Let's take a look and see how the home builder performed for the period.

What could impact the Simonds share price today?

The Simonds share price could come under pressure today after the company reported a drop in its key business metrics.

In yesterday's release, Simonds advised that revenue and earnings took a hit due to COVID-19 impacting trading conditions.

For the six months ending 31 December, Simonds delivered total revenue of $325 million, down 0.8% from the prior corresponding period. The slight fall was attributed to the effects of COVID-19 restrictions on site productivity. However, the company recorded 1,172 site starts, which was 29 starts above the comparative period in H1 FY20.

Although Simonds' home results saw a 1.1% dip in revenue to $318.1 million, its education segment rose strongly to achieve growth of $5.7 million, up 22.8%. The sound performance was underpinned by the take up of a virtual classroom delivery model, growing 72% in the first half of FY21.

Earnings before interest, tax, depreciation and amortisation (EBITDA) dropped to $14 million, a decline of 11.9% from this time last year. The company invested in new sales channels and increased its marketing spend which offset the additional margin obtained in H1 FY21.

The builder reported that net profit after tax (NPAT) from continuing operations sank to $1.9 million, shedding a mammoth 53.7% compared to the pcp.

The company generated net cash flows of $2.8 million, plunging 39.1% from H1 FY20. The poor result came from the ill timing of cash collections and payments.

Simonds closed the calendar year with a cash balance of $31.1 million. The group's headroom stood at $56.1 million with undrawn facilities on hand to weather any future crisis.

In a move that could possibly weigh down the Simonds share price today, the board declared that no interim dividend will be paid to shareholders.

Management commentary

Simonds group CEO and managing director Rhett Simonds touched on the first-half results amid challenging COVID-19 trading conditions. He said:

The ability of our customers, staff, suppliers, and sub-contractors to adapt in these conditions has ensured the Group could continue to generate positive cashflows. We remain focused on improving and delivering sustainable operating performance through cost efficiency, increasing sales through our traditional display homes and expanding through digital channels, as well as investing in new business channels.

Our business, like many others across the housing sector, has benefitted from government stimulus and in particular the Federal Government's HomeBuilder program. This has helped to mitigate the impact of the lockdowns initiated in each of the geographic areas the Group operates.

Outlook

Looking ahead to the current second-half, Simonds predicts COVID-19 to continue having an impact on its earnings. Government-mandated measures such as restrictions on access to sites and display centres as well as supply chain constraints are expected to remain.

The company noted that robust demand for the government's HomeBuilder stimulus package may prolong build times and impact trade rates. Despite the volatility, the group is forecasting positive growth through to FY22.

Simonds share price snapshot

Over the last 12 months, the Simonds share price has gained 70% reflecting positive investor sentiment in the market. Simonds shares hit a low of 20 cents in March, before strongly rebounding to their current levels.

Based on the current share price, Simonds has a market capitalisation of around $90 million.

The post Why the Simmonds (ASX:SIO) share price will be on watch today appeared first on The Motley Fool Australia.

Mark Simonds, the son of founder Gary, escaped Melbourne's strict COVID-19 lockdown on 9 August with his family on their luxury super-yacht Lady Pamela.

They sailed towards the Gold Coast armed with an exemption from the Queensland government that they didn't have to quarantine on arrival.

But according to Nine, the family and their guest had stopped off multiple times in Victoria and NSW as it sailed up north.

Queensland Health confirmed to The Motley Fool that the exemption had now been withdrawn.

"Attempting to bypass or manipulate Queensland's border direction is unacceptable," stated Queensland Health.

"All seven people are now required to quarantine in a government approved hotel for 14 days at their own expense."

The Motley Fool has contacted Simonds Group for comment.

It is understood the exemption was originally granted with what is now known to be incomplete information.

Police reportedly took 7 people off the boat into a mini-van on Tuesday evening. The group included crew and Hannah Fox, the daughter of Linfox executive chair Peter Fox.

Simonds Group is an ASX-listed company with a market capitalisation of $51 million. The Simonds share price held steady at 36 cents before trading opened on Wednesday morning.

It operates Simonds Homes, a Melbourne residential construction brand founded in 1949 by Gary Simonds.

Mark ran the company privately with father Gary until its public listing in 2014. Mark Simonds holds a building licence in Victoria, NSW, Queensland and South Australia.

The company is now jointly run by Gary's grandson Rhett Simonds in a unique timeshare chief executive role with Kelvin Ryan.

The post ASX company boss forced into COVID-19 hotel quarantine appeared first on The Motley Fool Australia.

That's the view of Allan Gray managing director Simon Mawhinney after the fund manager analysed all IPOs over the last decade with market caps greater than $2 million. 7 of the worst ten performing companies in 2016 were businesses that listed in the past three years.

A number even failed to pass their three-year anniversary, including electronics retailer Dick Smith Holdings, training provider Vocational Education and trucking company McAleese.

Mr Mawhinney says IPO companies tend to outperform the market in their first year, but performance tails off after that as the years pass. "They are priced for perfection. Most newly listed companies come to market when either economic times or just stock markets, in general, are incredibly buoyant and are more receptive to new listings," he has told Fairfax Media.

That's not always the case of course, with several IPOs tanking in their first 12 (or so) months. Wellard Ltd (ASX: WLD) – a livestock marketing, export and transportation company has lost 85% of its value since the start of 2016. It listed in December 2015.

There are plenty of examples of IPOs from within the past three years that have tumbled, but remain listed.

Building company Simonds Group Ltd (ASX: SIO) listed in late 2014 with an issue price of $1.78 and had seen its share price sink to just 38 cents. It was one of the worst-performing shares in the 2016 financial year. The company now appears to be looking to delist from the ASX.

Surfstitch Group Ltd (ASX: SRF) issued shares in its December 2014 IPO at $1.00 each. After soaring to a high of $2.13 in November 2015, the share price has crashed to as low as 10 cents. Shares currently trade at 19.5 cents.

It remains to be seen whether the above-mentioned companies can turn around their share price performance in the years ahead, but it's another warning to investors looking for those 'stag profits' in IPOs. Performance over the longer term counts more, and IPOs are not the best way to play that.

Foolish takeaway

No wonder the world's greatest investor, Warren Buffett, is not a big fan of investing in IPOs and recommends investors avoid them. Investors should remember his words, "It's almost a mathematical impossibility to imagine that, out of the thousands of things for sale on a given day, the most attractively priced is the one being sold by a knowledgeable seller (company insiders) to a less-knowledgeable buyer (investors)."

The post Why IPOs have not been great investments appeared first on The Motley Fool Australia.

While it is capable of generating huge returns for investors over time, the market is also known for its volatile – and even gut-wrenching – performances, which can unnerve even the most experienced investors, from time to time.

Peter Lynch famously said, "In this business, if you're good, you're right six times out of ten." While we're all prone to a losing investment every now and then, some can be far more painful than others.

Consider these 10 shares, which have all collapsed in price since the beginning of the year:

Data provided by S&P Global Market Intelligence

Topping the list is 1-Page Ltd, a company that is striving to revolutionise the way in which companies hire and promote new talent.

It's a solid concept and the company's customer base is made up of some of the world's biggest companies, but the group still has very low revenue and cash flows from operations. Although it does have plenty of cash on the balance sheet, investors are becoming impatient and may be starting to doubt the company's prospects (I sold my shares recently, although I do intend to keep an eye on the business in case of improvements).

Surfstitch Group has also been an incredibly disappointing investment for shareholders, plagued by several earnings downgrades and the loss of its CEO and, more recently, its chairman as well.

Other big-name businesses that many investors will have been hurt by include Virgin Australia and Slater & Gordon, together with 3P Learning.

Indeed, there are some names on this list that investors could easily have avoided. I myself owned a small parcel of 1-Page shares as a speculative bet, although hindsight tells me I should have at least waited for more positive revenue generation from the business before pulling the trigger.

Other bets, including 3P Learning, would have been more difficult to avoid. The company was showing some nice growth figures, although that quickly changed following an earnings downgrade and the shock resignation of its CEO.

There are a few lessons to take away from this list of non-performers. Firstly, it is imperative that you diversify your portfolio. If a company makes up, say, 1% or 2% of your entire portfolio (as 1-Page did with me), a hefty loss on that one stock won't cause too much damage to your overall wealth, compared to a situation in which an individual holding made up 40% or 50% of your wealth.

It's also important to do your own due diligence on all companies you're interested in owning, and ensure you're aware of both the risks and the opportunities. If you're not comfortable with the risks, it may be worth looking elsewhere to park your funds.

The post These are the 10 worst-performing shares on the ASX in 2016 appeared first on The Motley Fool Australia.

Simonds Group Ltd (ASX: SIO) – down 42%

The Simonds Group Ltd share price traded sharply lower today after the building group shocked investors by saying it expects to report a loss of between $2 million and $4 million for the first half of 2016. Simonds said deferrals in site starts, increased competition, high land prices and no commensurate increase in consumer buying prices led to the profit downgrade. You can read more here.

Australia and New Zealand Banking Group (ASX: ANZ) – down 1.6%

While not a big move in percentage terms, Australia and New Zealand Banking Group's share price retreat comes after the bank dropped 4% yesterday. ANZ shares are down over 38% since their 52-week high of $37.25 posted in May 2015. ANZ, like its peers, is facing significant headwinds from both local and international markets, and it appears investors are starting to take a bearish stance on the bank.

BC Iron Limited (ASX: BCI) – down 7%

Junior iron ore miner BC Iron traded sharply lower today following more falls in commodity prices. Overnight, iron ore, a steel-making ingredient, was fetching just $US41.61 according to the Fairfax Press — down from over $US180 a tonne in 2011. The plunging market prices have wreaked havoc with shares of junior iron ore miners like BC Iron, whose break-even prices are usually higher than major producers like BHP Billiton and Rio Tinto. Since early 2014, BC Iron shares have fallen from more than $5 to 7.7 cents.

Slater & Gordon Limited (ASX: SGH) – down 3.5%

Shares of Slater & Gordon slumped 3.5% today despite no company-specific news being released by the company. The selloff could have something to do with the decision by rival law firm Shine Corporate Ltd (ASX: SHJ) to enter its shares into voluntary suspension this morning. Shine says it is reviewing its procedure for determining profit guidance, specifically focusing on its 'Work in Progress', a common line item for law firms.

The post Why these 4 shares are sinking on the ASX today appeared first on The Motley Fool Australia.

Simonds says it is forecasting a first half of 2016 financial year loss of between $2 and $4 million, after deciding to close its Madison Projects division – which will cost between $7 and $8.5 million.

As the company explains…

Madison Projects was acquired by Simonds in 2002 and operates in the medium density market. But the market has seen a significant drop in margins for builders as the land costs have increased for commercial developers with no increase in customer buying prices. Madison has completed 6 projects totalling $42.1 million in the past 4 months – but has also been unsuccessful winning a number of tenders at appropriate margins.

An independent review confirmed the impact of its closure, including operating losses from existing projects of between $7 and $8.5 million.

Unfortunately, the bad news didn't stop there. Simonds says a number of factors have impacted its Simonds Homes division including:

1. deferrals in site starts due to land titling delays,
2. delays in the opening of new display homes
3. increased market competition, and
4. increased costs incurred in advance of the expansion in Queensland and NSW.

The company also says its Builders Academy Australia has experienced slower than anticipated growth in new student enrolments.

All in all, that's not great news for Simonds, which listed on the ASX in November 2014 at an offer price of $1.78.

Investors looking for an alternative home builder with a solid fully franked dividend might want to consider looking at Tamawood Ltd (ASX: TWD), which at today's price of $2.95 is offering a yield of 8.5%, or Cedar Woods Properties Limited (ASX: CWP) – with a dividend yield of 6.7%, fully franked too.

Foolish takeaway

Simonds was never an especially exciting company with a huge growth runway. Dependent on the building cycle and in a sector with intense competition is always fraught with danger. Simonds shareholders might want to consider looking elsewhere.

The post The Simonds Group Ltd share price is crashing: Here's why appeared first on The Motley Fool Australia.

But some investors were pulling their investments out of several stocks, some on disappointing news. These four companies were heavily sold off.

SMS Management & Technology Limited (ASX: SMX) share price crashed 23.5% to $3.41, after the company unveiled a forecast earnings downgrade, as we discussed in detail here. IT Consulting is a tough gig at the best of times, but it seems clients are keeping their hands in their pockets at the moment.

Simonds Group Ltd (ASX: SIO) share price dropped 13.6% to $0.93. The homebuilder gave a market update yesterday and announced a strategic review of its Madisson Projects – a business-to-business project builder, which appears to be struggling. Simonds also announced a $6 million acquisition of West Australian homebuilder Gemmill Homes Group – WA's eighth-ranked homebuilder with revenues of $132 million. Investors were clearly disappointed in the news and opted to sell out instead.

Ainsworth Game Technology Limited (ASX: AGI) saw its share price sink 6.5% to $2.90, despite announcing the acquisition of Nova Technologies. The purchase will see Ainsworth's units in participation in North America double to more than 2,600. But perhaps investors were focused on the poker machine company's comment that margins will fall temporarily thanks to the lower Australian dollar in the near term. That will result in the pre-tax profit for the 2016 financial year being similar to the previous period.

MMA Offshore Ltd (ASX: MRM) share price slipped 4.1% to $0.23, most likely on the back of a broker downgrade. Hartleys maintained a 'Reduce' recommendation on the marine services company, as market conditions in the oil and gas sector deteriorate fast. We also provided an in-depth look at MMA Offshore yesterday.

The post 4 ASX stocks smashed by the market today appeared first on The Motley Fool Australia.

They aren't A-REITS or property trusts as they used to be known – just in case you were wondering. Two are property developers and home builders in the true sense while the third provides managed and serviced offices.

So here they are….

Servcorp Limited (ASX: SRV)

Servcorp offers floors of managed and serviced offices around the world, and yesterday announced a net profit after tax of $33.1 million for the 2015 financial year – up 26% over the previous year. Cash flows were also strong, rising 49%. Servcorp has 145 floors currently, with 46 in Asia Pacific region, 35 in North Asia, 35 in North America and another 38 in Europe & Middle East.

A dividend of 22 cents for the full year franked to 40% represents a dividend yield of 3.4%, or ~3.9% grossed up. Looking forward, net profit before tax is expected to rise by more than 16% in the 2016 financial year.

Cedar Woods Properties Limited (ASX: CWP)

Cedar Woods develops housing estates in Western Australia, Victoria and recently expanded into Queensland. Despite revenues falling 17%, net profit rose 5.6% to a record $42.6 million in the 2015 financial year. The company paid 28 cents of fully franked dividends, equating to a yield at the current price of $4.96 of 5.6% or 8% grossed up. Presales of $153 million up 10% over last year suggest another record net profit in the year ahead. With a P/E of 9.1x, the current price looks very cheap.

Simonds Group Ltd (ASX: SIO)

An annualised dividend yield of 7.6%, fully franked and a trailing P/E ratio of 10.0x makes Simonds Group our third pick. Only recently listed, Simonds is the number one homebuilder in Victoria and also operates in Queensland and South Australia, and plans to enter NSW. The company also has a Builders Academy, which recorded 500% growth in revenues in the 2015 financial year over the previous year. Simonds also comes with low debt levels of $2.8m and recently announced an on-market share buyback for around 7.5 million shares.

The post 3 overlooked property plays with juicy dividends appeared first on The Motley Fool Australia.

Since listing via initial public offering in November 2014, the stock has failed to trade above its float price of $1.78 which will of course disappoint IPO investors.

Finally, shareholders have something to smile about with Simonds announcing that its full year results had exceeded prospectus forecasts – this news led to a 6.1% jump in the share price to $1.48.

Here's what got the market excited: Pro-forma revenue increased 16.7% to $634.4 million, while pro-forma net profit after tax jumped 80.3% to $21.1 million. Meanwhile, net debt was maintained to just $2.8 million.

Drivers of these results included: continued strong revenue and margins in Victoria and South Australia, a maturing growth strategy in Queensland and New South Wales, and positive expansionary developments in its associated vocational training business.

• Simonds Homes Australia (the building division) recorded 12% growth in revenue to $600.2 million and pro-forma earnings before interest, tax, depreciation and amortisation (EBITDA) of $24.7 million.
• Builders Academy Australia (the vocational education division) reported a rise in revenue from $3.8 million to $23.2 million. Pro-forma EBITDA was a stunning $10.4 million.

Two more positives: Beating prospectus forecasts with a strong profit result and reporting positive momentum in the business divisions is good news in its own right, however, there were two more highlights from Simonds' results worthy of a mention.

• Firstly, the board declared an inaugural fully franked final dividend of 5.3 cents per share.
• Secondly, the board announced a share buy-back of up to 5% of total shares outstanding with the CEO noting that: "The buy-back is an effective method of maintaining adequate capital where SIO's shares are trading at a significant discount to the underlying value of the Company. "

The buyback is a very positive development and shows that management are seeking to maximise shareholder value. With a positive tailwind from the property market, an industry-leading position and a subdued share price, Simonds could be a stock for the watch list.

The post Why the Simonds Group Ltd share price jumped 6.1% appeared first on The Motley Fool Australia.