The Secos Group Ltd (ASX: SES) share price is lifting after the company released its earnings for the financial year 2021 (FY21).

Right now, the Secos share price is trading at 34 cents, up 6.25% on its previous closing price.  

Secos share price jumps on $2.5 million profit

Here's how the producer of sustainable packaging performed over FY21:

• Net profit after tax of $2.5 million, up 318% on FY20's $1.1 million loss
• $30.8 million of revenue, a 43% increase of that of FY20
• No dividend

The company reported $30 million worth of sales, with year-on-year sales growth of 126.6%.

The company's traditional film business saw weaker sales due to COVID-19 impacts on demand and a line breakdown in January which was resolved in March. 

Secos' compostable resins, films, and bags recorded double-digit growth. Its compostable bags segment grew well as a result of councils implementing household 'food organics garden organics' (FOGO) programs and demand for dog waste bags.

Secos ended the period with $11.3 million of cash and no debt.

What happened in FY21 for Secos?

FY21 was a busy period for Secos. The company increased its film and bag production capacity at its plant in China and installed more equipment at its operation in Malaysia.

It also increased its asset utilisation rates in its current compostable operations and added more compostable resin capacity at its Malaysian bio-resin plant. Finally, it secured a new facility in Malaysia to meet the demands of an expanding compostable market.

Secos also completed a $15 million placement in FY21. The funds were to go towards equipment and working capital to expand its biopolymer capacity in Malaysia and China.

In July 2020, Secos announced Woolworths (ASX: WOW) was to stock its products in 82 select stores. 

Secos also entered into a supply contract with Jewett-Cameron Trading Company Limited to supply its dog waste bags to big-box retail stores in the Americas. 

What did management say?

Secos chair Richard Tegoni commented on the results, saying:

​​The momentum to solve the world's plastic waste crisis is building and has resulted in strong demand for compostable packaging and products globally. SECOS has delivered vastly improved results in 2021 but most importantly… has established itself as one of the key global participants in the bioplastics and environmental packaging space…

The company's excellent results were achieved despite very difficult global trading conditions hampered by COVID-19 restrictions and the impact the virus has had on the world economies generally. During the year, SECOS experienced significant worldwide shipping challenges. However, SECOS staff managed its supply chain well and maintained strong customer service levels to deliver on its growth targets.

What's next for Secos?

Here's what those interested in the Secos share price might want to keep an eye on in FY22:

Secos has already announced some news that might boost its bottom line in FY22. 

In July, Secos announced Woolworths will stock some of Secos' products in 203 of its stores.

Additionally, the company's council business has continued to expand. 

Secos expects more growth in biopolymer resin and film sales in FY22. The growth is expected to be delivered through new opportunities and expanded manufacturing capacity. 

It will also work on growing its MyEco branded products' market share in both Australia and the United States. 

Finally, the company recently announced it has invested in a new Australian Research and Development centre for bio-based products. 

Secos share price snapshot

The Secos share price has gained 61% in 2021. It is also 142% higher than it was this time last year.

The post Secos (ASX:SES) share price soars 6% on FY21 earnings  appeared first on The Motley Fool Australia.

The Secos Group Ltd (ASX: SES) share price is rocketing today, up more than 18% in afternoon trade.

We look at the latest business update from the ASX listed sustainable packaging manufacturer.

What update did Secos provide?

The Secos share price is soaring after the company reported a huge lift in Woolworths Group Ltd (ASX: WOW) stores offering Secos' certified compostable bin liners.

In July 2020, Woolworths initially rolled out Secos MyEcoBag brands to 88 Eco Stores. According to the release, the rollout performed beyond expectation. Secos has now been awarded 115 more stores within the Woolworths retail network, bringing the total to 203 stores.

Commenting on the expanded offering by Woolworths, Secos CEO Ian Stacey said:

This expansion, along with growth being experienced across various customer groups, is expected to continue strong revenue growth for Secos into FY2022 and beyond.

Secos is pleased to broaden the store number with Woolworths and is pleased to see the hard work in launching new brands with Woolworths is yielding positive results. Secos also will see its products move to a more prominent position with the Woolworths store shelf plan.

The company said that volumes remain dependent on in-store sales growth. It added that the demand for compostable bags via retail chains is "significant", and it expects demand to grow as consumer increasingly embrace sustainable practices.

The Secos share price is also getting a lift from the company's forecast of additional growth opportunities for its products in grocery and convenience stores in Australia, Latin America and the United States. It added that many Australian Councils are in the process of issuing compostable bin liners to households.

Secos share price snapshot

No doubt about it, Secos shareholders will have little to complain about over the past 12 months. With today's gains factored in, shares are up 342% since this time last year. By comparison, the All Ordinaries Index (ASX: XAO) has gained 31% over that same time.

Year-to-date the Secos share price has continued to outperform, up 26% so far in 2021.

The post Here's why the Secos (ASX:SES) share price is rocketing 18% today appeared first on The Motley Fool Australia.

There are as many different approaches to investing as there are investors, and no approach is inherently correct. But one approach to investing is gathering quite a buzz lately.

Environmental, social, and governance (ESG) investing considers the sustainability and ethics of companies above other measures. This approach is relatively new and has received praise from some experts and investment firms, but not everyone is a believer.

Who is ESG investing good for?

Those that argue for ESG investing believe it is the best way to future proof your portfolio. Those concerned by climate change, environmental destruction, and social inequality might find investing in companies with sustainable practices eases their minds.

If this sounds like you, you're not alone. BlackRock surveyed investors all over the globe and found that 54% believe sustainable investing is fundamental to processes and procedures.

Immediate past president of the Myer Foundation Martyn Myer and global head of responsible investment at Mercer Helga Birgden spoke to Motley Fool about their approach to ESG investing on the ASX on Wednesday.

"If you invest with ESG principles in mind in a sophisticated way, you invest with economic and social tailwinds behind your investment instead of headwinds," said Martyn Myer.

"It means that lots of things you're investing in are growing far faster than GDP. So, you're investing in growth, but for a very sound reason."

Helga Birgden added:

One of the biggest concerns for investors is about what should be in their portfolios in the light of current policy commitments in Australia. We are framed to reduce our pollution by 15% by 2023 if we are to meet the Paris Agreement goal. That's only 2 years away. And 45% absolute carbon emissions reductions in the next 9 years. For investors that's pretty significant.

Who shouldn't take an ESG approach to investing?

Often, a sustainable approach to investing is characterised by long-term gains with little short-term satisfaction.

As UK Firm Newton Investment Management commented in Investment Magazine, those who want a quick, passive gain may not find their needs fulfilled by conventional ESG investing.

To be done right, ESG investing should be an active form of investing with a lot of research and maintenance involved, reasoned Newton Investment Management.

If that doesn't sound like your cup of tea, there's no need to worry. You may find that you're already investing in ESG-focused companies.

In 2019, the Australian Council of Superannuation Investors that 76% of the companies listed on the ASX 200 already report at least a moderate level of meaningful ESG management.

Where to start when looking for ESG investments on the ASX?

There are plenty of companies on the ASX that align with the principles of ESG investing. Here are 3 ASX shares currently focused on sustainability across various industries.

Secos Group Ltd (ASX: SES)

Secos Group is a producer of sustainable packaging materials. It has stockists in 20 countries and a successful contract with Woolworths.

The company has had some incredible gains this year. Currently, its share price has risen by 51% year to date, and by an incredible 362.6% over the last 12 months.

Wide Open Agriculture Ltd (AXS: WOA) 

Wide Open Agriculture Ltd is a regenerative food and farming company aiming to make eco-friendly food products. It's making gains in the development of an Australia-made plant-based protein from Western Australian lupin.

Wide Open Agriculture's share price is down 20% year to date but is up by a whopping 400% over the last 12 months.  

Neometals Ltd (ASX: NMT) 

Neometals is a lithium mining company working towards powering electric vehicles and clean energy storage initiatives. It has also partnered with German plant manufacturer SMS group to create Primobius, a lithium-ion battery recycling program.

Neometals' share price is up 24% year to date and 84.6% over the last 12 months.

The post Future proofing: Should you invest in a sustainable ASX portfolio? appeared first on The Motley Fool Australia.

Secos Group Ltd (ASX: SES) shares are sliding today after the company released its financial results for the half-year ending 31 December (H1 FY21). At the time of writing, the Secos share price has slumped 1.64% to 30 cents. But over the last year, Secos shares have rocketed by nearly 330%. 

Let's take a look at how the sustainable packaging manufacturer has been performing.

What did Secos report?

The Secos share price is on the slide today despite the company reporting a half-year net profit after tax (NPAT) of $66,000. That compares to a net loss of $1.1 million in the first half of the 2020 financial year.

The company's gross profit margin increased to 18.2%, up from 14.2% in the prior corresponding period.

Revenue increased 30.5% year on year, driven by a 129% increase in the company's biopolymer sales. In H1 FY20, Secos' bio-based sales represented 39% of total sales. In the half-year just reported, bio-based sales made up 73% of total sales.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at $576,000. Secos reported it had $14.3 million in cash with no debt as at 31 December.

The company now boasts global sales to 20 countries, which it says are "protected by strong patents, technical knowhow and distribution channels".

During the half, Secos also completed the first phase of expansion in its China plant. The company noted strong growth in demand for its compostable bags in China, and the plant expansion is intended to open the door to an additional US$3 million in compostable bag sales annually.

Looking ahead, Secos stated, "The forward pipeline for the company is strong, with Secos seeing significant growth opportunities with major brands in various regions." Secos added it "expects to further expand its retail branded MyEcoBag range via Woolworths and other retail chains".

Secos share price snapshot

If you had bought Secos shares this time last year, you'd be sitting on a gain of 328%. By comparison, the All Ordinaries Index (ASX: XAO) is up 8% over the past 12 months.

Year to date, the Secos share price is up 42.86%.

Based on the current Secos share price, the company has a market capitalisation of around $163 million.

The post Up 330% in a year, Secos (ASX:SES) share price slides on results appeared first on The Motley Fool Australia.

The Secos Group Ltd (ASX: SES) share price is soaring higher today after the sustainable package materials company announced a positive sales update. At the time of writing, the Secos share price is trading up 12.9% higher at 18 cents. Let's take a look.

Sales growth

Secos reported its September quarter sales were $5.8 million, up 19% on the June quarter. Biopolymer sales jumped more than 75% compared to the prior corresponding period. This represented its strongest quarter result on record.

The company said that sales were expected to further increase more than $8 million in the current December quarter. Demand for its Cardia biopolymer resin, film and bags continues to grow with increased awareness of compostable plastics as an effective alternative.

Organic treatment programs

Secos said there were further opportunities for growth in organic treatment programs.

Typically run by councils, food organic, garden organic (FOGO) programs enable the use of compostable biopolymer bags to dispose of household waste.

Secos said that using eco-friendly bags rather than traditional methods significantly reduced cost and the environmental impact. With more than 120 councils in Australia adopting FOGO programs, that amounts to around 20% growth in the sector in the last two years.

Operating highlights

To cater for the increase in customer orders, the group has focused on expanding production capacity during the past few months. Proceeds of a recent $15 million equity placement were invested into new manufacturing assets and working capital.

Capital expenditure investment was made in film and bag lines for local government council food and organic waste bags, and dog waste bags.

In addition, Secos committed to meeting $1.5 million sales orders of resin, by increasing capacity at its Malaysian plant.

Fixed operating costs were well-contained, with a portion of savings from employee and administration expenses redeployed to marketing investments. It's anticipated that this will support retail store sales as well as its own branded line of products.

FY21 outlook

Secos advised that it expected the robust global demand in its core segments to continue into FY21. However, no guidance was given by the company.

Commenting on the company outlook, Secos CEO Ian Stacey said:

We remain on track to meet or exceed our internal sales targets and are actively expanding capacity to supply current sales commitments and to cater for additional growth opportunities that we see.

About the Secos share price

The Secos share price reached a low of 4.6 cents in April, representing a drop of 269% on today's price. The company has been making tailwinds in recent months with a raft of positive announcements and a shift in consumer behaviour towards eco-friendlier alternatives.

The post The Secos (ASX:SES) share price has soared 13% higher today. Here's why. appeared first on The Motley Fool Australia.

Secos Group Ltd (ASX: SES) share price is up 6.9% today after a major new pet supply contract delivers material improvement in FY20 results. 

Located in Melbourne, the group is a leading developer and manufacturer of sustainable packaging materials. It supplies biodegradable resins, packaging products and high-quality cash films to a global customer base and has sales offices around the world including Malaysia, China, Mexico and the United States. 

Material improvement in FY20 results 

The Secos share price rise reflects a significantly improved profit and loss position anticipated for the year ended 30 June 2020. Unaudited FY20 net loss is expected to improve 71.5% to $1.2 million.

Additionally, the group achieved positive earnings before interest, taxation, depreciation and amortisation (EBITDA) in the second half, with a net loss of less than $0.1 million. The financial improvement has been driven by growing demand for its biodegradable products, significantly increased plant utilisation, lower interest costs and operational and manufacturing efficiencies. 

In FY20, unaudited financial headline numbers include:

• Revenue from ordinary activities up 0.9%. $21.039 million in FY20 vs $20.848 million in FY19 
• Gross profit is up 129%. $3.383 million in FY20 vs $1.478 million in FY19
• Expenses are down 33.2%. $3.512 million in FY20 vs $5.257 million in FY19
• Net loss for the period has improved 71.5%. $1.186 million in FY20 vs $4.170 million in FY19

The group's fully audited accounts will be released on 27 August 2020. 

Pet supply contract secured

Secos announced a significant supply contract this week with leading US pet company, JC USA Inc, a wholly owned subsidary of the Jewett-Cameron Trading Company. The contract is for the supply of compostable pet waste bags made from Cardia proprietary biopolymer resins. This supports an estimated $3 million in sales annually with growth potential as Jewett-Cameron grows its market reach and compostable pet waste bags sales.

There are more than 89 million dogs in the USA and a similar number in Western Europe, according to Statista. And Secos says pet owners are more focused on finding environmentally-friendly ways to manage their pet's waste and reduce the use of conventional plastic bags and eliminate micro plastic pollution. 

About Secos share price

The Secos share price has surged 6.9% to 16 cents at time of writing. It has a market capitalisation of $66.2 million.

The post The Secos share price has climbed more than 6% today. Here's why appeared first on The Motley Fool Australia.