ASX 200 jumps, Pointsbet reveals acquisition, Metcash drops

The S&P/ASX 200 Index (ASX:XJO) jumped 0.8% today. Pointsbet Holdings Ltd (ASX:PBH) announced an acquisition and went higher.
The post ASX 200 jumps, Pointsbet reveals acquisition, Metcash drops appeared first on The Motley Fool Australia. –

ASX 200

The S&P/ASX 200 Index (ASX: XJO) went up by 0.8% today, rising to 6,827 points.

The tech sector went through a bit of a recovery rally today. The Afterpay Ltd (ASX: APT) share price rose 3.1% and the Xero Limited (ASX: XRO) share price grew 4%.

Here are some of the highlights from the ASX:

Pointsbet Holdings Ltd (ASX: PBH)

The Pointsbet share price rose strongly today after announcing an acquisition.

It’s acquiring Banach Technology, which is a Dublin-based provider of proprietary risk management platforms and quantitative driven trading models that support complex pre-game and in-play betting products across numerous sports, including the four major American sports and international soccer.

Pointsbet is going to spend US$43 million to buy the business on a cash and debt free basis. This price will be split between 55% cash and 45% in 1.75 million shares.

The Banach team were described by Pointsbet as deeply experienced, particularly in leading pre-game and in-play sports wagering markets, having previously established the ‘quants’ division of Paddy Power Plc, which is now Flutter Entertainment Plc.

Pointsbet’s managing director Sam Swanell said:

We are delighted with the acquisition of Banach and that its well credentialled team have agreed to join Pointsbet. As legalisation to approve US sport betting accelerates across the US, it has become clear that the in-play opportunity will be very significant and those with the best depth and breadth of product will win.

Metcash Limited (ASX: MTS)

The Metcash share price fell after giving investors a trading update and increasing its dividend guidance.

Metcash gave a detailed presentation about the different segments of its business including food, liquor and hardware.

In the trading update it said that in the first four months of the second half of FY21, it is seeing strong sales momentum continuing in all of its pillars from a shift in consumer behaviour, improved competitiveness of its retail businesses, stronger customer loyalty and a strong Christmas and New Year period of trading.

However, Metcash reminded investors that in March 2021 and April 2021 it will be cycling against the spike in sales for food and hardware in FY20.

Supermarket sales are up 14.4% against the prior corresponding period, with food sales up 4.1% (or up 14.1% excluding the 7-Eleven impact).

Hardware sales increased 31.6% in the first four months of the second half of FY21. It was a 19.2% increase excluding Total Tools.

Liquor sales increased 19.6% year on year.

In terms of its dividend, Metcash said that strong financial performance and cashflows support raising the target dividend payout ratio to 70% of underlying net profit after tax (NPAT).

Clover Corporation Limited (ASX: CLV)

The Clover share price jumped today more than 9% after reporting its FY21 half-year result.

Net sales revenue decreased 21.7% to $29.4 million, whilst net profit after tax declined by 45.8% to $2.5 million.

Adjusted for foreign exchange impacts, net sales revenue was $30.3 million. Excluding Melody Dairy start-up and IP legal defence costs, there was an underlying net profit after tax (NPAT) of $3.3 million.

Clover said that it has retained and grown its customer base, but the ongoing COVID-19 pandemic has negatively impacted customer demand. Many of the new product programs under development have been placed on hold due to customers’ staff around the world working from home.

Some customers have experienced reduced demand as the China market undergoes changes in supply channels due to COVID-19 restrictions and the daigou channel reduction, whilst minimal international travel by Chinese tourists and students has slowed the grey market importing of many products including infant formula. The local Chinese market has become more competitive with local manufacturers competing on price and aggressive channel strategies.

The board decided to declared an interim dividend of 0.5 cents per share.

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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 Clover Limited and Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post ASX 200 jumps, Pointsbet reveals acquisition, Metcash drops appeared first on The Motley Fool Australia.

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