Tag: Motley Fool

A number of classic Australian brands listed on the ASX last week. These tech-enabled companies saw significant increases in their share prices after listing. Here’s the rundown for ASX IPOs you might have missed. 

Booktopia Group Ltd (ASX: BKG) 

Booktopia is the largest Australian-owned online book retailer by market share with revenue in FY20 of $165.8 million. More than 85% of the items it sold in FY2020 were books. However it also sells eBooks, DVDs, audiobooks, magazines, maps, calendars, puzzles, stationery and cards. The company’s revenue has grown at a compound annual growth rate of approximately 26.4% between FY15 and FY20. 

The company raised $43.1 million at an offer price of $2.30 per share.  The Booktopia share price has since jumped more than 30% to almost $3.00. 

Nuix Ltd (ASX: NXL) 

Nuix is a provider of investigative analytics and intelligence software. Its platform supports a range of established use cases, including criminal investigations, financial crime, litigation support, employee and insider investigations, data protection and privacy, data governance, legal eDiscovery and regulatory compliance.

The company has been involved in some headline events over the last 15 years including the Panama Papers, the Royal Commission into the misconduct in the banking, superannuation and financial service industry in Australia, organised crime rings, corporate scandals and terrorist activities. 

Nuix has a customer base of more than 1,000 existing customers, including large government agencies, regulators, corporations and professional services firms. In FY20, the company achieved $175.9 million in total revenue, an increase of 25.9% on the previous financial year.

The company successfully raised $953 million at an offer price of $5.31 per share. Its shares opened more than 50% higher on its debut last Friday and closed at $9.06 on Monday. 

Cashrewards Ltd (ASX: CRW) 

Cashrewards is the largest Australian-owned-and-operated cashback ecosystem with more than 800,000 members and 1,500+ merchant partners. Members can browse brands and access cashback offers while shopping online or in-store with participating merchant partners.

The company generates revenue from commission from merchant partner sales and gift cards. In FY20, the company achieved $17.1 million in revenue and a net profit after tax loss of $5.7 million.

Its IPO raised $65.0 million at $1.73 per share. The Cashrewards share price is closed at $2.03 on Monday, or 17% higher than its offer price. 

More reading

• Watch out! ASX IPO boom may sink the ASX bull market in 2021
• The Nuix (ASX:NXL) share price rocketed a further 37% higher today
• Why Fortescue, Metcash, Nuix, & Xero shares are storming higher
• ASX 200 goes up on Friday
• The Nuix (ASX:NXL) share price zoomed 69% higher following its IPO

Motley Fool contributor Lina Lim 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 AML3D Ltd (ASX: AL3) share price will be on watch this morning. This comes after yesterday’s market close announcement that the company is progressing with its next-gen body armour program.

Progression to stage 2 development

The AML3D share price could be on the move today after the company advised its next-gen body armour program has progressed to the second stage.

According to the release, AML3D’s ‘made-to-fit’ titanium body armour entered the next stage of prototype development with Lightforce Australia Pty Ltd.

Lightforce is a developer and manufacturer of defence solutions with operations in Australia and the United States.

Production of the innovative, high-tech body armour is under direct supervision of AML3D’s Wire Arc Manufacturing division. It is stated that the prototype is uniquely printed in a way that is not possible using traditional techniques. Potential applications include creating ‘made-to-fit’ body armour by scanning the torsos of individual soliders. 

The first stage of the program marked the beginning of the Memorandum of Understanding (MoU) with Lightforce and involved product testing. The second stage will encompass ballistics testing with additional prototypes. These samples will be used with a variety of thicknesses and finished using a range of different techniques and treatments. The end goal for AML3D is to optimise the design to deliver the lightest, yet strongest armour to market.

Finalisation of the second stage will conclude the testing phase under the MoU. AML3D will spend $55,000 on providing several prototypes to Lightforce for testing.

AML3D advised it is confident it will succeed in developing the next-gen body armour product for commercialisation. The company also noted the opportunity for contract manufacturing revenues is significant.

According to AML3D, the market for such a product is expected to be above US$3 billion by 2025, representing a compound annual growth rate of 5.5%.

Management commentary

AML3D managing director, Mr Andrew Sales, was pleased with the company’s achievements. He said:

We’re excited to progress to Stage 2 with Lightforce in the development of a disruptive, world- first product offering. We’re confident that our highly qualified team will be able to deliver a range of prototypes that meet or exceed Lightforce’s required specifications.

Post the recent capital raise, AML3D is now well capitalised to fulfil the demands of opportunities such as Lightforce, which have the potential to deliver significant contract manufacturing revenues.

About the AML3D share price

The AML3D share price has risen strongly since its initial public offering (IPO) earlier this year. Back in April, AML3D shares were asking just 15 cents but have since increased to 42 cents as at yesterday’s close. This reflects a gain of 180% for investors who held the company’s shares over this eight month period.

The AML3D share price reached an all-time high of 73 cents in September, and has been gradually trending lower in the months following.

More reading

• This cheap ASX share is supplying US giants: fundie

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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There are a few different reasons to be interested in watching the A2 Milk Company Ltd (ASX: A2M) share price.

What does A2 Milk do?

It’s a premium-branded dairy nutritional company which is focused on products containing the A2 beta-casein protein type. Its sales items like liquid milk, powdered milk, ice cream and infant formula.

Its products are sold in various places including New Zealand, Australia, China, the US, Vietnam and South Korea. It’s also testing a fresh milk presence in Singapore and recently launched into the Canadian market.

Here are three reasons to consider looking at A2 Milk shares:

International growth

The company has experienced difficulties this year because of impacts relating to COVID-19.

A2 Milk said it has seen disruption to the corporate daigou and reseller channel, particularly because of the restrictions in Victoria. The daigou revenue reduction was beyond its previous expectations and without the replenishment orders that would have been expected by that point.

Sales in the daigou channel represent a significant portion of infant formula sales in the Australia and New Zealand business.

However, sales made internationally are growing strongly. In FY20 A2 Milk achieved sales of $337.7 million for the Chinese label infant nutrition business, which was growth of over 100%. Its Chinese mother and baby store (MBS) value share was 2%, compared to 1.7% at 31 December 2019 and 1.3% at FY19. It also saw 40.3% growth of its English label infant nutrition cross border-commerce sales in FY20.

In the US it achieved 91.2% growth of its revenue, whilst earnings from Western Canada had just started.

A2 Milk’s recent trading update said that its US milk revenue continues to grow strongly, whilst the local China business is performing strongly as well.

Once local COVID-19 impacts subside, A2 Milk is expecting significant improvement in the second half of FY21 and beyond.

Strong balance sheet

Many businesses had to carry out a capital raising during the 2020 to ensure stability during the difficult COVID-19 conditions.

A2 Milk wasn’t one of those businesses that had to do a dilutive capital raising at a low share price.

That’s because it has a large amount of cash sitting on the balance sheet. At the end of FY20 it had a closing cash balance of NZ$854.2 million and no debt.

At the moment A2 Milk is contemplating using some of that cash, around NZ$385 million, to buy a 75.1% interest in Mataura Valley Milk. This business has recently constructed and commissioned a state of the art nutritional facility which could be used to complement A2 Milk’s existing supply relationships. Management think it’s well located for access to a growing productive milk pool supported by favourable climactic conditions and water availability.

Mataura Valley Milk has agreed to provide A2 Milk with a period of exclusivity to conduct confirmatory due diligence and negotiate definitive transaction documentation.

Valuation

The A2 Milk share price has fallen down to almost $13. It didn’t even fall that low during the COVID-19 crash. It was November 2019 when it was last that low.

At this level, it’s priced at 23x FY22’s estimated earnings according to Commsec. This compares to other popular growth shares like Appen Ltd (ASX: APX) which is trading at 30x FY22’s estimated earnings.

More reading

• These are the 10 most shorted shares on the ASX
• 2 stellar ASX growth shares to buy in December
• Why healthcare, tech and consumer staples shares underperformed the ASX 200 in November
• 10 fantastic ASX shares to buy in December
• 2 fantastic ASX growth shares to buy

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd. 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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With the outlook for interest rates remaining very bleak, it is fortunate that there such a large number of dividend shares for investors to choose from on the Australian share market.

Two ASX dividend shares that offer investors very generous yields are listed below. Here’s why they come highly rated:

Aventus Group (ASX: AVN)

Aventus is a retail property company with a difference. It is the owner and operator of 20 large format retail parks across Australia. These retail parks count major retailers such as ALDI, Bunnings, Officeworks, and The Good Guys as tenants.

It was thanks to its high weighting to national retailers, and particularly everyday needs, that allowed Aventus to come out of the pandemic relatively unscathed. The company was able to collect the majority of its rent as normal despite the disruption in the retail sector.

One broker that is positive on the company is Goldman Sachs. Its analysts have a buy rating and $2.76 price target on its shares. They also estimate that the current Aventus share price currently offers a forward ~6.1% dividend yield.

Fortescue Metals Group Limited (ASX: FMG)

Fortescue is one of the world’s leading iron ore producers. It appears well-positioned to deliver another very strong result in FY 2021. This is thanks to its record shipments, ultra low C1 costs of US$12.74 per wet metric tonne, and sky high iron ore prices.

In respect to the latter, on Friday the spot iron ore price jumped a further 5.4% to a seven year high of US$145.30 a tonne. This was driven by production cuts in Brazil by mining giant Vale.

This news led to analysts at Macquarie reaffirming their outperform rating and lifting their price target on the company’s shares to $23.00. The broker is also now forecasting a $2.61 per share fully franked dividend in FY 2021. Based on the latest Fortescue share price, this equates to a massive 12% dividend yield.

More reading

• Top ASX shares making record all-time highs
• Leading brokers name 3 ASX shares to buy today
• ASX 200 up 0.7%: Metcash impresses, BHP & Fortescue storm higher, Xero given buy rating
• Why Fortescue, Metcash, Nuix, & Xero shares are storming higher
• Why ASX iron ore stocks are set to rally today

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

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The Link Administration Holdings Ltd (ASX: LNK) share price will be on watch on Tuesday following the release of an announcement after the market close yesterday.

What did Link announce?

On Monday afternoon Link announced that it has received a new unsolicited takeover approach, potentially sparking a bidding war.

According to the release, SS&C Technology has tabled an offer of $5.65 per share. This represents a 13.9% premium to Link’s last close price. This offer price assumes no further dividends, distributions, or reductions in capital.

SS&C Technology is a NASDAQ listed global provider of investment and financial software-enabled services and software for the financial services and healthcare industries.

This isn’t the first time SS&C Technology has taken a liking to an ASX listed share. Last year it outbid Bravura Solutions Ltd (ASX: BVS) in an ultimately unsuccessful attempt to acquire GBST Holdings.

What now?

The Link board advised that it will now consider the SS&C Technology proposal. This includes obtaining advice from its financial and legal advisers.

In the meantime, a consortium comprising Pacific Equity Partners and Carlyle Group continues to undertake due diligence in the Link data room.

The consortium currently has an offer of $5.40 per share on the table. Though, shareholders will no doubt be hoping that the offer from SS&C Technology, which is a 4.6% premium, will lead to an improved offer from the Pacific Equity Partners and Carlyle Group consortium.

For now, Link has told shareholders that they do not need to take any action in relation to the SS&C Technology proposal. It also warned that there is no certainty that the discussions with SS&C Technology will result in any transaction.

However, if there are material developments in the future, Link will inform shareholders as required under its continuous disclosure obligations.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Why the Downer (ASX:DOW) share price is outperforming today

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 Link Administration Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd. The Motley Fool Australia has recommended Link Administration 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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On Monday the S&P/ASX 200 Index (ASX: XJO) started the week on a positive note. The benchmark index rose 0.6% to 6,675 points.

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

ASX 200 expected to fall.

The Australian share market looks set to give back some of its gains on Tuesday. According to the latest SPI futures, the ASX 200 is poised to open the day 16 points or 0.25% lower this morning. This follows a reasonably mixed start to the week on Wall Street. In late trade the Dow Jones is down 0.65%, the S&P 500 is down 0.4%, and the Nasdaq is up 0.3%.

Link receives takeover offer.

The Link Administration Holdings Ltd (ASX: LNK) share price could be on the rise today after it revealed the receipt of an unsolicited takeover approach. SS&C Technology Holdings has tabled an offer of $5.65 per share. This represents a 13.9% premium to Link’s last close price. The Link board will now consider the SS&C proposal, including obtaining advice from its financial and legal advisers.

Oil prices soften.

It could be a tough day for energy producers including Oil Search Ltd (ASX: OSH) and Woodside Petroleum Limited (ASX: WPL) on Tuesday after oil prices softened. According to Bloomberg, the WTI crude oil price is down 0.75% to US$45.91 a barrel and the Brent crude oil price has fallen 0.75% to US$48.88 a barrel. COVID-related forced lockdowns are weighing on demand for oil.

Gold price jumps.

Gold miners such as Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could be on the rise today after the gold price jumped higher. According to CNBC, the spot gold price is up 1.3% to US$1,863.90 an ounce. This was driven by US stimulus optimism and a weaker US dollar.

Bank of Queensland AGM.

The Bank of Queensland Limited (ASX: BOQ) share price will be in focus today when it holds its annual general meeting. Shareholders will be keen to see how the regional bank is faring in the first half of FY 2021. In the last financial year the bank recorded $133 million in COVID-19 collective provisions. They will be optimistic that no further provisions will be necessary.

More reading

• ASX 200 rises on Monday
• Here’s why the Beach Energy (ASX:BPT) share price is up more than 50% over the past month
• Regional Express (ASX:REX) share price soars to 13-year high
• Watch out! ASX IPO boom may sink the ASX bull market in 2021
• After record breaking ASX share price rallies, what next in 2021?

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 Link Administration Holdings Ltd. The Motley Fool Australia has recommended Link Administration 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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Antipodes Partners, which is the manager of Antipodes Global Investment Company Ltd (ASX: APL), has been scouring the global market for investment options and identified three which it feels are top options for value investors.

Which shares does Antipodes like?

The first share which Antipodes believes is great value is US-based specialty beauty chain, Ulta Beauty (NASDAQ: ULTA).

Client Portfolio Manager, Alison Savas, commented: “Ulta Beauty is one of the largest specialty beauty chains in the US. It’s a similar beauty concept to Sephora or Mecca here in Australia but stands apart for providing both mass and prestige brands to consumers under the one roof.”

Ms Savas believes Ulta Beauty can outperform the beauty industry’s growth by winning market share from department stores and smaller market participants. In addition to this, the company’s strong online business is expected to be a key driver of growth.

“COVID forced Ulta to shut down its 1,200 stores, but the business was well placed from earlier ecommerce platform investment. Its online sales have grown triple digits but Ulta also remains a reopening beneficiary as customers get back to their stores for the unique advice and experience from testing products and getting treatments,” she added.

A retail property option.

The portfolio manager also sees an opportunity for investors with Simon Property Group (NYSE: SPG). It is a dominant force in the US retail mall and outlet sector with a share of over 40% of the premium malls and outlets. This makes it a go-to partner for US retailers, according to Antipodes.

While trading conditions will remain volatile in the near term, Ms Savas believes Simon Property Group is well-placed for the future. An added bonus is the attractive dividend yield it offers.

She explained: “Adjustments are occurring in the retailing industry. Some Simon tenants will disappear, as they have during prior retail cycles, but they’ll be replaced by other retailers looking for access to high traffic real estate.  Whilst waiting for sentiment to improve, Simon pays a sustainable 6% cash dividend yield.”

A beverage giant to buy.

A final option that Antipodes believes offers a lot of value is the global parent of Coca-Cola Amatil Ltd (ASX: CCL) – The Coca-Cola Company (NYSE: KO).

Ms Savas believes the beverage giant is well-placed to benefit once the pandemic passes.

She explained: “We believe Coca-Cola is another great reopening play. Coke generates just over 40% of its global revenue from on-premise consumption – which is cafes, restaurants, bars and entertainment/sporting venues. These have all been shuttered thanks to lockdown and social distancing.”  

“As well as a reopening opportunity, Coke is distinctive from most other consumer staples by retaining strong influence over its bottler supply chain, right up to delivery and stocking customer shelves. This helps the business keep distribution costs low, maintain customer relationships and sustain pricing power,” she added.

The portfolio manager expects the company to grow faster than its peers, leading to a re-rating of its shares to higher multiples.

More reading

• Meet the latest ASX stock to come under the takeover spotlight
• Can these fund managers drive the Coca-Cola Amatil (ASX:CCL) share price 10% higher?
• BlueScope (ASX:BSL) share price on watch as takeover rumours swirl
• Aussie companies blast ‘knee-jerk’ COVID-19 border closures
• 3 shares that have strongly outperformed their sectors this month

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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The S&P/ASX 200 Index (ASX: XJO) has delivered its 5th straight week of gains. While many ASX 200 shares are still well below their pre-COVID-19 price levels, some are not only setting year-to-date highs on the ASX, they’re breaking out into record territory. Let’s take a look at 4 of the top ASX share performers.

Fortescue Metals Group Limited (ASX: FMG) 

Iron ore prices have gone from strength-to-strength, backed by an industrial boom in China and supply-side challenges from key exporters. The spot price has soared to a 7-year high of US$141 per tonne, up from US$100 in June and US$90 in January this year. Higher iron ore prices warrant a higher Fortescue share price, as such, it set an all-time high of $21.55 today. 

Mineral Resources Limited (ASX: MIN) 

Mineral Resources is a diversified mining services company with a range of mining services to help clients operate and maintain facilities, establish and manage production. The company has also invested into commodity projects including iron ore and lithium assets. 

The commodity boom has benefited every aspect of its business. FY20 was the company’s best full year results to date, with underlying earnings before interest, tax, depreciation and amortisation (EBITDA) up 77% to $765 million and a return on invested capital of 49.6%. Its mining services has experienced a 65% increase in volumes with revenue up 50%. While its iron ore projects have maximised volumes to capitalise on strong iron ore prices. 

The Mineral Resources share price has more than doubled in 2020, and hit a record all-time high of $35.55 on Monday. 

Polynovo Ltd (ASX: PNV) 

The Polynovo share price was seemingly going nowhere as it spent July through to mid-October drifting around the $2.20 mark. A series of positive announcement in October and November pushed its share price to record highs of $3.85 on Monday.

This includes distribution partners appointed in Finland in September, Taiwan FDA approval in October, AGM with a strong US sales update in November, and finally, entry into Belgium, Netherlands, Luxemburg and Sweden in mid-November.

Xero Limited (ASX: XRO) 

The Xero share price has been on a tear since the initial March selloff. The Xero share price hit a record all-time high of $139.61 on Monday. Its share price received an extra kick from Goldman Sachs as it initiated coverage of Xero shares with a buy rating and price target of $157. 

More reading

• The sector that’ll explode in February: fundie
• 2 of the best ASX tech shares you can buy today
• Leading brokers name 3 ASX shares to buy today
• ASX 200 up 0.7%: Metcash impresses, BHP & Fortescue storm higher, Xero given buy rating
• Why Fortescue, Metcash, Nuix, & Xero shares are storming higher

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of POLYNOVO FPO and Xero. 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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NSX Ltd (ASX: NSX) was placed in a trading halt this afternoon, after shares in the stock exchange operator dropped 15% to 28 cents.

The NSX share price plummeted on news the Australian Securities and Investments Commission (ASIC) has launched civil proceedings in the Federal Court against iSignthis Ltd (ASX: ISX) and its managing director John Karantzis.

Mr Karantzis is also managing director of NSX.

A long list of allegations

ASIC alleges that iSignthis breached its continuous disclosure obligations by failing to disclose material information regarding 3 client contract agreements.

The customers – Corp Destination Pty Ltd, Fcorp Services Ltd and IMMO Servis Group – entered into agreements that provided one-off integration and set-up services for trading platforms.

ASIC alleges the revenues derived under the agreements resulted in iSignthis achieving performance milestones which caused the allocation of 336,666,667 performance shares – a substantial majority of which were allocated to the iSignthis directors, including to Mr Karantzis.

Specifically, ASIC alleges iSignthis failed to disclose in 2018 that it had recognised approximately $3 million in revenue that was one-off and non-recurring. It’s alleged that the revenue was derived from the integration agreements.

In an analyst briefing given by Mr Karantzis on 3 August 2018, ASIC alleges that Mr Karantzis stated iSignthis’ revenue for one-off fees accounted for less than 15% of the total revenue, when ASIC alleges it actually amounted to 75% of the total unaudited revenue for that period.

Due to these breaches, ASIC says that Mr Karantzis was involved in the failure of iSignthis to comply with its continuous disclosure obligations, and that Mr Karantzis contravened his directors’ duties under the Corporations Act.

A terminated relationship

ASIC’s proceedings also relate to iSignthis’ statements about the suspension and termination of its commercial relationship with global payments company Visa Inc (NYSE: V).

ASIC alleges that by 17 April 2020, iSignthis failed to disclose that Visa had terminated its relationship with iSignthis.

According to Visa, its decision to terminate was due to, “IsignThis not operating appropriate programs to manage Anti-Money Laundering and Risk”.

ASIC is currently seeking orders that Mr Karantzis be disqualified from managing corporations.

NSX and ISignthis share prices

Prior to today, the NSX share price has been enjoying a good year, rising by more than 100%. It is the owner and operator of two stock exchanges in Australia – the National Stock Exchange of Australia Ltd, and IR Plus Securities Exchange Limited.

The NSX business has no relevance or association with the iSignthis’ fintech business. However, it has been caught in the crossfire today as its managing director Mr Karantzis is also the chief executive of Isignthis.

The shares of iSignthis have been suspended by the ASX since October.

More reading

• 3 reasons Mastercard is a buy

Motley Fool contributor Eddy Sunarto 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 S&P/ASX 200 Index (ASX: XJO) went up by around 0.6% to 6,675 points today.

Here are some of the highlights from the ASX:

Metcash Limited (ASX: MTS)

The food, liquor and hardware business reported its FY21 half-year result and revealed that it saw significant growth in sales volumes across all of its pillars.

Metcash reported total revenue increased 12.2% to $7.1 billion. Revenue growth was 12.3% to $8.1 billion when including charge-through sales.

‘Food’ benefited from the move to ‘shop local’ and the improved competitiveness of retailers resulted in an increase in both foot traffic and average basket size. Total food sales rose 9.5% to $4.8 billion.

‘Liquor’ experienced high levels of demand across the retail stores, which more than offset the adverse impact of trading conditions of ‘on premise’ customers. Total liquor sales went higher by 14.3% to $2 billion.

Finally, hardware experienced elevated demand from DIY customers and a return to growth in trade. Hardware sales increased by 20.6% to $1.3 billion.

Overall, group underlying earnings before interest and tax (EBIT) rose by 30.4% to $203 million. Underlying net profit after tax jumped 43% to $129.6 million. It generated statutory profit after tax of $125.1 million.

Metcash CEO Jeff Adams said: “All pillars performed exceptionally well, adapting quickly to the many challenges associated with COVID-19 while continuing to successfully execute their strategic initiatives and champion the success of our independent retailers.”

The Metcash board decided to increase the interim dividend by 33% to 8 cents per share.

In terms of an FY21 trading update, it said that food sales in the first five weeks of the second half of FY21 were up 2.4% (or up 12.1% excluding the 7-Eleven impact) with supermarket sales up 8.4%, excluding tobacco. Liquor sales were up 16.9% in the first five weeks whilst hardware sales went up 25.3%, or 19.2% excluding the Total Tools acquisition.

Metcash was the best performer in the ASX 200, its share price went up around 10%.

Westpac Banking Corp (ASX: WBC)

The big ASX bank announced today the sale of its Pacific businesses. Specifically, it has sold Westpac Fiji and the 89.91% stake in Westpac Bank PNG to Kina Securities Ltd (ASX: KSL) for up to $420 million.

The sale price is made up of $315 million payable at completion and $60 million to be paid six-monthly over the following 18 months for Westpac PNG. The sale price also includes earn-out payments of up to $45 million which are scheduled to occur annually over 24 months following completion and are subject to the business performance of Westpac Fiji.

Westpac expects to report an accounting loss of approximately $230 million for the sale.

Westpac group chief executive, specialist businesses and group strategy, Jason Yetton, said: “We are taking another step in becoming a simpler, stronger bank while ensuring a high standard of banking services is maintained for our Pacific customers as well as providing new opportunities for our people.

“Choosing the right purchaser for our businesses is important to us, our people and the communities we serve. We are pleased our Pacific businesses are being acquired by Kina Bank. Kina is a strong brand in the region and is well positioned with deep local knowledge to continue to help our consumer and business customers succeed.”

The Westpac share price was flat whilst the Kina share price jumped 13%.

Afterpay Ltd (ASX: APT)

This morning it was reported by the Australian Financial Review (AFR) that Reserve Bank of Australia (RBA) governor Dr. Philip Lowe gave a strong indication that buy now, pay later (BNPL) operators can continue to tell merchants not to pass their costs onto customers.

He said that “The board’s preliminary view is that the BNPL operators in Australia have not yet reached the point where it is clear that the costs arising from the no-surcharge rule outweigh the potential benefits in terms of innovation”.

Dr Lowe also commented that the BNPL operators still only make up a small amount of the total consumer payments and there may be downward pressure on merchant costs from competitors.

In reaction to this, the Afterpay share price rose 2%, though it rose to around $97 in early trading.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. 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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