I think there are certain group of ASX income shares that are worth being in every dividend-seeker’s portfolio.

There were a couple of names that I nearly included like Rural Funds Group (ASX: RFF) and WAM Microcap Limited (ASX: WMI). However, their share prices have run hard over the past six months, so there may be some other names that I’d want to buy first.

It’s very hard to make any money from keeping cash in the bank at the moment. But I don’t think ASX blue chips are the safest place to generate income. I think these ASX income shares are worth buying for dividends:

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

I think Soul Patts is the best ASX dividend share in Australia. It has been listed since 1903. 

It has a diversified portfolio of different assets because it’s an investment house. It can invest anywhere and shift its portfolio to other growing areas over time. Some of the ASX shares that it owns a sizeable chunk of include: TPG Telecom Ltd (ASX: TPG), Australian Pharmaceutical Industries Ltd (ASX: API), New Hope Corporation Limited (ASX: NHC), Clover Corporation Limited (ASX: CLV), Bki Investment Co Ltd (ASX: BKI), Milton Corporation Limited (ASX: MLT), Palla Pharma Ltd (ASX: PAL) and Tuas Ltd (ASX: TUA).

The ASX income share also owns plenty of unlisted businesses in various sectors like swimming schools, resources, agriculture and financial services.

It receives a strong level of investment income from its portfolio each year. After paying for expenses, Soul Patts then pays out some of the remaining net cashflow as a growing dividend.

Soul Patts has actually increased its dividend every year since 2000 (including through the worst of COVID-19) which is the best record on the ASX. I like the defensive nature of Soul Patts, but it has also managed to outperform the index in the short-term and the long-term.

At the current Soul Patts share price it offers a grossed-up dividend yield of 3.3%.

Future Generation Investment Company Ltd (ASX: FGX)

Future Generation is another quality ASX income share.

It’s a listed investment company (LIC) which has investments across around 20 top fund managers that invest in ASX shares – those managers work for free so that Future Generation can donate 1% of its net assets to youth charities each year. There are no management fees or performance fees when it comes to Future Generation.

Its gross portfolio has outperformed the S&P/ASX 200 All Ordinaries Accumulation Index over the past month, six months, twelve months, three years, five years and since inception in September 2014. Over the past year Future Generation’s portfolio has outperformed by more than 10%.

The ASX income share can use its investment gains to pay a steadily-growing dividend, which it has done since 2015.

At the current Future Generation share price it offers a trailing grossed-up dividend yield of 6.3%.

Brickworks Limited (ASX: BKW)

Brickworks is primarily known as a building products business in Australia. It sells a variety of products like bricks, paving, masonry, roofing and precast.

It also has a strong market presence in the north east of the US after three targeted acquisitions. It’s now the market leader in places like New York. I think Brickworks is well placed to benefit when the US construction industry returns to normal operations after COVID-19.

Brickworks also has two other assets. It owns around 40% of Soul Patts and it also has a 50% stake of an industrial property trust alongside Goodman Group (ASX: GMG). Goodman is a high quality operator of industrial estates, one of the best in the world. The trust will soon have Amazon as a key tenant at a large distribution warehouse that it’s constructing.  

The building products business hasn’t cut its dividend for over 40 years. That’s very reliable. It’s one of the main reasons why I think Brickworks is must-have ASX income share.

It’s the above two assets’ cashflow which completely fund Brickworks’ dividend, it doesn’t need the building products divisions to do well every single year to keep growing the dividend.

At the current Brickworks share price it offers a grossed-up dividend yield of 4.4%. I think that’s a good starting yield.

More reading

• Why the Soul Patts (ASX:SOL) share price is up 25% in 2 months
• Is it time to go all in on ASX shares?
• 2 ASX shares I plan to hold til I’m 100
• 2 ASX dividend shares raising their dividends like clockwork
• Why Brickworks, Flight Centre, Whitehaven, & Zip shares are dropping lower

Tristan Harrison owns shares of FUTURE GEN FPO, RURALFUNDS STAPLED, WAM MICRO FPO, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Tuesday the S&P/ASX 200 Index (ASX: XJO) followed the lead of U.S. markets and dropped lower. The benchmark index fell 0.7% to 6,184.6 points.

Will the market be able to bounce back from this on Wednesday? Here are five things to watch:

ASX 200 expected to edge higher.

It looks set to be a better day of trade for the ASX 200 on Wednesday. According to the latest SPI futures, the ASX 200 is poised to open the day 2 points higher. This follows a strong night on Wall Street which in late trade sees the Dow Jones up 0.55%, the S&P 500 0.65% higher, and the Nasdaq climbing 0.5%. This follows comments by Nancy Pelosi that she is optimistic that a stimulus deal will be reached.

Oil prices rise.

Energy shares Oil Search Limited (ASX: OSH) and Santos Ltd (ASX: STO) could be on the rise today after oil prices pushed higher. According to Bloomberg, the WTI crude oil price is up 1.7% to US$41.51 a barrel and the Brent crude oil price is up 0.8% to US$42.96 a barrel. Stimulus hopes gave oil prices a lift.

Annual general meetings.

The annual general meetings continue on Wednesday with both Orora Ltd (ASX: ORA) and Service Stream Limited (ASX: SSM) scheduled to hold their virtual meetings. Both the packaging company and the essential network services company could provide trading updates at their respective meetings.

Gold price higher.

Gold miners Evolution Mining Ltd (ASX: EVN) and Saracen Mineral Holdings Limited (ASX: SAR) will be on watch after the gold price strengthened. According to CNBC, the spot gold price is up 0.15% to US$1,914.40 an ounce following a softening U.S. dollar and stimulus optimism.

CSL rated as a buy.

The CSL Limited (ASX: CSL) share price still has further to run according to analysts at Goldman Sachs. According to a note, the broker has retained its buy rating and lifted its price target on the biotherapeutics company’s shares to $329.00. This follows the company’s R&D day on Tuesday. Overall, it was pleased with its update and has increased its valuation in response to the products under development.

More reading

• CSL (ASX:CSL) share price and 2 other ASX stocks among latest broker “buy” ideas
• The ASX 200 slid 0.72% lower today
• Oil Search (ASX:OSH) share price flat on Q3 FY20 update
• Leading brokers name 3 ASX shares to sell today
• Is the ASX 200 trading too high right now?

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 CSL Ltd. The Motley Fool Australia has recommended Service Stream Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The CSL Limited (ASX:CSL) share price may not have been a star performer in the post COVID‐19 bounce, but that could soon change.

Shares in the blood products developer dipped nearly 3% since March when the pandemic rattled markets.

It’s performance is roughly inline with the S&P/ASX 200 Index (Index:^AXJO), although UBS reckons it could soon outperform.

Shot in the arm for CSL share price

The catalyst is the upcoming flu season in the northern hemisphere. The broker believes this year’s season will be worse than normal.

“As at 9 October, 139mn flu vaccine doses had been distributed for the US flu season, up 9% vs. pcp [previous corresponding period],” said UBS.

“CSL noted at their FY20 result they had increased supply into the US of up to ~60mn doses for the 20/21 season (up from ~50mn in pcp, i.e. +20%).”

Broker “buy” rating reaffirmed on positive outlook

It also looks like Europe and the UK are facing a colder than normal winter – perfect conditions for the flu.

The unpleasant experience from COVID-19 should also aid demand for flu jabs. People are more likely to get a shot while governments are increasing their health budgets to pay for flu and coronavirus vaccinations.

UBS reiterated its “buy” recommendation on CSL with a 12-month price target of $346 a share.

Unlocking value key to buy recommendation

The Downer EDI Limited (ASX: DOW) share price is another that could outperform in the near-term. Macquarie Group Ltd (ASX: MQG) believes a potential sale of Downer’s mining division will fetch a better than expected price.

The broker’s optimism is based on Cimic Group Ltd’s (ASX: CIM) divestment of Thiess. The transaction ascribes the business with an enterprise value of $4.3 billion, or 8.1 times forecast pre-tax profit.

If the same multiple was applied to Downer’s unwanted asset, the mining business could fetch up to $713 million. This compares to the net asset value of $599 million for the business that is recorded in Downer’s FY20 accounts.

Macquarie is keeping its “outperform” recommendation on the stock with a 12-month price target of $5.29 a share.

Strong September quarter supports broker’s “buy” call

Meanwhile, Citigroup repeated its “buy” recommendation on the South32 Ltd (ASX: S32) share price after the miner released its quarterly report.

South32 posted record hydrate production at Worsley Alumina. It also remains on track to increase alumina production to nameplate capacity in FY21.

Overall, Citi described the quarterly as a strong report with management sticking to its production forecasts for the current financial year.

South32 also restarted its on-market share buyback as its net cash position increased by US$70 million to US$368 million in the quarter.

Citi’s 12-month price target on the stock is $2.60 a share.

More reading

• The ASX 200 slid 0.72% lower today
• Is the ASX 200 trading too high right now?
• 3 things to tell someone who has never invested in ASX shares
• ASX 200 down 0.2%: Afterpay rockets on Westpac deal, Zip climbs, BHP’s Q1 update
• CSL (ASX:CSL) share price edges lower on annual R&D update

Brendon Lau owns shares of CSL Ltd., Macquarie Group Limited, and South32 Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Weebit Nano Ltd (ASX: WBT) share price has rocketed up by 24.5% today as interest continues to grow in this ASX technology share. Weebit is a developer of next generation memory technology for the global semiconductor industry. According to the company, it is pioneering a new technology in this field.

Weebit Nano argues that flash memory is not keeping up in the embedded market. This is where memory is combined with other elements on the same chip. Moreover, the company proposes this new technology as a better replacement.

What moved the Weebit share price?

The Weebit share price was on fire today with the company recently announcing positive progress in the development of its new resistive random-access-memory (ReRAM) product. This is a technology Weebit states is the equivalent of 1000 times faster than and requires around 1000 times lower power than flash memory. 

According to Weebit, some estimates of the flash memory market place it at over US$60 billion. It also maintains that the world’s storage requirements are doubling every two years. This is due to the increasing use of pictures and videos at a growing rate as well as the uptake of new, big-data and artificial intelligence applications.

Weebit recently announced it completed the stabilisation process for its ReRAM product, sending the Weebit share price up 17% on that day alone. This is a phase to verify that the production process is repeatable and consistent. In addition, the optimised integration showed excellent wafer-to-wafer reproducibility for various programming conditions, which means that different memory cells in different areas of a wafer and across different wafers in the batch present the same behaviour.

Management commentary

Coby Hanoch, CEO of Weebit Nano, said:

The successful completion of the stabilisation process follows four years of extensive research and development by the joint Weebit and Leti engineering teams, which has created a unique and highly competitive ReRAM technology. Our close collaboration with Leti will continue, as we constantly strive to improve and further optimise the technical parameters of our silicon oxide ReRAM.

In parallel to completing the stabilisation process which has reinforced the capabilities of our technology, we are moving closer to commercialisation, engaging in discussions with a production partner and working towards transferring our IP and achieving technology qualification in the partner’s fab.

Weebit company performance

Investor interest in the company’s technology and progress has been building over the 2020 calendar year. In year-to-date trading, the Weebit share price has rocketed up by nearly 198%. Indeed, it has blasted upwards by nearly 50% in the past 5 days alone. 

More reading

• Weebit Nano (ASX:WBT) share price rockets 17% up today. Here’s why.

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The BOD Australia Ltd (ASX: BDA) share price was shooting higher as the company launched its CBD (cannabidiol) product in the Netherlands. By the market’s close, the BOD share price was trading 7.69% higher at 56 cents.

The Australian micro-cap has been on an impressive run as of late, gaining 75% so far this year.

What BOD does

BOD is a vertically integrated (loosely meaning it does everything itself) distributor of plant-based natural health supplements and beauty solutions. BOD partnered with Australian vitamin giant Swisse in July last year.

The company has a cannabis business and is developing a range of over the counter and therapeutic products based on certified cannabis extracts.

Product launch

The BOD share price was flying today as the company announced it has launched its four new CBD products in the Netherlands. The products were released under recognised Australian vitamin and skincare brand Swisse Wellness.

The CBD products are in soft, gel-cap form and are designed to target specific need states including immune function and joint mobility.

The entry into the Netherlands marks the third major market entry for BOD consumer CBD products. The cannabis producer currently has sales channels established in Australia, the United Kingdom and the Netherlands. Furthermore, BOD is planning more expansion into the European market which is estimated to be worth upwards of 450 million euros.

CEO of the company, Jo Patterson, was pleased as she said:

Together with H&H, we have now collaboratively launched Swisse-products into three major markets in a very short space of time and the Company is confident that our highquality CBD products will be well received by consumers to address a range of mainstream need states.

What now for the BOD share price?

The BOD share price rose almost 8% today on the back of the impressive announcement. However, according to the release, there could be more news in store for holders of the cannabis company’s shares.

This is because BOD also disclosed it is now focused on progressing its United States market entry, with the first binding purchase orders for products expected later this quarter.

More reading

• Why the Weebit (ASX:WBT) share price soared 24% Tuesday
• Centuria Capital (ASX:CNI) delivering on FY21 strategy
• Zip (ASX:Z1P) announces major payments expansion with Tap & Zip
• Apiam (ASX:AHX) share price soars 12% on strong Q1 update
• McPherson’s (ASX:MCP) share price on watch on Wednesday after Q1 update

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Centuria Capital Group (ASX: CNI) reported solid FY20 results in August, despite exposure to bushfires, floods and the impacts of COVID-19. Today it released its annual report demonstrating it was starting to deliver on its FY21 strategy. Centuria is a real estate funds management company that provides listed and unlisted investment options. During FY20, the company increased its assets under management (AUM) by an impressive 52% over FY19. It also managed to increase operating net profits after tax by 16.6%.

Highlights of FY20 results

One of the most significant points highlighted in Centuria’s FY20 results was the growth in the company’s AUM. This was partially due to the company’s acquisition of Augusta Capital Limited of New Zealand. Other asset acquisitions were in industrial and office properties. These included two Arnott’s distribution centre assets, and a Telstra Corporation Ltd (ASX: TLS) data centre on a buy and leaseback arrangement.  

Australia’s largest pure play listed office real estate investment trust (REIT) is the Centuria Office REIT (ASX: COF). During FY20, this fund expanded its portfolio with $637 million of acquisitions. In addition, government and ASX listed tenants provided approximately 80% of the portfolio’s income, supporting the FY20 results.

Likewise, the Centuria Industrial REIT (ASX: CIP) is Australia’s largest domestic, pure play listed industrial REIT. This fund expanded its portfolio with over $300 million of acquisitions in FY20. Approximately 52% of the portfolio’s income is from tenants directly linked to the production, packaging and distribution of consumer staples.

What’s next?

Centuria has set about commencing the new financial year strongly. Notable FY21 activity to date includes $0.7 billion in real estate acquisitions, launch of the Centuria Healthcare Property Fund, and the launch of the Augusta Property Fund with $55 million in seed assets. In addition, the company has provided FY21 operating earnings per share (EPS) guidance of 10.50 to 11.50 cents per share (cps) and distribution guidance of 8.50 cps. Centuria retains a strong operating balance sheet with cash on hand of $149.5 million as at 30 June 2020, some of which has since been used for the takeover bid for Augusta Capital Limited.

Joint CEO’s John McBain and Jason Huljich commented:

Additionally, we have implemented technology to future proof our business. We recently launched our “VISION 2020” property management and finance software platform providing an integrated solution that will provide efficiency and scalability for the future.

Centuria share price performance

The Centuria share price is up 4.95% in year-to-date trading, and is currently trading at a price-to-earnings (P/E) ratio of 19.17 on today’s earnings report. It has a current trailing 12-months dividend yield of 4.21%.  

More reading

• Looking to invest in ASX real estate shares? Read this first
• With even Kogan (ASX:KGN) eyeing a return to the office, where next to invest?
• Could industrial REITs be the best ASX shares to buy for dividends?
• Centuria Capital’s fund managers’ insights on A-REITs and unlisted property funds
• 1 ASX share to ride the viral logistics boom

Motley Fool contributor Daryl Mather owns shares of Centuria Office REIT. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Zip Co Ltd (ASX: Z1P) share price was up 3.5% in early morning trading before turning around in the afternoon to close 0.7% lower.  

This came after the company’s progress report, released today, revealed a major expansion to its buy now, pay later (BNPL) services – Tap & Zip.

Despite today’s retracement, the Zip share price is up 101% since 2 January.

By comparison the S&P/ASX 200 Index (ASX: XJO) is down 6% year to date.

Why will Tap & Zip open up a much larger market?

Founded with the intent to disrupt the traditional credit card industry, Zip’s latest offering, Tap & Zip, now looks set to also disrupt the ‘traditional’ BNPL industry.

Tap & Zip is powered by the company’s partnerships with Visa Inc (NYSE: V) and Marqeta, the world’s first open API modern card issuing platform.

Commencing today, you’ll be able to pay for your online or in-store purchases with Zip anywhere in Australia that accepts Visa payments online and Visa contactless payments in store.

To give you an idea of the potential growth here, according to RFI Research, until today only 13% of Australian stores have been able to accept BNPL options. The vast majority offer contactless Visa payment terminals.

Contactless payments arrived in Australia in 2006. Since then, consumers have increasingly embraced the touch-free option over cash or entering their PIN. A trend that’s accelerated since the outbreak of the global pandemic.

Staying with the growth outlook, Zip reports that (until today) only 24% of its transactions have been occurring in brick and mortar stores. That compares to 87% of broader Australian retail transactions made in store.

Beyond being able to use Zip anywhere that accepts Visa, from today Zip customers can also use Apple Inc‘s (NASDAQ: AAPL) Apple Pay and Alphabet Inc‘s (NASDAQ: GOOGL) Google Pay.

Zip’s Co-founder and CEO, Larry Diamond said that Tap & Zip, “completely changes the game, enabling Zip to compete with the credit card at every checkout in Australia.”

He added, “Tap & Zip marks the future of BNPL: flexible and transparent payment options that are accepted everywhere.”

Our chat with Zip’s Chief Commercial Officer, Hamish Moline

Earlier today, the Motley Fool had a chance to catch up with Zip’s Chief Commercial Officer, Hamish Moline for his insights on the wider impact of the new Tap & Zip.

Moline said:

Buy now pay later continues to grow strongly, which is great news for all of us. Our focus is really on the untapped in-store opportunity. Only 24% of our transactions are in-store today, so there’s a huge opportunity for us to move in and make sure that Zip becomes the first payment choice. Obviously, we want that every day and everywhere, and Tap & Zip is designed to really drive that.

With Tap & Zip backed by Visa, we wondered what type of impact this might have on traditional credit card companies.

Moline commented:

We are an alternate to traditional credit cards. And we have 2.2 million customers now. 49% of them are Millennials and 59% say they don’t have a credit card. We’re seeing a whole new category of customer who want more flexible interest rate options. For us it’s about tapping that market and giving them what they need.

Credit card companies are certainly now looking at the buy now pay later space. And you’ve seen some of them do things similar to Zip. We’re proud of the fact that we’re a pioneer here, that we’ve created a model of more flexible interest free products. So we want to continue to grow our base from where it is today.

Hamish Moline also hopes the new Tap & Zip rollout will help give some of Australia’s stressed retailers a hand.

There are lots of businesses who don’t currently accept buy now pay later who have struggled through COVID. And as people get back to the shops, particularly towards the next trading period going into Christmas, we hope our consumers will shop at new merchants that haven’t seen the benefit of buy now pay later yet.

When Zip’s brand is available it increases sales 20% from our customers, and it increases the conversion rate and basket size for our merchants.

Moline was obviously reluctant to speculate on the impact Tap & Zip may have on the company’s future revenue stream. He did say:

Tap & Zip is just one of the new ways our consumers can now shop and it really opens up a whole bunch of new merchant categories for us, particularly around every day spending like groceries and fuel and other areas. Our customers have been asking us for a long time to increase the number of merchants that we transact at.

We offer a number of products. Zip Pay is one Zip Money is another; we have online and in-store. And we continue to have QR and barcode on top of Tap & Zip. For us this is about really driving consumer engagement and activation, while continuing to help our merchants by increasing their conversion rates and basket sizes.

Zip already has a strong presence in the United States, with more than 2.1 million customers. Asked about the company’s future market expansion plans, Moline told us:

We’re doubling down on the US, where we already have tap and pay. And we’ll be launching more aggressively in the UK. We’re also looking at a number of other markets that might be good for buy now pay later.

Finally, we wanted to know if Zip is concerned about the potential of rising customer defaults as government support measures, such as JobSeeker and JobKeeper, get wound down into 2021.

Moline commented:

One of the things we pride ourselves on is our responsible lending. We do credit checks and ID checks for all of our customers, regardless of product. We saw a spike in some of the hardship during the start of COVID, to 1,200 or so individuals. That’s declined since then to about 600. We’ll keep an eye on that. But given the way in which we scale up our loan book to our customers we’re quite comfortable with where we are today.

With the Zip share price more than doubling so far in 2020, and up an eye-popping 478% since the 23 March lows, this is one BNPL share we’ll be keeping a sharp eye on.

More reading

• The ASX 200 slid 0.72% lower today
• Leading brokers name 3 ASX shares to sell today
• Douugh and Afterpay were among the most traded shares on the ASX last week
• ASX 200 down 0.2%: Afterpay rockets on Westpac deal, Zip climbs, BHP’s Q1 update
• 3 ASX 200 shares hit with broker downgrades

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Bernd Struben 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 Alphabet (A shares), Apple, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has recommended Alphabet (A shares) and Apple. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Apiam Animal Health Ltd (ASX: AHX) share price is soaring today following the release of a positive Q1 update.

The animal health company’s shares broke its share price record today, up 12% at a high of 70 cents at close of trade. The robust quarterly performance represents a 52-week high share price for Apiam.

Continued momentum

Apiam reported that momentum has continued on from the strong results achieved in the second-half of FY20.

For the period ending 30 September, the company recorded revenue of $29.6 million, an increase of 14% on Q1 FY20. Gross profit also grew to $16.6 million, up 21.2%.

This was supported by a robust performance in its companion animal and dairy segment, as well as its pig segment. The surge in demand offset a fall in revenue from its feedlot services. Apiam said fewer cattle were on feed compared to the comparative period due to higher feeder cattle prices.

Underlying conditions in the company’s regional areas also improved due to the recent rainfall. This led Apiam to focus on its growth strategy which saw new implementations of business initiatives. Launching the ProDairy consultancy program, and Best Mates program delivered organic growth through new customer acquisitions.

Management advised Apiam is generating operating cost efficiencies and leverage, and expects a strong second-half to FY21.

COVID-19 impact

As COVID-19 related lockdowns have restricted movement, Apiam said it has had a bumper six months in its animal business. The contributing reasons were stated as people have further time on their hands and in-turn were seeking companionship.

The favourable conditions allowed the company to launch its Best Mates annual subscription, which grew 64% in its membership base. The program covers unlimited health checks cover for animals among other services.

Apiam managing director, Chris Richards commented on pet ownership. He said:

We’re seeing a trend towards pets being more a part of the family and treated as such. This has been a trend we have been observing in regional areas for some time, where traditionally it was more of a trend we saw in the cities. It is now more widespread with regional communities willing to invest more in the health and wellbeing of their companion animals.

In addition to the program, Best Mates has recently launched a TV advertising campaign to promote its services. The advertisement is being shown across regional towns in Victoria and southern New South Wales.

More reading

• McPherson’s (ASX:MCP) share price on watch on Wednesday after Q1 update
• The ASX 200 slid 0.72% lower today
• Up 20% today, what’s driving the 8VI (ASX:8VI) share price?
• Where to invest your first $500 into ASX shares today
• Why the Sunland (ASX:SDG) share price rocketed 50% higher today

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The McPherson’s Ltd (ASX: MCP) share price will be one to watch on Wednesday after the release of its first quarter update after the market close.

How did McPherson’s perform in the first quarter?

The health, wellness and beauty products company has started the year in a positive fashion.

According to the release, for the three months ended 30 September, McPherson’s sales revenue was up 4% on the prior corresponding period to $49.7 million.

This was underpinned by 8% growth in sales revenue from owned brands to $41.7 million. Management notes that its category market share grew in 4 out of 6 core brands and its China sales were strong thanks to its ABM partnership model.

Things were even better for its earnings, with McPherson’s reporting an 84% lift in underlying profit before tax to $2.9 million. However, it is worth noting that this does not include a hefty $5.7 million non-recurring full provision for the write down of its hand sanitiser inventory.

Management advised that delays in the supply of hand sanitiser products led to a customer cancelling the majority of its orders. This left it with a significant quantity of product.

Since then, demand has dissipated and the supply base for such products has become much more competitive. As a result, the company is currently holding excess quantities of hand sanitiser inventory.

This could be bad news for Zoono Group Ltd (ASX: ZNO), which was profiting greatly from increased demand at the height of the pandemic. But judging by this update, it appears that the market is now saturated.

McPherson’s Chief Executive Officer and Managing Director, Laurence McAllister, was disappointed with the provision but pleased with the overall quarter. Especially given how this is traditionally the company’s weakest.

He commented: “While we are very disappointed with the nonrecurring provision to fully write down legacy hand sanitiser inventory, our core business has made a strong start to FY21.”

“The strong growth in sales from our owned brands in the midst of the disrupted COVID-19 trading environment confirms the market strength and resilience of our brand portfolio. This top line growth in combination with improved contribution margins across the majority of our brands has generated a very strong lift in first quarter FY21 profitability from our core business, noting that the first quarter of our financial year is our seasonally lowest in terms of profitability,” he added.

Outlook.

McPherson’s is one of just a handful of companies which has stuck its neck out and provided guidance for the full year.

It has forecast first half underlying FY 2021 profit before tax growth in the range of 20% to 30% and full year underlying FY 2021 profit before tax growth in the range of 5% to 10%.

Management notes that its guidance takes into account the cycling of strong COVID-19 demand from the second half of FY 2020.

In addition to this, the company’s dividend policy remains in place. It intends to pay out a minimum dividend of 60% of underlying profit after tax, subject to cash requirements.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post McPherson’s (ASX:MCP) share price on watch on Wednesday after Q1 update appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) finished lower today by 0.7% to 6,185 points after sliding downwards during the afternoon.

Here are some of the main highlights from the ASX:

Afterpay Ltd (ASX: APT)

The leading buy now, pay later (BNPL) business announced today that it is linking up with Westpac Banking Corp (ASX: WBC) to offer savings accounts.

The two financial businesses have signed a collaboration agreement to introduce Afterpay savings accounts and cashflow tools. It is being facilitated by Westpac’s new digital banking as a service platform which will offer additional, customer-centric alternatives to traditional banking products.

Afterpay customers will be able to use their new savings account to conduct the majority of their money management activities, including paying bills, withdrawing cash and budgeting. Further services and tools will be introduced over time for customers.

The BNPL company said that linking the new services to a user’s existing Afterpay account will deliver further insight into how customers prefer to manage their finances, what their savings goals are, and how responsible spending behaviour can be further encouraged and rewarded. These insights are aimed to deliver a more tailored user experience and more mutually beneficial consumer and retailer connections.

Afterpay CEO and managing director Anthony Eisen said: “The introduction of savings accounts and budgeting tools offers new customer benefits that continue to build on our core principle of encouraging responsible spending and enabling financial wellness.

“In deepening our relationship with our customers we will gather greater insights into how they prefer to manage their finances and better understand their savings goals. This will allow us to assist them to budget more effectively and avoid debt traps.”

The Afterpay share price shot higher by 4.5%, though it was up to $105.20 earlier in the day. It was one of the top performers in the ASX 200. 

Zip Co Ltd (ASX: Z1P)

Zip announced today the launch of ‘Tap & Zip’. This is a new product that will allow customers to use Zip Pay users to shop anywhere that accepts Visa.

The move will see Zip expand into more every expenditure categories and management are excited about the significant instore payments opportunity. Zip said that just 13% of stores in Australia are able to accept buy now, pay later options. Management believe that this new product addresses this significant customer need.

For customers, Zip said it will mean that they can use Zip Pay to shop everywhere and pay later, always interest-free. For merchants it will mean greater access to new customers, bigger basket values and increased sales volumes.

Zip’s co-founder and CEO, Larry Diamond, said: “BNPL has seen phenomenal growth over the last few years, as customers switched traditional forms of credit for flexible, digital alternatives. However, until now that growth as been restricted by a clunky instore checkout experience and limited acceptance.

“We continuously hear from Zip customers that they want to use their digital wallet to pay for everyday purchases like groceries and petrol, or to buy products and services from merchants that don’t accept BNPL.”

Zip has been granted a principal issuer licence from Visa. Zip will earn interchange revenue on transaction volume processed on its cards.

The BNPL business also announced today that Zip customers can use Apple Pay and Google Pay.

The Zip share price went as high as $7.42 in reaction to this news, though it finished down by 0.2% to $7.07.

Cochlear Limited (ASX: COH)

The ASX 200 hearing device business released its first quarter trading update today.

It said that cochlear implant revenue (in constant currency) was 94% of the first quarter of last year. Unit volumes declined by 14% with developed markets growing by low single digits while emerging markets were down around 40%.

Cochlear also said that services revenue continues continue with first quarter revenue (in constant currency) at around 86% of the level of the first quarter of last year.

Acoustics revenue in constant currency for the first FY21 quarter was around 89% of the first quarter last year. There was a “strong” uptake of the Osia 2 system in the US and there has been a resumption of acoustics surgeries in the UK.

The Cochlear share price rose by 2.3% in reaction to this update.

More reading

• Leading brokers name 3 ASX shares to sell today
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• Douugh and Afterpay were among the most traded shares on the ASX last week
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• ASX 200 down 0.2%: Afterpay rockets on Westpac deal, Zip climbs, BHP’s Q1 update

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Cochlear Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post The ASX 200 slid 0.72% lower today appeared first on Motley Fool Australia.

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