Small-cap stock Damstra Holdings Ltd (ASX: DTC) closed Tuesday at 10 cents, but at the time of writing on lunchtime Wednesday, it is flying at 26 cents.

What's going on here?

US suitor makes Godfather offer

The excitement is all from news that Damstra has received a takeover bid from a US suitor.

The ASX company revealed coming out of a trading halt that privately owned Texan business Mitratech Holdings Inc has proposed to acquire all Damstra shares at 30 cents cash.

At the moment it remains just a proposal, but Mitratech has been granted four weeks of exclusive due diligence.

"The proposal is non-binding and highly conditional," Damstra stated to the ASX.

"There is no certainty that any binding transaction will proceed or eventuate as a result of the proposal."

Not an easy ride for this ASX tech stock

Damstra makes software for clients in industries that need to manage workplace safety and regulatory requirements.

While Wednesday's share price movements are undoubtedly fantastic for its shareholders, it's merely a small relief for long-term investors.

The company listed on the ASX in October 2019 after selling shares at 90 cents at its initial public offering (IPO).

After climbing to $2.19 one year later, Damstra shares have tumbled 89% in the midst of the growth stock sell-off.

There is currently no analyst coverage of the $65 million ASX tech stock on CMC Markets.

The post Guess which ASX tech stock just rocketed 160%! appeared first on The Motley Fool Australia.

In afternoon trade, the integrated workplace management solutions provider's shares are up a massive 14% to 16 cents.

That's despite Nasdaq futures currently pointing to the tech-focused index opening tonight's session on Wall Street deep in the red. This follows an underwhelming update from Google parent Alphabet.

Why is the Damstra share price storming higher?

Investors have been buying Damstra's shares in response to the company's first quarter update this morning.

According to the release, Damstra delivered a 25% increase in revenue over the prior corresponding period to $7.4 million.

Another positive was that the company was profitable at an EBITDA level, with its EBITDA margin now growing towards the double digits. This has been supported by the company's cost optimisation plan, which has achieved a run rate of $6.1 million. This represents 76% of its $8 million target.

This helped Damstra report positive operating cashflow of $0.3 million for the period, which was a big improvement on its operating cash outflow $1.7 million a year earlier. Free cash flow was still negative at $1.8 million but almost 50% lower than FY 2022's average quarterly outflow of $3.4 million.

Damstra's cash balance stood at $8 million at the end of September, with a further $5 million in funds from its credit facility currently undrawn.

Management commentary

Damstra's CEO, Christian Damstra, was pleased with the quarter. He said:

Q1 FY23 has been a pleasing start to the financial year, showing continued growth in the business while structurally lowering our cost base. Our targeted improvement in cash burn profile is tracking as planned and we have total confidence we will, at a minimum, reach our $8m cost out target.

It is important to highlight the structural improvement in our cashflow which can be best demonstrated by free cash outflows being $1.8m for the quarter compared to the average quarterly outflow of $3.4m in FY22, which is a 47% improvement. This demonstrates that we have structurally lowered our cost base when coupled with increasing revenue, reinforcing our target of becoming free cash positive in second half of FY23.

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After opening 10.5% higher at 21 cents, the workplace management solutions provider's stock surged to trade at an intraday high of 26.5 cents – representing a 39% gain. At market close on Monday, the Damstra share price finished at 24 cents, a rise of 26.32% from the previous close.

Damstra share price takes off on positive cash flow

• $8 million of unaudited revenue – the highest quarterly revenue of financial year 2022 (FY22)
• The company has now reported three consecutive quarters of revenue growth
• $1.3 million of operating cash flow – first quarter of positive cash flow in FY22
• The company boasted 953 clients at the end of June – a 12.5% quarter-on-quarter improvement

A strong June quarter's performance saw Damstra's revenue for the second half increase 25.2% on the first half of financial year 2022.

The company's operating cash flow ended in the green. However, when also considering investing outflows, it reports an outflow of $1.2 million. That was an improvement on the March quarter's $4.7 million outflow.

The ASX tech company ended the quarter with $10.1 million in cash and $5 million of undrawn funding.

What else happened in the last quarter?

Damstra's bottom line improved through the June quarter, but its share price wasn't so lucky. The stock tumbled 42% last quarter despite news of a three-year agreement with Barrick Gold worth at least US$1.2 million.

The company also signed a three-year agreement with Capstone Copper alongside smaller North American client wins expected to help drive its international expansion.

Finally, the company's cost optimisation project is now targeting savings of $8 million, up from $5 million in April.

Around half of those savings had been realised on a run rate basis at the end of June. It's expecting to achieve its final target by the end of the December quarter.

What did management say?

Damstra CEO Christian Damstra commented on the results driving the company's share price higher today:

Q4 has been a breakthrough quarter for Damstra in many ways… our international business is now showing the benefits of our significant investment and we believe Damstra has the critical mass to grow at scale.

We continue to see a growing sales pipe of opportunities in [Australia and New Zealand] but also internationally.

Our much-improved cash flow outcomes are pleasing in the current environment, with a material and structural reduction in cash outflows in Q4.

What's next?

Damstra hasn't provided guidance for FY23 just yet, but there is good news regarding its outlook.

The company believes it will be free cash positive in the second half of this financial year as long as markets don't materially decline between then and now. It noted its focus on free cash flow, rather than operating cash flow, will likely meet investors' focus on the net cash position of technology companies.

Damstra share price snapshot

The Damstra share price has underperformed through 2022 so far.

It has slumped 29.4% year to date. It's also currently 78.9% lower than it was this time last year.

For context, the S&P/ASX All Technology Index (ASX: XTX) has fallen 28.5% since the start of the year and 26% over the last 12 months.

The post Damstra share price soars 26% following 'breakthrough quarter' appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that hold them back are listed below. Here's why they are rising today:

Damstra Holdings Ltd (ASX: DTC)

The Damstra share price is up 16% to 22 cents. This follows the release of the integrated workplace management solutions provider's fourth-quarter update. Damstra had its best quarter of the financial year, delivering revenue of $8 million. This underpinned a 25.2% half on half increase in revenue during the second half. Damstra also achieved its first quarter of positive operating cash flow.

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price is up over 3% to $17.69. This morning the travel agent upgraded its guidance for FY 2022. Management revealed that a strong finish to the financial year means that it expects to record an underlying EBITDA loss of between $180 million and $190 million in FY 2022. This is an 11.9% improvement on the mid-point of the company's initial FY 2022 guidance.

Insurance Australia Group Ltd (ASX: IAG)

The IAG share price is up almost 6% to $4.45. This appears to have been driven by the release of a number of broker notes that rate the insurance giant's shares as a buy. One of those is Citi. Although the broker was disappointed with IAG's FY 2022 update, it sees enough value to maintain a buy rating with a $5.10 price target.

Pantoro Ltd (ASX: PNR)

The Pantoro share price is up 3% to 18.5 cents. Investors have been buying this gold explorer's shares following an update on drilling on stage two of the open pit plan at Green Lantern at the Norseman Project. Management advised that drilling continues to increase confidence in the ore geometry and controls on mineralisation.

The post Why Damstra, Flight Centre, IAG, and Pantoro shares are pushing higher appeared first on The Motley Fool Australia.

Four ASX shares that are climbing more than most today are listed below. Here's why they are storming higher:

Chalice Mining Ltd (ASX: CHN)

The Chalice Mining share price is up 8% to $4.05. Investors have been buying this mineral exploration company's shares following the release of a drilling update. Chalice revealed that a new nickel-copper-PGE sulphide zone has been intersected in initial drilling at the Dampier target, ~10km north of the Gonneville Deposit. This is the first significant indication of orthomagmatic sulphide mineralisation outside of the Gonneville Deposit and is considered an exciting result.

Damstra Holdings Ltd (ASX: DTC)

The Damstra share price is up 19% to 18.5 cents. This morning the enterprise protection software provider confirmed media reports that it has been in takeover talks with Accel-KKR. And while these talks have now ended without a deal being reached, this hasn't stopped investors from buying shares today.

Link Administration Holdings Ltd (ASX: LNK)

The Link share price is up 6% to $4.06. Investors have been buying this administration services company's shares amid news that Dye & Durham has lifted its takeover offer from $4.30 per share to $4.57 per share. The Link board advised that it will consider this revised offer.

Pinnacle Investment Management Group Ltd (ASX: PNI)

The Pinnacle share price has jumped 10% to $8.35. The catalyst for this was the release of a market update which revealed that performance fees from its affiliates totalled approximately $57.1 million in FY 2022. This includes a sizeable $38.3 million from the second half of the financial year. Pinnacle's net share of these performance fees is approximately $16.4 million.

The post Why Chalice Mining, Damstra, Link, and Pinnacle shares are storming higher appeared first on The Motley Fool Australia.

In afternoon trade, the enterprise protection software provider's shares are up 26% to 19.5 cents.

Despite this, the Damstra share price is still down 44% since the start of the year.

Why is the Damstra share price rocketing higher?

Investors have been bidding the Damstra share price higher on Thursday amid reports that the company has been a takeover target.

According to the AFR, private equity firm Accel-KKR has been talking to Damstra in relation to a potential transaction. However, the report indicates that Accel-KKR has since walked away from talks without a deal being reached.

Interestingly, this is what happened with fellow tech share ELMO Software Ltd (ASX: ELO) last month. Accel-KKR was rumoured to have been the private equity firm that made the HR technology company a $6.10 per share indicative proposal. This was over double the ELMO share price at the time. However, talks ended before a deal could be made.

Damstra response

This morning Damstra confirmed that takeover discussions had taken place with Accel-KKR, but that they have now ended.

It commented:

[Damstra] refers to recent media speculation in relation to receipt of an unsolicited confidential, non-binding and indicative proposal (Proposal) from Accel-KKR. Discussions in relation to this Proposal have concluded.

The Board of Damstra will continue to explore options to maximise shareholder value, and will update the market in accordance with its continuous disclosure obligations under ASX Listing Rule 3.1.

Time will tell if Accel-KKR returns. But some investors appear to believe it will judging by the Damstra share price performance today.

The post Why is the Damstra share price soaring 26% on Thursday? appeared first on The Motley Fool Australia.

The workplace management solutions company said its subsidiary, Damstra Technology, had secured a three-year contract with Pinot Valley Mining Corp. Pinot Valley, which is in Arizona, is owned by Capstone Copper Corp (TSE: CS).

The Damstra share price is currently up 1.25% 8.1 cents.

For comparison, the S&P/ASX 200 Index (ASX: XJO) is up 0.3% at the time of writing.

Strategic value helps Damstra share price

The contract with Capstone — which has its headquarters in Canada — is estimated to be worth at least circa US$615,000 ($892,000).

Capstone will implement Damstra's Enterprise Protection Platform (EPP) through five modules — workforce and contractor management, security, health and safety, training, and compliance and incident management.

While the total value of the contract is not considered to be material, management pointed out the strategic importance of the win.

Worth more than the monetary value

In the first instance, the ASX tech minnow is pleased that it is replacing an international competitor. Management noted the deal "helps validate the competitiveness of Damstra's EPP on an international scale".

Secondly, there could be an opportunity for Damstra to roll out its solution across more mine sites operated by Capstone.

Damstra's chief executive Christian Damstra said:

What is exciting about Capstone is that it helps validate our EPP product positioning and strategy where we can offer to clients one module or, as in the case of Capstone, five modules, under the EPP where all the modules work in an integrated fashion.

How is the Damstra share price performing?

The contract win comes as the Damstra share price has shed 90% of its value over the past year. The brutal sell-off in ASX tech shares has hit smaller-cap companies harder.

Rising interest rates have forced investors to dump growth shares, and small-cap ASX tech shares are a near-perfect descriptor of this category. This explains why three-quarters of ASX tech shares have fallen by 20% or more in the past year.

Only two others have performed worse than the Damstra share price in the last 12 months — the colorTV Ltd (ASX: CTV) share price and the 3D Metalforge Ltd (ASX: 3MF) share price. Both have shed around 92% of their value.

The post What's boosting the Damstra share price today? appeared first on The Motley Fool Australia.

At times, it can be telling when certain ASX shares underperform on days of broad strength. Such situations usually indicate investors are paying attention to more prevalent issues at the company level than the positivity demonstrated at a sector-wide level.

Having said this, let's take a look at three ASX tech shares that reached new lows today.

These ASX tech shares are not catching a break

Siteminder Ltd (ASX: SDR)

While the global hotel e-commerce platform technically reached a new 52-week low today, the company has only been listed since 8 November 2021.

Following its initial share price pop on debut, this ASX tech share has failed to impress shareholders. In February, the Siteminder share price suffered a blow after reporting a net loss of $87 million for the December ending half year.

However, today's negative move occurred without any substantial information. The company is slated to enter the S&P/ASX 300 Index (ASX: XKO) on 22 March. Shares in Siteminder finished the day at $4.52, down 5.8% from their previous close.

Damstra Holdings Ltd (ASX: DTC)

Another ASX tech share hitting a new 52-week low today was the workplace management solutions company, Damstra Holdings.

Investors have gone cold on Damstra after a guidance downgrade in November last year. Since then, the picture hasn't gotten prettier, as the company reported a net loss of $56 million compared to $5.49 million in the previous corresponding period.

In a similar fashion, Damstra did not release any announcements today. However, the company is expected to be removed from the All Ordinaries Index (ASX: XAO) this month. Shares in Damstra finished the day at 20 cents, up 2.6% — rebounding from their new 18 cent low.

Dug Technology Ltd (ASX: DUG)

Lastly, Dug Technology is the third and final ASX tech share that cemented a new 52-week low on Wednesday.

Unfortunately for shareholders, it has been a slow and steady grind lower for the high-performance computing company over the past 12 months. Today, Dug Technology announced the appointment of a new CFO after its previous chief financial officer resigned yesterday.

Shares in Dug Technology finished the day at 55 cents, down 1% from their previous close.

The post 3 ASX tech shares at 52-week lows despite tech rally appeared first on The Motley Fool Australia.

This follows an announcement from the workplace management solutions company regarding Victoria's $15.8 billion North East Link project.

At the time of writing, Damstra shares are swapping hands for 22 cents, up 12.82%.

What was in Damstra's announcement?

Investors are buying Damstra shares after the company provided a positive update to the ASX this morning.

According to its release, Damstra advised it has been appointed as a technology partner for the North East Link project.

In what will be Victoria's largest road project, the North East Link project will fix the missing link in the city's freeway network.

Building the state's longest twin road tunnels, the design delivers an overhaul of the Eastern Freeway, Melbourne's first dedicated busway, completion of the Ring Road in Greensborough and a North East Trail with more than 34km of walking and cycling paths.

It's estimated up to 135,000 vehicles will use the North East Link each day, reducing congestion on other major roads.

The Spark Consortium, which is in charge of ensuring the project is delivered, comprises a number of companies. This includes Cimic Group Ltd (ASX: CIM) companies CPB Contractors, Ventia and Pacific Partnerships, Italy's WeBuild, South Korea's GS Engineering and Construction, China Construction Oceania, Capella Capital, John Laing Investments and DIF.

The project is expected to deliver new $4.9 million of revenue for Damstra over six years (average $816,000 per annum).

Under the partnership, Damstra will provide mobilisation systems via its Enterprise Protection Platform (EPP) to approximately 15,000 users. This will allow utilising the workforce management, Damstra Learning and digital forms modules.

Mobilisation for early work projects is forecasted to commence sometime during the third-quarter of FY222. Full project implementation will follow in FY23.

What did management say?

Damstra CEO, Christian Damstra commented:

We are very pleased to announce this significant long-term arrangement with the Spark Consortium, which will be a major new client for Damstra.

We believe it reflects confidence in Damstra's ability to provide critical services for workers and contractors for large-scale infrastructure projects and demonstrates the strength of our integrated EPP offering. It also leverages the strength of our construction vertical which has continued to rebound strongly since COVID restrictions began to lift.

About the Damstra share price

It has been a turbulent 12 months for Damstra shareholders, with the company's shares down more than 25%. The downfall began after Damstra reported its disappointing half-year results for FY21 in February.

Damstra has a market capitalisation of roughly $58.63 million, with approximately 257.70 million shares on its books.

The post Here's why this ASX tech share is surging 12% today appeared first on The Motley Fool Australia.

At the time of writing, shares in the workplace management solutions provider are trading 7.4% lower at 25 cents. Earlier in trade, the Damstra share price reached 24 cents apiece, representing a fall of 11%.

Damstra share price tumbles as the business resets

• Revenue up 9.2% over prior corresponding period to $13.2 million
• Annual recurring revenue of $27.8 million, representing a 15% increase
• Net client retention fell to 104% compared to 114% in previous first half
• Net loss after tax of $56 million, deepening from $5.49 million
• Held $18.7 million in cash and cash equivalents as at 31 December 2021
• Reaffirmed revenue guidance between $30 million and $34 million for FY22

What else happened during the half?

The six months ending 31 December 2021 presented a challenging period for Damstra, having lost one of its major clients — Newmont. In combination with COVID-19 impacts, the client loss resulted in earnings before interest, tax, depreciation, and amortisation (EBITDA) coming in at a loss of $200,000.

Following this, the company tried to offset some of the pressure on the bottom line by implementing cost optimisations. To date, this has led to more than $1 million in savings across the business.

However, parts of Damstra's operations still incurred notable expenses during the half. For example, general and administration expenses increased to ~43% of revenue from ~25%.

While not as drastic, sales and marketing expenses also jumped to ~36% of revenue versus its previous ~32%. Likely, these increased costs are weighing on the Damstra share price today.

During the half, Damstra acquired Sydney-based workplace safety and compliance company TIKS Solutions. The total consideration involved a mix of cash and shares worth $18 million.

According to today's report, the company is focused on three key areas: geographic expansion, verticals, and product. A $20 million capital raise in December last year will be used to push forward with these targeted items.

What did management say?

CEO Christian Damstra commented on the results:

Excluding Newmont, our business grew by 16% during the first half, and while our EBITDA performance was below our expectations, the second quarter was EBITDA positive. With COVID restrictions continuing to ease across our clients' operations, activity accelerated towards the end of Q2, and we believe this trend will continue for the rest of the financial year. We see our key metrics improving in many areas of the business and this, along with the capital raise we successfully completed in December, provides a strong foundation for growth in the second half and beyond.

What's next?

In a positive sign, Damstra has reaffirmed its forward guidance for FY22. Although, the same couldn't be said for its EBITDA margin guidance. Previously, the company anticipated an EBITDA margin of 15% to 20% — but now it is guiding for 2% to 5%.

There are signs that "positive trends" are emerging, according to the Damstra CEO. In addition, no contract renewals are coming due in FY22, providing some near-term stability.

Damstra share price snapshot

The performance of the Damstra share price has been hellacious over the past year, tumbling 75%. In light of the sell-off, ASX-listed Damstra now holds a market capitalisation of $68 million.

If the company were to be valued on a forward-looking price-to-sales (P/S) ratio, based on its own revenue guidance for FY22, it would be between 2 to 2.26 times sales.

The post Damstra (ASX:DTC) share price stoops 11% amid downgraded margins appeared first on The Motley Fool Australia.

• The Damstra share price is up nearly 13%
• The comany's quarterly revenue increased 16% in Q2 of FY22
• It achieved customer wins in Australia and New Zealand

The Damstra Holdings Ltd (ASX: DTC) share price is on the rise today on the back of the company's quarterly results.

Damstra provides software-as-a-service solutions to industries around the globe. At the time of writing, the company's shares are swapping hands at 31 cents, up 12.73%.

Let's take a look at what the company's Q2 FY22 results revealed.

Damstra share price in the green amid results

Highlights of the company's unaudited results include:

• Quarterly revenue increased 16% on the previous quarter to 7.2 million
• Cash receipts of $7 million quarterly
• Operating cash outflows $7.3 million, down 22% from $9.4 million in the first quarter of FY22
• Half-yearly revenue for FY22 up 16% on the prior corresponding period (PCP)
• Revenue guidance of $30-$34 million for FY22 confirmed
• Annual recurring revenue up 15% on PCP to $27.8 million

What else happened in the quarter?

Damstra attributed its improved quarterly revenue to acquiring new clients and achieving customer wins in Australia and New Zealand.

The company said another positive was its partnership with TechnologyOne. That business segment has now grown to 18 clients and Damstra is hoping to expand this partnership into the UK market.

Damstra acquired 30 new clients in total for the quarter with a total customer base of 73. Of these client contracts, none of the top 10 is due for renewal in FY22.

Damstra is also rolling out a work permit software solution to a global commercial real estate services company.

The company completed a $20 million capital raise in December to support its sales and investment internationally.

Management comment

Commenting on the results, Damstra chief executive officer Christian Damstra said:

This improved performance was due to increased activity and client wins in ANZ, and we believe in this quarter some of our international opportunities will also eventuate.

We have successfully completed our capital raise in December to strengthen our balance sheet and have sufficient capital to return to positive operating cash flows, whilst continuing to grow internationally, particularly in North America.

We have seen an increase in ANZ activity as we continue to make good progress with a number of international client opportunities, and we were pleased to provide solutions to many of our clients as they managed tracking and monitoring through the ongoing disruption from COVID-19.

What's next for the company?

Damstra also revealed its revenue for the third quarter to date is higher than revenue at the same point in Q2.

The company plans to continue to reduce its operating cash outflows while increasing revenue. Damstra's announcement claimed its Australian operations were a stand-out performer, despite the company not breaking down the results on location.

Damstra is also in final contract discussions with a global mining client in North America. It's expecting a decision from this client before the end of March.

Share price recap

The Damstra Holdings share price has dropped almost 9% since the start of 2022 and more than 76% over the past 12 months.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has returned 5.54% in the past year.

The company has a market capitalisation of about $80 million based on its current share price.

The post Here's why the Damstra (ASX:DTC) share price is surging 13% today appeared first on The Motley Fool Australia.

We've put the constituents of the All Ordinaries Index (ASX: XAO) under the microscope to uncover the shares that were least favoured by investors in the last year.

Count yourself lucky if none of these companies were in your portfolio in 2021. The following five ASX shares were bullets worth dodging.

5 worst performing ASX All Ords shares of 2021

Laybuy Holdings Ltd (ASX: LBY)

Illustrating the destruction across buy now, pay later (BNPL) shares in 2021, instalment payment provider Laybuy takes the crown for the worst performing ASX share of the year.

The company made its entrance into the year at a price of $1.30. By the time the curtains drew close on 2021, Laybuy shares were fetching 24 cents apiece — representing a stomach-churning 82% fall over the course of the year.

While Laybuy managed to achieve a record year in terms of revenue and gross merchandise value, investors punished the share price as sentiment waned across the BNPL sector.

Splitit Ltd (ASX: SPT)

Continuing the trend, the next poorest performing ASX share making the list is another instalment payment provider.

Splitit couldn't escape the shift in how bullish investors were on BNPL companies. In turn, Splitit shares plummeted 81% by the end of the year. A steep increase in bottom-line losses likely didn't help with the company's appeal in 2021. Losses ballooned to US$35.2 million in FY21 compared to US$26.6 million in FY20.

Currently, Splitit shares are trading at 26 cents per share, down a further 10% on Thursday.

Ora Banda Mining Ltd (ASX: OBM)

2021 wasn't kind to ASX-listed gold mining shares. Even the giants of the game suffered throughout the year. Newcrest Mining Ltd (ASX: NCM), Northern Star Resources Ltd (ASX: NST), and Evolution Mining Ltd (ASX: EVN) all witnessed a fall of 10% to 30%.

Though, it was the more speculative segment of the gold mining market that was smashed. Perth-based Ora Banda Mining sank 78% last year. Shares in the company continued to move lower after Ora Banda raised $21 million to fund the development of its Davyhurst Gold Project.

Damstra Holdings Ltd (ASX: DTC)

Turning towards the tech-end of the town, workplace management solutions provider Damstra was a drag on investors' portfolios in 2021.

The Damstra share price waltzed into last year at $1.53 after having gained ~32% in the previous year. However, shares gradually declined as the company experienced challenges. These included a contractual dispute with a client and a reduction of service to another client.

As a result, FY22 guidance was cut to between $30 billion to $34 million, down from $35.9 million to $38.9 million. The mounting disappointments were reflected in the 78% fall in Damstra shares in 2021.

Cleanspace Holdings Ltd (ASX: CSX)

Rounding out the top five worst-performing ASX shares of 2021 is respiratory protection equipment manufacturer, Cleanspace.

The company enjoyed a record-setting year in 2020 as demand for respirators skyrocketed in the face of COVID-19. Opportunistically, shares in Cleanspace debuted on the ASX in October 2020.

Unfortunately for investors, a sudden dropoff in sales in the second half of FY21 led to a 50% crash in Cleanspace shares. The Cleanspace share price continued to face challenges throughout the remainder of 2021 to finish the year 78% lower.

The post These are the 5 worst performing ASX shares of 2021 appeared first on The Motley Fool Australia.

But of course, some of those ASX shares fared better than others.

We've already taken a look at the 5 best-performing ASX tech shares from last year. 

Now it's time for the dreaded worst performing stocks from 2021.

Whether it's due to governance scandals, financial downgrades, industry consolidation, or COVID-19 impacts, these businesses have copped the proverbial cold shoulder from investors as the year wore on.

Here are the 5 worst tech shares from 2021 from the ASX All Tech index:

Foreign BNPL businesses bleeding badly on the ASX

Buy now, pay later (BNPL) started 2021 as the hot sector with limitless potential.

While that might still be the case for the concept, investors have cooled on BNPL shares since the revelation in August that US giant Block Inc (NYSE: SQ) would wholly acquire market leader Afterpay Ltd (ASX: APT).

That's been the turbulent background for New Zealand's Laybuy Holdings Ltd's (ASX: LBY) listed life since floating on the ASX in September 2020.

This ASX tech share landed on the bourse with high hopes and an initial public offer price of $1.41 per share.

But after a shocking 82% fall over last year, Laybuy stocks closed 2021 at 24 cents.

At the time of listing, founder and managing director Gary Rohloff told The Motley Fool his company's payment cycle would be its competitive edge.

"We're the only buy now, pay later provider in the market that offers a weekly payment option," he said.

"We're very simply weekly pay in 6 [payments]. We own that weekly space in New Zealand, I'd argue we own it in Australia, and we definitely own it in the UK."

Another BNPL provider, New York's Splitit Ltd (ASX: SPT), was not far behind Laybuy as the worst ASX tech share of 2021.

The stock price had plunged an eye-watering 81% over the year, leaving it with a market capitalisation of just $117.34 million.

Coverage is scarce on the business. But according to CMC Markets, at least Canaccord Genuity analysts currently rate it as a "strong buy" based on its bargain share price of 25 cents.

'The market appears to have lost short-term confidence'

Microcap Bill Identity Ltd (ASX: BID) saw its share price fall more than 79% over 2021, leaving it to say goodbye to the year at 24 cents.

The Melbourne business automates bill payment processes through its cloud software.

Rounding out the worst 5 honour roll are Damstra Holdings Ltd (ASX: DTC) and Nuix Ltd (ASX: NXL), which saw their shares shrink 78% and 73% respectively.

At its annual general meeting in November, Damstra's language was far from positive.

The workplace management software company stated "the market appears to have lost short-term confidence" in the business and that it is sharing "the disappointment in [its] share price performance with other investors".

Yikes.

Nuix's problems have been all over the front page of not just financial publications like The Motley Fool, but also mainstream newspapers.

After a much-hyped listing in December 2020, the shares peaked at $11.86 in late January.

It's all been downhill since for this ASX tech share, with a series of governance scandals, alleged insider trading, and financial underperformance. In November, Nuix's own shareholders started suing it.

The stock farewelled the forgettable year at $2.20.

The post 5 worst ASX 200 tech shares of 2021 appeared first on The Motley Fool Australia.

This comes after Damstra announced a $20 million capital raise to fund its future growth operations. Here are the details.

What did Damstra announce?

Damstra advised it had raised a total of $20 million before costs via a 2-tranche offer at 34 cents per share. The offer was made to sophisticated and institutional investors only.

Specifically, the funds were obtained via a fully underwritten institutional placement of new shares, raising $10 million, and a fully underwritten accelerated pro rata non-renounceable entitlement offer to obtain the other $10 million.

The offer represents a 15% discount to the last closing share price on 1 December 2021 of 40 cents per share and a 23.7% discount to the 5 day volume-weighed average price (VWAP) up until that point.

Damstra intends to use the funds for a range of growth initiatives in order to drive sales and support profit margins. For instance, it intends to allocate funds to grow sales capability and resources, especially in the North American market.

It also hopes to ensure availability of funds for the TIKS deferred consideration payment, secure further investment in Damstra's Enterprise Protection Platform and bolster working capital requirements.

The trading halt is expected to end at market open on 6 December at which point eligible retail shareholders will have the opportunity to participate in a retail entitlement offer.

This particular offer is expected to run from 6 December and will close at the end of business on 16 December. Damstra says that eligible retail shareholders can choose to take up all, part, or none of their entitlements.

Furthermore, Damstra notes that this offer will include a "shortfall facility", under which eligible retail shareholders may also apply for "top up shares" that weren't nabbed up by other shareholders, "up to a maximum of 50% of the [shareholder's] entitlement".

The news follows an announcement from last week where the company announced that it had signed a variation to the Master Supply Agreement it holds with CPB Contractors Pty Ltd.

The impact of this update to the company's turnover is expected to increase Annual Recurring Revenue (ARR) by $550,000, Damstra says.

Damstra share price snapshot

It's been an unimpressive last 12 months for Damstra, with its share price losing almost 77% in that time. It's arrived at this point after sliding a further 74% this year to date.

Even in the past month alone, Damstra has slipped more than 44% in the red and is also down 24.5% in the past week.

The post Damstra (ASX:DTC) share price halted amid $20m cap raise appeared first on The Motley Fool Australia.

Shares in the enterprise protection software business took a hit from the open following the release of Damstra's AGM presentation this morning.

Language at the AGM acknowledged "the market appears to have lost short-term confidence in the company" and that Damstra is focused on sharing "the disappointment in [its] share price performance with other investors".

Not only that, the company reduced its forecasts for FY22 after a series of challenges across the year.

Here are the key takeouts.

What's happening with the Damstra share price?

It's been a difficult year for Damstra shareholders. Since this time in 2020, the Damstra share price has wobbled down from a high of $1.71 and is now at 52-week lows.

Alas, management acknowledged Damstra has faced challenges in 2020/21 that have contributed to the current investor sentiment.

The first major issue related to a contractual dispute with a client acquired through the Vault Intelligence Ltd acquisition. The second came down to "descoping and reduction of service from a global mining client as they internalised their hardware and site access requirements".

Both were "extremely disappointing and adversely impacted [the company's] near-term organic growth outlook". This resulted in adjustments to FY22 guidance.

Damstra downgraded its FY22 revenue guidance and now has its sights on $30 million to $34 million, down from $35.9–$38.9 million.

It also sees an earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin of 15%–20% after downgrading from 22.5%–25%.

As noted by the company, these changes reflect the minimal contribution from its Newmont business and the UK business for the remainder of FY22. At the lower end of the guidance range, it assumes minimal new client acquisition for the remainder of the financial year.

Damstra also notes that even with its new guidance, FY22 revenue is still expected to grow by 10%–24% and, if Newmont was excluded entirely, underlying revenue growth rate would be expected at 21%–37%.

Despite these headwinds, Damstra reiterated its FY21 results, where it increased sales by 40% to $27.4 million, with 87% of total revenues now annually recurring (ARR). The Damstra share price also fell on the release of these results in August.

As for Q1 FY22, unaudited revenue was $6.2 million, with 87.3% of that ARR. Cash receipts were unaudited $7.7 million and the number of paying users grew to 746,000.

What did management say?

The company also appointed a new CFO today. Andrew Ford will take over as Damstra's chief of finance. He has more than 20 years of experience in similar roles.

Speaking on the announcement, Damstra's executive chairman Johannes Risseeuw said:

Today we have also announced the appointment of Andrew Ford as chief financial officer, commencing in February 2022 based in Melbourne. Andrew has spent the majority of his 20-year career in CFO and senior finance roles, most recently as CFO/finance director for Infrabuild Ltd/GFG Alliance. Prior to this, he was the CFO of ASX-listed Godfreys Group Ltd. Andrew has also held finance positions with Cleanaway Ltd, Skilled Group Ltd, BlueScope Ltd, and professional services firm Deloitte. Andrew graduated with a commerce degree from the University of Melbourne.

The Damstra share price has performed well under the market's expectations these past 12 months, posting a loss of 72% in that time. That's been spurred on by a 71% loss this year to date. Shares are also down 51% in the past month.

The post Damstra (ASX:DTC) share price tumbles 11% as guidance downgraded appeared first on The Motley Fool Australia.

At the time of writing, the Damstra share price is down 15% to 78.2 cents. For comparison, the S&P/ASX 200 Index (ASX: XJO) is down 0.46% to 7,414.7 points this afternoon.

Shareholders are applying selling pressure after the quarterly numbers came in below what had been hoped for. Let's take a look.

Temporary challenges take a toll

Although Damstra reported growth for its operations in the first quarter, the numbers were below management's expectations. Equally disappointed are shareholders, as reflected by the steep fall in the Damstra share price today.

According to the release, revenue increased by 20% year-on-year to $6.2 million in Q1. At face value, this seems like a respectable level of growth. However, management had previously guided for 32.5% to 40% revenue growth for the full year. This discrepancy between expectations and reality appears to have caught the market off guard.

Management stated the reason for the underperformance in revenue growth was due to "… the impact of COVID but also some client-specific activity in Q1".

Firstly, COVID-19 resulted in lockdowns across New South Wales and Victoria. This led to client projects being delayed and a reduction in users in these areas. In turn, shareholders are selling down the Damstra share price today.

Secondly, the client-specific aspect involved the descoping of arrangements between Damstra and its client, Newmont. The gold mining company has decided to internalise hardware, access, and site control. This move had an estimated overall impact of $0.8 million to Damstra.

However, it's not all bad news. Despite the hiccup in its trajectory, Damstra is confident accelerated growth will return as economies reopen. As such, construction verticals and its United States pipeline of opportunities look strong at this point.

Another positive line item is Damstra's annual recurring revenue grew by 55% year-on-year to $29.3 million. Similarly, 9 new clients were added during the quarter, taking the total tally up to 733.

Damstra share price snapshot

Today's fall in value adds to a downward trend that has been playing out over the past year. Unfortunately for shareholders, the Damstra share price is now down around 61% compared to this time last year.

Although the share price has been in decline, the company has maintained top-line growth during this time. At the end of June 2021, trailing 12-month (TTM) revenue was $27.05 million. This represents an increase of 38% compared to the TTM revenue reported at the end of June 2020.

The post Damstra (ASX:DTC) share price plummets 15% as COVID takes a toll appeared first on The Motley Fool Australia.

Two that could be worth watching very closely are listed below. Here's what you need to know about these small cap ASX shares:

Booktopia Group Ltd (ASX: BKG)

The first small cap ASX share to watch is rapidly growing online book retailer, Booktopia.

It was a very strong performer in FY 2021, reporting a 35% lift in revenue to $223.9 million and a 125% jump in underlying EBITDA to $13.6 million.

This was underpinned by a 19% increase in active customers to 1.8 million and a 26% lift in units shipped to 8.2 million. The latter was supported by its new automated distribution centre, which allowed the company to capture increased demand from the shift to online shopping.

And while no guidance was given for FY 2022, management revealed that the new financial year has started strongly and revenue was tracking ahead of the prior corresponding period at the end of August.

Morgans is very positive on the company's outlook. It currently has an add rating and $3.72 price target on Booktopia's shares.

Damstra Holdings Ltd (ASX: DTC)

Another small cap ASX share to watch is Damstra. It is an integrated workplace management solutions company providing an increasingly popular cloud-based workplace management platform.

This platform is used by businesses globally to track, manage, and protect their workers and assets.

It was also on form in FY 2021. For the 12 months ended 30 June 2021, Damstra reported a 63% increase in annual recurring revenue (ARR) to $34.5 million. This was driven by a 74% increase in user numbers to 737,000.

The company has also just strengthened its offering with the acquisition of TIKS Solutions for $15.5 million. This leaves Damstra well-placed to continue growing into its substantial addressable market. Management estimates that its total addressable market (TAM) will be worth US$20 billion in 2022.

The team at Shaw & Partners are positive on the company. They have a buy rating and $1.67 price target on its shares.

The post 2 exciting small cap ASX shares to watch appeared first on The Motley Fool Australia.

Four ASX shares that are climbing more than most today are listed below. Here's why they are surging higher:

Damstra Holdings Ltd (ASX: DTC)

The Damstra share price is up 6.5% to 91.5 cents. This follows news that the workplace management software company has signed an agreement to acquire TIKS Solutions for $18 million in cash and shares. The Australia-based workplace safety and compliance management company generated revenue of $4.14 million in FY 2021 and was free cash positive.

EML Payments Ltd (ASX: EML)

The EML Payments share price is up 3% to $3.86. This morning the payments company announced the completion of its acquisition of Sentenial. This follows approval by French and U.K. financial regulators. The deal will see EML take control of Sentenial's open banking product suite, Nuapay, for an upfront enterprise value of $112.7 million. The deal also includes an earn-out component of up to $64.4 million.

Orica Ltd (ASX: ORI)

The Orica share price has jumped 14% to $13.74. Investors have been buying this commercial explosives company's shares following the release of a broker note out of Morgans. According to the note, the broker has upgraded the company's shares to an add rating with a $13.70 price target.

South32 Ltd (ASX: S32)

The South32 share price is up almost 4% to $3.52. This morning the mining giant announced the acquisition of an additional 25% shareholding in Mozal Aluminium in Mozambique from MCA Metals. South32 has exercised its pre-emptive rights to acquire the additional stake for US$250 million. This brings its ownership of the smelter up to 72.1%.

The post Why Damstra, EML, Orica, & South32 shares are storming higher appeared first on The Motley Fool Australia.

Shares in the tech company are flying higher following the announcement of an acquisition.

Let's take a look at why investors are bidding the Damstra share price higher today.  

Damstra share price flies on TIKS Solutions acquisition

Shares in Damstra are flying today after the company announced a key acquisition.

The tech company publicised that it has entered into a share sale agreement to acquire 100% of the shares in TIKS Solutions Pty Ltd (TIKS).

TIKS is an Australia-based workplace safety and compliance management company, with approximately 70 clients across a wide range of sectors.  

Damstra provided several highlights on the management company's performance in FY21.

TIKS was able to generate audited revenue of $4.14 million for the full-year and remained free cash positive.

As a result, the acquisition is not expected to negatively impact Damstra's FY22 operating cash flow.

According to the update, the acquisition will comprise $2.5 million in cash from Damstra's existing cash reserves.

In addition, Damstra will issue an equivalent of $12 million in its shares, with a further $3.5 million in cash to be paid 12 months after completion.

Damstra noted that the acquisition is in line with the company's strategy to pursue inorganic opportunities and consolidate existing markets.

Damstra's CEO, Christian Damstra, commented:

TIKS is an exciting natural fit for Damstra that will bring further scale to our business, enhancing our leadership position in workforce management in Australia and expanding our international footprint.

How did Damstra perform in FY21?

The Damstra share price has struggled since reporting its full-year results for FY21.

Highlights from the company's report included;

• Revenue up 40% on the prior corresponding period (pcp) to $27.4 million
• Annual recurring revenue (ARR) up 63% on pcp to $34.5 million
• Pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) down 3% to $6.6 million
• Cash receipts up 51% on pcp to $31.7 million
• 737,000 users, up 74% from 423,000 in FY20

For FY22, Damstra has renewed its aim to break even in free cash flow and realise cash synergies from its acquisition of Vault Intelligence Ltd (ASX: VLT) late last year.

Snapshot of the Damstra share price

Shares in Damstra have tanked more than 40% since the start of the year.

However, today's announcement has reignited interest in the company's share price.

At the time of writing the Damstra share price is trading more than 10% higher for the day at around 95 cents.

The post Damstra (ASX:DTC) share price soars 10% on acquisition news appeared first on The Motley Fool Australia.

Three that could be worth watching closely are listed below. Here's what you need to know about them:

Adore Beauty Group Ltd (ASX: ABY)

The first small cap to watch is Adore Beauty. It is Australia's leading online beauty retailer with ~700,000 active customers. Adore Beauty could be destined for big things thanks to its very long runway for growth. This is due to the relatively low penetration of online beauty sales relative to other Western markets and categories.

Morgan Stanley has an overweight rating and $6.00 price target on its shares. It believes the company can grow strongly over the medium term.

Bigtincan Holdings Ltd (ASX: BTH)

Another small cap share to look at is Bigtincan. It is a leading provider of enterprise mobility software to businesses globally. Bigtincan's popular software unlocks new and more effective ways for teams to perform at higher levels and deliver better business results by creating more positive and efficient buying experiences. Demand for its software continues to grow and is underpinning strong annualised recurring revenue (ARR) growth.

Morgan Stanley appears to believe this strong form can continue. Late last month it put an overweight rating and $2.10 price target on Bigtincan's shares.

Damstra Holdings Ltd (ASX: DTC)

A final small cap to watch is Damstra. It is a growing integrated workplace management solutions provider which provides a cloud-based workplace management platform that is used by businesses globally. Its platform allows users to track, manage, and protect their workers and assets. Demand has been increasing strongly in recent years and this continued in FY 2021, underpinning solid revenue growth.

Shaw and Partners is very positive on the company. It currently has a buy rating and $1.88 price target on Damstra's shares. The broker believes its shares are extremely cheap and sees potential for a major re-rating as its recurring revenues ramp up and margins improve.

The post 3 stellar small cap ASX shares for your watchlist this month appeared first on The Motley Fool Australia.