Virtus Health Ltd (ASX: VRT) shares are teetering up and down following the company’s half-year results release this morning. At the market’s open, the Virtus Health share price surged nearly 6% to a new 52-week of $6.52. However, at the time of writing, Virus shares have pulled back to $6.18, up 0.32% for the day so far.

Let’s take a peek and see how Australia’s largest in vitro fertilisation provider performed over the first half of FY21 (1HFY21).

What’s moving the Virtus Health share price?

The Virtus Health share price is all over the show today after the company reported group revenue of $169.6 million for 1HFY21, compared to H1FY20’s $142.1 million in revenue.

Earnings before interest, tax, depreciation and amortisation (EBITDA) was $59 million, beating H1FY20’s EBITDA of $35.5 million.

Virtus declared an interim, fully franked dividend of 12 cents per share for the period.

Group CEO Kate Munnings commented on doing business during the challenging conditions presented by coronavirus. She said:

While we all felt the impact of COVID-19 on our services, our clinics have responded strongly. I am proud of how our team mobilised post the initial COVID-19 global shutdown, and how they have been able to continue to provide our essential services safely during the numerous lockdowns that have been experienced since then. We have experienced record levels of activity since restarting in mid-2020, demonstrating the resilience of assisted reproductive services.

Company outlook

After withstanding the disruptions of COVID-19, Virtus anticipates normalisation of growth rates heading into H2FY2021.

However, Virtus did caution that rising COVID-19 cases in the United Kingdom and Europe have led to stricter restrictions across the UK and Ireland which may continue to impact future business activities.

Commenting on what lies ahead, Munnings added:

We will continue to differentiate our services to drive further improvements in IVF pregnancy rates, via the One Lab approach, which was prototyped and implemented in Victoria, and resulted in IVF pregnancy rates increasing by 15% in the last three years. Melbourne IVF is now the clear leader in IVF pregnancy outcomes in Victoria, as demonstrated in the VARTA 2020 Annual Report published in December 2020. 

We expect to see sporadic disruptions from local and international COVID outbreaks for some time yet but remain optimistic that our clinics will continue to maintain their resilience.

Foolish takeaway

Over the past six months, the Virtus Health share price has soared by more than 90%. This has come after the company’s shares dropped as low as $1.56 in March 2020. Based on the current Virtus share price, the company has a market capitalisation of around $496 million and 79 million shares outstanding.

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Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Virtus Health Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Openpay Group Ltd (ASX: OPY) share price has been a very strong performer on Tuesday.

At one stage today the buy now pay later provider’s shares were up 17% to $3.11.

When the Openpay share price hit that level, it meant it was up 31% since the start of 2021.

Why is the Openpay share price rocketing higher?

Investors have been piling into the buy now pay later (BNPL) industry this year en masse.

This appears to be on the belief that a number of BNPL shares, such as Openpay and Zip Co Ltd (ASX: Z1P), were undervalued in comparison to giants Afterpay Ltd (ASX: APT) and newly Nasdaq-listed Affirm.

Is the Openpay share price undervalued?

Analysts at Shaw and Partners appear to believe the Openpay share price is very cheap at the current level.

The broker currently has a buy rating and $5.00 price target on the company’s shares. This implies potential upside of approximately 60% for Openpay shares over the next 12 months.

Why is it bullish?

There are a number of reasons why Shaw and Partners is bullish on Openpay. The first is the structural tailwinds it is experiencing, which are driving mainstream adoption.

It explained: “We expect structural tailwinds to continue to grow adoption from both merchants and customers, driving well above system growth and taking share from major incumbents, whilst growing the size of the overall pie.”

Another factor is its competitive advantages.

The broker commented: “OPY has a best-in-breed product. OPY has competitive advantages across three key value chains which include: 1) customers; 2) merchants; and 3) funders – a rare position to be in.”

In addition, the broker likes Openpay for its recurring income.

It notes: “Although having relatively short amortisation and book turn metrics compared with a traditional personal finance lender, OPY has a material base of customers, repeat transactions and some duration and repeatability to its book.”

A final factor that makes it positive on Openpay is the optionality around further geographies and products. Particularly following its recent B2B deal with Woolworths Group Ltd (ASX: WOW).

The broker explained: “We see opportunity for further growth with penetration into NZ and the UK and then other geographies such as Europe as well. The recent deals with Pentana (cars) and Woolworths (SaaS) are further evidence – and validation – of OPY’s broad product offering.”

All in all, although the Openpay share price has rallied strongly in 2021, Shaw and Partners appears to believe it can keep on running.

More reading

• Why IOOF, Kogan, Openpay, & Woodside shares are dropping lower
• Why the Openpay (ASX:OPY) share price is crashing 13% lower
• 3 ASX shares that have outperformed over the past year

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO and Woolworths Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Renergen Limited (ASX: RLT) share price is gaining strongly today, up 13.21% in afternoon trade.

The soaring share price appears to be driven by the helium and natural gas company’s ASX release yesterday, after markets closed, announcing the completion and successful operation of its first Cryo-Vacc prototype.

Why is Renergen’s Cryo-Vacc launch driving ASX investor interest?

The spike in investor interest in the company’s Cryo-Vacc prototype is likely linked to its potential role in delivering COVID-19 vaccines, particularly in developing nations where reliable cold storage facilities are few and far between.

Renergen delivered the prototype to South African-based media in Johannesburg yesterday. The company plans to start production within days.

According to Renergen’s release, Cryo-Vacc enables the “efficient transport and storage of ultracold biologics for periods of up to 25 days or longer in transit”. This is possible even when there is no external power available. The unit can maintain temperatures in the range of anywhere from -150 ºC to 8ºC, enabling it to support the delivery of a suite of vaccines.

Cryo-Vacc units are also able to give accurate temperature readings of the vaccines during transit, along with GPS tracking.

The units use liquid nitrogen to transport by road and helium to transport by air. Helium is far lighter than nitrogen, and Renergen reported that based on current flight safety regulations, Cryo-Vacc with helium can transport up to 12 times more vials per flight “compared to other cryogens”.

In South Africa, Renergen has partnered with local express courier partner, DPD Laser, part of The Laser Group, to distribute vaccines.

Commenting on the rollout of the company’s Cryo-Vacc, Renergen’s CEO Stefano Marani:

Precise temperature control combined with a formidable hold time in transit, makes Cryo-Vacc a compelling asset in the transport of biologics, especially in the developing world. With a useful temperature range of over 150 ºC, Cryo-Vacc is very versatile when compared to even standard refrigeration technology.

Following the presentation to South African media, Marani added (quoted by Reuters), “We’ve already started to take orders for this product. So we’re ready to start going into production in the next few days.”

He added that Renergen has already received numerous queries and order requests from across the globe.

Renergen share price snapshot

With today’s intraday gains taken into account, the Renergen share price is up 45% so far in 2021. That compares to a gain of 3% on the All Ordinaries Index (ASX: XAO).

More reading

• Renergen (ASX:RLT) share price explodes 71% today
• The Renergen (ASX:RLT) share price is soaring 24% higher today. Here’s why

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The market may be pushing higher again today but the same cannot be said for the Commonwealth Bank of Australia (ASX: CBA) share price.

In afternoon trade the banking giant’s shares are down 1% to $85.41. This compares to a 0.4% gain by the S&P/ASX 200 Index (ASX: XJO).

What is happening?

The decline in the CBA share price might be confusing investors, especially given how the rest of the big four are on the rise today.

For example, the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price is up 1.2%, the Westpac Banking Corp (ASX: WBC) share price is up 0.7%, and the National Australia Bank Ltd (ASX: NAB) share price is up 0.8% following its first quarter update.

The good news for the shareholders of Australia’s largest bank is that today’s decline in the CBA share price has nothing to do with its performance and everything to do with its dividend.

This morning CBA shares traded ex-dividend. This means that the rights for the upcoming CBA interim dividend now lie with the seller rather than the buyer. In light of this, a share price generally declines in order to reflect this. After all, you wouldn’t want to pay full price for a share if you’re not going to receive the dividend.

In fact, had it not been going ex-dividend today, the CBA share price would actually be pushing higher.

The CBA interim dividend is a fully franked $1.50 per share, whereas its shares have declined by $1.00.

What now?

Eligible CBA shareholders can now look forward to being paid this dividend into their nominated accounts in around six weeks on 30 March.

Looking ahead, analysts at Citi are expecting the bank to declare a final dividend of $1.95 per share, which will bring its full year dividend to $3.45 per share.

Based on the current CBA share price, this represents a fully franked 4% yield.

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• ASX 200 Weekly Wrap: ASX cools on earnings reality check
• How to generate $50,000 a year from ASX dividends
• Is the CBA (ASX:CBA) share price a buy?

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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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.

Apple (NASDAQ: AAPL) is partnering with Taiwan Semiconductor Manufacturing (NYSE: TSM) to produce micro OLED displays for its long-rumored augmented reality devices at a secretive facility in Taiwan, according to Nikkei Asia Review.

That Feb. 10 announcement is surprising since TSMC mainly manufactures semiconductors on silicon wafers instead of display panels on glass substrates. However, Apple’s micro OLED displays will be built directly on chip wafers to make them smaller, thinner, and more power-efficient than regular OLED screens.

These new screens are reportedly less than one inch wide and would be well-suited for AR devices like headsets and glasses, which need to be lightweight and last for a long time on a single charge.

Nikkei’s sources claim the screens are still being tested, and they will take “several years” to enter mass production — which supports rumors that Apple will be launching AR devices over the next few years. The facility is also testing out larger micro-LED screens for upcoming Apple Watches, iPads, and MacBooks.

How will this deal help Apple?

Apple’s near-term goals are simple. It needs to keep selling more iPhones, which generated over half its revenue last year, to tether more users to its expanding ecosystem of services, which include the App Store, Apple Music, Apple TV+, Apple Arcade, Apple Pay, and other services.

Meanwhile, it needs to keep refreshing its iPad, Mac, Watch, and AirPods segments. But looking further ahead, Apple will eventually need to launch a completely new line of hardware devices, and AR headsets and glasses will likely represent that next big leap.

That’s why Apple has boosted its presence in the AR market in recent years. It launched ARKit, a software development kit for AR apps on iOS, back in 2017. It added 3D-sensing cameras to its iPhones to encourage developers to create more AR apps and patented several designs for AR glasses.

It also gobbled up smaller AR and VR companies, including Metaio, Flyby Media, SensoMotoric Instruments, and Akonia Holographics, and assembled a team of industry experts to develop new products. However, Apple already reportedly scrapped several of its ambitious AR/VR projects, and it’s still unclear how the tech giant plans to proceed in the slippery, nascent market.

The latest rumors suggest Apple could launch an AR headset in 2022 and a pair of lightweight AR glasses in 2023. Those launch dates suggest Apple could wait for early movers like Microsoft and Magic Leap to expose the market’s flaws before launching disruptive user-friendly products, as it previously did with MP3 players, smartphones, tablet computers, and smartwatches.If Apple’s AR glasses gain mainstream momentum, it would diversify the company’s hardware business away from the iPhone while locking more users into its walled garden. It could also pave the way for the eventual launch of the long-rumored “Apple Car” tethered to its AR services.

How will this deal help TSMC?

TSMC, the world’s largest contract chipmaker, has produced Apple’s first-party chips for years. Apple accounted for just over a fifth of TSMC’s revenue in 2020, with most of its orders boosting the 5nm and 7nm nodes, which accounted for 41% of its top line.

TSMC’s top rival, Samsung, also manufactures chips for Apple. However, Samsung also produces LCD and OLED displays for Apple’s devices. Therefore, Apple’s decision to partner with TSMC to produce micro OLED screens marks a deliberate shift away from Samsung, which could also have produced micro-LED and OLED displays with its in-house chip foundry.

It makes more sense for Apple to partner with TSMC, for two reasons: Samsung is still its biggest competitor in the smartphone market, and splitting its orders between two or more suppliers gives it more clout in price negotiations.

Apple clearly benefits from this partnership, but it could also help TSMC reduce its dependence on the maturing smartphone market, which accounted for 48% of its revenue in 2020. As the AR market expands, other companies could also follow Apple’s lead and tap TSMC to manufacture similar advanced screens for their devices — which would open up new sources of revenue growth beyond semiconductors.

The bottom line

This deal won’t move the needle for Apple or TSMC anytime soon. But it could still be a win-win deal over the long term — Apple would reduce its dependence on Samsung and advance its AR plans, while TSMC would tighten its relationship with Apple and diversify its business away from smartphone chips.

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

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Leo Sun owns shares of Apple. The Motley Fool owns shares of and recommends Apple, Microsoft, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

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

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The ARB Corporation Limited (ASX: ARB) share price is trading lower today following the release of the company’s half-yearly report.

Shares in the 4WD accessory business are up 90% over the past 12 months and 23% higher year-to-date. However, the ARB share price has slipped 2.48% to $38.14 at the time of writing.

ARB share price drops despite strong performance

Sales for the half-year period ending 31 December 2020 were $284 million, an increase of 21.6% over the prior corresponding period (pcp).

ARB reported a profit after tax of $54 million for the half-year 2021, representing a 113.5% gain compared to the same period in FY20.

ARB’s half-year profit before tax was $72.1 million, which is at the top of its previously released guidance.  This beats the December 2019 half-year profit before tax by 109.6%. 

The board declared an interim fully franked dividend of 29 cents per share. This was 18.5 cents per share fully franked last year.

The board noted that the interim dividend payout ratio of 43% was “well below ARB’s historical payout ratio of between 53% and 58% over the last five years”.

This is because the board plans to use excess capital to increase its future business growth.

What’s ahead for the ARB share price? 

With regard to its half-year performance and looking ahead, ARB said in today’s release:

The company maintains a positive short-term outlook based on a strong customer order book and a return to growth in new car sales in Australia over the past few months.

The company’s first half performance should not be used as an indicator for the second half of the financial year given continued uncertainty around COVID-19 related restrictions and trading conditions more generally and the inclusion of non-recurring government benefits received during the first half.

Due to uncertainty caused by the coronavirus pandemic, the company did not provide full-year guidance.

At the current ARB share price, the company has a market capitalisation of $3.13 billion.

More reading

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Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ARB Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The National Australia Bank Ltd (ASX: NAB) share price is up 0.7% after revealing substantial profit growth in the first quarter of FY21.

NAB profit

The big bank revealed that its first quarter cash earnings of $1.65 billion were 47% higher than the FY20 second half quarterly average. This was primarily driven by low credit impairment charges. At the underlying level, NAB said that performance has been sound in the current competitive, low interest rate environment. Statutory profit generation amounted to $1.7 billion.

NAB reported that its credit impairment charges fell 98% compared with the second hand quarterly average, to $15 million.

Revenue declined 3%, reflecting lower markets and treasury income, mainly because of the one-off reversal of mark-to-market reversal of losses in the second half of FY20. Excluding markets and treasury, revenue grew 1% with higher fees and commissions income benefiting from increased levels of business activity.

The net interest margin (NIM) declined but was stable excluding the impact of markets and treasury and higher liquids. NAB explained that competition and the impact of low interest rates were offset by home loan repricing and lower funding and deposit costs.

NAB’s expenses for the period fell 1% with productivity benefits and lower restructuring related costs, partly offset by provisions for higher performance-based compensation. The big bank is targeting expense growth in FY21 of 0% to 2%.

Loan book

The bank said at that 31 December 2020, the Australian home loan deferral balance had declined to approximately $2 billion and the Australian business loan deferral balance had declined to approximately $1 billion. These balances are much lower than the peak balances of approximately $38 billion for home loans and approximately $19 billion for business loans.

However, the percentage of loans that are more than 90 days past due and gross impaired assets, compared to gross loans and acceptances, increased by 17 basis points between December 2020 and January 2021 to 1.18%.

Balance sheet

The big four ASX bank disclosed that its group common equity tier 1 (CET1) ratio had increased to 11.7%, compared to 11.5% at 30 September 2020. This includes the benefit of 12 basis points from the foreign currency translation and mark-to-market on its liquids portfolio.

NAB strategy comments

NAB’s CEO Ross McEwan spoke about the bank’s ongoing strategy:

“Implementation of our strategy is proceeding well as we invest for the long-term and focus on initiatives that make a real difference to our customers and colleagues. While there is still much to do, it is pleasing to see momentum building in our core businesses as we simplify and streamline our processes and policies and enhance our digital offerings.”

Initial reaction

Aside from the market’s upbeat reaction to the report, sending the NAB share price higher, analysts have also been having their say.

The Australian Financial Review quoted Credit Suisse analyst Jarrod Martin as saying that the NAB result was a clean and solid first quarter trading update and that he expected the market to react positively.

Using the earnings projections on Commsec, the NAB share price is valued at under 20x FY21’s estimated earnings and it’s valued at 16x FY22’s estimated earnings.

More reading

• ASX 200 up 0.5%: BHP impresses, NAB rises, Zip rockets
• NAB (ASX:NAB) share price on watch after Q1 update
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 Weekly Wrap: ASX cools on earnings reality check
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) has followed the lead of European markets and is pushing higher. At the time of writing, the benchmark index is up 0.6% to 6,909 points.

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

ARB Corporation Limited (ASX: ARB)

The ARB share price is down over 2% to $38.25 following its half year update. For the six months ended 31 December, the 4×4 parts manufacturer reported a 21.7% increase in sales revenue to $283.9 million and a whopping 113.5% jump in profit after tax to $54 million. Investors may be disappointed with the company’s decision to reduce its interim dividend payout ratio well below historical levels. It made the decision so it could increase its investment in the business for future growth.

Domain Holdings Australia Ltd (ASX: DHG)

The Domain share price is down 4% to $5.07. This follows the release of the property listings company’s half year results this morning. Domain reported a 3.8% decline in revenue to $137 million. But thanks to a 14.5% reduction in operating expenses, it delivered a 52.5% jump in half year net profit to $19.4 million. Despite the strong profit growth, the Domain board opted to defer its dividend. Management also warned that operating expenses would grow over the full year.

Redbubble Ltd (ASX: RBL)

The Redbubble share price has tumbled 16% lower to $5.85 despite delivering very strong first half profit growth. For the six months ended 31 December, the ecommerce company reported marketplace revenue growth of 96% to $352.8 million. This ultimately led to the company posting earnings before interest and tax (EBIT) of $41.8 million, which was a massive improvement over the loss of $1.9 million in the prior corresponding period. Possibly causing concerns for investors was news that customer orders were affected by COVID-19 constraints during December.

Treasury Wine Estates Ltd (ASX: TWE)

The Treasury Wine share price is down 4% to $9.74. Investors have been selling the wine company’s shares ahead of its half year results release tomorrow. One broker that doesn’t appear overly confident on the company is Citi. On Monday the broker reiterated its sell rating and $8.20 price target on the company’s shares.

More reading

• ASX 200 up 0.5%: BHP impresses, NAB rises, Zip rockets
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool Australia has recommended ARB Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Pro Medicus Limited (ASX: PME) share price is inching lower today. This comes despite the company announcing a new contract award with a major university health system in the United States.

At the time of writing, shares in the leading health imaging company are slightly down 2% to $46.

What’s driving the Pro Medicus share price lower?

The Pro Medicus share price is in negative territory as investors seem unfazed by the company’s latest contract win.

According to its release, Pro Medicus advised that its United States wholly-owned subsidiary, Visage Imaging, Inc., has signed a 7-year, $31 million deal with a major academic health system.

This includes UC Los Angeles (UCLA), UC San Francisco (UCSF), UC San Diego (UCSD), UC Davis (UCD) and UC Irvine (UCI).

Based on a transactional licencing model, the agreement will see the company’s Visage 7 Viewer deployed across all five campuses. This will create a unified diagnostic imaging platform which will replace the current PACS systems. Pro Medicus noted that this will be the first time the entire system will operate under the Visage platform.

In addition, the deal allows the option for the health system’s affiliates to adopt the Visage platform.

Pro Medicus revealed that it will begin planning the rollout, with the initial go-live date set for H2 CY21. It expected all campuses to be operating the Visage platform within the next 18-24 months.

Management commentary

Pro Medicus CEO, Dr. Sam Hupert, hailed the contract win, saying:

This was a highly sought after, extremely competitive tender and as you would expect for such a large and highly sophisticated client, they underwent a very extensive evaluation process that included onsite pilots involving all five main campuses.

The fact that we won unanimous endorsement speaks to the strength of our offering.

We have won six out of six of the major contracts in our market over the last seven months. These have been across a broad range of opportunities in both the academic and non-academic-IDN space, five in North America and one in Europe. Two have been for more than one of our products and three will be deployed in public cloud. This confirms our view that our solution, more so than any other, is ideally suited to a large percentage of the total addressable market.

It’s worth noting that the Pro Medicus share price is up over 30% year to date due to positive investor sentiment. Earlier this month, the company announced it received United Stated Food and Drug Administration (FDA) approval for its Breast Density Algorithm. In January, the company won a 7-year, $40 million contract with Intermountain Healthcare.

Based on the current share price, Pro Medicus commands a market capitalisation of close to $4.8 billion.

More reading

• A turbulent tale of 2 ASX biotech shares: Polynovo (ASX:PNV) and Pro Medicus (ASX:PME)
• ASX 200 down 0.7%: AGL & Origin sink lower, Qantas pushes higher
• Pro Medicus (ASX:PME) share price drops lower despite FDA approval
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Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Pro Medicus Ltd. The Motley Fool Australia has recommended Pro Medicus Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Rhipe Ltd (ASX: RHP) share price is sliding in morning trade, down 3.61% to $1.74 at the time of writing.

This comes following the cloud and technology solutions provider released its results for the first half of the 2021 financial year (H1 FY21), and despite posting strong growth in sales.

What financial results did Rhipe report?

In this morning’s release, Rhipe reported group sales from its software products and services of $180 million. That’s an increase of 18% from the $153 million reported in H1 FY20.

Sales from its software products increased by 17% to $171 million. The company credited growth in its sales of Microsoft Office365 and Azure. Asia is a strong growth market, with Rhipe’s sales increasing 34% in the region year-on-year.

The half-year revenue increased by 15% to $30.5 million (up from $26.6 million).

Growth in the company’s licensing revenue of $21.6 million slowed to 7% year-on-year. Rhipe pointed to changes in its software vendor incentives and the impact of COVID-19 on its business partners for the lower revenue growth.

Revenue from its services and support activities grew more strongly, up 40% on the previous corresponding half year, to $9 million.

Earnings before income, taxes, depreciation and amortisation (EBITDA) of $8.2 million was up 17% from H1 FY20. Profit after tax also increased by 17% to $3.8 million, up from $3.2 million.

As of 31 December, the company had cash of $57.5 million, having paid $3.2 million in dividends and $4.3 million for its Parallo acquisition.

Rhipe announced an interim dividend of 1.5 cents per share (cps), fully franked, to be paid in March.

Looking ahead, Rhipe forecasts strong financial results for the second half of the 2021 financial year. The company stated it intends to increase investments in several areas of its business. Rhipe is aiming for full-year operating profit of $17.5 million for FY21, approximately 27% more than it delivered in FY20.

Rhipe share price snapshot

The Rhipe share price has yet to recover from the hit it took during last year’s viral selloff in February and March. Over the past 12 months, Rhipe’s shares are down 29%. Year-to-date the share price is down 7% (with today’s intraday losses factored in).

For comparison, the All Ordinaries Index (ASX: XAO) is up 3% so far in 2021.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post The Rhipe (ASX:RHP) share price slides despite strong sales growth appeared first on The Motley Fool Australia.

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