ASX 200 drops, Nuix sinks, Link declines

It was a negative day for the ASX 200, with Nuix (ASX:NXL) plunging again.

The S&P/ASX 200 Index (ASX: XJO) dropped around 0.25% today to 7,162 points today.

Here are some of the highlights from the ASX:

white arrow dropping down representing the 10 most shorted shares on the ASX

Image source: Getty Images

Nuix Ltd (ASX: NXL)

The Nuix share price fell almost 18% today in response to another disappointing update out of the ASX 200 tech share.

Nuix said that pro forma revenue for FY21 is now expected to be $173 million to $182 million. That's a downgrade from the $180 million to $185 million forecast range on 21 April 2021.

Annualised contract value (ACV) of $165 million to $172 million is the new guidance. That's a decrease of expectations from a range of $168 million to $177 million.

Pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) is still expected to be in a range of between $64.6 million to $66.6 million.

Nuix explained that several key factors have affected the revised forecasts including the expected timing of closure of some upsell opportunities and new potential customers. In-particular, Nuix said there remains uncertainty in relation to both the structure and timing of a small number of large customer upsell opportunities, including whether these may result in multi-year deals during FY21.

The company said that the revised forecasts are susceptible to a number of risk factors relevant between now and 30 June 2021.

Nuix CEO Rod Vawdrey said:

We understand the importance of meeting financial forecasts. There's a near-term level of uncertainty regarding the precise timing, shape and scope of some large and anticipated customer contracts coming to fruition in the next few weeks. We expect to capture most of the revenue which remains under current negotiation with these customers either by financial year-end or early in our new financial year. We remain confident in the long-term outlook for the company.

Link Administration Holdings Ltd (ASX: LNK)

Link was another of the ASX 200's worst performers today, falling by almost 7%.

The business advised that PEXA has confirmed that following a cornerstone bookbuild process, it has signed an underwriting agreement for the purposes of a proposed initial public offering (IPO) of PEXA.

The underwritten price of the IPO implies an enterprise value for PEXA for $3.3 billion.

Before any scale back from this process, Link Group's shareholding in PEXA will increase from 44% to approximately 47%. Link Group will receive a minimum of $50 million in cash as a result of the IPO process, plus any proceeds received through the scale back.

PEXA is expected to list near the end of June 2021.

The Link board concluded that retaining exposure to Link's interest in PEXA was in the best interest of shareholders, whilst also realising a transparent valuation through a listing and flexibility to monetise its interest over time.

REA Group Limited (ASX: REA)

The REA Group share price fell by 0.5% after announcing a transaction.

Under the deal, REA will transfer ownership of its Malaysia and Thailand entities to PropertyGuru in exchange for an 18% equity interest in PropertyGuru. REA will take one seat on the board.

PropertyGuru is a leading digital proptech company operating marketplaces in Singapore, Vietnam, Malaysia, Thailand and Indonesia.

REA Group said the proposed transaction will provide the ASX 200 share with a strategic shareholding in a larger, more diversified company in a region that continues to experience rapid digital transformation across the real estate sector.

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 Link Administration Holdings Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Nuix Pty Ltd. The Motley Fool Australia has recommended Link Administration Holdings Ltd, Nuix Pty Ltd, and REA Group Limited. 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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