The BlueScope Steel Limited (ASX: BSL) share price stormed up the leader board this morning after it posted a 12% profit upgrade.

The BSL share price surged 6.4% to $17.05 in morning trade. This makes it the second best performer on the S&P/ASX 200 Index (Index:^AXJO).

The Service Stream Limited (ASX: SSM) share price is only marginally in front of the BSL share price. The SSM share price jumped 6.7% to $1.85 after it signed a deal with Telstra Corporation Ltd (ASX: TLS).

Profit upgrade boosts the BSL share price

Coming back to BlueScope, management expects first half FY21 earnings before interest and tax (EBIT) to reach around $530 million.

This is ahead of the previous guidance of $475 million and all parts of BlueScope’s businesses are performing strongly.

“All operating segments have performed well across the half,” said BSL’s chief executive Mark Vassella.

“We have seen strong volumes and improving steel spreads in our largest steelmaking business in Australia and the US, along with strong earnings improvements from our other businesses.

“The results are a continued demonstration of BlueScope’s operational leverage from our diverse portfolio of businesses.”

Firing on all cylinders

The group’s Australian Steel Products (ASP) business produced a much better result compared to the previous half. This is due to strong domestic construction and distribution segment demand, particularly for coated and painted product.

Management even went as far as to say it’s experiencing the strongest domestic mill sales volumes in a decade as steel spreads continued to strengthen.

It’s US North Star division also experienced a rebound. There was a significant increase in benchmark Midwest hot rolled coil prices, above raw material price rises, in recent months.

BlueScope’s Building Products Asia & North America segment also recovered from its COVID-19 doldrums.

Small cracks in BlueScope’s profit update

But it isn’t all good news. The company commented that the earnings surge at its Buildings North America division won’t be repeated in the second half of FY21. This is because the first half was bolstered by a $40 million property sale.

Management also added an air of caution as it can’t say if the expanding steel spreads that lifted its profits will be sustained.

Volatile macroeconomic and market factors, including the potential of further supply chain and demand disruptions from the pandemic, is convoluting the outlook.

BlueScope will officially release its interim profit results on 22 February, where it will provide further comments on trading conditions.

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Motley Fool contributor Brendon Lau owns shares of BlueScope Steel Limited and Telstra Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended Service Stream 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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Retailer Dusk Group Ltd (ASX: DSK) is now back-paying more than $2.3 million in wages after signing an enforceable undertaking with the Fair Work Ombudsman.

The company, which only listed on the ASX in early November, sells candles and home fragrance products via 115 shops in Australia.

Dusk staff complained last year that the retailer had not properly paid out an entitlement that was triggered when an employee had a break of less than 12 hours between shifts.

The company then found more than 1,500 former and current service staff, assistant store managers and store managers in all states and territories were underpaid.

Some employees are owed as much as $26,000, according to the Ombudsman.

The Motley Fool has contacted Dusk for comment.

Dusk has plenty of remediation to do

As well as back-paying the missing wages, Dusk must pay a $45,000 “contrition payment” to the federal government.

The retail chain must also apologise to its staff via physical media, social media and online notices. A telephone hotline must also be manned using an external provider for 12 months to field employee enquiries.

The enforceable undertaking commits the company to put in measures to prevent future breaches.

“These measures include engaging, at Dusk’s own cost, an expert auditing firm to assess the outcomes of its rectification program and audit its compliance with workplace laws over the next two years,” said Fair Work Ombudsman Sandra Parker.

“This matter demonstrates how important it is for employers to place a high priority on ensuring they are aware of every lawful entitlement they must pay their employees. The underpayment of just a single entitlement can result in a large-scale back-payment bill.”

The company is also paying out interest and superannuation related to the back-pay. It has until 22 February to complete remediation with all former and current employees.

A small-cap ASX share to watch

At the time of writing on Friday, the Dusk share price is trading 3.1% higher at $2.33 giving it a market capitalisation of around $149 million. The business floated on the ASX in November with an initial public offer (IPO) price of $2 per share.

WAM Microcap Ltd (ASX: WMI) last week named Dusk as an ASX share to watch, citing it as a beneficiary of Australians staying home more during the COVID-19 pandemic.

Dusk has forecast sales in the first half of financial year 2021 to land between $90 million to $90.5 million, up from $58.7 million in the same period the previous year.

The company’s earnings before interest and tax (EBIT) guidance was between $26 million to $27 million, which would be a big boost from $9.7 million the prior year.

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Motley Fool contributor Tony Yoo 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 Kogan.com Ltd (ASX: KGN) share price is out of form on Friday and dropping lower again.

In morning trade, the ecommerce company’s shares are down 5% to $18.70.

Why is the Kogan share price dropping lower?

Investors have been selling Kogan’s shares following the release of an update on its performance during the first half of FY 2021.

According to the release, for the six months ended 31 December, Kogan’s gross sales (including the Mighty Ape acquisition) increased 96% over the prior corresponding period.

Thanks to margin expansion, the company’s gross profit and earnings before interest, tax, depreciation and amortisation (EBITDA) grew at an even quicker rate.

Gross profit was up more than 120% on the prior corresponding period and EBITDA rose over 140%.

Key drivers of this growth were a record-breaking performance during Black Friday, the acquisition of Mighty Ape, and a significant increase in customer numbers. At the end of the period, Kogan.com had 3,003,000 customers and Mighty Ape had 719,000 customers.

Taking a little bit of the shine of the strong result were some additional charges totalling $3.4 million.

These comprise logistics demurrage charges of $1.9 million driven by one-off warehousing and supply chain interruptions and a $1.5 million write-down of personal protective equipment (PPE) inventory held by Kogan.com following a reduction in COVID-19 cases in Australia.

Management also advised that it recorded an unspecified but significant unrealised foreign exchange loss due to the rise in the Australian dollar.

Nevertheless, at the end of the half, Kogan had a very strong balance sheet with a cash balance of $78.9 million.

Management commentary

Kogan.com Founder & CEO, Ruslan Kogan, commented: “We are proud to have delivered another record half while undertaking significant investments into the future of the business.”

“We delivered our largest acquisition to date, in Mighty Ape and expanded the Kogan.com community of members to more than 3 million active customers. We are investing into building strong customer relationships by expanding our logistics capability, our marketing reach and our systems and infrastructure – giving us the foundation to continue delighting customers as the business further scales.”

Commenting on the Black Friday sales period, Mr Kogan revealed that the company experienced incredible demand from consumers.

He explained: “The Black Friday week saw some of the most extraordinary trading we have ever seen – with 7 out of our top 10 days ever occurring during the Black Friday period.”

“Customers have come to rely on Kogan.com to deliver their Christmas shopping needs, and we are proud to have satisfied well over a million happy shoppers this Christmas period. Keeping up with the extreme demand is an engineering, supply chain, and logistical challenge that our team loves working on and solving,” he concluded.

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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 Kogan.com 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 trading flat this morning. This comes after the software company provided investors with a business update on its preliminary results for the first half of FY21.

In early morning trade, the Rhipe share price swapped hands for $2.01, up 1.5% but has since retreated to it opening price of $1.98. Let’s take a look at the results.

What’s driving the Rhipe share price higher?

In today’s release, Rhipe highlighted that for the period ending 31 December, growth has been achieved across all key metrics.

Group revenue rose to $30.5 million, reflecting an increase of 15% over the prior corresponding period (pcp). The company attributed the positive result to its subscription software licencing of Microsoft public cloud products. In the last 6 months, Microsoft Office365 licensees jumped more than 90,000 seats to record a total of 720,000 seats.

As a result, gross profit also lifted to $27.7 million, representing a gain of 11% compared to this time last year.

Operating expenses moved slightly higher to $19 million, a marginal 3% increase over the pcp. Its licencing business achieved lower costs due to fewer employees, marketing, and travel-related outflows as a result of COVID-19. However, expenses rose from its rhipe solutions business as the company focused its efforts on investing for the future.

Group operating profit (gross profit minus operating expenses) came to $8.8 million, up 34% on H1 FY20. The overall result was complemented by strong growth in its licensing business, and management’s strict cost control.

Earnings before interest, tax, depreciation and amortisation (EBITDA) grew to $7.7 million, an uplift of 10% over the comparable period.

Rhipe reported to have a cash balance of $57.5 million at the end of the first-half, after paying dividends to shareholders, and investing in the Parallo acquisition.

Outlook

Management noted that despite COVID-19 operating challenges, its large and diversified reseller base has proven resilient. It believes the robust performance will continue to run into the second-half, especially with future investments to drive business growth.

Consequently, the group is forecasting its full-year operating profit for FY21 to be $17.5 million. This would imply an 27% increase when compared to the prior year’s result.

The company is scheduled to release its final half-year results for the 2021 financial year on 16 February.

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• Here’s why the Pointerra (ASX:3DP) share price is storming higher

Motley Fool contributor Aaron Teboneras 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 Origin Energy Ltd (ASX: ORG) share price is lifting today after the Aussie energy group’s latest quarterly report.

What’s driving the Origin Energy share price?

In Origin’s integrated gas segment, the company reported record quarterly production by Australia Pacific LNG for the period ended 31 December 2020 (Q4 2020). Australia Pacific LNG production climbed 6% from the September quarter due to heightened market demand and completion of planned maintenance.

Commodity revenue jumped 6% during the quarter with higher volumes offsetting lower realised contracted LNG prices. Sales volumes increased 12% with Origin drawing down on LNG inventory.

The Origin Energy share price has been under pressure in the last year, falling 41.7% lower to $4.86 per share. Despite that, shares in the Aussie generator and retailer or “gentailer” are climbing in early trade, up 0.41% at the time of writing.

Origin reported a realised gas price of A$6.17 per gigajoule for the December quarter. That includes an average LNG price of US$5.20 per million British Thermal Units (mmbtu). Origin’s average domestic price came in at A$4.40 per gigajoule.

Origin also provided an update on its Energy Markets segment for Q4 2020. Electricity volumes fell 4% lower compared to the December 2019 quarter. Retail volumes fell 5% due to milder weather and lower small business customer numbers with business volumes down 3% due to COVID-19 impacts.

Gas sales volume rose 1% on Q4 2019 volumes with a 16% increase in the business segment offsetting a 6% decline in retail. Gas used in generation slumped 29% compared to Q4 2019 figures due to the coronavirus pandemic impact on demand.

The Origin Energy share price is climbing higher on this morning’s update. That includes Origin tipping in an additional $65 million in Octopus Energy to maintain its 20% equity interest in the UK-based electricity and gas supplier.

Octopus is launching into the Japanese market via partnership with Tokyo Gas, with Origin boosting its investment to maintain its ownership level.

How is the market performing today?

The S&P/ASX 200 Index (ASX: XJO) has jumped higher in early trade to pare back some of yesterday’s losses. The benchmark Aussie index closed down 2.0% yesterday in the worst session since September 2020.

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Motley Fool contributor Ken Hall 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 Service Stream Limited (ASX: SSM) share price is pushing higher on Friday after the release of an announcement.

At the time of writing, the essential network services provider’s shares are up 7% to $1.86.

What did Service Stream announce?

This morning Service Stream announced that it has secured a multi-year agreement with telco giant Telstra Corporation Ltd (ASX: TLS)

According to the release, under Telstra’s new commercial framework, Service Stream will be a key delivery partner responsible for performing design, construction, and maintenance activities associated with its wireless and fixed-line infrastructure networks.

This includes site acquisition, design, construction and upgrade services of wireless infrastructure and design, construction, and relocation of fixed-line network infrastructure.

The release explains that the two parties have signed a five-year agreement, which comprises an initial period of three years and two one-year extension options. Those options are at Telstra’s discretion. The agreement is expected to transition in or around April 2021.

What is the contract worth to Service Stream?

Management advised that the agreement does not provide guaranteed volumes.

However, it notes that the company has historically delivered approximately $70 million of wireless and $30 million in fixed-line infrastructure works per annum to Telstra under similar agreements. And this was with a larger pool of delivery partners historically operating across allocated regions.

Service Stream’s Managing Director, Leigh Mackender, commented: “Service Stream is very pleased to be selected as one of Telstra’s strategic delivery partners under their new Field Optimisation Agreement, continuing to support our long-term relationship which has existed for more than 15 years.”

“The business looks forward to partnering with Telstra and supporting both their wireless and fixed-line network programs, particularly at a time where demand for 5G wireless infrastructure is expected to increase,” he concluded.

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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 Telstra Limited. The Motley Fool Australia has recommended Service Stream 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 Pointerra Ltd (ASX: 3DP) share price is storming higher on Friday morning.

At the time of writing, the 3D geospatial data technology company’s shares are up 5% to 50 cents.

Why is the Pointerra share price storming higher?

Investors have been buying the company’s shares on Friday following the release of its quarterly update.

According to the release, Pointerra’s strong growth continued during the second quarter and into the third. As of 29 January, the company’s Annual Contract Value (ACV) stood at US$6.88 million.

This is an increase of US$1.06 million or 18% since its last update on 25 November. It is also up 262% since this time last year, albeit from a small base.

Management advised that this was driven partly by new customers in the US energy utilities and the US and Australian mapping sectors.

One of these new customers is Eversource Energy, a US$32 billion market capitalisation energy company servicing customers in Connecticut, Massachusetts, and New Hampshire. It is working with Eversource to determine the scope and scale of deployment of Pointerra’s platform to support its storm response and network integrity operations.

Management notes that, as part of its recent storm response efforts, Eversource has engaged Pointerra to provide an enterprise repository and analytics platform to extract actionable information from geospatial data allowing for better and informed decisions. This is expected to lead to faster response efforts and higher reliability for its customers.

Eversource is currently paying US$150,000 per month for a four-month deployment. However, management expects to agree a material ongoing subscription with the energy company upon expiry.

Also supporting its ACV growth was a further increase in demand from existing customers. Management notes that its existing customers were spending more thanks to a number of successful POC projects with utilities and their LiDAR and imagery capture mapping partners in the US.

Balance sheet

During the second quarter, Pointerra received $0.63 million in customer receipts.

However, thanks to its modest operating costs, the company only posted a net operating cash outflow of $0.231 million. This left it with a cash balance of $4.52 million at the end of December.

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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 Pointerra Limited. The Motley Fool Australia has recommended Pointerra 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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In morning trade on Friday, the Humm Group Ltd (ASX: HUM) share price is charging higher.

At the time of writing, the financial services company’s shares are up 7% to $1.23.

Why is the Humm share price charging higher?

Investors have been buying Humm shares following the release of a first half trading update.

According to the release, the company is expecting to report strong profit growth for the six months ending 31 December 2020.

The release explains that the company’s unaudited first half cash net profit after tax came in at $43.4 million. This will be a 25.8% increase on the $34.5 million it reported in the prior corresponding period.

Management advised that its cash profit growth has been driven largely by its continued focus on reducing underlying costs. It notes that its operating expenses for the half will be $87.2 million excluding loan impairment expense. This is down 11.1% from $98.1 million in the first half of FY 2020.

In addition to this, its loan impairment expense has reduced by 35.3% to $25 million as a result of lower actual losses and strong recoveries. Management advised that this reflects the benefit of continued investment in developing a superior credit decision platform and adopting a customer-centric approach to managing hardships and collections during the pandemic.

Also supporting its performance has been the success of its buy now pay later offering. The company now has a total of over 2.6 million customers, which is up 40.4% or 750,000 on the prior corresponding period.

Outlook

Management appears cautiously optimistic on the second half.

It commented: “While hummgroup’s credit performance remains robust, the Company continues to take a prudent approach by monitoring the potential impact on arrears and losses from changes to government stimulus, and remains well provisioned for the future.”

“In 2H21 hummgroup will be making new investments in marketing and people as it enters two international markets. As a result, the Company expects 2H21 Cash NPAT to be lower than 1H21,” it added.

Interestingly, Humm hasn’t provided any details in relation to its recently announced potential joint venture with the beleaguered Douugh Limited (ASX: DOU). However, some shareholders may be hoping the company finds another way to expand into the US market given the controversy surrounding the former neobank.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Humm Group 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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McMillan Shakespeare Limited (ASX: MMS) shares will be on watch today after the company announced a business update and preliminary result for its FY21 first-half trading period. At yesterday’s closing bell, the McMillian share price finished the day at $11.54.

Why will the McMillian share price be in focus?

It will be interesting to see where the McMillian share price heads today on the back of the company’s latest update.

According to this morning’s release, McMillian advised it is continuing to experience tailwinds within the salary packaging, novated leasing, and fleet & asset management market.

Despite the challenging operating environment from COVID-19, McMillian revealed that its business performance is rapidly recovering. In particular, novated lease sales are rebounding, remarketing values for used vehicles are seeing stronger returns, and its Plan Partners is on an upwards growth trajectory.

As a result, the company anticipates that underlying net profit after tax for the FY21 first-half period will be $42.7 million. McMillian said this includes a $7.3 million payment from the Australian Government’s JobKeeper scheme.

The company is scheduled to release its half-year results for the 2021 financial year on 24 February.

Management commentary

McMillian CEO and managing director Mr Mike Salisbury welcomed the favourable trading conditions, saying:

We are pleased with the underlying performance of the business in the first half. Our investments in digital technologies and our ability to flex our operating model has delivered a stronger performance and is reflected in the ongoing positive feedback we have received from our customers.

We have benefited from unusual trading conditions in the broader motor industry in the first half. These conditions are expected to normalise throughout the course of the second half of the 2021 financial year and as such, operating performance in the second half is expected to be similar to the first half, excluding the JobKeeper contribution.

Review of the McMillian share price

The McMillian share price has gone on a seesaw ride over the past 12 months. Its shares hit a 52-week high of $13.23 last February, before falling to a decade-low of $5.01 the month after.

Since then, the McMillian share price has gradually moved higher with a few bumps along the road.

In comparison to this time last year, McMillian shares are down 9.8%.

Based on the current McMillian share price, the company commands a market capitalisation of around $893 million.

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Motley Fool contributor Aaron Teboneras 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 National Australia Bank Ltd (ASX: NAB) share price is on watch today as the bank pushes further into the growing neobank sector.

Why is the NAB share price on watch today?

This morning, NAB announced it has entered into a scheme implementation agreement to acquire 100% of 86 400 Holdings Ltd shares. That is the holding company of Aussie neobank 86 400, of which NAB currently owns an 18.3% stake.

86 400’s growth has been impressive since being granted its authorised deposit-taking institution (ADI) licence in July 2019. As at 15 January this year, 86 400 had more than 85,000 customers and $375 million of deposits. The Aussie neobank has $270 million in approved residential mortgages and 2,500 accredited brokers.

The NAB share price is one to watch following the announcement, which signals the company’s strategic push towards expanding its presence in the neobank sector. The big four bank currently owns UBank, another leading neobank with more than 600,000 customers.

NAB announced UBank as a strategic priority in April 2020 as the company looks outside of its traditional banking products. NAB plans to accelerate UBank’s growth via this latest acquisition and potential synergies. That includes combining UBank’s customer base, brand and colleagues with 86 400’s experience and technology platform.

NAB expects total transaction costs of approximately $220 million with 86 400’s independent directors voting unanimously in favour of the scheme.

The 86 400 acquisition comes after fellow neobank Xinja handed back its banking license and returned money to its customers. Xinja was arguably a market leader but faced difficulties with bringing lending products to market while paying high rates to customers.

What about other ASX bank shares?

It’s not just the NAB share price that will be on watch today. Bendigo and Adelaide Bank Ltd (ASX: BEN) also has a large interest in the Aussie neobank market via its digital banking arm, Up.

Today’s announcement sees NAB pushing ahead with plans to take a stranglehold on the neobank market which means the Bendigo share price is worth keeping an eye on as well.

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Motley Fool contributor Ken Hall 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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