The Swoop Holdings Limited (ASX: SWP) share price is having an incredibly positive first day on the ASX boards.

In morning trade, the telecommunications company’s shares have more than doubled in value after the successful completion of its initial public offering (IPO).

At the time of writing, the Swoop share price is fetching $1.15, which is up 130% from its listing price of 50 cents.

What is Swoop?

Swoop is a telecommunications company formed by the merger of Cirrus Communications and NodeOne Telecommunications.

It is a national provider of fixed wireless internet services to wholesale, business, and residential customers. The company notes that the Swoop network is designed and scaled to deliver ultra-reliable, high throughput, flexible telecom network services.

The Swoop IPO

In conjunction with the acquisitions of Cirrus and NodeOne, Swoop successfully completed a fully underwritten offer which raised gross proceeds of $20 million.

Demand for its IPO was exceptionally strong, with the company revealing that it was more than 15x oversubscribed.

Directors Tony Grist and James Spenceley, along with major shareholder Tatterang, showed strong support for the listing. They collectively subscribed for $4 million of the capital raise. Mr Spenceley is the founder of fellow telco Vocus Group Ltd (ASX: VOC).

The company intends to use the offer proceeds for organic expansion of its fixed wireless network and customer base, as well as the potential acquisition of complementary businesses.

The latter could happen sooner than you might think. According to its prospectus, the company is already in discussions with a number of smaller telcos.

Upon listing, Swoop has approximately 169.6 million ordinary shares on issue. Based on the current Swoop share price, this implies a market capitalisation of approximately $195 million.

Trading update

Positively, the combined business continues to perform well. Management advised that its operational and financial performance for FY 2021 is in line with the company’s expectations.

This news appears to have gone down well with investors, judging by the performance of the Swoop share price today.

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The Tyro Payments Ltd (ASX: TYR) share price is edging lower on Thursday.

In morning trade, the payments company’s shares are down 1% to $3.80.

Why is the Tyro share price dropping?

The catalyst for the softness in the Tyro share price today appears to have been driven by an update on its terminal outages earlier this year.

Following the outages, Tyro’s focus was to return all impacted merchants to normal operation as rapidly as possible. After which, the company established a remediation framework to provide financially impacted merchants a fast and straightforward channel to claim for financial losses caused by the incident.

This included the company actively engaging with all impacted merchants (via its usual merchant communications portal, email, SMS, and direct mail) inviting them to register with Tyro if they claimed to have suffered financial loss.

Today’s update reveals that, to date, a total of 3,656 merchants have registered with Tyro.

What now?

The impacted merchants have been given two options:

Accelerated Path Assessment – which provides a simple remediation solution via a merchant service fee rebate over a designated period if loss is assessed. This rebate is designed to offset the financial loss suffered.

Case Managed Path Assessment – which provides a more tailored remediation solution under which an impacted merchant provides specified claim information about their particular circumstances and the loss they claim to have suffered.

Tyro advised that it has received 973 responses from merchants wishing to pursue the accelerated path option and 76 responses from merchants wishing to pursue the case managed option.

To date, of the 3,656 merchants who have registered as having claimed to have suffered a financial loss, 888 have had their claims settled.

However, no details have been provided in respect to the amount the company has remediated affected customers. As a result, this uncertainty could be weighing a little on the Tyro share price this morning.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Tesla Inc (NASDAQ: TSLA) is dumping radar for driver assistance in its lower-priced vehicles, instead putting all of its focus on camera-based technologies to power Autopilot features including lane control and adaptive cruise control.

The electric vehicle (EV) manufacturer said in a Tuesday blog post that beginning this month, Model 3 sedans and Model Y SUVs built for the North American market will no longer be equipped with radar. CEO Elon Musk telegraphed the change in a March 12 tweet, saying the company is moving toward a “pure vision” approach for Autopilot. 

Tesla has long been at odds with much of the auto industry over the need for radar and related lidar systems. The technology, which provides measurements of distance to help guide automated driving, is relatively expensive and requires sophisticated processing power on vehicles to manage the data in real time. Musk in the past has called lidar “a crutch.”

But Tesla is not abandoning radar entirely. All new Model S and Model X vehicles, which tend to be higher priced, and vehicles built for markets outside of North America will continue to come equipped with radar and will have radar-supported Autopilot functions.

The company said that for now, it is focused on its “higher volume vehicles” but intends to transition all models to the new system, which it calls Tesla Vision, over time. “Transitioning them to Tesla Vision first allows us to analyze a large volume of real-world data in a short amount of time, which ultimately speeds up the rollout of features based on Tesla Vision,” the company said.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Volpara Health Technologies Ltd (ASX: VHT) share price is pushing higher on Thursday.

At the time of writing, the healthcare technology company’s shares are up 1% to $1.26.

Why is the Volpara share price pushing higher?

Investors have been buying the company’s shares following the release of its full year results for FY 2021.

For the 12 months ending 31 March, Volpara reported record revenue from customer contracts of NZ$19.7 million. This was a 57% increase on the prior corresponding period and driven by a 99% lift in subscription revenue to NZ$18.1 million.

This was driven by further market share gains. Approximately 32% of US women now have a Volpara product applied on their images and data. This compares to 27% at the end of the prior corresponding period.

Another positive was the company’s gross margin, which expanded from 86% to 91%. This was driven by several factors, including a focus on cost reductions and scalability of Microsoft Azure, which is its largest cost-of-revenue expense item. Management expects its gross margins to remain within 90% to 92% in FY 2022.

The company’s operating costs increased by just 8% during the year to NZ$39 million. Management advised that costs would have been flat excluding the first full year of MRS costs and two months of CRA costs.

This ultimately led to the company reporting a 14% improvement in its net loss to NZ$17.5 million for the year. Pleasingly, Volpara has the balance sheet strength to withstand this loss. At the end of the period, the company’s cash balance stood at NZ$32.2 million.

Management commentary

Volpara’s CEO and Chief Scientist, Dr Ralph Highnam, said: “FY2021 was an excellent year for Volpara. We successfully conducted our second acquisition, of Boston-based breast cancer risk company CRA Health, LLC, but we’ve also done a huge amount of work behind the scenes to make the company more scalable: digital marketing through to smarter use of our cloud services through to easier-to-deploy software systems into clinics.”

“It’s great to see that work start to come through in the numbers as we see Gross Margin moving upwards and the net loss coming down, even as we continue to grow at a strong pace. We look forward with relish to now Accelerating Out of COVID-19 and reporting on those results during FY2022,” he added.

Outlook

Management expects its growth to continue in FY 2022. It has provided revenue guidance of approximately NZ$25 million to NZ$26 million. This represents year on year growth of 27% to 32%.

And, as mentioned above, the company is expecting its gross margins to be in the range of 90% to 92% in FY 2022.

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The Costa Group Holdings Ltd (ASX: CGC) share price is crashing lower on the day of its annual general meeting.

At the time of writing, the horticulture company’s shares are down 23% to $3.39.

What happened at the annual general meeting?

Costa took investors through its performance during FY 2020 and then provided an update on its guidance for the current financial year. It is the latter that is weighing heavily on the Costa share price today.

In respect to the former, management notes that it successfully managed and executed a COVID action plan which mitigated the risk of any cases within its business and the community and ensured it could continue its day-to-day operations.

This led to Costa delivering a $59.4 million underlying net profit after tax (NPAT-SL), representing an increase of 108.4% over the prior year. This allowed the Costa board to declare a fully franked total dividend payment of 9 cents per share for the year.

What about the 2021?

The company’s new CEO, Sean Hallahan, spoke about current trading conditions. While its international operations are performing well (in constant currency), things aren’t quite as positive for its domestic operations.

He said: “In terms of the outlook for our 2021 financial year, in our international segment we are now well progressed on our harvests in both China and Morocco and as we reported in February at our full year CY20 results announcement, performance has been very positive versus previous year and expectations.”

However, due to a stronger Australian dollar, its reported results will be negatively impacted.

Speaking about its domestic operations, Mr Hallahan said: “Across the domestic produce categories, we have seen mixed performances for the current year to date. In relation to the berry category, solid pricing across the four main berry varieties has led to a good performance to date with a strong outlook.”

“Mushroom production at Monarto has been impacted by short term labour constraints, however once labour needs are fully addressed, we expect improving outcomes. Overall mushroom demand conditions remain strong going into the cooler months.”

Elsewhere, its Avocado volumes and quality have been pleasing, with export volumes continuing to grow. However, its Citrus operations are facing challenges and its Tomato operations are experiencing short term pricing pressures.

Guidance

In light of the above, Costa’s first half performance is expected to be marginally ahead of the previous comparable period in 2020, with strong international operations offset by challenges in domestic produce conditions.

This has fallen well short of the market’s expectations, putting significant pressure on the Costa share price today.

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A global investment house has suggested dividends on the ASX are about to explode.

The latest Janus Henderson Global Dividend Index predicted dividends in Australia would grow 40% this year.

This would come on the back of an excellent first quarter and industries benefiting from the post-COVID recovery.

“As the economic recovery continues, we’re anticipating further dividend increases, with payouts reaching 85% of their 2019 levels,” said Janus Henderson head of Australia Matt Gaden. 

“The dividend bounce back should be a big relief to Australian investors, particularly self-funded retirees.”

Mining carried Australia’s dividend boost in Q1

Janus Henderson noted that Australia looks more like an emerging market than a developed economy.

This is due to the ASX’s reliance on the mining sector, which single-handedly led the dividend boost in the quarter ending March.

“Fortescue Metals Group Limited (ASX: FMG) almost doubled its distribution and became Australia’s largest payer in the first quarter,” the investment company stated.

“Including BHP Group Ltd (ASX: BHP)’s special dividend, mining payouts jumped 60% year-on-year in Australian dollars, with further increases signalled to arrive later in the year rounding off the 60% growth for mining dividends in calendar year 2021. Rio Tinto Limited (ASX: RIO) upped its payout by half in April, for example.”

Next sectors where you can grab that sweet dividend action

With mining already topping out and commodity prices starting to wane, where to next for ASX yield seekers?

Janus Henderson predicted another dominant sector on the ASX, banking, would be next to restore dividends to chunky pre-COVID levels.

“Banks [are] expected to likely to restore dividends to around 70% of their 2019 level,” the investment house stated.

“Janus Henderson expects healthy increases from defensive retailers like Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) too, but a number of other companies will find it harder to grow their dividends substantially — and some may pay nothing.”

A 40% growth in dividends this year would take payouts to $70.9 billion

“Our outlook clearly points to a dividend revival in Australia after a dividend drought last year,” said Gaden.

Janus Henderson portfolio manager Jane Shoemake warned investors to still expect plenty of uncertainty in a still uncertain world.

“There is certainly much less downside risk to payouts this year than previously anticipated, though the timing and magnitude of individual company payouts is going to be unusually uneven and this will add volatility to the quarterly figures,” she said.

“Special dividends will play a role too.”

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The Air New Zealand Limited (ASX: AIZ) share price will be one to watch this morning.

This follows the airline operator’s announcement in regards to its international cargo flights.

At yesterday’s market close, Air New Zealand shares finished the day at $1.565.

What did Air New Zealand announce?

The Air New Zealand share price could receive a boost today after the company revealed it would be receiving continued government assistance.

In this morning’s release, Air New Zealand advised it has been awarded a further five months of cargo flights under the New Zealand government’s Maintaining International Air Connectivity (MIAC) scheme.

Introduced in March 2021, the MIAC scheme gives financial assistance to selected airline operators. The funds are used to support the cost of flying, and help keep the country connected to global trade partners.

This is particularly crucial at a time where international borders continue to remain shut due to COVID-19.

The MIAC scheme will run until the end of October 2021.

Air New Zealand has been awarded an average of 30 flights per week across 13 international cities and key Pacific ports.

These include Los Angeles, Hong Kong, Shanghai and other major hub destinations. However, it excludes the trans-Tasman and Rarotonga travel bubbles currently in service.

The total financial support for Air New Zealand over this additional five-month period is estimated to be between $120 million and $145 million.

This brings overall government financial assistance for FY21 to between $320 million and $340 million in cargo revenue.

While the result is an improvement from FY20 levels, the airline still expects to make a significant loss for cargo revenue in FY21.

Air New Zealand share price summary

Over the past 12 months, Air New Zealand shares have jumped more than 20%, however year-to-date performance has fallen 6%.

The company’s shares reached a 52-week high of $1.88 last June before dropping lower in the months ahead.

On valuation grounds, Air New Zealand has a market capitalisation of roughly $1.7 billion, with approximately 1.2 billion shares outstanding.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The rumors over the last couple of weeks turned out to be on target: E-commerce giant Amazon (NASDAQ: AMZN) announced today that it is buying movie studio MGM, in a deal worth $8.45 billion. The similarly named hospitality and entertainment company MGM Resorts International (NYSE: MGM) plays no part in this deal. MGM spun off the movie studio as an entirely separate company many years ago. Amazon and MGM have not provided a firm closing date, and the agreement is subject to the usual gauntlet of regulatory approvals.

The buyout gives Amazon access to MGM’s film catalog of more than 4,000 titles. Its movie franchises include the James Bond and Rocky films. The studio also comes with 17,000 TV shows such as Hulu’s The Handmaid’s Tale and the FX hit Fargo. Amazon Prime already hosts the historical fantasy show Vikings, also produced by MGM.

Amazon says it plans to “reimagine and develop” new content based on MGM’s collection of characters, story worlds, and other intellectual property. The privately held studio sees the Amazon connection as an opportunity to continue telling stories backed by the parent company’s rock-solid financial assets.

Some of MGM’s most popular productions are currently running on streaming services in direct competition with Amazon Prime Video. Walt Disney (NYSE: DIS) owns both Hulu and FX, for example. MGM is also developing a Vikings sequel for Netflix (NASDAQ: NFLX). Competing studios have a long history of cross-publishing their work on rival TV networks, but rival streaming services have shown a tendency to cancel their cross-platform deals relatively quickly. It remains to be seen how Amazon will handle MGM’s existing development agreements.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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There are some ASX shares that generate a lot of their revenue from a software as a service (SaaS) setup. They might be opportunities.

The SaaS model can be attractive because it leads to recurring revenue at relatively high profit margins. The business model may also mean high retention rates with sticky clients.

Class Ltd (ASX: CL1)

Class is a leading provider of self-managed super fund (SMSF) administration software for accountants. It aims to simplify the process by removing complexity and manual back-office processes. Class also looks to provide automation that delivers efficiency at scale.

The business has a retention rate of over 99% in the SMSF accounting space. It’s looking to improve earnings by driving efficiency and price opportunities for margin improvement in FY22 and beyond. Ongoing market share growth will come from its multiproduct strategy execution.

The SaaS ASX share is now also offering Class Trust. Accountants are currently using excel and practice management to administer trusts, but Class Trust is helping improve time efficiencies by up to 68%. Investment trusts are the second biggest wealth vehicle outside of super.

Class has also acquired a few businesses to become a market leader in the documentation and corporate compliance space. By revenue, it has a 14% market share of this space. Class continues to look for further acquisition opportunities.

It’s also looking for new verticals and opportunities to expand offshore. 

Fund manager Spheria thinks that Class is “hugely undervalued”, saying:

We remain comfortable that Class’ management team has built a platform for solid earnings growth with the launch of the new adjacent Class Trust product and the entry into the documents and corporate compliance space. At 3.2x revenue and 12x EV/EBIT (annualised 12 months going forward) for a growing and solidly profitable cloud software business we believe Class is hugely undervalued.

TechnologyOne Ltd (ASX: TNE)

TechnologyOne is a SaaS ASX share that provides enterprise resource planning software to over 1,200 leading corporations, government agencies, local councils and universities.

It recently released its FY21 first half result which showed revenue from SaaS and continuing business rose 7% to $140.6 million, whilst SaaS annual recurring revenue (ARR) went up 41% to $155.8 million.

TechnologyOne believes that it will see long-term continuing strong growth driven by its global SaaS ERP solution as it increases its penetration with existing customers, adds new customers and expands globally.

Over the next few years, its SaaS and continuing business is expected to grow by approximately 15% per annum, once it has wound down its legacy licence fee business. It also sees its total ARR increasing to more than $500 million by FY26, from its current base of $233 million.

Management said that the economies of scale from its global SaaS ERP solution will see the SaaS ASX share’s continuing profit before tax margin expand to 35%.

Morgans currently rates TechnologyOne as a buy with a price target of $10. It think TechnologyOne is valued at 47x FY21’s estimated earnings.

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A prominent economist has warned investors Australia has hit the end of a 40-year trend.

According to AMP Capital chief economist Dr Shane Oliver, current stock investor fears will be justified in the coming months as inflation rises up.

“Shares are at risk of a further near-term correction,” he said in a memo to AMP Ltd (ASX: AMP) clients.

“In the next few months, a further rise in inflation will likely push bond yields higher which may further threaten shares (particularly tech stocks which are vulnerable to higher interest rates).”

But the good news is that this won’t last long.

“While the risks have increased, we are of the view that the inflation spike will prove temporary,” said Oliver.

“There are some very tentative early signs of this with some commodity prices rolling over… semiconductor chip prices trending down and business surveys showing a decline in the ratio of new orders to inventories. There is a long way to go before this is confirmed though.”

A very long deflationary era is now ending

In a longer-term timeframe, OIiver warned investors the world was now at the end of a multi-decade trend.

“We’re likely now going through the bottoming of the long-term decline in inflation that has been in place since the early 1980s,” he said.

“Many of the factors that drove the declining trend in inflation since the early 1980s are now fading.”

After years of struggling to get inflation up, the COVID-19 downturn has given central banks the impetus to be more aggressive.

“The shift from focusing on forecasts to actual inflation means central banks will be slower to raise rates — allowing inflation to rise further. And massive quantitative easing is now being combined with fiscal stimulus which provides an avenue for easy money to boost spending (unlike last decade when fiscal austerity offset easy money),” said Oliver.

“This likely constitutes a ‘regime shift’ in the approach to [boosting] inflation – much like the aggressive approach to keeping inflation down led by the Fed from the early 1980s was a ‘regime shift’.”

Oliver also observed that both the pandemic and the political climate has put globalisation into retreat, leading to less competition.

“We’re seeing a trend to bigger governments and that can ultimately be associated with lower productivity growth,” he said.

“The ratio of workers to consumers is declining in many countries which may drive higher wages growth and lower productivity growth.”

How will this affect share markets?

Oliver’s view that the inflation spike will be short-lived bodes well for equities in the near-term.

“Cyclical bull markets usually don’t end until excesses build, central banks tighten aggressively, and this drives a collapse in earnings. But this still looks a long way off,” he said.

“As a result, we remain of the view that share markets will provide solid gains over the next 12 months.”

In the longer term, with the deflationary era now over, growth stocks can no longer be expected to outperform value shares.

The zero-interest environment that drove growth’s winning streak the last 12 years will “start to fade”, said Oliver, and investor returns will more closely correlate to “underlying yields and earnings growth”.

“Inflation around target is the best scenario as it would still mean low inflation – but less risk of deflation and likely higher wages growth (which is positive in terms of social stability, rising living standards and equality). And investment returns would still be okay.”

The pessimism for growth stocks matches the findings from a recent Vanguard study.

“We expect value to outperform growth over the next 10-year period by as much as 5% to 7% per year, and perhaps by even more over the next 5 years,” read the paper titled Value versus growth stocks: The coming reversal of fortunes.

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