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The BrainChip Holdings Ltd (ASX: BRN) share price has been a strong performer on Thursday.

In morning trade the artificial intelligence technology company’s shares are up 8% to 37.3 cents.

Why is the BrainChip share price zooming higher?

Investors have been buying the company’s shares this morning after it provided an update on the development of its Akida Neuromorphic System-on-Chip. (NSoC).

According to the release, BrainChip confirms that the Register-Transfer Level (RTL) design has been completed and transferred to its manufacturing partner, Socionext America.

Socionext America will now complete the physical design of the device and all related engineering tasks required. After which, it will transfer the full device files to Taiwan Semiconductor Manufacturing Company (TSMC) for mask creation and wafer fabrication.

Following this, the mask set will be utilised to manufacture production wafers as well as support qualification testing and parametric testing of the Akida device.

“A major milestone”.

BrainChip’s CEO, Louis DiNardo, believes this is a major milestone for the company.

He commented: “The Akida device design will be transferred to TSMC for use in manufacturing production wafers in support of potential customer requirement in 2021 and beyond. This is a major milestone for the Company as we move to commercialize the Akida NSoC.”

“Our chosen markets in Smart Home, Smart Transportation, Smart Medical and Smart City include some of the most discriminating customers in the electronics industry. Through our partnership with SNA [Socionext America] and TSMC we have world-class resources and expect to have a robust Integrated Circuit (IC) that suits their requirements for both performance and reliability,” he added.

What is Akida?

The company believes that Akida brings artificial intelligence to “the edge” in a way that existing technologies are not capable.

In respect to artificial intelligence, the edge is where algorithms are processed locally on a hardware device, without requiring any connection.

Management claims Akida has a high-performance, small, ultra-low power, and enables a wide array of edge capabilities.

This includes its use in applications such as Smart Home, Smart Health, Smart City and Smart Transportation. The company explained that these applications “include but are not limited to home automation and remote controls, industrial IoT, robotics, security cameras, sensors, unmanned aircraft, autonomous vehicles, medical instruments, object detection, sound detection, odor and taste detection, gesture control and cybersecurity.”

More reading

• Will the Afterpay (ASX:APT) share price hit new highs?
• WiseTech (ASX:WTC) share price steady after earnings guidance
• Kogan (ASX:KGN) share price storms higher on $122m Mighty Ape acquisition
• Facebook just spent $1 billion to monetize messaging
• Splitit (ASX:SPT) share price lower despite record November performance

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.

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Like the Energizer Bunny, the Afterpay Ltd (ASX: APT) share price just keeps going and going… higher and higher.

The company’s shares hit an all-time closing high of $104.53 per share on 9 November. Since then, the Afterpay share price has slipped 6.75% to $97.47 at the time of writing. Still, that represents a phenomenal 218% gain year to date.

By comparison the broader S&P/ASX 200 Index (ASX: XJO) is down 0.98% so far in 2020.

With such a stellar performance already in hand for the year, can the Afterpay share price keep going and going?

Based on the company’s latest announcement, it certainly seems possible. The update, released after the market closed yesterday, revealed a new sales milestone for the month of November.

What did Afterpay announce?

Afterpay revealed in a market update last night that its global underlying sales in November reached $2.1 billion. That’s up 112% from the $1 billion reported in November 2019.

Buy now, pay later (BNPL) sales were buoyed by big spending across the Black Friday and Cyber Monday weekend.

The company reported that its United States market reached the highest level of monthly underlying sales ever across all the regions it covers. US consumers purchased $1 billion of goods and services on the company’s BNPL platform.

With sales in the US growing 186% year on year, November marked the first month that underlying sales in the US were more than the ANZ region. ANZ spending came in at $900 million, up 54% from November 2019, and also setting a new record for the region.

In fact, Afterpay reported that every region it operates in recorded new monthly underlying sales records in November.

The company’s United Kingdom market saw the fastest growth, with November’s $200 million in underlying sales 315% higher year on year. The number of UK merchants on its platform also leapt 800% over the year.

What does Afterpay do?

Afterpay is a leader in the BNPL space. The company’s payment platform allows people to buy and receive goods and spread the cost of their purchase out over equal payments, without any interest fees.

The company was founded in 2015. The Afterpay share price first began trading on the ASX in June 2017. The company now operates in Australia, the US and the UK, with current expansion plans into the wider European market.

With November’s strong sales growth figures in mind, it will be interesting to see how the Afterpay share price performs moving forward.

More reading

• These ASX shares are growing rapidly in FY 2021
• Why the Afterpay (ASX:APT) share price continues to dominate
• 5 things to watch on the ASX 200 on Wednesday
• Why healthcare, tech and consumer staples shares underperformed the ASX 200 in November
• Why the Afterpay (ASX:APT) share price and these ASX stocks could get a boost next week

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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 WiseTech Global Ltd (ASX: WTC) share price is holding steady after it announced that its earnings forecast for FY21 is largely intact, providing the same level of guidance that it did in August.

In early morning session, the WiseTech share price is trading at $30.95, up slightly by 0.36%.

WiseTech’s FY21 guidance

WiseTech advised that its full year revenue for FY21 would be $470 million to $510 million, representing growth of 9% to 19% from prior year. This is the same level it had previously forecast during its August guidance.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) will be $155 million to $180 million, a growth of 22% to 42%.

WiseTech’s supply management software CargoWise will contribute a recurring revenue market share growth of 15%-30% as a result of large customer roll-outs and new customer wins.

The company says its acquisitions are now completed, and their full year contribution is expected to be $12 million.

The company will also make cost reduction of $10 million in FY21, and expects this to be in the range of $20-$30 million in FY22.

More about WiseTech

WiseTech develops cloud-based software solutions for the international and domestic logistics industries, and has more than 12,000 customers using its software across 150 countries.

The company is part of the so-called WAAAX, a group of Australia’s fastest growing technology companies. Including WiseTech, the WAAAX companies are Afterpay Ltd (ASX: APT), Altium Limited (ASX: ALU), Appen Ltd (ASX: APX), and Xero Limited (ASX: XRO).

More recently, WiseTech struck a partnership with the payment specialist company OFX Group Ltd (ASX: OFX). Under the partnership, WiseTech’s supply chain software company will use OFX as its preferred provider for international payments.

How did the WiseTech share price perform in 2020

For the 12 months ended 30 June, WiseTech delivered a 23% increase in revenue to $429.4 million. This was driven by a combination of acquisitions and its core CargoWise offering. CargoWise recorded revenue of $263 million, up 20% on FY 2019.

The WiseTech share price has increased by more than 30% in 2020, reflecting its strong performance during the year. At the current market price, the company commands a market value of almost $10 billion. 

More reading

• ASX 200 drops 0.5%: Treasury Wine sinks, Zip flat after AGM update, Bega Cheese rises
• ASX 200 falls on Thursday
• ASX 200 flat: Bega Cheese announces major acquisition, WiseTech reaffirms guidance
• Why the WiseTech Global (ASX:WTC) share price is climbing higher today
• 5 things to watch on the ASX 200 on Thursday

Eddy Sunarto 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 Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd and Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO and WiseTech Global. 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 Kogan.com Ltd (ASX: KGN) share price is storming higher on Thursday after announcing a new acquisition.

At the time of writing, the ecommerce company’s shares are up 5% to $16.93.

What did Kogan announce?

This morning Kogan announced that it has acquired 100% of the issued capital of leading New Zealand-based online retailer Mighty Ape for A$122.4 million.

This is payable over four tranches and subject to earn outs through to the delivery of its FY 2023 financial results.

According to the release, Mighty Ape operates online stores in New Zealand and Australia and has a focus on gaming, toys, and other entertainment categories. It has more than 690,000 unique customers and more than 895,000 subscribers.

It also has a reputation for fast delivery and excellent customer service. Management notes that this is demonstrated by Mighty Ape achieving Kantar’s highest rank among retailers in New Zealand for customer experience.

Financials.

Based on unaudited management accounts, for the 12 months ended 30 September, Mighty Ape generated revenue of A$120.1 million, gross profit of A$37.8 million, and EBITDA of A$9.9 million.

For the full year FY 2021, which ends 31 March 2021, Mighty Ape is forecast to generate revenue of A$137.7 million, gross profit of A$45.7 million, and EBITDA of A$14.3 million. This represents year on year growth of 43.7%, 58.1% and, 254.1%, respectively.

It is also worth noting that this excludes any potential benefits from synergies that may be available as a result of this acquisition.

Why is Kogan acquiring Mighty Ape?

Management believes Mighty Ape represents a highly complementary acquisition.

It notes that it combines two market leaders, enables Mighty Ape to build on its strong customer offering, and provides the infrastructure and expertise for Mighty Ape to further scale. Significant synergies are also likely to be available across numerous areas of the business.

Kogan.com’s COO and CFO, David Shafer, commented: “We are pleased to be bringing the iconic Mighty Ape into the Kogan Group, and are delighted to be welcoming Simon Barton and his team. We are a natural home for Mighty Ape, given similar histories and shared values — most importantly our obsession with delighting customers, and continually improving the online shopping experience. Mighty Ape has more than a decade of experience and track record of delighting Kiwi customers, and has become one of New Zealand’s most trusted brands.”

“Mighty Ape will give us significant scale in New Zealand and further strength across a variety of operational dimensions. We will be drawing on Mighty Ape’s deep experience in gaming, toys, other entertainment product categories and the New Zealand market, and combining this experience with Kogan.com’s sourcing, technology, systems, infrastructure, and marketplace capabilities, to further enhance the group’s already market-leading offering across the Tasman,” he added.

More reading

• After a record November, what’s next for ASX 200 shares?
• Why the Afterpay (ASX:APT) share price and these ASX stocks could get a boost next week
• Kogan (ASX:KGN) share price falls on option grants to top execs
• 3 ASX shares growing the dividend rapidly
• 4 ASX growth shares to buy in December

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 Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com 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.

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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.

Facebook Inc (NASDAQ: FB) has been taking small steps toward monetizing its messenger properties for years with the aim of providing tools to connect businesses to customers. It’s adding a new tool to the box with the acquisition of Kustomer, a customer relationship management software start-up. Facebook will pay about $1 billion, according to The Wall Street Journal.

With 200 million businesses using various tools offered by Facebook every month, there’s a massive opportunity to grow Kustomer and offer more monetized customer relationship tools to businesses.

Monetizing messaging

Facebook’s best effort to monetize its messaging apps has been through its WhatsApp Business. The app has quickly amassed 50 million users and has potential for a lot more. The app is mainly monetized through an API that allows other applications, like Kustomer, to connect with the WhatsApp messaging system. 

Kustomer takes that effort a step further by helping customer service teams manage their entire customer relationship across multiple social media platforms and communication channels. Facebook plans to continue supporting all communication channels on Kustomer.

Facebook’s other efforts to monetize messaging are less direct. It’s building more and more social commerce tools, including catalogs and payments in WhatsApp and Facebook Shops. Those tools position Facebook to do everything for a business from customer acquisition to sale, and with the addition of Kustomer, it can foster those customer relationships providing customer support and producing repeat sales.

“We want businesses of all sizes and across all industries to discover the value of messaging,” Dan Levy, VP of Ads and Business Products, and Matt Idema, COO, WhatsApp wrote in a press release. To that end, Facebook has a long way to go. It says 175 million users contact companies through WhatsApp daily. But WhatsApp has over 2 billion monthly active users. Meanwhile, WhatsApp Business’s 50 million users represent a tiny portion of the 200 million businesses across Facebook’s platforms.

The more reasons and ways Facebook can provide businesses to connect with customers on messaging, the more adoption it will see. And some of those tools will invariably present themselves with monetization potential.

The bigger business at Facebook

Monetizing messaging directly isn’t the endgame for Facebook. Giving businesses a reason to use WhatsApp, Messenger, or Instagram is part of a strategy to grow businesses’ engagement across all of their properties. Being able to support the entire customer journey from discovery to sale and then managing the customer relationship will likely lead to greater interest in Facebook’s bread and butter: advertising.

Facebook’s advertising business brought in $21.2 billion in the third quarter, up 22% year over year. Growth has been slowing, however, and not just because of the secular headwinds created by the coronavirus pandemic or because of the advertiser boycott it faced in July. Facebook has maxed out the ad load in its feed products on Facebook and Instagram, and it’s seeing time spent shift to its Stories products, which carry lower ad loads and lower ad prices.

For Facebook to accelerate its ad revenue growth again, it needs to produce more value per ad impression. And it’s done an excellent job providing the tools to businesses to do that. Facebook Shops, for example, is a great tool to improve sales conversions. Meanwhile, Facebook continually improves its targeting and measurement capabilities so marketers can tweak their audience and creatives for maximum effect.

Kustomer is another way for Facebook to sell businesses on the value of starting and managing customer relationships on Facebook, feeding the value of its ad impressions. If the tech company can also sell it as a service and grow the number of paying WhatsApp Business API users, that’s gravy.

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

More reading

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• How the biggest companies are the worst investments
• 10 most searched shares in Australia
• I have too many tech shares: Do I sell, buy or hold?
• It’s official: Like it or not, millions will own Tesla stock soon

Adam Levy owns shares of Facebook. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Facebook. The Motley Fool Australia has recommended Facebook. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Splitit Ltd (ASX: SPT) share price is dropping lower on Thursday after the release of a trading update.

In early trade the buy now pay later provider’s shares are down 1% to $1.30.

How is Splitit performing?

As with rivals Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P), Splitit performed strongly in November.

According to the release, Splitit achieved record merchant sales volume (MSV) during the Black Friday and Cyber Monday promotional period.

Over the holiday shopping event, the company reported MSV of US$15.3 million. This was an increase of 216% on the same period a year earlier.

This strong finish to the month led to the company reporting year-on-year November MSV growth of 255%.

Unlike Afterpay, which has a reasonably modest average order size, Splitit is being used for higher value items. Management notes that its average order value (AOV) remains above $1,000.

It advised that shoppers are taking advantage of the holiday shopping period to invest in their home and health, using Splitit to make purchases on their credit cards for important items and pay over time.

The company revealed that verticals with the highest volumes over the shopping week include Home, Fitness & Outdoor, and Jewellery & Accessories. The latter had an AOV of ~US$5K, driven by the purchase of diamonds and watches.

Splitit’s CEO, Brad Paterson, commented: “We were delighted to see such exceptional activity this past week. This speaks to the significant need in the market for merchants to offer flexible payment solutions to shoppers. Never has it been more important in retail that shoppers can manage their cash flow without incurring new debt, and we’re proud to partner with so many forward looking eCommerce businesses.”

“We’ve also observed, both through the exceptional November period and via a recent shopper survey, that this holiday shopping event is expanding into a shopping season. Our survey told us 48% of US shoppers who purchased an item made their purchase in the week leading up to Black Friday,” he added.

Customer numbers increase.

Splitit’s total shoppers have now surpassed 410,000 with 48,000 new shoppers added over October and November. Management believes this reflects the growing acceptance of Splitit.

This growth was supported by the company’s recent marketing campaign targeting US consumers.

Splitit has also seen the number of total merchants grow. It now has more than 1,600 on its platform, up 20% over the same two-month period.

This merchant growth is partly due to the company’s recently launched self-onboarding platform, powered by its partnership with Stripe Connect. This allows merchants to start using the Splitit platform in a matter of minutes.

More reading

• Why the Afterpay (ASX:APT) share price continues to dominate
• Is buy now, pay later (BNPL) giving Aussies a headache?

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. 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 Westpac Banking Corp (ASX: WBC) share price is edging lower on Thursday following the release of an announcement.

At the time of writing, the banking giant’s shares are down slightly to $20.25.

What did Westpac announce?

This morning Westpac announced that it has entered into an enforceable undertaking with the Australian Prudential Regulation Authority (APRA) in relation to risk governance remediation.

This follows the recent receipt of APRA’s review of risk governance which identified Westpac as having an “immature and reactive risk culture, unclear accountabilities, capability shortfalls and inadequate oversight.”

Westpac’s CEO, Peter King, has acknowledged that significant work is required to address the bank’s shortcomings and is determined to deliver on its risk remediation activities.

He commented: “My top priority is to ensure the bank’s risk culture and management of risk meet the high standards expected of us. We have had constructive discussions with APRA and know we have to deliver a disciplined step change in our management of financial and non-financial risk. While we have made progress in improving our standards, we have much more work to do, and this must be done at pace.”

What is the enforceable undertaking?

The enforceable undertaking includes an integrated remediation plan.

Westpac will develop a plan which describes all major remediation activities related to risk governance. It will also set a clear timeline for implementation and specifies who is accountable for delivery.

The bank will have to submit this plan in writing to APRA within 90 days from the commencement of the enforceable undertaking.

Westpac will also have to provide sufficient funding and resources to implement the plan and establish appropriate governance arrangements.

The enforceable undertaking also requires Westpac to make regular reports. This will see an independent reviewer provide APRA with updates on the effectiveness of the integrated plan within 15 business days from the end of each quarter.

Finally, Westpac will be required to provide clarity on accountability. It will incorporate accountability for the delivery of the integrated plan into relevant Banking Executive Accountability Regime statements and remuneration scorecards.

More reading

• ASX 200 flat on Wednesday
• ASX 200 down 0.2%: Zip’s November update, Mesoblast jumps, Westpac’s asset sale
• Westpac (ASX:WBC) share price edges higher on $725 million general insurance sale
• Banks rejoice: House prices to return to 2019 levels
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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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Australian unicorn Nuix Limited (ASX: NXL) will list on the ASX on Friday, making more than $1 billion for majority investor Macquarie Group Ltd (ASX: MQG).

Nuix makes analytics software that serves big government and law enforcement agencies. The Sydney company’s flagship product is an unstructured data processor named the Nuix Engine.

The software was even used to process 11.5 million documents during the famous Panama Papers investigation in 2016.

Investors have thus anticipated the float for several years now. 

This year’s blockbuster listing of similarly mysterious US analytics provider Palantir Technologies Inc (NYSE: PLTR) has pumped up the hype for Nuix even more.

Palantir shares floated in October with a reference price of US$7.25 a share. It’s now trading at US$25.67 — a 254% increase in just two months.

Nuix’s initial public offering (IPO) saw shares offered at $5.31, giving it a market capitalisation of $1.69 billion.

However, the company is in a legal dispute with former chief executive Eddie Sheehy in the courts over his past share options. If Nuix loses that case, the market cap will be $1.81 billion due to additional shares.

The Motley Fool contacted Nuix for an interview about the IPO but, at the time of publication, had not received a response.

Macquarie’s biggest deal ever?

The Motley Fool reported in September that Nuix would end up returning Macquarie more than $1 billion after an estimated $100 million to $150 million investment.

There is speculation that the float will end up being Macquarie’s biggest single winning bet.

But the court proceedings against Sheehy remain a dark cloud over potential retail investors.

According to The Australian Financial Review, if Sheehy wins the case in a year or two, Nuix and its shareholders will have a headache regardless of whether the share price has gone south or north.

This is because he will claim damages based on lost opportunity to sell out his stake.

“The shares are floating at $5.31, but if Sheehy wins his case in a year or two and the price meanwhile drops, say 20 per cent for example, then on top of getting his options he will be claiming $24 million damages for his lost opportunity to sell out,” reported the AFR this week.

“This will stretch a company with forecast EBIT of just $27.5 million for 2021.”

If the Nuix share price rockets up like Palantir, Sheehy could be owed a 9-figure amount.

Friday’s listing will be keenly watched by many parties — retail investors, Australia’s tech sector and Sheehy.

Nuix reported revenue of $175.9 million for the 2020 financial year and forecasts $193.5 million for the current year. The company made a net profit of $18.8 million for the 2020 financial year. 

More reading

• CBA (ASX:CBA) and the ASX banks just had an amazing month
• Here’s when your ASX bank dividends are being paid in December
• ASX 200 Weekly Wrap: ASX 200 on track for a top month
• Here are the US shares that CommSec customers are buying
• Macquarie’s model portfolio of ASX stocks to hold in the post-COVID recovery

Motley Fool contributor Tony Yoo owns shares of Macquarie Group Limited. 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 Shaver Shop Group Ltd (ASX: SSG) share price is on watch after the company provided a business update and announced the buyback of its final six franchise stores.

What could impact the Shaver Shop share price today?

It will be interesting to see what the Shaver Shop share price does today after the company advised it has entered into a definitive agreement to acquire its six remaining franchise stores in New South Wales for $13 million plus stock on hand. The transaction is expected to complete on 1 February 2021. 

Shaver Shop’s Managing Director and CEO, Mr Cameron Fox, said:

We are very excited to be acquiring the last six franchised stores and turning Shaver Shop into a fully owned corporate network. These are powerhouse locations across metro-Sydney that have proven to outperform in online sales growth as well as deliver strong in-store sales results. This completes our franchise buyback strategy, simplifies our business processes and reporting, and in doing so will lead to better outcomes for our customers.

The acquisition will be immediately accretive to the company’s earnings with approximately $1.5 million to $1.6 million being added to net profit after tax (NPAT) in the first full year of ownership. To add some perspective, the company delivered a 44.6% increase in NPAT of $10.6 million in FY20. 

The transaction will be funded with available cash and debt facilities if required. Shaver Shop had approximately $20.6 million net cash with no debt at 30 November 2020. 

Business update 

The Shaver Shop share price and earnings have benefitted considerably from COVID-19 lockdowns. The business update reveals that sales trends in the first quarter of FY21 have continued through October and November after the easing of government restrictions. Total sales for the five months ended 30 November 2020 were up 19.1% to $88.4 million. This growth was underpinned by a 137% increase in online sales, amounting to a 33.2% of total sales in FY21. 

The Shaver Shop share price is up 60% year to date and currently $1.06 at the time of writing. Its shares are only 7% below their 52-week high of $1.16. Shaver Shop’s record sales and profits have translated to a FY20 dividend of 4.8 cents per share or a yield of approximately 2.50% at today’s prices. 

More reading

• Qantas (ASX:QAN) share price in focus after market update
• Serko (ASX:SKO) share price on watch after trading update
• Why Pfizer and BioNTech stocks popped Wednesday
• Ex NRL player lists $530m company on ASX this Friday
• 2 stellar ASX growth shares to buy in December

Motley Fool contributor Lina Lim 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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All eyes will be on the Qantas Airways Limited (ASX: QAN) share price this morning after the release of a market update.

What did Qantas announce?

This morning the airline operator provided investors with an update on its expectations for the first half and the full year.

Management advised that it expects to move into recovery mode in the second half of FY 2021 and will start repairing its balance sheet. This is thanks to domestic borders re-opening, cost reduction programs making progress, and the continued strong performance of its Loyalty and Freight divisions.

And while Qantas will report a significant statutory loss in FY 2021, it is expecting to be close to breakeven for underlying EBITDA in the first half and then net free cash flow positive in the second half.

However, as you would expect, this forecast assumes no material domestic border closures. It also assumes no material international travel until at least the end of June 2021.

How strong is the Qantas balance sheet?

The good news for shareholders is that Qantas still has significant liquidity.

As of 30 November, the company had $3.6 billion in available liquidity. This is made up of $2.6 billion in cash and $1 billion in an undrawn revolving credit facility. This facility is expected to be increased by ~$500 million before 31 December to provide additional standby liquidity

Management also notes that a significant backlog of supplier payments and refunds have now been cleared. By 31 December, approximately 50% of the redundancy payments associated with 8,500 job losses will have been made.

Capacity update.

With domestic borders reopening, Qantas is responding by increasing its capacity.

It advised that group domestic capacity will increase to 68% of pre-COVID levels for December, before rising to nearly 80% in the third quarter. This compares with 20% capacity in the first quarter and around 40% in the second quarter.

Management expects this to maintain its current domestic market share of above 70%.

Qantas’ CEO, Alan Joyce, commented: “We’ve seen a vast improvement in trading conditions over the past month as many more people are finally able to travel domestically again. There’s been a rush of bookings as each border restriction lifted, showing that there’s plenty of latent travel demand across both leisure and business sectors.”

“Between Qantas and Jetstar, there were over 200,000 fares sold for flights to Queensland in 72 hours after the border openings with Sydney and Victoria were announced. We’re also seeing people booking several months in advance, which reflects more confidence than we’ve seen for some time,” he explained.

Mr Joyce concluded: “Overall, we’re optimistic about the recovery but we’re also cautious given the various unknowns. We also have a lot of repair work to do on our balance sheet from the extra debt we’ve taken on to get through the past nine months. That’s why we remain focused on delivering on our recovery program, which unfortunately involves following through on some hard decisions to restructure and respond to the new set of circumstances we’re faced with.”

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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.

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