ASX to rise with Wall Street IGO PointsBet Mesoblast drop results
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Afterpay rival Splitit looks like an experiment that is not keeping up with the buy now pay later pack.
Splitit’s BNPL USP (unique selling point) is that it operates on a credit card utlising the debt headroom.
It’s the BNPL for non-Millennials and without the bad debts that Afterpay, Zip and Sezzle face, but it doesn’t seem to have caught the same wave of support either.
Splitit’s share price is plunging - from a high of $1.93 last year to 45c this morning.
Splitit’s Australian boss Brad Paterson is set to depart the company.Credit:
Its losses are soaring, from $US8.9 million to $US18.7 million for the year ending June 30.
And its Aussie CEO Brad Paterson has been dumped by the board which determined that a “proactive change of leadership is necessary for the company to continue building on its achievements and prioritise its ambitions to significantly expand its merchant footprint across all geographies.
“Merchant Sales Volume (MSV) rose 94 per cent to US$172.5 million while its actual fee revenue generated from these transactions was up 80 per cent to $US5.5 million.
Total merchants on its platform increased 167 per cent to 2,800 and total customers were up 83 per cent to 566,000.
You get the feeling that none of its BNPL rivals will be troubled by these numbers or feel the need to investigate this particular variation of the payments sector.
Splitit did not offer any guidance for the current financial year.
Mixed miner IGO Limited has more than tripled post-tax profit to $549 million, thanks to the sale of its Tropicana gold mine to Regis Resources.
However, it declared a final fully franked dividend of 10c payable on 8 September, which was 1c lower than last year’s final dividend.
The lower dividend was due to a revised shareholder returns policy that would now see shareholders getting between 15 per cent and 25 per cent of free cash flow whenever liquidity is less than $500 million. When liquidity exceeds that, shareholders could get more.
IGO sold the Tropicana gold mine to Regis Resources.
The policy will be at the discretion of the board, which “expects to consistently pay dividends over the near to medium-term†that are frankable.
Shares last traded $9.52 and are up 49 per cent this year so far. The market will be looking for any updates about a potential tie up with miner Western Areas.
Revenue came in at $919 million and the company generated underlying earnings before interest, tax, depreciation and amortisation of $475 million.
“Fiscal year 2021 was a highly successful and transformational year for IGO, with the continued delivery of strong operating and financial performance, while also delivering two transactions to transform IGO into a business 100 per cent focused on metals critical for enabling clean energy,″⣠chief executive Peter Bradford told the market.
During the year it formed a 49 per cent stake in a joint venture with Tianqi, which includes the Greenbushes Lithium mine and bought the entire Kwinana lithium hydroxide plant. Mr Bradford flagged more mergers and acquisitions in the future.
IGO has $528.5 million of cash and no debt, but about $410 million of liabilities.
For 2021-22 it expects to produce between 25,000 and 27,000 tonnes of Nickel, up from the 22,000 tonnes it sold in 2020-21. Last fiscal year it sold 10,752 tonnes of copper and expects to produce up to 12,500 tonnes of copper in the current fiscal year. In 2021-22 it expects to produce up to 1,000 tonnes of cobalt.
It will also spend about $65 million on exploration and up to $22 million on improvement capex.
Betting firm PointsBet says all the pieces of the puzzle are on hand to crack the lucrative US wagering market after a year of rapid expansion and upscaling.
The $2.6 billion Australian company more than doubled its full-year revenue to $194 million as it rolled out across a growing number of US states over the past 12 months.
The company’s loss widened four-fold to $187 million as its presence in the US - and Australia - continued to build. No dividend will be paid.
Shaquille O’Neal is a brand ambassador for PointsBet in Australia. Credit:AP
PointsBet’s profile surged in August last year on a landmark five-year partnership deal with US broadcasting giant NBC Sports.
The company has since rolled out across Illinois, Colorado and Michigan and launched iGaming operations in the states of Michigan and New Jersey, while also becoming the official betting partner of baseball’s Detroit Tigers, the Indiana Pacers and the Denver Nuggets of the NBA, the Indianapolis Colts and the Chicago Bears of the NFL and the Colorado Avalanche of the NHL.
In addition, Pointsbet was appointed an official sports Betting Partner of the NHL.
The company’s US business saw gross win growth of 481 per cent to $95.8 million, with net win also increasing by 481 per cent to $40.9 million.
Cash active clients in the US rose more than seven-fold to 159,321.
In Australia, the Company achieved year-on-year net revenue growth of 121 per cent, with the Australian Trading business achieving an annual EBITDA of $9.2 million.
“This strong performance demonstrates PointsBet’s capability to disrupt and grow market share in an advanced market where we compete successfully against global groups such as Flutter, Entain and Bet365,†the company said.
For the 12 months to 30 June 2021, the Australian Trading business had 196,585 Cash Active Clients, a 117 per cent increase compared to the 12 months to 30 June 2020.
“Further, with the completion of the successful capital raises in September 2020 (raising $353 million) and August 2021 (raising $400 million), the company is well-placed for future growth,†it said.
PointsBet shares were last trading at $10.21 on the ASX, down from a record high of about $17 in February.
Losses at stem cell treatments producer Mesoblast have hit $US98.8 million ($135 million) for 2021, up from $US77 million last year.
The $1.3 billion biotech is still working through multiple meetings with the US Food and Drug Administration (FDA) to get its flagship product approved for use.
It’s been close to one year since the regulator asked it to go back to the drawing board to get more evidence for its Ryoncil product, which is used to treat an acute response to bone marrow transplants in kids.
Mesoblast chief executive and major shareholder Silviu Itescu. Credit:Josh Robenstone
The company also met with the regulator to discuss how it would get that same active ingredient approved for use in COVID-19 patients.
“The FDA advised Mesoblast that an additional clinical study in COVID ARDS would be required which, if statistically positive, could provide a dataset in conjunction with the recently completed 222 patient clinical study that might be sufficient to support an EUA,†management said in an update.
Mesoblast generated $US7.4 million in revenues during 2021, and spent $US53 million on research and development throughout the year.
Chief executive Silviu Itescu said the company had made “significant progress†on product approvals throughout the year. Auditors PwC highlighted in Mesoblast’s full year report that the business will need to raise cash or restructure its loan agreements to continue as a going concern.
“The ability of the group to continue as a going concern is dependent on completing either one or more strategic partnerships or restructuring existing loan agreements.
The dependency on these planned events indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern,†the auditors said.
Mesoblast shares closed flat on Monday at $1.98 and have lost 12 per cent in value this year so far.
A personal grooming boom has continued to benefit listed shaver retailer Shaver Shop, with the business reporting a spike in revenue and earnings at its full-year results today.
Sales grew 9.6 per cent to $213.7 million and profits spiked 68.3 per cent to $17.5 million for the 2021 financial year, allowing the business to hike its final dividend by 85 per cent to 5 cents per share, payable September 23.
The $130 million business has been a beneficiary of the pandemic since its beginning, as many customers have taken haircuts into their own hands due to the closure of hair salons through most government lockdowns.
Shaver Shop sales have accelerated again during the latest lockdowns.
Chief executive Cameron Fox said this trend had reemerged through the beginning of the new financial year as lockdowns in Victoria and NSW continued.
Shaver Shop’s total sales are down 7.3 per cent through July and August, though they have continued to improve the longer lockdowns wear on.
“Over the last couple of weeks, in key NSW and VIC States, we have seen rising demand in categories that resembles what we experienced at the start of the pandemic in April 2020,†he said.
“This is driving an improvement in sales growth compared to July 2021 as well as supporting healthy gross profit margins.â€
Online sales have jumped 52 per cent over the start of fiscal 2022, and Mr Fox expects sales will rebound once lockdowns end.
Shaver Shop shares closed at $1.02 on Monday.
Aged care operator Regis Healthcare is still working towards vaccinating employees and staff, with just 58 per cent of employees fully vaccinated at the end of August.
The $600 million operator told investors in its full year earnings report this morning that 86 per cent of both residents and staff had received at least one jab, but only 78 per cent of its residents and 58 per cent of its workers had received a second dose.
The company had secured an external provider to offer vaccines to all staff and has completed one clinic.
Regis Healthcare is back in profit, though an underpayments case dragged on its full-year result.
“The first clinic at every Regis aged care home has been completed and the Company expects all second clinics to be completed by mid-September,†Regis management said in the update.
The business recorded a net profit of $19.9 million and declared a 4.63c dividend payable September 30.
The performance was a big improvement on last year’s $700,000 loss, but an underpayments case uncovered during the year had a $7.1 million on the underlying numbers.
Regis was able to lift its occupancy rate from 88.2 per cent to 88.9 per cent despite the tough COVID environment.
“Regis has maintained tight and conservative management of the business ahead of expected funding, policy and regulatory reform over the next year,†chief executive Linda Mellors said.
The board did not provide earnings guidance, citing the unpredictability of the pandemic.
Shares closed up 1 per cent on Monday to $1.97.
Victoria’s daily coronavirus numbers are in.
The state has recorded 76 new, locally acquired cases of COVID-19 and zero in hotel quarantine.
The Department of Health says 45 cases are linked to known outbreaks. This means there are, at this stage, 31 mystery cases.
Authorities have not yet said how many cases were in isolation for their entire infectious period.
There are now 841 active cases of coronavirus across the state.
Today’s numbers are off the back of yesterday’s 50,848 coronavirus tests.
Asian stocks look set for a steady open Tuesday as traders assess a technology-led rally in US shares and the latest escalation in China’s regulatory crackdown on private enterprise.
Futures were steady for Japan and edged up for Australia and Hong Kong.
US contracts fluctuated after the S&P 500 notched its 12th all-time high in August and the Nasdaq 100 advanced, including a jump in Apple’s market value past $US2.5 trillion.
Chinese video-gaming stocks listed in the US were under pressure again after Beijing moved to reduce the amount of time children can play such games.
Apple CEO Tim Cook. The gadget and entertainment company’s value surpassed $US2.5 trillion overnight. Credit:AP
The ongoing crackdown will feed into the debate over whether beaten-down Chinese technology equities faces further pain.
Treasuries pushed higher overnight, adding to gains since Federal Reserve Chair Jerome Powell’s measured comments about a possible reduction in stimulus and any eventual interest-rate hikes. The US dollar was little changed.
Global stocks are set for their seventh monthly advance, helped by strong corporate earnings, expanding vaccinations that are boosting economic reopening hopes and supportive Fed policies. At the same time, concerns about elevated inflation and the spread of the delta coronavirus variant are shadowing the rally.
“Tactical investors should tilt portfolios in favour of stocks over bonds,†said Ryan Detrick, chief market strategist at LPL Financial.
“This certainly does not mean that an exogenous shock could not cause stocks to correct. However, when looking at the recent pace of earnings, the policy environment and market history, we fail to see a compelling bear case against equities.â€
In the latest US data, pending home sales fell in July. Traders are awaiting key payrolls figures Friday for further guidance on the strength of the economy.
Elsewhere, oil was little changed as offshore explorers assess damage from Hurricane Ida. The focus is also shifting to an OPEC+ meeting that could see more supply added to the market.
A rally in gold lost some momentum. Bitcoin was trading around $US48,000.
Bloomberg
ASX futures up 17 points or 0.2% to 7460 at 8.30am AEST
Good Morning, and welcome to another week of ASX coverage with the Markets Live team.
Your editors today are Alex Druce, Lucy Battersby, and Colin Kruger.
The ASX 200 finished 0.2 per cent ahead on Monday with the iron ore giants - led by Fortescue Metals - surging ahead.
Bubs Australia, Regis Resources, Sandfire Resources, Regional Express, and Harvey Norman are among the final companies reporting today at the tail-end of earnings season.
This blog is not intended as financial advice.
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