Why the MotorCycle Holdings (ASX:MTO) share price is on watch

The MotorCycle Holdings (ASX: MTO) share price will be one to watch this morning after the company provided a business update to the ASX.
The post Why the MotorCycle Holdings (ASX:MTO) share price is on watch appeared first on The Motley Fool Australia. –

Older woman looking up as if watching asx share price

The MotorCycle Holdings Ltd (ASX: MTO) share price will be one to watch on Tuesday morning. This follows the motorcycle dealership group’s announcement after market close yesterday regarding a business update. The company’s shares closed Monday’s session at $2.79, down 1.06% for the day.

What was announced?

MotorCycle shares will be in focus today after the company reported positive sales momentum leading to an improved result.

According to its release, MotorCycle Holdings expects to report a bumper result for the upcoming financial year’s end.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) is forecast to come in at between $42 million and $45 million. This includes interest and amortisation on leased properties as an expense, which coincides with when the lease was added.

The company also revealed it received $5.8 million from the federal government’s JobKeeper program. In turn, this reduced the effects of the temporary store closures mandated by the Victorian and Queensland Governments.

Due to the stronger-than-expected profit result, upbeat trading conditions, and robust balance sheet, the board has decided to reward shareholders. The company will pay out around 50% to 70% of its net profit after tax (NPAT) to shareholders in dividends.

MotorCycle Holdings said new motorcycle unit sales increased by 51% for the first three months of the calendar year. This is in comparison to the prior corresponding period. Pleasingly, demand for both new and used motorcycles is continuing its run for the remainder of 2021.

Lastly, the company noted that with low levels of debt, and low-interest rates, it will actively pursue acquisition opportunities.

Motorcycle Holdings share price review

It has been a great 12 months for the MotorCycle Holdings share price, which has risen by more than 217%. However, more recently, the company’s shares have climbed by just 5.2% year to date.

MotorCycle Holdings shares are currently sitting just shy of their 52-week high of $2.98.

Based on valuation grounds, the company commands a market capitalisation of around $172 million, with 61 million shares outstanding.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

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.

The post Why the MotorCycle Holdings (ASX:MTO) share price is on watch appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!