Insights

ASX 200 rises, Zip falls, Brambles sinks

The Zip share price rose today, however the Brambles share price fell.
The post ASX 200 rises, Zip falls, Brambles sinks appeared first on The Motley Fool Australia. –

The S&P/ASX 200 Index (ASX: XJO) went up by 0.2% today to 7,443 points.

Here are some of the highlights from the ASX:

Brambles Limited (ASX: BXB)

The Brambles share price was the worst performer in the ASX 200 today, falling by over 9%.

It gave an investor briefing presentation yesterday after the market had closed. Today was the first time investors were able to react to that update.

The logistics company outlined how it was expecting its revenue and underlying profit to grow over the next few financial years. It said that in FY22 it’s expecting revenue to grew by between 5% to 6%, whilst underlying profit was expected to increase by only 1% to 2%.

The FY22 profit growth includes the spending of around $50 million on short-term “transformational costs”. It also said that its underlying effective tax rate is expected to increase by around 1.5 percentage points, driven by the expected impact of increases in the US, UK and Spanish tax rates.

This transformation is then expected to drive sustained high single digit underlying profit growth from FY23 onwards for the ASX 200 share. Profit is expected to be driven by mid single-digit sales growth with pricing initiatives and volume growth across all segments support underlying profit growth and earnings leverage. FY24 and FY25 are expected to have no short-term transformation costs.

FY22 free cashflow is expected to be an outflow of around US$200 million because of the reversal of US$215 million of FY21 timing benefits. Excluding those timing benefits, free cash flow generation in the year is expected to fully fund the capital expenditure (including transformation investments) and dividends.

Zip Co Ltd (ASX: Z1P)

Another business in the ASX 200 that saw a decline was Zip, its share price dropped around 2.5% after releasing an investor presentation.

The buy now, pay later business outlined to investors how it had performed in FY21 and its plans for the future.

It told investors that it’s going to launch savings accounts and rewards for people utilising Zip. The company said that its ‘Zip Card’ will make the in-store shopping experience easier and it would come with rewards such as up to 3% cashback every time the card is used in-store.

Another headline-grabber was the news that Zip will allow people to buy, hold, sell and pay with crypto. This will also come with ‘crypto rewards’ for paying with crypto.

Zip also plans to help shoppers with its shopping assistant, which will enable people to find discounts and find better deals.

Another area that Zip is working on is long duration payments. In the presentation it showed an example of six-month and twelve-month options for paying.

Westpac Banking Corp (ASX: WBC) and Kina Securities Ltd (ASX: KSL)

ASX 200 bank Westpac saw its share price rise 0.3% today, whilst the Kina Securities share price fell 5.6%.

Westpac has been trying to sell two of its Pacific businesses to Kina. Specifically, the big four bank had entered into an agreement to sell Westpac Fiji and its 89.91% stake of Westpac Bank PNG to Kina.

But, the Papua New Guinea Independent Consumer and Competition Commission (ICCC) has released a final determination, confirming that it has denied authorisation for the sale.

Kina disclosed that the ICCC isn’t convinced the sale won’t substantially lessen competition in the PNG markets. The ICCC also said that it wasn’t convinced the sale would benefit the public.

Kina said it’s assessing the implications of the decision and is considering its options. Westpac stated it will continue to operate these businesses while it reviews the impact on the sale to Kina Bank.

The post ASX 200 rises, Zip falls, Brambles sinks appeared first on The Motley Fool Australia.

Should you invest $1,000 in Zip right now?

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More reading

Here are the top 10 ASX shares today

Here are the 3 most heavily traded ASX 200 shares so far today

Why Australian Ethical, Brambles, Novonix, & Zip shares are tumbling lower

Leading brokers name 3 ASX shares to sell today

The latest ASX 200 mining shares to get hit by broker downgrade

Motley Fool contributor 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 and has recommended ZIPCOLTD FPO. 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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