Tag: Motley Fool

The Rhipe Ltd (ASX: RHP) share price went into freefall today, down 13.4% to $1.87 by the market’s close. From the opening bell, investors began to run for the hills after digesting the release of the company’s FY20 results. At midday, the Rhipe share price stabilised and hasn’t moved much since.

What moved the Rhipe share price?

For the financial year ending 30 June, Rhipe reported a 15% lift in net revenue to $55.8 million compared to the prior corresponding period. Net profit after tax was $5 million, down from $6.2 million in FY19.

However, when adjusted for the company’s investment in Japan and its provision of doubtful debt, that figure increased to $6.9 million.

Earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $11.6 million, an increase of 16%.

Rhipe’s operating profit stood at $15 million, a jump of 17% excluding its joint venture with Japan Business Systems Inc.

A possible catalyst for the plunge in the Rhipe share price was that its earnings per share fell 23% to 3.49 cents, from 4.53 cents.

Cash on hand was $60.9 million, almost double the $35 million recorded the prior corresponding period. However, Rhipe completed a $32.5 million capital raise in April this year.

The company declared a fully franked dividend of 2 cents per share to be payable on 24 September.

COVID-19

The cloud channel business reported a slowdown in travel, marketing and headcount related costs during the challenging economic environment caused by the coronavirus pandemic.

Furthermore, Rhipe witnessed an increase in its customers asking for extended payment terms and customers being unable to pay their bills. As a result, Rhipe has increased its provision for doubtful debts to cover the expected increase in business failures in FY21.

Rhipe’s Dynamics365 consulting practice saw a dramatic decline in project workload. While the Dynamics365 pipeline has improved, the business underperformed to target in FY20.

Thus, management is focusing on carefully controlling costs during the pandemic.

FY21 outlook

Management advised it expects its public cloud business to continue to be the growth engine for the company, despite the economic challenges ahead.

The company said it will prudently invest in its licensing sales and solutions division whilst seeking new growth revenue markets. Rhipe will be using its operating profit to fund its expansion.

About the Rhipe share price

The Rhipe share price has recovered somewhat since its March low of $1.16, up 61% to date. However, the Rhipe share price is trading 10% lower since the beginning of the year.

More reading

• 4 ASX tech shares to buy that aren’t BNPL shares

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Consumer confidence is up 4.1 points to 92.7 points (112.7 is the monthly average since 1990) according to an ANZ-Roy Morgan survey released today. It is one of the highest increases in the last three months and is represented by a 4.6% weekly change. Pleasingly, the increase in sentiment was broad-based with all sub-indices gaining.

An increasing number of Australians are more optimistic about current and future financial conditions. Additionally, there is an expectation of improved economic conditions over the next 12 months despite a significant amount of Australians still expecting bad times.

Furthermore, 37% of Australians think it’s a bad time to buy a major household item compared to 33% of Australians saying it’s a good time to buy.

Impact of consumer confidence on economy

Consumer confidence matters because it’s a solid indicator of how consumers are behaving and likely to behave in the future. Spending is linked to people’s discretionary income and ties in with other economic data including gross domestic product (GDP), inflation, jobs, and interest rates.

Additionally, consumer spending could help boost S&P/ASX200 Index (ASX: XJO) share prices since it could lead to greater profits, especially in discretionary based industries such as retail.

ANZ Head of Australian Economics, David Plank, commented on the results:

In an encouraging development, consumer confidence built on the gain seen in the previous week, with the strongest weekly gain for some time. The substantial decline in active cases in Melbourne and continued low numbers in Sydney have raised hopes that the pandemic can be contained without a broadening of lockdowns beyond those already in place. Although only one subcomponent is above the neutral level of 100, the gains made in the last two weeks have bought other subcomponents closer to that point, though ‘current economic conditions’ is still 38% below the neutral level. Confidence was up firmly across all states except Victoria and NSW, where the gains were more subdued. Sentiment is now above neutral in Perth and Adelaide.

Foolish takeaway

An improvement in consumer confidence is better than no improvement. However, it’s still considerably lower than the monthly average since 1990. Government stimulus is still making its way through the economy which could be assisting with the boost in consumer sentiment. 

Additionally, lower coronavirus case numbers could be an important factor as to why an increasing number of Australians are optimistic about their current and future outlook. 

More reading

• ASX 200 rises, Bingo jumps after reporting
• Afterpay share price leaps 7% today after 3 broker upgrades
• The latest ASX stocks that brokers just upgraded to “buy”
• ASX 200 up 0.7%: Big four banks storm higher, Blackmores disappoints, Xero acquisition
• Hub24 share price tumbles despite a big profit and dividend increase

Motley Fool contributor Matthew Donald has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Over the last 12 months the healthcare sector has once again been a great place to invest your money.

Since this time last year the S&P/ASX 200 Health Care index has generated a return of just under 23%. This compares to a 5% decline by the benchmark ASX 200 index.

The good news is that due to favourable tailwinds in the sector, I believe this outperformance can continue in the future.

In light of this, I think the two ASX shares listed below could be great buy and hold options for investors. Here’s why I would buy them:

Pro Medicus Limited (ASX: PME)

I think Pro Medicus is an ASX share that investors should consider buying and holding. It is a provider of a full range of radiology IT software and services to hospitals, imaging centres, and healthcare groups worldwide. It was solid performer in FY 2020 despite the pandemic and reported a 23.9% increase in revenue from underlying operations to $56.8 million.

On the bottom line things were even better. Thanks to a lift in its margins to 52.5%, underlying profit before tax was up 33.4% to $30.24 million. The good news is that Pro Medicus still has a long runway for growth ahead of it. I believe this could make it a great long term investment option.

ResMed Inc. (ASX: RMD)

Another ASX healthcare share to consider buying and holding is ResMed. The sleep treatment focused medical device company was also a strong performer in FY 2020. It delivered a 15% constant currency increase in revenue to US$2,957 million and a 32% jump in net income to US$692.8 million.

I’m confident there will be more of the same over the coming years thanks to its world-class products and massive addressable market. On its earnings call this month, management stated that there are 936 million people with sleep apnoea globally. There are also over 380 million people who suffer from chronic obstructive pulmonary disease (COPD) and over 340 million people living with asthma. This gives it a significant runway for growth over the next decade and beyond.

More reading

• Where to invest $100,000 into ASX shares right now
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• Pro Medicus share price drops 5% despite strong FY 2020 growth
• 3 five-star 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. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. The Motley Fool Australia has recommended ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Spark Infrastructure Group (ASX: SKI) share price has edged higher today after the company announced it has turned in a solid half year of results, despite the impacts of coronavirus. Specifically, distribution and transmission revenues rose by 3.8%, in accordance with agreed regulatory pricing. Consequently, earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 4.8% year on year. By the market’s close, the Spark Infrastructure share price has risen 1.83% to $2.23.

The infrastructure fund owns $6.6 billion of regulated and unregulated assets in the electricity transmission, distribution and generation sectors. The Australian Energy Regulator (AER) agrees the company’s allowable revenues over a 5 year period. As a result, it delivers consistent, predictable results unless there are major unforeseen circumstances. 

A final important note is that the company saw a 10.5% increase in growth CAPEX during the period. This is important because under the regulated model, the company draws part of its income from the value of its regulatory asset base.

Spark infrastructure results

The only asset that is 100% owned by the fund is the Bomen Solar Farm project north of Wagga Wagga in NSW. It was delivered on time and on budget and is now fully operational. This is an interesting step into unregulated revenues. The fund is also planning new solar projects. These include, Jemalong and Melbourne Airport Solar Projects in Victoria, and commercial solar and battery solutions in South Australia.

On one hand, solar farms produce an annuity style income stream because they are low cost energy producers. On the other hand, they are easily impacted by weather changes and ambient environmental issues. For example, New Energy Solar Ltd (ASX: NEW) reported impairments to its FY20 production plans due to rainfall and grass fires. 

In terms of risk management, the company saw minimal impacts from COVID-19, highlighting its very defensive nature. Spark Infrastructure is supporting business customers via network tariff relief. The company also paid all remaining historical taxes to remove downside risk and minimise potential ATO interest costs. 

Best performing subsidiary

According to the 2019 AER benchmarking report, some of the Spark Infrastructure assets have consistently been among the most productive service providers in the national electricity market (NEM) across the past 11 years. 

Spark Infrastructure owns 49% of distribution companies; Victoria Power Networks (VPN) and SA Power Networks (SAPN). VPN saw an increase in net capital expenditure of 41% due to the need to replace zone power stations. This has helped increase the regulatory asset base (RAB) by 5.4%, therefore contributing to future revenues. 

SAPN saw its RAB increase to $4.372 million. It also managed to reduce operating costs by 6.1%. However, the company also owns 15% of Transgrid, which saw its overall capital expenditure grow by 64.6%. This was mainly due to investment in augmentation projects including Powering Sydney’s Future, Stockdill Switching Station, and higher maintenance capex.

Foolish takeaway

The company will pay an unfranked dividend of 7 cents per share. With the current Spark Infrastructure share price at the close of trading on Tuesday, that represents a payment yield of 3.2%. The fund has a trailing 12 month dividend yield of 6.58%, and has reconfirmed guidance of 13.5 cents per share across all of CY20.

This fund delivers high cash flows and appears to be well managed. It has pledged to maintain at least 85% of revenue streams from regulated sources, thus sustaining its defensive nature. While it is planning growth across its entire portfolio, the growth pipeline at Transgrid is particularly significant.

More reading

• Why Catapult, Perseus Mining, Prospa, & Spark shares are dropping lower

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Tinybeans Group Ltd (ASX: TNY) share price soared 20.99% today following the signing of over $1 million in big brand name advertising contracts. By the market’s close, the Tinybeans share price had risen to 98 cents after closing yesterday’s session at 81 cents.

Big brand contracts

Since the commencement of July, Tinybeans has signed over A$1 million in new advertising contracts including with two of the big four technology companies. Partners include Apple Inc. (NASDAQ: AAPL), Dorel Juvenile, Google (NASDAQ: GOOGL) (NASDAQ: GOOG) and Walmart (NYSE: WMT).

Additionally, a breakdown of the $1 million contract shows 70% are from new brands signing on to the platform and 30% are contracts with existing brands. 

As a result of the signed contracts, Tinybeans has doubled the forward booked advertising contracts for the rest of the year to $2.3 million. The revenues commence immediately.

Tinybeans believes it demonstrates the increased value of the enhanced platform following the successful integration of Red Tricycle. Additionally, it is well placed to benefit from the pandemic tailwinds of family togetherness and at-home learning.

Management comments

CEO, Eddie Geller commented “Given the summer months are typically slower in the U.S. for advertising, we are thrilled with these recent and important new contract signings. Over $1 million dollars signed in recent weeks is a new company record and reinforces that our enhanced value proposition following successful integration of Red Tricycle is providing more value to our partners than ever before….”

June quarter results

The big contract wins follow an update to the market late last month showing revenue of $2.36 million which is an increase on the prior corresponding period of 83%.

Additionally, the company achieved new advertising wins with Amazon (NASDAQ: AMZN), Penguin Random House, General Mills and YouTube Kids. 

Registered users reached 4.65 million, which represents growth of 39% on the prior corresponding period (pcp). Monthly active users (MAU) grew to over 3.7 million which is an increase of 200% over the pcp. 

About the Tinybeans share price

According to Tinybeans, the company offers a free mobile and web-based technology platform that connects parents with the most trusted digital tools and resources on the planet to help every family thrive. It is available on the Apple App Store and Google Play store. Additionally, the platform helps parents and their family members capture and share their children’s life stories.

The Tinybeans share price ended trading today at 98 cents which is represented by an increase of 20.99%. Additionally, its market capitalisation is $44.88 million as a result of today’s share price surge. 

More reading

• ASX 200 rises, Bingo jumps after reporting
• Today’s strong performance sees Webjet’s share price leap 31% so far in August
• Forget term deposits and buy these quality ASX income shares
• Can the Macquarie share price go to $200?
• Qantas to cut 2,420 more jobs

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Matthew Donald 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 Alphabet (A shares), Alphabet (C shares), Amazon, and Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tinybeans Group Ltd and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Tinybeans Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) went up 0.5% today to 6,161 points.

It was another busy day for ASX 200 share reporting today:

Bingo Industries Ltd (ASX: BIN)

Bingo announced its FY20 result today. The Bingo share price went up 13%.

It said that underlying revenue rose by 21% to $486.7 million.

The underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 40.8% to $152.1 million. The underlying EBITDA margin improved by 440 basis points to 31.3%.

Operating free cashflow rose by 37.4% to $160.1 million.

Statutory net profit after tax (NPAT) rose by 196% to $66 million and statutory earnings per share (EPS) went up 159% to 10.1 cents.

Bingo’s board decided that the final FY20 dividend would be 1.5 cents per share, bringing the annual dividend to 3.7 cents per share, almost the same as last year’s 3.72 cents per share.

The company has seen momentum continue into FY21, however COVID-19 impacts may cause some disruption. But, infrastructure activity is expected to remain strong for the foreseeable future.

In order to maintain and grow volumes, Bingo expects the group EBITDA margin to decline by 200 basis points to 300 basis points, before rebounding to its longer term target of 30%.

It was the best performer in the ASX 200.

Ansell Limited (ASX: ANN)

Glovemaker business Ansell also reported its FY20 result today. The Ansell share price dropped 2%.

Ansell sales increased by 7.7% to US$1.6 billion with healthcare organic growth of 13.4% due to COVID-19 related demand – particularly for exam and single use products.

The business reported adjusted earnings before interest and tax (EBIT) rose by 8.3% year on year to US$219.7 million. Adjusted profit rose by 5.2% to US$158.7 million and EPS rose by 9.2% to US$1.218.

Ansell’s board increased its full year dividend by 7% to US$0.50 per share, up 7% compared to FY19.

In FY21 the company is expecting continuing strong demand for the exam and single use industry, though this is likely to result in increased costs. These costs are expected to be recovered, but it is likely to mean that the EBIT margin will be negatively impacted.

FY21 EPS is expected to be in the range of US$1.26 to US$1.38. This guidance reflects the uncertainties relating to raw materials, foreign exchange, the ability to increase prices and the ability to increase supply of needed products.

Blackmores Limited (ASX: BKL)

The Blackmores share price fell by 5.6% today after reporting its FY20 result, it was one of the worst performers in the ASX 200.

Blackmores saw FY20 revenue drop by 3% to $568 million, with international revenue growth of 30% on the prior year. However, Australian sales fell by 15% to $227 million driven by lower sales from Chinese led demand.

Blackmores China sales – which represents export accounts and in-country sales – dropped 16% to $103 million. The export business, impacted by regulatory changes and price discounting, was down 30% on the prior year.

Blackmores said that its EBITDA dropped by 42% to $50.7 million and EBIT dropped 61.6% to $29.4 million.

Profit after tax from continuing operations fell 68.3% to $16 million.

The ASX 200 share’s board decided not to pay a dividend due to COVID-19 uncertainty.

In FY21 the company is expecting full year profit growth in FY21 despite the additional cost variances which will arise from the first full year of Braeside manufacturing ownership. That profit growth is expected to largely come in the second half of the financial year. Due to COVID-19 uncertainties the company decided not to give full year FY21 guidance.

Blackmores believes it has taken the steps needed to rebuild. It has simplified its operating model, which should lead the company back to sustainable profit growth and restore future dividends.

More reading

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• The latest ASX stocks that brokers just upgraded to “buy”
• Bingo Industries share price surges on 196% boost in profit
• Why Blackmores, MNF Group, Nanosonics, & Seven West Media are dropping lower
• ASX 200 up 0.7%: Big four banks storm higher, Blackmores disappoints, Xero acquisition

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The Webjet Limited (ASX: WEB) share price gained 4.2% today. That’s enough to deliver shareholders over a 31% gain so far in August.

Webjet’s share price has now rebounded 64% from this year’s April 23 low. But that rebound has a long way to go before the company recovers from the massive hit it took as COVID-19 saw domestic and international travel grind to a virtual halt.

Despite the recent strong performance, year-to-date Webjet’s share price is still down 61%.

Webjet is an S&P/ASX 200 (INDEXASX: XJO) listed company. By comparison the ASX 200 is down 8% since January 2.

What does Webjet do?

Headquartered in Melbourne, Webjet is a digital focused travel agency operating in Australia and New Zealand, with customers across global consumer and wholesale markets.

Webjet’s business consists of a B2C division comprising the Webjet, Online Republic brands and WebBeds, and a B2B division comprising the Lots of Hotels and Sunhotels brands and FIT Ruums. The company’s operations are primarily online/technology-based.

Webjet shares first listed on the ASX in 1997.

What’s behind Webjet’s 31% share price leap in August?

Webjet’s 31% share price gains in August so far are even more remarkable when you take into account the company’s 11% loss last Thursday.

That loss followed on from the release of Webjet’s FY20 results, reporting a $143.6 million full-year loss.

Since Thursday’s close Webjet’s share price has rebounded 15%. That — and today’s 4.2% share price gains — will come as sour news to the legion of investors betting against the company.

Yesterday, Webjet led the pack of most shorted shares on the ASX with a short interest of 13.1%. That tells me that some short covering — when investors buy back shares they’ve sold short to escape increasing losses when share prices move higher — is likely responsible for some of today’s gains.

As for Webjet’s 31% share price gain since the beginning of August, this follows the trend of investors looking beyond the viral global shutdowns and towards the reopening of national and international travel. A trend that’s also seen big share price gains in August for companies like Qantas Airways Limited (ASX: QAN) and Flight Centre Travel Group Ltd (ASX: FLT).

When borders do fully reopen, it’s the well-managed but still beaten down stocks in the travel and leisure industries that could offer some of the biggest share price gains.

More reading

• Are Webjet and other ASX travel shares taking off?
• These are the 10 most shorted shares on the ASX
• ASX 200 down 0.8%, IDP Education soars
• Webjet share price crashes 12% lower: Is it time to buy?
• Top brokers name 3 ASX shares to sell today

Motley Fool contributor Bernd Struben 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 has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Are you looking for a source of income in this low interest rate environment? Then check out the two ASX shares listed below.

Both offer investors generous dividend yields that smash the interest rates on offer with term deposits. Here’s why I like them:

Aventus Group (ASX: AVN)

The first ASX dividend share I would suggest income investors consider buying is Aventus. The retail property company’s shares have come under significant pressure this year because of the pandemic. However, I believe this selloff has been largely unwarranted due to its focus on large format retail parks and its reasonably high rental income weighting towards everyday needs.

For example, this morning Aventus released its full year results and revealed a 4.2% increase in funds from operations (FFO) to $100 million. It also reported solid rent collection of 87% through the COVID-19 period and a high occupancy rate of 98%. This is thanks to its blue chip tenant base which includes the likes of The Good Guys, ALDI, Bunnings, and Harvey Norman Holdings Limited (ASX: HVN). It also declared total distributions of 11.9 cents per security in FY 2020. Based on the current Aventus share price, this equates to a generous 5.3% yield.

BHP Group Ltd (ASX: BHP)

Another dividend share to consider buying is BHP. I believe the mining giant would be a great addition for investors that are not averse to investing in the resources sector. As well as offering a portfolio some added diversity, I believe it also provides solid potential returns for investors over the coming years.

This is thanks to BHP’s world class operations, its low costs, favourable commodity prices, and growth opportunities. In respect to commodity prices, the iron ore price is currently trading beyond US$120 a tonne. At this level BHP is generating material free cash flows from its Pilbara iron ore operations. This should put it in a position to deliver another generous dividend payment in FY 2021. Based on the current BHP share price, I estimate that it offers a forward fully franked ~5% dividend yield.

More reading

• The latest ASX stocks that brokers just upgraded to “buy”
• What are dividend shares and how do you find them?
• Aventus share price wobbles despite solid FY20 results
• Here are the highlights of this ASX reporting season
• ASX 200 Weekly Wrap: Blue chips, earnings drag ASX lower

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended AVENTUS RE UNIT. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It has been a very interesting year for shareholders in all industries.  Market shocks and rebounds have become the norm in 2020.

The Macquarie Group Ltd (ASX: MQG) share price has been no different. It fell to as low as $70.45 in March and has now recovered to $128.96 (at the time of writing). So the question I was asked recently was: Can the Macquarie share price hit the $200 mark?

Macquarie share price at a glance

Valued at $47.47 billion, Macquarie is Australia’s fifth largest company on the ASX by market capitalisation.  The company specialises in global banking, financial, advisory, investment and fund management services.

Over the past few years, Macquarie has further diversified its business model, providing protection against future recessions.  It’s strong capital position and robust risk management framework has contributed to the company’s 51-year record of unbroken profitability.

The economic outlook

The uncertain economic environment resulting from the coronavirus pandemic has certainly cast an unclear picture of the Australian banking industry.  What once was deemed safe blue-chip shares with reliable dividends has been marred with share price volatility and slashed surpluses affecting pay-outs to shareholders.

While banks tend to do well in times of market hysteria, cashing in on wild price swings in, Macquarie has been no different.

In its most recent market update in July, Macquarie CEO Shemara Wikramanayake said:

Macquarie’s markets-facing businesses were down on the first quarter of 2020, primarily due to significantly lower investment-related income in Macquarie’s Capital, partially offset by stronger contributions from certain divisions in commodities and global markets.

The global powerhouse has continued to maintain a conservative approach to capital, funding and liquidity that positions the group to respond constructively to COVID-19.

At June 30, Macquarie’s cash surplus position stood at $8.1 billion, well above the Australian Prudent Regulatory Authority’s strict capital requirements. Macquarie’s common Tier 1 ratio was 13.2 percent.

Macquarie Assets Management fell to $568 billion, down 5% by predominantly FX movements.  Although its Banking and Financial Services division grew 8% in total deposits to $69 billion from the previous quarter.

Macquarie’s bullish share price rise

The global powerhouse has been on the mends to recovery from the fallout of coronavirus.  The Macquarie share price is up 84% since it bottomed out in March, sitting just below its all-time high of $152.35 achieved in late February this year.

Interestingly, Macquarie has been steadily growing its earnings per share by 10%–15% over the last three years.  Earnings per share is considered an important tool to understanding the value of a business.  It is widely use to track a company’s performance.

Should, the company be able to continue this trend, the correlation between the value of the business and the profitability reported should, in essence, send the Macquarie share price higher.

It is a growth trajectory in the works for this banking giant.

Macquarie is expected to release its half year earnings for FY21 on 6 November.

Foolish Takeaway

I do believe that the Macquarie share price will reach the $200 mark.  Of course, with the business being so resilient in the face of such challenging conditions and strong capital to back it up, it is just a question of timing.

With almost 3 months remaining, perhaps the milestone won’t be reached by the end of this year.  However, there is a strong possibility it could attain that feat in 2021.

More reading

• 2 leading ASX shares for a blue chip portfolio
• 6 ASX giants pay $1 billion for ripping off customers
• 2 of the best ETFs for investing in ASX shares
• The latest ASX stocks upgraded by brokers to “buy” today
• The highest paid CEOs in the ASX 200

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Qantas Airways Limited (ASX: QAN) has announced a plan to outsource ground crew in order to axe up to 2,420 jobs.

The airline revealed its intentions on Tuesday afternoon, saying it had briefed staff and unions earlier in the day.

“Outsourcing this work to specialist ground handlers would save an estimated $100 million in operating costs each year,” said Qantas Domestic boss Andrew David.

“Today’s announcement will be very tough for our hard-working teams, most of whom have already been stood down for months without work. This obviously adds to the uncertainty but this is the unfortunate reality of what COVID-19 has done to our industry.”

The outsourcing reviews would take place in three different areas:

1. Outsourcing ground-handling operations at 10 Australian airports. This would cut up to 2,000 jobs.
2. Outsourcing bus services for customers and staff at Sydney Airport. This could impact up to 50 in-house employees.
3. Jetstar will outsource ground handling at 6 Australian airports. There are 370 jobs under threat from this move.

Qantas stated no customer-facing roles would be impacted by the proposals.

Other airlines do it already

Jetstar chief Gareth Evans said “every major airline” in the world outsources ground-handling operations.

“These ground handlers provide these services to many airlines at airports, rather than just one, and provide scalable resources, which makes them very cost effective,” he said.

“Contracting this work out also reduces the capital spend required each year. As an example, Qantas and Jetstar would need to invest a further $100 million on ground handling equipment over the next five years, such as tugs and bag loaders, if the work is kept in-house.”

The outsourcing revelations follow last week’s financial results, which saw Qantas lose $2.7 billion before tax for the 2020 financial year.

Qantas chief executive Alan Joyce at the time begged for national consistency in state border closures, which is crippling the company’s operations.

“We still don’t understand why states with zero cases for a long time have borders closed to states with zero cases. That doesn’t seem to make any medical sense or any advice that we  have seen.”

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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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