resonance Health products.

What is HepaFat-AI?

The company describes HepaFat-AI as a fully automated AI assessment device “that measures the volumetric liver fat fraction, proton density fat fraction and steatosis grade in individuals with confirmed or suspected fatty liver disease”.

When interpreted by a trained physician, the HepaFat-AI results can be used to monitor liver fat content in patients undergoing weight loss management. In addition, it can aid in the assessment and screening of living donors for liver transplant.

About the Resonance Health share price?

Resonance Health is developing non-invasive medical imaging software. Its products are used by clinicians to diagnose and manage human diseases, and by pharmaceutical companies in their clinical trials.

Despite FDA clearance earlier this month that sent its shares flying 80%, the Resonance Health share price is trading 8% lower for the year. Investors may be disappointed with this return as the S&P/ASX 200 Health Care Index (ASX: XHJ) has returned 2.7% over the same period.

More reading

• Why the Resonance Health (ASX:RHT) share price is shooting 39% higher today
• Why Afterpay, Creso Pharma, Healius, & Resonance Health shares are storming higher

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 Resonance Health 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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At lunch on Thursday the S&P/ASX 200 Index (ASX: XJO) is on course to finish the week strongly. The benchmark index is up 0.5% to 6,675.6 points.

Here’s what is happening on the market today:

BHP resumes operations at Samarco.

The BHP Group Ltd (ASX: BHP) share price is pushing higher on Thursday after announcing that its Samarco operation has resumed operations after just over five years in suspension. According to the release, Samarco has now met the licensing requirements to restart its operations at the Germano complex in Minas Gerais and its Ubu complex in Espírito Santo, Brazil. As a result, the mining giant has commenced iron ore pellet production.

A2 Milk acquisition.

The A2 Milk Company Ltd (ASX: A2M) share price on the rise today after it confirmed that it has entered into a binding agreement relating to the acquisition of a 75% interest in Mataura Valley Milk (MVM). According to the release, the company will be paying a total consideration of NZ$268.5 million for the 75% stake in MVM. This is based on an enterprise value of circa NZ$385 million. MVM is a dairy nutrition business that is located in Southland, New Zealand.

Credit Corp rockets.

The Credit Corp Group Limited (ASX: CCP) share price is surging higher today after it announced that it has entered into a binding agreement to acquire the Australian Purchased Debt Ledger (PDL) book of Collection House Group Limited (ASX: CLH). Credit Corp has agreed to pay a total consideration of approximately $160 million plus the provision of a short-term loan of $15 million which is expected to be fully repaid within 9 months.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Thursday has been the Credit Corp share price by some distance. The debt collector’s shares are up 19% at lunch. The worst performer has been the Netwealth Group Ltd (ASX: NWL) share price with a 3% decline on no news.

More reading

• Why the Credit Corp (ASX:CCP) share price is surging 19% higher today
• Why AVZ Minerals, BrainChip, BSA, & Credit Corp shares are storming higher
• 10 incredible quotes that sum up investing in 2020
• Why the Woodside (ASX:WPL) share price is edging higher today
• Iron ore prices poised to hit US$180 next month: Westpac

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 Netwealth. The Motley Fool Australia owns shares of and has recommended A2 Milk. 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 Beach Energy Ltd (ASX: BPT) share price is up slightly in morning trade, after the company announced yesterday that its joint venture with Mitsui & Co. has made a final investment decision (FID) for the Waitsia Gas Project stage 2 development in Western Australia.

This decision reportedly comes after two years of the Beach Energy and Mitsui & Co. teams working to deliver this outcome.

At the time of writing, Beach Energy share price is up 1.75% to $1.86 per share.

What are the details of the decision? 

The Waitsia gas field is ranked as one of the top 5 largest onshore gas fields ever discovered in Australia. The proposed new production facility in stage 2 will lift output to 250 terajoules of natural gas each day.

The second stage of the project has an expected cost of $700 million to $800 million. Beach Energy’s contribution will be $350 million to $400 million net. Funding for the contribution will be derived from the company’s existing cash flows and facilities.

Full funding is anticipated to be delivered in the third quarter of 2021, pending regulatory approvals and commercial conditions.

If all goes to plan, Beach will commence production of the stage 2 development in the second half of 2023.

All a part of the plan 

Beach Energy managing director Matt Kay revealed that the approval of this project is core to the company’s 5-year growth strategy. Annual production of more than 37 MMboe (million barrels of oil equivalent) is being targeted by 2025.

Mr. Matt Kay spoke to the value this project could bring to shareholders:

We believe the project offers material value to Beach’s shareholders and, through the agreement to export through the North West Shelf facilities, makes Beach an LNG player for the first time in the Company’s 60-year history.

This development comes after the Western Australia premier, Mark McGowan, delivered an exemption to the state’s strict gas reservation policy for the onshore gas project.

Next steps?

Beach Energy isn’t the only company making progress on expansion plans. Its bigger brother Santos Ltd (ASX: STO) announced back in November that it was pursuing FID for the next phase of its Narrabri Gas Project.

It seems that these Aussie energy stocks aren’t turning off the gas anytime soon. The next step for Beach will be to get all the regulatory checkboxes ticked, such as approval from the state’s Environmental Protection Authority, before any works are started.

More reading

• Why the Woodside (ASX:WPL) share price is edging higher today
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday

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 What’s moving the Beach Energy (ASX:BPT) share price today? appeared first on The Motley Fool Australia.

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The Beach Energy Ltd (ASX: BPT) share price is up slightly in morning trade, after the company announced yesterday that its joint venture with Mitsui & Co. has made a final investment decision (FID) for the Waitsia Gas Project stage 2 development in Western Australia.

This decision reportedly comes after two years of the Beach Energy and Mitsui & Co. teams working to deliver this outcome.

At the time of writing, Beach Energy share price is up 1.75% to $1.86 per share.

What are the details of the decision? 

The Waitsia gas field is ranked as one of the top 5 largest onshore gas fields ever discovered in Australia. The proposed new production facility in stage 2 will lift output to 250 terajoules of natural gas each day.

The second stage of the project has an expected cost of $700 million to $800 million. Beach Energy’s contribution will be $350 million to $400 million net. Funding for the contribution will be derived from the company’s existing cash flows and facilities.

Full funding is anticipated to be delivered in the third quarter of 2021, pending regulatory approvals and commercial conditions.

If all goes to plan, Beach will commence production of the stage 2 development in the second half of 2023.

All a part of the plan 

Beach Energy managing director Matt Kay revealed that the approval of this project is core to the company’s 5-year growth strategy. Annual production of more than 37 MMboe (million barrels of oil equivalent) is being targeted by 2025.

Mr. Matt Kay spoke to the value this project could bring to shareholders:

We believe the project offers material value to Beach’s shareholders and, through the agreement to export through the North West Shelf facilities, makes Beach an LNG player for the first time in the Company’s 60-year history.

This development comes after the Western Australia premier, Mark McGowan, delivered an exemption to the state’s strict gas reservation policy for the onshore gas project.

Next steps?

Beach Energy isn’t the only company making progress on expansion plans. Its bigger brother Santos Ltd (ASX: STO) announced back in November that it was pursuing FID for the next phase of its Narrabri Gas Project.

It seems that these Aussie energy stocks aren’t turning off the gas anytime soon. The next step for Beach will be to get all the regulatory checkboxes ticked, such as approval from the state’s Environmental Protection Authority, before any works are started.

More reading

• Why the Woodside (ASX:WPL) share price is edging higher today
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday

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 Primewest Group Ltd (ASX: PWG) share price is slipping today on news the property manager has added two new assets to its portfolio. At the time of writing, the Primewest share price is trading down 1.6% at $1.23. 

It has been a volatile year for the real estate investment trust (REIT) which has suffered as a result of the coronavirus pandemic. However, the Primewest share price has since rebounded and is trading 10% higher for the year, outperforming the S&P/ASX 200 Real Estate Index (ASX: XRE).

What’s the deal today?

Primewest announced it has added two regional shopping centres to its portfolio with total assets of $92 million. The company has acquired the asset management rights for Chester Pass Mall in regional Western Australia, and Pialba Place, a sub regional shopping centre in Hervey Bay, north of Brisbane.

Primewest said Pialba Place had a weighted average lease expiry of 5.31 years, while Chester Mall boasted 7.9 years. This metric represents the average time when all leases expire, and is used by property managers as a measure for expected future income streams.

In addition, the company said its new assets had the security of blue chip tenants including Coles Group Ltd (ASX: COL), Woolworths Group Ltd (ASX: WOW) and Bunnings, owned by Wesfarmers Ltd (ASX: WES).

What did management say?

Commenting on the deal, Primewest chairman John Bond said:

Securing another $92 million in assets under management in a single transaction is a great outcome for Primewest which already has an extensive network of retail assets in both Queensland and WA.

Both assets have been enhanced recently with the opening of a new Bunnings Warehouse at Chester Pass Mall earlier this month and ongoing improvements and leasing activity at Pialba Place. There is significant further development and leasing upside in both assets which will delivered in the short to medium term.

What now for the Primewest share price

Primewest has more than $4.9 billion worth of assets under management across all states of Australia and the west coast of the United States. Established in 1995, it aims to add value in a counter cyclical manner, operating in the agricultural, retail, industrial, commercial and residential areas.

The Primewest share price has recovered strongly since its March lows, rising an impressive 79% in the period.

More reading

• Why the Credit Corp (ASX:CCP) share price is surging 19% higher today
• Why AVZ Minerals, BrainChip, BSA, & Credit Corp shares are storming higher
• 10 incredible quotes that sum up investing in 2020
• Why the CIMIC (ASX:CIM) share price is pushing higher
• Why the Woodside (ASX:WPL) share price is edging higher today

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

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The Credit Corp Group Limited (ASX: CCP) share price is surging higher today. This comes after the company announced an acquisition of a ledger book and an increase of its FY21 guidance.

At the time of writing, the Credit Corp share price is up 19% to $29.70.

What’s driving the Credit Corp share price higher?

According to its release, Credit Corp advised that it will acquire the Australian purchased debt ledger (PDL) book of Collection House Limited (ASX: CLH).

Collection House is a credit management agency that specialises in commercial debt recovery and outsourced credit control.

The book value of the transaction is estimated to be around $160 million. Credit Corp, however, will provide Collection House with an additional short-term loan of $15 million. The loan is due to be repaid back within 9 months and is secured against Collection House’s tax receivables.

The total amount of the deal is subject to minor adjustments including costs associated with the transaction. Credit Corp therefore estimates it will have a net expense of $150 million from the acquisition. This will be funded by the company tapping into its existing cash reserves, without the need to draw down on loan facilities.

The transaction is expected to be completed by the end of the current calendar year.

Under the terms of the agreement, Collection House is able to receive a portion of the collection funds that Credit Corp recovers. This is provided that Credit Corp achieves above the level required to have a return on its investment. Pleasingly, the book that will be acquired includes ongoing payment arrangements to the value of almost $200 million.

Words from the CEO

Commenting on the transaction, Credit Corp CEO Mr. Thomas Beregi said:

Acquisition of Collection House’s Australian book will be the largest single PDL purchase in Credit Corp’s history.

Even after this acquisition, Credit Corp will retain almost $400 million in available cash and funding lines to deploy as and when suitable investment opportunities arise across all of its segments.

Revised guidance

With the deal due to be wrapped in the coming days, Credit Corp revised its guidance for 2021. The company is forecasting its current financial year earnings to grow by $10 million in net profit after tax. This brings the adjusted net profit after tax between $70 million to $85 million, which is an increase on the previously projected net profit after tax of $60 million to $75 million.

Credit Corp said it will update shareholders on its operational performance at its half-year results release on 2 February 2021.

At the time of writing, the Credit Corp share price is up almost 20% in morning trade, giving it a current market cap of $1.67 billion.

More reading

• Why AVZ Minerals, BrainChip, BSA, & Credit Corp shares are storming higher

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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