In morning trade, the health, wellness and beauty products company's shares are up almost 15% to $1.02.

Why is the McPherson's share price surging higher?

The catalyst for the rise in the McPherson's share price has been the announcement of an agreement with pharmacy giant Chemist Warehouse Group.

According to the release, the two parties have agreed to establish a unique strategic alliance which has been structured to deliver material commercial and operational benefits to McPherson's.

As part of the agreement, McPherson's will be appointed as Chemist Warehouse's exclusive long-term distributor of a select portfolio of Chemist Warehouse-owned or controlled health and beauty brands outside of the Chemist Warehouse Network in Australia and New Zealand.

The range, which includes Wagner Vitamins, Wagner Body Science, Bondi Protein, Foster Grant, INC and Microgenics, will be made available to all customers within the McPherson's distribution network for an initial term of five-years commencing on 1 July 2022.

In addition, Chemist Warehouse will increase the portfolio of McPherson's brands it currently ranges in Australia and New Zealand, to include Moosehead, Maseur, Fusion Health, Stratton, Sugar Baby and Happy Flora. The pharmacy giant will also recognise McPherson's as a preferred supplier, allowing the company to enjoy the benefits of that status.

What's the catch?

Chemist Warehouse isn't doing this out of generosity. It will come at a cost to McPherson's.

McPherson's is essentially giving away almost 10% of the company to Chemist Warehouse in exchange for these agreements.

The release notes that the company will issue approximately 14.1 million McPherson's shares to Chemist Warehouse on 1 July 2022, making the pharmacy chain a substantial shareholder with an interest of 9.9% on a fully diluted basis.

Despite the dilution caused by the material share issue, management expects the agreement to be earnings per share accretive in FY 2023. This is based on agreed sales targets.

Time will tell if that is the case.

The post McPherson's (ASX:MCP) share price leaps 15% on Chemist Warehouse deal appeared first on The Motley Fool Australia.

That came after the health and beauty company closed at $1.44 per share last week and opened at $1.22 this morning. This means the company has lost its slender gain for 2021, and the shares are now down 14.34% year to date. The company is also down 56.25% over the past 12 months.

So what went wrong today?

McPherson's many suitors

The fall in the McPherson's share price can probably be blamed on an ASX release to investors before market open.

In this release, McPhersons advised the takeover proposal the company received in April from Arrotex Australia Group Pty Ltd will not be going ahead.

Back in April, McPherson's announced Arrotex had put forward a "non-binding, indicative proposal" to acquire 100% of McPherson's shares at a price of $1.60 per share. The offer was an all-cash one.

Prior to that, McPherson's had received a different offer, this one from Gallin Pty Ltd. Gallin put up an offer of $1.40 per share. However, the McPherson's board advised shareholders to reject this offer.

Earlier this month, McPherson's gave investors an update on the Arrotex proposal. It noted the following:

The Arrotex Indicative Proposal is conditional upon completion of satisfactory due diligence to be undertaken over a four-week period pertaining to accounting, financial, legal and key operational areas, and a number of other customary conditions.

Well today, here's what McPherson's had to say on the proposal from Arrotex:

After providing Arrotex with the agreed four-week due diligence period, the board wishes to advise that the parties have agreed to cease due diligence and Arrotex has withdrawn its indicative proposal.

So close perhaps, but no cigar.

Wedding called off

Here's some of what McPherson's CEO Grant Peck said on the outcome:

Following today's announcement in respect of Arrotex, I now look forward to working with the board to continue to implement the outcomes of our operational review announced on 19 May 2021.

We have a clearly defined strategy and are focused on its execution to deliver significant value to our shareholders in the short and long term… The McPherson's team will continue to focus its attention on delivering our health, wellness and beauty strategy.

At today's closing share price, McPherson's has a market capitalisation of $156.75 million, a price-to-earnings (P/E) ratio of 92.04 and a trailing dividend yield of 8.57%.

The post The McPherson's (ASX:MCP) share price fell 15% today. What happened? appeared first on The Motley Fool Australia.

Four ASX shares that have failed to follow the market higher today are listed below. Here's why they are sinking:

Austal Limited (ASX: ASB)

The Austal share price has tumbled 8.5% to $2.13 after downgrading its earnings guidance. This morning the shipbuilder revealed that it expects its earnings before interest and tax (EBIT) to be in the range of $112 million to $118 million in FY 2021. This is down from its previous EBIT guidance of $125 million. Delays due to COVID-19 are behind Austral's underperformance.

Cettire Ltd (ASX: CTT)

The Cettire share price has crashed 21% to $1.98. Investors have been selling the online luxury goods retailer's shares amid concerns over fund managers selling shares and its long term prospects due to sales tactics and supply chains. The Cettire share price has been paused from trading without explanation.

Leigh Creek Energy Ltd (ASX: LCK)

The Leigh Creek Energy share price has sunk 13% to 19.5 cents. This follows the completion of an $18 million capital raising undertaken at a deep discount of 18 cents per new share. The proceeds will be used to progress stage 1 of the Leigh Creek Energy Project to production of commercial syngas and power generation. Management advised that the placement was supported by several Australian and global institutions.

McPherson's Ltd (ASX: MCP)

The McPherson's share price has fallen 17% to $1.20. This morning the beauty products company revealed that Arrotex Australia has withdrawn its Indicative Proposal. In April, Arrotex Australia tabled a $1.60 per share takeover offer. However, following a four-week period of due diligence, the parties have agreed to cease due diligence and Arrotex has withdrawn its proposal.

The post Why Austal, Cettire, Leigh Creek Energy, & McPherson's are sinking today appeared first on The Motley Fool Australia.

Let's take a look at what the company announced.

Trading update

McPherson's this morning provided an FY2021 trading update to the market. Today's quantitative guidance comes after the beauty products supplier was unable to provide guidance due to "unpredictable and sporadic demand" from its exclusive Dr LeWinn's China-based brand partner.

McPherson's today announced a forecast $222 million decline in revenue. The Aussie supplier expects revenue of $200 million to $205 million for FY21 despite a 3% increase in domestic sales.

The big driver has been disappointing China distribution in late 2020. McPherson's said sales via its exclusive China brand partner, Access Brand Management (ABM), in Q4 2020 were "well below expectations".

The McPherson's share price is surging today despite the company forecasting FY2021 underlying earnings per share (EPS) of 5.0 to 6.5 cents per share. That's thanks to the weaker past sales and lower shipments to ABM expected in Q4 2021.

However, it's not just today's earnings downgrade that has been impacting the McPherson's share price.

What else is driving the McPherson's share price?

On 25 March 2021, McPherson's received a Bidder's Statement from Gallin Pty Ltd. That constituted an unconditional, on-market takeover offer to acquire all shares at $1.34 per share.

The McPherson's share price had previously last closed at $1.41, and the board saw the Gallin offer as opportunistic thanks to the "abnormally low, short-term export sales of Dr LeWinn's in FY2021".

As a result, McPherson's directors today unanimously reiterated that shareholders should reject the Gallin offer by taking no action. However, another offer has surfaced and appears to be boosting the McPherson's share price today.

McPherson's yesterday received a non-binding, indicative proposal from Arrotex Australia Group Pty Ltd (Arrotex). Arrotex is proposing to acquire all McPherson's shares at $1.60 per share in an all-cash transaction.

That would be a 31% premium to the 24 March 2021 closing price of $1.22, prior to receiving the Gallin Offer. It's also a 5.96% premium to the company's current share price at the time of writing. The board is now working with Arrotex to put together an offer that would work for McPherson's shareholders.

Foolish takeaway

It's been a big morning for shareholders with the McPherson's share price responding positively to today's updates.

The post McPherson's (ASX:MCP) share price jumps 7% on takeover news appeared first on The Motley Fool Australia.

At the time of writing, shares in the health and beauty supplier were trading higher at $1.425, up 0.71%. By comparison, the S&P/ASX All Ordinaries Index (ASX: XAO) is up 0.84%.

Let's take a closer look at these latest developments and how they might affect the McPherson's share price.

McPherson's brushes off Gallin

In today's ASX statement, McPherson's confirmed its board was unanimously recommending shareholders reject the offer from Gallin to buy 100% of the shares in the company for $1.34 each.

The board said the offer "profoundly undervalued the company".

McPherson's chair Graham Cubbin said Gallin was "exploiting" recent share price weakness to buy the company:

The offer has been opportunistically timed to exploit McPherson's recent share price weakness following a period of challenging trading conditions.

Shareholders who sell their MCP Shares to Gallin will not benefit from any future growth and any share price improvement above recent lows.

In the release, Mr Cubbin told shareholders McPherson's still had significant room for growth.

The company was currently working on a "comprehensive" operational review to identify areas of growth and implement strategies.

At just under $1.43, the current McPherson's share price is trading higher than the Gallin offer of $1.34.

In its pitch to shareholders, Gallin claimed McPherson's was "in urgent need of reinvigoration…" In addition, Gallin said a $46 million capital raising effort by McPherson's in October 2020 followed by a profit downgrade within 1 month of it raised "a number of red flags…" about the company.

McPherson's claimed Gallin was merely trying to "acquire as large an investment exposure as possible to McPherson's at the least possible price". The board did not indicate whether it would be prepared to accept a revised offer from Gallin.

McPherson's share price snapshot

As noted, the McPherson's share price has faced challenges recently. Over the past 12 months, the company's shares have fallen 36.5%. The company has been hit especially hard by the COVID-19 pandemic and international border closures.

McPherson's has a market capitalisation of $183.6 million.

The post McPherson's (ASX:MCP) share price lifts on takeover developments 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:

Brickworks Limited (ASX: BKW)

The Brickworks share price has climbed 4% to $19.67. Investors have been buying the building products company's shares following the release of its half year results. Although its underlying earnings were down 10% on the prior corresponding period to $90 million, management spoke positively about its outlook. This appears to be an indication that the worst is now behind Brickworks.

McPherson's Ltd (ASX: MCP)

The McPherson's share price has jumped 13% to $1.38. This follows news that McPherson's has received a takeover approach from Gallin Pty Ltd at $1.34 cash per share. Gallin has been incorporated specifically for the purpose of acquiring an interest in McPherson's. It is owned by Kin Group, which is controlled by the Geminder family. Kin Group attacked McPherson's management for destroying shareholder wealth. The McPherson's board responded by saying that the offer is "utterly opportunistic and profoundly undervalues" the company.

Medadvisor Ltd (ASX: MDR)

The MedAdvisor share price is up 3% to 33.5 cents. Investors have been buying the medication management company's shares following the release of a positive announcement. MedAdvisor has revealed that a global pharmaceutical company has extended its health program deal for an estimated 3 months. This is expected to be worth US$4.7 million.

Premier Investments Limited (ASX: PMV)

The Premier Investments share price has stormed over 4% higher to $24.88. The catalyst for this was the release of a broker note out of Macquarie this morning. According to the note, the broker has retained its outperform rating and lifted its price target to $31.00. Macquarie was impressed with the retail conglomerate's first half result.

The post Why Brickworks, McPherson's, MedAdvisor, & Premier Investments are storming higher appeared first on The Motley Fool Australia.

At the time of writing, the personal care and beauty products company's shares are up 14% to $1.39.

Why is the McPherson's share price surging higher?

Investors have been fighting to get hold of shares this morning after McPherson's announced the receipt of a takeover approach.

According to the release, Gallin Pty Ltd has made an unconditional on-market takeover offer of $1.34 cash per share.

While this represents a 9.8% premium to its last close price, it is a very opportunistic 60% discount to its 52-week high.

What is Gallin Pty Ltd?

A separate release explains that Gallin has been incorporated specifically for the purpose of acquiring an interest in McPherson's.

All of the shares in Gallin are owned by Bennamon Pty Ltd, which is wholly owned by Kin Group, which is ultimately controlled by the Geminder family. Kin Group also owns a significant stake in Pact Group Holdings Ltd (ASX: PGH), among many other investments.

Gallin has been quietly building up a position in McPherson's over the last few months and, prior to today, owned a 4.95% stake.

"McPherson's has lost its way"

Gallin's Director, Nick Perkins, believes McPherson's has lost its way and needs new leadership.

He said, "McPherson's is a business that has lost its way and is in urgent need of reinvigoration across its strategy, governance, and leadership. The company's performance has disappointed shareholders for some time despite owning a number of quality, attractive brands across key consumer markets."

"Now investors face a further extended period of uncertainty, including a lack of visibility on the current performance of sales of the Dr. LeWinn's product range into China. Although highly uncertain and with no guarantee of success, McPherson's urgently needs to undertake a full operational and strategic review with a view of turning around the business. We have the capital, capability, wherewithal and patience to do this, while shareholders have an opportunity to receive cash now at an attractive premium."

Gallin also took aim at management's poor M&A track record, its history of one-off adjustments, and wasted capital.

It concluded: "McPherson's also has a relatively poor M&A track record and a history of recognising "one-off" adjustments. Notably, between FY16 and 1H FY21 there has been c. $56.7 million4 in one-off impairments, inventory write-downs and restructuring costs. Moreover, the latest downgrade to the outlook on 1 December 2020 has further eroded market trust having come approximately 1 month after McPherson's raised fresh capital from shareholders."

The post Why the McPherson's (ASX:MCP) share price is zooming 14% higher today appeared first on The Motley Fool Australia.

The beauty products company's shares dropped 11% to $1.21.

This means the McPherson's share price is now down 60% over the last 12 months and trading within touching distance of a two-year low.

Why did the McPherson's share price crash lower today?

Investors were selling McPherson's shares today following the release of a disappointing half year result.

Management blamed the same weakness in the daigou channel that has been impacting A2 Milk Company Ltd (ASX: A2M) and Blackmores Limited (ASX: BKL) for its poor performance.

For the six months ended 31 December, the company reported a 4.1% decline in sales revenue to $101.7 million.

Management advised that it achieved domestic sales growth of 6% during the first half. This was thanks to market share gains from four of its products. However, a 65% decline in export sales more than offset this.

On the bottom line, the company reported a 19.2% decline in underlying net profit after tax to $4.6 million. Though, it is worth noting that this underlying result does not include a $4.3 million provision for excess hand sanitiser inventory.

Despite its weak result, the McPherson's board has declared a fully franked interim dividend of 3.5 cents per share. This is down from 4 cents per share in the prior corresponding period.

Management commentary

McPherson's Managing Director, Grant Peck, commented: "McPherson's 6% revenue growth in the Australian market over the six months to 31 December 2020 illustrates the strength of our brand portfolio and our ability to deliver new product innovations to market. McPherson's is the second largest Australian supplier of beauty products to the Australian Pharmacy channel."

"Our existing brand portfolio, with its predominance in the beauty category, is now complemented by the recent acquisition of the Fusion Health and Oriental Botanicals brands and the establishment of McPherson's Health category. This acquisition, effective 1 December 2020, provides the Group with strong go to market capabilities and product innovation credentials in the Natural Health & Vitamins and Dietary Supplements category, which in Australia is part of the $5.63 billion Health & Wellness retail sales market."

Outlook

Management warned that there remains an elevated level of uncertainty due to the difficulty of forecasting demand in China.

Furthermore, it notes that consumer behaviour will be difficult to gauge in the short term following an unexpected slowdown in the market in the last quarter of last year.

As a result, it is unable to provide guidance at this stage. However, it suspects that its underlying profits will be materially below what it achieved in FY 2020.

The post Why the McPherson's (ASX:MCP) share price was crushed today appeared first on The Motley Fool Australia.

Four shares that have not let that hold them back are listed below. Here's why they are pushing higher:

A2 Milk Company Ltd (ASX: A2M)

The a2 Milk share price is up 1.5% to $10.40. This appears to be down to bargain hunters swooping in today to take advantage of a significant pullback in the infant formula company's share price. Its shares were sold off last week after it was forced to downgrade its guidance due to weakness in the daigou channel.

Doctor Care Anywhere Ltd (ASX: DOC)

The Doctor Care Anywhere share price has jumped 7% higher to $1.29. This has been driven by an announcement that revealed that the UK-based telehealth company has signed a new channel agreement with Allianz Partners. It is one of the world's largest insurance and assistance companies. This agreement will give Allianz Partners international private medical insurance policyholders and their dependents based in Europe access to Doctor Care Anywhere's digital health services.

McPherson's Ltd (ASX: MCP)

The McPherson's share price is up 5% to $1.39. Investors have been buying the beauty products company's shares following the release of an update after the market close on Monday. That update revealed that McPherson's is on track to achieve its previous first half underlying profit before tax guidance which was recently withdrawn. It is expecting underlying profit before tax in the range of $6.5 million to $7.5 million. This represents an 11.8% to 23.5% decline on the prior corresponding period.

Volpara Health Technologies Ltd (ASX: VHT)

The Volpara share price has risen 3.5% to $1.37. This solid gain has been driven by news that it has signed a five-year software-as-a-service (SaaS) contract with BreastScreen Queensland following a successful pilot trial. BreastScreen Queensland is the third largest public breast screening program in Australia. The contract is initially for Volpara's quality assurance platform, VolparaEnterprise. But allows for the expansion of services to include VolparaDensity and VolparaLive.

The post Why a2 Milk, Doctor Care Anywhere, McPherson's, & Volpara are pushing higher appeared first on The Motley Fool Australia.

What did McPherson's announce?

This afternoon McPherson's confirmed that sales from its core brands in the Australian market continue to exceed last year's figures.

According to the release, year to date, the company's owned brands, excluding the Dr. LeWinn's brand, have recorded sales growth of 7%.

This has been driven by double digit sales growth from the Manicare, Lady Jayne, and A'kin brands. Furthermore, market share growth has been recorded from 4 out of 6 of its owned brands.

The Dr. LeWinn's brand continues to weigh on the company's performance, though. Like A2 Milk Company Ltd (ASX: A2M), this has been caused by weakness in the daigou channel.

However, unlike a2 Milk, the sales of these products inside China haven't been strong, with Chinese Singles' Day sales falling well short of expectations.

Global Therapeutics acquisition.

In addition to this, the company revealed that the Global Therapeutics acquisition from Blackmores Limited (ASX: BKL) completed successfully on 30 November and its integration is progressing smoothly.

Management believes that this reflects the professional, collaborative approach of Global Therapeutics, McPherson's, and Blackmores.

McPherson's new Chief Executive Officer and Managing Director, Grant Peck, commented: "McPherson's year to date domestic sales growth reflects the consumer appeal of our market leading brands and our focus on new product innovation. All of the early signs are positive as we integrate Global Therapeutics into McPherson's and realise the complementary capabilities of the combined teams. Domestically, we continue to drive cashflow to support our mature dividend profile and modest debt levels."

Mr Peck, who was appointed CEO earlier this month after the sudden departure of Laurie McAllister following a series of terrible updates, also provided the market with guidance for the first half of FY 2021.

He revealed that McPherson's is on track to achieve its previous first half underlying profit before tax guidance in the range of $6.5 million to $7.5 million. This represents an 11.8% to 23.5% decline on the prior corresponding period's profit before tax of $8.5 million.

In addition to this, the new chief executive revealed that shareholders should expect a dividend March. He advised that the company's dividend policy is to pay a minimum dividend of 60% of underlying profit after tax, subject to cash requirements.

In line with this policy and based on its forecast first half underlying earnings, an interim fully franked dividend of at least 3 cents per share is expected to be paid to shareholders in March.

Annualised, this represents a fully franked 4.5% dividend yield. This may be far better than many had expected after its recent updates and guidance withdrawal.

The post Why the McPherson's (ASX:MCP) share price could charge higher on Tuesday appeared first on The Motley Fool Australia.

Four shares that have fallen more than most today are listed below. Here's why they are dropping lower:

Appen Ltd (ASX: APX)

The Appen share price has sunk 12% lower to $26.27 following the release of an update. The artificial intelligence services company revealed that COVID-19 has been weighing on its performance and is expected to lead to it falling well short of guidance in FY 2020. It is now forecasting underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $106 million to $109 million (or $108 million to $111 million when applying the originally assumed exchange rate). This is down from its previous guidance of $125 million to $130 million.

McPherson's Ltd (ASX: MCP)

The McPherson's share price has dropped 8% to $1.15. Investors have been selling the health, wellness, and beauty products company's shares after it announced the departure of its CEO after a difficult year. Laurie McAllister has resigned with immediate effect just days after the company completed the acquisition of the Global Therapeutics business from Blackmores Limited (ASX: BKL).

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price is down 5.5% to $12.30. This follows a sizeable pullback in the spot gold price overnight after risk sentiment improved and demand for safe havens softened. It isn't just Northern Star that is sinking lower. The S&P/ASX All Ordinaries Gold index is down 3.6% at the time of writing.

PWR Holdings Ltd (ASX: PWH)

The PWR share price has fallen 3.5% to $4.98 despite the release of a positive update. PWR revealed that trading had been strong recently. As a result, for the first half of FY 2021, it expects EBITDA in the range of $10 million to $11.5 million. This represents an increase of more than 30% on the prior corresponding period. However, with its shares recently hitting a record high, some investors may have been expecting even stronger growth.

The post Why Appen, McPherson's, Northern Star, & PWR shares are dropping lower appeared first on The Motley Fool Australia.

At the time of writing, the health, wellness, and beauty products company's shares are down 6.5% to $1.17.

This means the McPherson's share price is now down over 65% from its 52-week high of $3.40.

What did McPherson's announce?

This morning the company announced that its Chief Executive Officer and Managing Director, Laurie McAllister, has resigned with immediate effect.

This follows a dreadful year for McPherson's which has seen the company's performance and share price deteriorate materially.

What happened this year?

During the first quarter of FY 2021, the company recorded a decent 4% lift in sales to $49.7 million.

However, it appears as though it tried to take advantage of the incredible demand for hand sanitiser at the height of the pandemic and this ultimately backfired.

While McPherson's reported an 84% lift in underlying profit before tax to $2.9 million, this excludes a hefty $5.7 million non-recurring full provision for the write down of its hand sanitiser inventory.

Management advised that delays in the supply of hand sanitiser products led to a customer cancelling the majority of its orders. This left it with a significant quantity of product.

Since then, the strong demand has dissipated and the supply base for such products has become much more competitive. As a result, McPherson's has been left holding excess quantities of hand sanitiser inventory.

Unfortunately, it went from bad to worse from there. At the start of December, the company revealed that its Chinese Singles' Day sales fell well short of target.

Once again, this left its China joint venture partner, Access Brands Management (ABM), with higher than forecast inventory levels at the end of November.

As a result of this, the company was forced to withdraw its guidance.

What's next?

McPherson's has revealed that Non-Executive Director, Grant Peck, will replace Mr McAllister on an interim basis, effective today. It feels this will provide continuity and aid the transition to a new permanent CEO and Managing Director.

This continuity will be very important given that it only completed the acquisition of the Global Therapeutics business from Blackmores Limited (ASX: BKL) on 1 December.

The board advised that it will now initiate the necessary steps to identify and appoint a permanent CEO and Managing Director and will make a further announcement in due course.

The post Why the McPherson's (ASX:MCP) share price is sinking lower again appeared first on The Motley Fool Australia.

Four shares that have failed to follow the market higher today are listed below. Here's why they are dropping lower:

Adore Beauty Group Ltd (ASX: ABY)

The Adore Beauty share price is down almost 2% to $6.39. This is despite the release of a positive trading update this morning by the online beauty retailer. That update revealed that trading has been stronger than expected, leading to an upgrade to its guidance. Management is now expecting first half revenue to come in at approximately $95.2 million. This exceeds its prospectus forecast of $89 million by 7%.

Bank of Queensland Limited (ASX: BOQ)

The Bank of Queensland share price is down 1.5% to $7.54. On Monday the regional bank announced the completion of its Capital Notes 2 offer. It raised $260 million through the issue of 2.6 million capital notes for $100 each. In other news, late last week analysts at Macquarie slapped an underperform rating and $6.50 price target on its shares.

Bega Cheese Ltd (ASX: BGA)

The Bega Cheese share price has run out of steam and is down 2% to $5.35. This may be down to profit taking after some strong gains in recent days following its acquisition of Lion Dairy & Drinks. In fact, the diversified food company's shares hit a 52-week high on Monday. When its shares hit that level, it meant they were up 13% in the space of a week.

McPherson's Ltd (ASX: MCP)

The McPherson's share price has crashed 35% lower to $1.20 following the release of a very disappointing trading update. According to the release, McPherson's key China joint venture partner, Access Brands Management, has provided feedback that its key 11/11 event was below expectations. This has led to management downgrading its underlying profit before tax forecast of $10.2 million to $11.1 million to a range of just $6.5 million to $7.5 million. It has also withdrawn its full year guidance.

The post Why Adore Beauty, Bank of Queensland, Bega Cheese, & McPherson's are dropping lower appeared first on The Motley Fool Australia.

Here's why these ASX shares are taking a tumble in November:

Kogan.com Ltd (ASX: KGN)

The Kogan share price has tumbled a disappointing 21% lower since the start of the month. This ecommerce company's shares have been caught up in a seismic rotation by investors out of COVID winners and into value shares. In addition to this, a broker note by UBS earlier this month hasn't helped investor sentiment. While UBS has retained its neutral rating on its shares, it has reduced its price target from $22.00 to $18.00. The broker has concerns that recent gross margin strength is unsustainable.  

McPherson's Ltd (ASX: MCP)

The McPherson's share price has lost 16% of its value in November. This decline appears to have been triggered by a recent first quarter update by the health, wellness and beauty products company. Although it recorded a 4% increase in sales to $49.7 million, its profits were wiped out by a hefty $5.7 million non-recurring provision. This was driven by the write down of its hand sanitiser inventory. Management advised that demand for it has dissipated and the supply base for these products has become much more competitive. As a result, the company has been left holding excess quantities of hand sanitiser inventory.

Silver Lake Resources Limited (ASX: SLR)

The Silver Lake Resources share price has been a poor performer and is down 16% since the start of the month. Investors have been selling Silver Lake and other gold miners after positive COVID-19 vaccine developments weighed heavily on the gold price and other safe haven assets. This has led to the S&P/ASX All Ordinaries Gold index (a gold miner index) losing over 8% of its value this month.

The post Why these All Ords shares have been smashed this month appeared first on The Motley Fool Australia.

What was in Blackmores' update?

As well as providing investors with a summary on how the health supplements company performed in FY 2020, management revealed its expectations for the current financial year.

According to the release, while no specific full year profit guidance has been given, it is anticipating full year profit growth in FY 2021. This is despite additional cost variances arising from Braeside manufacturing ownership in the first half of the year.

Though, management has warned that its profit growth will come predominantly from the second half of the financial year.

Looking beyond FY 2021, management notes that it has confidence in its renewed strategy and expects it to put the company back on a path to sustainable, profitable growth and in a position to restore future dividends.

No real update was given for its performance in the first quarter of the year. Though, management did advise that it has completed its restructuring, which is set to deliver $15 million of gross annualised savings from the second half.

It has also initiated a Leading Value Position (LVP) savings program, which will contribute to cost of goods sold savings of $10 million in FY 2021.

Global Therapeutics divestment.

In a separate announcement, Blackmores has revealed an agreement to sell its Global Therapeutics business to McPherson's Ltd (ASX: MCP) for $27 million.

Chief Executive Officer, Alastair Symington, commented: "Fusion Health and Oriental Botanicals are wonderful brands which play an important role in the health and wellness routine of many Australians. While we have decided that Global Therapeutics is no longer part of of our strategic priorities, I want to acknowledge the unique value of these brands and believe Global Therapeutics will now have an opportunity to reach its true potential with McPherson's."

The transaction is scheduled for completion on 30 November. It remains subject to conditions in relation to the transfer of a minimum number of employees and material contracts and there being no material adverse change to the business.

The post Blackmores (ASX:BKL) share price on watch after AGM update appeared first on The Motley Fool Australia.

How did McPherson's perform in the first quarter?

The health, wellness and beauty products company has started the year in a positive fashion.

According to the release, for the three months ended 30 September, McPherson's sales revenue was up 4% on the prior corresponding period to $49.7 million.

This was underpinned by 8% growth in sales revenue from owned brands to $41.7 million. Management notes that its category market share grew in 4 out of 6 core brands and its China sales were strong thanks to its ABM partnership model.

Things were even better for its earnings, with McPherson's reporting an 84% lift in underlying profit before tax to $2.9 million. However, it is worth noting that this does not include a hefty $5.7 million non-recurring full provision for the write down of its hand sanitiser inventory.

Management advised that delays in the supply of hand sanitiser products led to a customer cancelling the majority of its orders. This left it with a significant quantity of product.

Since then, demand has dissipated and the supply base for such products has become much more competitive. As a result, the company is currently holding excess quantities of hand sanitiser inventory.

This could be bad news for Zoono Group Ltd (ASX: ZNO), which was profiting greatly from increased demand at the height of the pandemic. But judging by this update, it appears that the market is now saturated.

McPherson's Chief Executive Officer and Managing Director, Laurence McAllister, was disappointed with the provision but pleased with the overall quarter. Especially given how this is traditionally the company's weakest.

He commented: "While we are very disappointed with the nonrecurring provision to fully write down legacy hand sanitiser inventory, our core business has made a strong start to FY21."

"The strong growth in sales from our owned brands in the midst of the disrupted COVID-19 trading environment confirms the market strength and resilience of our brand portfolio. This top line growth in combination with improved contribution margins across the majority of our brands has generated a very strong lift in first quarter FY21 profitability from our core business, noting that the first quarter of our financial year is our seasonally lowest in terms of profitability," he added.

Outlook.

McPherson's is one of just a handful of companies which has stuck its neck out and provided guidance for the full year.

It has forecast first half underlying FY 2021 profit before tax growth in the range of 20% to 30% and full year underlying FY 2021 profit before tax growth in the range of 5% to 10%.

Management notes that its guidance takes into account the cycling of strong COVID-19 demand from the second half of FY 2020.

In addition to this, the company's dividend policy remains in place. It intends to pay out a minimum dividend of 60% of underlying profit after tax, subject to cash requirements.

The post McPherson's (ASX:MCP) share price on watch on Wednesday after Q1 update appeared first on The Motley Fool Australia.

The likes of A2 Milk Company Ltd (ASX: A2M) and CSL Limited (ASX: CSL) were just two of a large number of companies handing in their report cards.

Given how many releases were made, a few results will inevitably have slipped under the radar.

Three that you might have missed are summarised below. Here's how they performed:

McPherson's Ltd (ASX: MCP)

The McPherson's share price rose almost 4% on Wednesday after the beauty products company delivered a solid FY 2020 result. For the 12 months ended 30 June, McPherson's reported a 6% increase in total sales revenue to $222.2 million. On the bottom line the company posted an underlying profit after tax of $15.5 million, up 13% on the previous year. On statutory basis, profit after tax fell 56% to $6.1 million. This includes a $10.7 million pre-tax non-cash impairment in its A'kin and Moosehead brands and its investment in the Kotia joint venture.

Moelis Australia Ltd (ASX: MOE)

The Moelis share price jumped over 9% higher yesterday following the release its half year results. Investors were very pleased to see the company deliver a result 6.5% ahead of the guidance it provided at its annual general meeting in May. Moelis reported a slight reduction in revenue to $67.4 million and a 19.4% increase in statutory net profit to $8.9 million. And although no guidance was given for the full year, management revealed that the second half has started positively.

Saracen Mineral Holdings Limited (ASX: SAR)

The Saracen share price tumbled lower on Wednesday following the release of its full year results. Though, this decline had more to do with a pullback in the gold price than its profits. In fact, had the gold price remained stable the Saracen share price would likely have risen. For the 12 months ended 30 June, Saracen reported a whopping 173% increase in underlying net profit after tax to $257.5 million. This was driven by a 47% jump in production, steady costs, and a stronger gold price.

The post 3 ASX results you might have missed on Wednesday appeared first on The Motley Fool Australia.

Despite retail being one of the hardest hit sectors during COVID-19 lockdowns in Australia and New Zealand, City Chic has remained profitable by pivoting to e-commerce sales channels.

How has the City Chic share price fared?

In a May COVID-19 trading update, City Chic reported a 57% increase in online sales versus the same period last year, with online sales now making up two thirds of the company's total global sales.

Prudent cost-cutting – such as working capital efficiencies and lower rental agreements negotiated across its retail stores – means the company is emerging from this crisis with a solid foundation for future growth.

This is reflected in the City Chic share price. After crashing to a low of around $0.80 back in March, the City Chic share price has skyrocketed 320% to $3.31 at the time of writing. The company has also successfully completed an $80 million institutional placement and announced the potential acquisition of US-based plus-size women's brand Catherines.

Can the growth story continue?

By pivoting away from traditional brick and mortar retailing and embracing online sales channels, City Chic has laid the foundation for a more resilient long-term business model. Other companies in the consumer discretionary space, like health and beauty specialist McPherson's Ltd (ASX: MCP), have adopted a similar strategy.

City Chic reported unaudited sales revenues for FY20 of $194.5 million, an increase of 31% year-on-year. Underlying unaudited earnings before interest, tax, depreciation and amortisation expenses (EBITDA) has come in at $26.5 million. These are strong results for a company operating in challenging retail conditions.

Should you invest?

Despite the recent rally in the City Chic share price, I think the company still offers some great long-term growth potential. The company's market cap is still only around $760 million, which is about the same as struggling outdoor clothing brand Kathmandu Holdings Ltd (ASX: KMD).

But City Chic is still a small player in a big industry: it estimates the value of the global plus-size women's clothing market to be more than $50 billion annually.

I think there is much to recommend about City Chic. It has shown it can remain profitable in difficult market conditions. It has a large addressable international market. And it has flagged its intentions to continue to expand internationally.

In addition, after its $80 million institutional placement, City Chic has a significant war chest to spend on growth initiatives and acquisitions.

The post Here's why I think the City Chic share price will keep climbing appeared first on The Motley Fool Australia.

What is McPherson's?

Originally founded in 1860, McPherson's is now a leading Australasian health and beauty company. It owns six core brands consisting of Dr. LeWinn's, A'kin, Swisspers, Manicare, Lady Jayne and Multix. The company sells its products across Australia and throughout parts of Asia, including China.

McPherson's has been quick to respond to the unique consumer demands created by the COVID-19 pandemic. It invested heavily in the research and development of sanitation and immunity and, in April, launched a new hand sanitiser in partnership with Chemist Warehouse licensed brand 'Ozguard'.

The company also invested in expanding its online stores after noting a big uptick in sales through these channels in the wake of lockdown restrictions.

In a trading update released to the market back in April, McPherson's stated that it was still on track to meet its FY20 underlying profit guidance of 10% annual growth. Its supply chains into China had not been severely disrupted, and the company was benefitting locally from consumers' increased focus on personal hygiene. Its Multix line of household products including freezer bags and baking aids was also seeing an uptick in sales as people spent more time cooking at home.

And while McPherson's did note that significant uncertainty still existed in the market, it emphasised that it had a strong enough balance sheet to meet any short-term challenges. Net debt was low at $14.7 million, and the company was in the final stages of negotiating an additional 3-year $47.5 million debt facility.

Should you invest in this ASX share?

This company's messaging has clearly resonated with investors. By boosting its online presence and directing its R&D investment towards personal hygiene and sanitation products, McPherson's has shown it can quickly pivot to capitalise on growth opportunities in a crisis.

McPherson's focus on its digital sales channels may help it to follow in the footsteps of other ASX companies who have (so far, at least) successfully negotiated the COVID-19 crisis. Online homewares and furniture company Temple & Webster Group Ltd (ASX: TPW) has seen its shares price skyrocket almost 190% higher so far this year. Meanwhile shares in e-commerce market darling Kogan.com Ltd (ASX: KGN) have also more than doubled in price year to date. These companies both sell direct to their consumers, have a strong digital presence and low fixed costs. In the current climate, they are quickly surging ahead of many of their traditional brick-and-mortar retail counterparts. 

It's worth keeping in mind that McPherson's is now trading within eyeshot of its 52-week high. This means it could be creeping into overvalued territory, especially as the country prepares for a potentially bruising recession. However, the COVID-19 pandemic could bring about a radical – and potentially permanent – step-change in the consumer retail industry. This makes it the perfect time for McPherson's to continue expanding its online presence to increase its future growth prospects.

The post A surprise ASX share that's doubled since March appeared first on The Motley Fool Australia.

According to The Guardian reporting, the ABS is looking at Aussie spending habits during the coronavirus pandemic.

The latest survey, conducted in mid-June, is about what Australians are going to spend money on once restrictions are loosened again.

The Guardian quoted ABS head of Household Surveys, Michelle Marquardt, talking about people's spending intentions: "a majority expected to increase their spending on recreational activities (74%), eating out (74%), private transport (73%), personal care (70%), childcare (66%) and public transport (55%)."

What does this mean for ASX shares?

Well it's good to see that people do plan to spend more money when restrictions allow. It is spending that makes the economy tick.

Recreational activities could mean a lot of different things. There are plenty of shares this could be applicable to such as: Ardent Leisure Group Ltd (ASX: ALG), Experience Co Ltd (ASX: EXP), Crown Resorts Ltd (ASX: CWN), Event Hospitality and Entertainment Ltd (ASX: EVT), Ingenia Communities Group (ASX: INA), Star Entertainment Group Ltd (ASX: SGR), Sealink Travel Group Ltd (ASX: SLK) and Village Roadshow Ltd (ASX: VRL).

Eating out would probably benefit the food shares listed on the ASX like Domino's Pizza Enterprises Ltd. (ASX: DMP), Collins Foods Ltd (ASX: CKF), Retail Food Group Limited (ASX: RFG) and Redcape Hotel Group Pty Ltd (ASX: RDC).

You'd think that private transport would be good for shares like Ampol Ltd (ASX: AMP), Viva Energy Group Ltd (ASX: VEA) and Waypoint REIT Ltd (ASX: WPR).

Increased spending on personal care would be good for shares like BWX Ltd (ASX: BWX), McPherson's Ltd (ASX: MCP), Sigma Healthcare Ltd (ASX: SIG) and Australian Pharmaceutical Industries Ltd (ASX: API).

It also looks like it would be good news for childcare related shares like G8 Education Ltd (ASX: GEM), Think Childcare Ltd (ASX: TNK) and Arena REIT No 1 (ASX: ARF).

What about travel?

People are also asked about their travel intentions. The ABS survey revealed that 55% were planning to go on a domestic holiday while less than a third were planning an international holiday.

Of the people planning to take a domestic holiday, 20% intended to go within the following month and another 68% planned to go within the following six months. Most people aren't thinking about an international holiday in the short-term. Of people thinking about an overseas holiday, 44% were thinking about doing it within six to 12 months and 31% were thinking about taking the holiday more than a year in the future.

Shares like Webjet Limited (ASX: WEB), Flight Centre Travel Group Ltd (ASX: FLT), Qantas Airways Limited (ASX: QAN) and Sydney Airport Holdings Pty Ltd (ASX: SYD) are obviously being disrupted by COVID-19 right now, but it'll be pleasing for them that people are thinking about taking domestic holidays.

Do any of these ASX shares look like buys?

I think there's a case for many of the shares hit by COVID-19 if you think about the long-term. Shares should be long-term investments. What happens over the next 12 months shouldn't change your long­-term thinking about a business too much, unless it could go bust. I'm not sure about travel shares at today's prices. The rising case numbers in Melbourne have hurt the prospect of the country being completely COVID-19 free this year, and may limit travel between Melbourne and the rest of the country for a bit longer.

I do believe that shares like BWX, McPherson's, API and Ingenia could be ones to watch over the next couple of years. I'm quite excited by the prospect of the continuing international earnings growth for BWX and McPherson's.

The post ABS reveals which industries (and ASX shares) may rebound hard after COVID-19 appeared first on The Motley Fool Australia.