ASX 200 rises, Nuix drops, Elders falls

The S&P/ASX 200 Index (ASX:XJO) went up today, though Nuix Limited (ASX:NXL) and Elders Ltd (ASX:ELD) both fell on news.

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The S&P/ASX 200 Index (ASX: XJO) rose by 0.1% today to 7,024 points.

Here are some of the highlights from the ASX today:

Nuix Limited (ASX: NXL)

The Nuix share price dropped almost 10% today in response to media reporting by Nine Entertainment Co Holdings Ltd (ASX: NEC) mastheads including the Australian Financial Review.

There were reports of “inadequate risk disclosures in the Nuix prospectus about growth and understanding of accounting standards, as well as infighting which led a group of senior executives to try and push out the CEO Rod Vawdrey.”

The AFR quoted one previously large investor in Nuix, who said:

It looks like they did something funny with the IPO accounting… but I actually think it’s a very interesting situation because a customer I spoke to said their product is a must-have.

What they were aggressively pitching [in the lead-up to the IPO] was the growth profile. This wasn’t in the prospectus, this was verbally communicated. So the thing that’s most disappointing is they were suggesting their numbers were conservative.

That investor went on to say that there should be a new CEO.

Nuix issued a media release to the ASX in response. It said that it has robust processes in place to measure forward indicators of performance in order to ensure that it keeps the market fully informed and has done so on a timely and regular basis. Nuix said it’s committed to the highest standards of corporate governance.

The company also said it has operated across multiple jurisdictions over many years and has a proud history of working with regulators exercising the highest standards of probity.

Nuix was one of the worst performers in the ASX 200 today. 

Elders Ltd (ASX: ELD)

The Elders share price fell by 3.4% today in response to the company’s FY21 half-year result.

The agribusiness said that it delivered growth across all state geographies and product lines. Its retail products division was particularly strong according to management, due to both sales growth and margin improvement as Elders’ own brand share of crop protection and animal health product sales increased.

Half-year revenue increased by 22% to $1.1 billion. Underlying earnings before interest and tax (EBIT) increased by 40% to $73.8 million whilst underlying net profit after tax rose 41% to $67 million. Statutory net profit after tax rose 31% to $68.2 million.

After favourable rainfall, Elders has a positive outlook for the winter crop. It’s expecting to see further strong demand for crop inputs, particularly fertiliser and crop protection products.

Carsales.com Ltd (ASX: CAR)

The Carsales share price was the worst performer in the ASX 200 today, falling by almost 12% after coming back to trade after its capital raising for the acquisition of Trader Interactive in the US.

It has successfully raised $428 million from institutions at the offer price of $17 with a take-up of approximately 83% by eligible institutional shareholders. A bookbuild for the shortfall of shares was done at $18 per new share.

Carsales CEO Cameron McIntyre said:

We firmly believe that this acquisition creates compelling value for our shareholders through accelerating our international growth strategy by providing us with exposure to a significant market in the United States across attractive non-automotive verticals.

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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. recommends Nuix Pty Ltd. The Motley Fool Australia has recommended carsales.com Limited, Elders Limited, and Nuix Pty Ltd. 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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