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The Afterpay Ltd (ASX: APT) share price is slipping today, down nearly 4% in early afternoon trading as the company is drawing attention over its merchant fees.

That’s heading in the opposite direction of the wider S&P/ASX 200 Index (ASX: XJO), up 0.6% at time of writing. And it puts the Afterpay share price down 7.2% from its all-time high of $104.53 reached on 9 November.

Year to date, shareholders will have little to complain about though, with Afterpay shares up 217% since 2 January.

What does Afterpay do?

Afterpay operates in the buy now, pay later (BNPL) market. 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 or fees. Those fees are carried by the merchants.

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

What’s pressuring the Afterpay share price?

Afterpay’s business model is based on consumers being able to pay for the goods and services they purchase over time without incurring any interest charges or other fees.

Of course, someone has to carry those fees. With Afterpay, and many BNPL shares, that someone is the merchant.

Afterpay charges merchants an average fee of 4% of the price of the items they sell via its payment platform. Crucially, the company doesn’t allow merchants to pass any of that cost on to their customers. That differs from credit cards, which generally charge merchants less than 1%, and also allow merchants to pass the cost along to customers if they choose.

According to the Australian Financial Review, merchant fees provide more than 80% of Afterpay’s revenue.

And Sebastian Siemiatkowski, CEO of Swedish-based Klarna – a direct competitor to Afterpay – says he’s surprised “people are celebrating the success of some of your local players when they are charging 400 basis points… To me, it’s not just about surcharging, it’s about capping – because that’s not a payments scheme any more, that’s an extortion scheme.”

A basis point, if you’re not familiar, is 0.01%. Hence 400 basis points is 4.0%.

Afterpay’s current business model may need to change next year. That’s when the Reserve Bank of Australia will decide whether or not merchants should be allowed to pass on the fees they incur from BNPL providers to their customers.

That decision is likely to have a material impact on the Afterpay share price.

More reading

• The 13 ASX shares that could have doubled your money in 2020
• Why has the Zip (ASX:Z1P) share price gone nowhere in 6 months?
• Tech shares could crash 40%, warns fundie
• 2 ASX small cap shares tipped for big things
• Are these the new paths for growth of the Afterpay (ASX:APT) share price?

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The stock market crash means there are a wide range of high-dividend-yield shares available to buy today. They could deliver impressive returns due to rising demand for income opportunities in a low interest rate environment.

Furthermore, their low valuations and potential to produce dividend growth may mean that they offer attractive capital growth. As such, buying a range of dividend stocks today could improve your chances of retiring early.

Low valuations after the stock market crash

The stock market crash has caused many dividend stocks to offer high yields and low valuations. In some cases, they may be warranted due to risks such as a company having a weak balance sheet that may inhibit its capacity to survive present economic woes. However, in other cases, weak investor sentiment towards a sector or industry may produce mispricings that can be exploited by long-term investors.

Furthermore, the past performance of the stock market shows that reinvested dividends have made up a large proportion of total returns. Buying high-quality companies while they offer attractive yields could be a means of obtaining a relatively impressive total return in the coming years. This may make income shares appealing for a wide range of investors – including those individuals who are seeking to generate capital growth from their portfolio.

A low interest rate environment

The stock market crash prompted policymakers across many major economies to put in place more accommodative monetary policies. As such, low interest rates could remain in place for a prolonged period of time as they try to stimulate economic growth.

Low interest rates reduce the amount of choice available to income-seeking investors. Products such as cash savings accounts and investment grade bonds now offer relatively low returns that may even struggle to keep pace with inflation. Similarly, high house prices in many locations may mean that property investment is no longer a viable choice for many income investors.

This could mean that demand for high-dividend-yield shares increases following this year’s stock market crash. They may be one of the few means of generating a high passive income. This may mean that their prices rise on the back of high demand among investors, thereby producing strong capital gains for their holders.

Financial strength

The prospects for many businesses have deteriorated following the stock market crash. Although dividends do not necessarily provide clear guidance on the financial position of a business, they can act as a useful guide in determining its financial strength and the confidence of its management team regarding future prospects.

Therefore, buying a range of income stocks with affordable dividends could be a means of lowering overall risk within your portfolio. Over time, they could produce high total returns that improve your financial prospects and even help you to retire early.

More reading

• IOOF (ASX:IFL) accused of butchering its share price
• Pro Medicus (ASX:PME) share price tumbles 4% after AGM
• Top brokers name 3 ASX shares to buy today
• Why the Webjet (ASX:WEB) share price is soaring 6%
• Why Origin, Qantas, Webjet, & Westpac shares are storming higher

Motley Fool contributor Peter Stephens 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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IOOF Holdings Limited (ASX: IFL) has faced a furious annual general meeting (AGM) today. Shareholders have accused the company of overpaying for its $1.44 billion MLC acquisition from National Australia Bank Ltd (ASX: NAB). The IOOF share price has fallen by 11.7% since the announcement of this deal on 31 August. Criticism to date has focused on the headline price paid for MLC. In particular, activist shareholder, Stephen Mayne, relentlessly accused the company of overpaying, highlighting the wealth destroying impact this can have. 

Mr. Mayne asked repeatedly who registered the 17% proxy vote against the acquisition. Nonetheless, IOOF chair, Allan Griffiths, would not be drawn on the issue. Instead deferring it until analysis could be undertaken. Surprisingly, the IOOF share price is up by nearly 3% today, at the time of writing. 

Another shareholder expressed his outrage, telling Mr. Griffiths “I vote against all resolutions, and will continue to do that as I think the handling of the MLC purchase was a disgrace.” He went on to state “You have butchered the share price.”

The growing rebellion in the ranks

A group was reported to be planning to vote against IOOF’s provision of operating funds for MLC subsidiaries. As a result, the company saw protest votes on all resolutions including, in particular, the reappointment of two directors. Elizabeth Flynn, recorded a 24.8% vote against her. Meanwhile, John Selak saw a 17% vote opposing his re-appointment. 

Shareholders have expressed frustration over the price of and approach to the MLC deal. In particular, they believe the company used a COVID-19 waiver to issue 300 million additional shares on the basis of a non-COVID-related issue. However, an ASX spokesman responded that the rules were not limited to raisings under the health crisis. In addition, many critics are skeptical about claims by IOOF CEO, Renato Mota, that the MLC acquisition would add 20% to the company’s earnings per share (EPS). 

Stephen Mayne pointedly questioned the chair’s competence to be running IOOF. Particularly as he has spent his career in unlisted financial services companies and has no additional directorships. He referred several times to the fall in the IOOF share price.

Mr. Griffiths pointed out he has only been chair for 18 months, during which time he had reset relationships with regulators, is implementing recommendations from the Hayne Royal Commission, and enjoys the full support of the board.

The falling IOOF share price

Since October 2017, the IOOF share price has fallen by over 60% during the heat of the Hayne Royal Commission. In the wake of the commission’s findings Mr. Mota confirmed to a questioner that conflicts of interest were always front of mind. As the four large banks have divested themselves of wealth management assets in response to the royal commission, IOOF has capitalised on this opportunity to propel itself past its longtime rival AMP Ltd (ASX: AMP) with regard to its funds under management.

In year-to-date trading, the IOOF share price remains down by more than 47%.

More reading

• ASX 200 events this week that could move the market
• 3 ASX dividend shares rated as buys by brokers
• AMP (ASX:AMP) asset sales part of wealth sector transformation

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 Pro Medicus Limited (ASX: PME) share price is falling today after the company held its AGM. Shares in the ASX imaging provider are currently trading 4.53% lower, down to a price of $29.72.

The drop marks the 10th straight day of declines for Pro Medicus. It has lost 14% since its November highs. This is despite the renewal of a large contract with Zwanger-Pesiri on 19 November.

What was covered at the AGM?

Pro Medicus chairman Peter Kempen updated shareholders on the company’s current and future market positions. Welcoming strong results despite the impacts of COVID-19, he said many of the goals the company set itself in the strategic plan of August 2018 had now been achieved.

Pro Medicus highlighted strong performance during FY20 through numerous contract wins. These included Ohio State university, Nines and the largest deal of the year, NorthWestern Memorial HealthCare.

Management noted that Pro Medicus was “working on a significant number of new opportunities” and its pipeline continued to be strong. Furthermore, the group “remains in an excellent position to continue to capitalise on these opportunities as they present”.

About the Pro Medicus share price

The Pro Medicus share price is falling despite a successful year for the imaging provider. In what marks the 20th year since publicly listing, Pro Medicus achieved strong financial results.

Despite trading 3.89% lower today, the company has gained 20% this year. This comes as it reported NPAT growth of 21% up to a total of $23 million in its FY20 results. Pro Medicus increased its dividend to 12 cents a share. Cash on hand also grew, rising from $32 million to $43 million, while continuing to be cash flow positive.

What Now

In October, the board met with the global management team to discuss the next phase of its strategic direction. A follow up meeting will be held before the end of the calendar year to assess strategic goals and objectives.

Mr Kempen predicts:

Another strong year with the majority of growth occurring in the second half of the financial year. The budget for the current financial year has been determined recognising continuing strong growth, with examination volumes returning to more normal levels. I am pleased to advise that results to date are ahead of budget, notwithstanding the impact of the falling US dollar.

More reading

• ASX 200 events this week that could move the market
• Pro Medicus (ASX:PME) share price drops despite inking new contract
• This cheap ASX share is supplying US giants: fundie
• 2 ASX growth shares to buy this month
• These were the best performing ASX 200 healthcare shares in October

Daniel Ewing owns shares of Pro Medicus Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus 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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Bravura Solutions Ltd (ASX: BVS)

According to a note out of Macquarie, its analysts have retained their outperform rating but trimmed the price target on this financial technology company’s shares to $5.00. The broker made the move after Bravura revealed that its sales cycle is lengthening because of the pandemic. In light of this, management warned that its FY 2021 earnings, which it expects to be flat, will be skewed 80% to the second half. Macquarie isn’t sure Bravura will deliver on its guidance and is now forecasting a 10% decline. Despite this, it remains very positive on its longer term prospects and therefore retains its outperform rating. The Bravura share price is trading at $3.39 this afternoon.

TechnologyOne Ltd (ASX: TNE)

Analysts at Morgans have retained their add rating and lifted the price target on this enterprise software company’s shares to $9.99. This follows the release of the company’s FY 2020 result earlier this week. Morgans notes that TechnologyOne delivered a better than expected result and its outlook for FY 2021 looks positive. The broker is expecting more strong annual recurring revenue (ARR) growth over the next 12 months. The TechnologyOne share price is changing hands for $9.02 on Wednesday.

Zip Co Ltd (ASX: Z1P)

Another note out of Morgans reveals that its analysts have retained their add rating and lifted the price target on this buy now pay later provider’s shares to $9.80. The broker was impressed with Zip’s trading update and notes that October was another record month. Morgans was also pleased with the performance of its US business, which saw its growth accelerate last month. The Zip Co share price is currently fetching $5.97.

More reading

• Why Mesoblast, Temple & Webster, Xero, & Zip shares are dropping lower
• Why has the Zip (ASX:Z1P) share price gone nowhere in 6 months?
• Why Coles and this ASX dividend share are buys for income investors
• ASX 200 rises more than 1% on Tuesday
• Here’s why the Bravura Solutions (ASX:BVS) share price raced higher today

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 and has recommended Bravura Solutions 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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Webjet Limited (ASX: WEB) shares are rising today, as airlines and travel-related shares on the ASX flew higher on the back of optimism that the soon-to-be available COVID-19 vaccines will restart international travel. At the time of writing, the Webjet share price has today jumped by 6.42% to $5.97. The broader S&P/ASX 200 Index (ASX: XJO) has also erased its losses for 2020 this morning, as it closes in on the 6,700 level. The ASX 200 is currently sitting at 6,698.90, up by 0.64% today.

The move in the ASX 200 follows the rise in United States stocks overnight, where the Dow Jones Industrial Average Index (DJX: .DJI) hit a record 30,000 level for the first time ever. 

Other ASX travel shares rising today

Along the with the Webjet share price, the Qantas Airways Limited (ASX: QAN) share price is also rising, currently up by nearly 2% to $5.68.  

The move in the Qantas share price follows a comment by its chief, Alan Joyce, who said yesterday he believes “all Aussies could be travelling back and forth to New Zealand in the early New Year”. Joyce also said that July 2021 will be the turning point for international travellers, and that Qantas expects to have reactivated its long haul international aircrafts by that time.

Trade Minister, Simon Birmingham, meanwhile offered a more cautious outlook, saying that future travel hinges on the effectiveness of the vaccine. He said the manufacturing, distribution and all the other factors surrounding the vaccine will determine whether Australia could turn things around in the next 12 months. Flight Centre Travel Group Ltd (ASX: FLT) and Corporate Travel Management Ltd (ASX: CTD) shares are also marching higher today.

Optimism in the United States

The news of President Trump’s concession to the new Biden administration has also paved the path for a smooth transition of power in the world’s largest economy. The expectation of a more stable political environment in the US, along with the vaccines, has given a degree of stability and confidence back to the market. 

Global market strategist at Invesco Ltd (NYSE: IVZ), Brian Levitt, says, “The market is focusing beyond the next few weeks and is pricing in a recovery as 2021 progresses. What you’ll end up having is an environment that over the next couple of years should be good for risk assets.” 

The market was also boosted by a comment from Bill Gates who said he is “optimistic that by February, it’s very likely that all three vaccines will prove very efficacious and safe.”

However, Gates provided caution for the next 6 months, saying that the daily death rate from the virus could possibly top 2,000 per day for much of the winter. 

More reading

• Why Origin, Qantas, Webjet, & Westpac shares are storming higher
• ASX stock winners from the $23 billion Victorian state budget
• Qantas (ASX:QAN) adds 360 flights a week
• Why fund manager optimism is at almost 3-year highs
• Why Brickworks, Mesoblast, Qantas, & Telix shares are storming higher

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel 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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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to record another solid gain. The benchmark index is currently up 0.85% to 6,700 points.

Four shares that have climbed more than most today are listed below. Here’s why they are storming higher:

Origin Energy Ltd (ASX: ORG)

The Origin Energy share price is up 4.5% to $5.28. Investors have been buying the energy company’s shares after oil prices jumped higher overnight. According to Bloomberg, on Tuesday night the WTI crude oil price climbed 4.3% to US$44.92 a barrel and the Brent crude oil price rose 3.8% to US$47.81 a barrel. Prices were given a boost by vaccine hopes and news that President Trump will allow the transition of the Biden administration to commence.

Qantas Airways Limited (ASX: QAN)

The Qantas share price is up 2% to $5.68. With three potentially effective COVID-19 vaccines on the way, investors appear to believe travel markets will recover quicker than anticipated. Pleasingly, Qantas is ready to meet this expected demand. On Tuesday the airline revealed that it would be adding 360 flights to its weekly schedule after border restrictions eased.

Webjet Limited (ASX: WEB)

The Webjet share price has jumped 6.5% to $5.98. As with Qantas, this appears to have been driven by hopes that the COVID-19 vaccines will underpin a quick recovery in the travel market. In addition to this, the reopening of borders between Queensland and New South Wales should be a major boost for Webjet’s domestic business.  

Westpac Banking Corp (ASX: WBC)

The Westpac share price is up almost 2.5% to $20.92. Investors have continued to pile into the banks again as the rotation away from COVID winners gathers pace. This latest gain means the Westpac share price is now up by an impressive 17% since the start of the month. It isn’t just Westpac on the rise today. All the big four banks are outperforming and helping drive the ASX 200 into positive territory for 2020.

More reading

• Could these ASX renewable energy shares benefit from the Biden win?
• ASX stock winners from the $23 billion Victorian state budget
• Qantas (ASX:QAN) adds 360 flights a week
• ASX energy shares surge ahead as oil rises to 9-month high
• Why fund manager optimism is at almost 3-year highs

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended Webjet 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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The Dow Jones Industrial Average (INDEXDJX: .DJI) is stealing the financial headlines today. The Dow closed at a new record high yesterday (overnight Aussie time), topping 30,000 points for the first time.

The Dow is now up 61% from its 23 March lows.

Yesterday’s boost comes after United States share markets, and indeed most every major global index, posted another day of strong gains.

Investor optimism is surging, with US election uncertainty fading and President-elect Joe Biden appointing former Fed chair Janet Yellen as his Treasury Secretary. Even more importantly, the promise of multiple effective COVID-19 vaccines is stirring hopes of a major global economic rebound in 2021.

Now in the opening sentence I wrote that the Dow is “stealing” headlines. That’s because it’s not just the Dow charging higher. The Dow isn’t even the only major share index hitting new all-time highs.

The S&P 500 Index (INDEXSP: .INX) also hit a new all-time high, closing 0.2% above the previous record high set on 16 November.

The S&P 500, however, closed at 3,635 points. And 3,635 doesn’t have the same psychological impact as 30,000. Hence the Dow gets the spotlight.

While not posting a new record, the tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) gained 1.3% yesterday. That puts the Nasdaq just 0.16% below its own 2 September all time-highs.

Here in Australia, the S&P/ASX 200 Index (ASX: XJO) is powering ahead today as well, up 0.8% in late morning trading. That puts the ASX 200 up 13.0% so far in November and in positive territory year-to-date. Though the index is still 6.5% below its own all-time high, set on 20 February.

Dow to 40,000, ASX 200 to…?

If you’re watching share prices charge higher and are thinking this bull market run may be nearing its end, you’re not alone.

But that kind of thinking could be costly.

In fact, Hilary Kramer, chief investment officer at Kramer Capital Research, sees the potential for a lot more share price growth ahead. Focusing on the Dow’s new 30,000 point record, she says (from the Australian Financial Review):

If all goes well we should see 40,000 before 2024.  After all, the Dow has lagged benchmarks with heavier Big Tech allocations (17 per cent compared to 25 per cent for the S&P 500 and arguably above 50 per cent on the Nasdaq), but now that the vaccines are coming, it’s time for the ‘old economy to get back to work and take advantage of the Fed’s largesse.

Ross Mayfield, investment strategy analyst at Baird, highlights the forward-looking nature of share markets, even in these dark days, is spurring on the bull market (quoted by the AFR):

If 2020 has shown us anything it is that stock markets have a tremendous ability to look past bad news if there is sun on the horizon.

Gene Goldman is the chief investment officer at Cetera Financial Group. He echoes that sentiment, pointing out cashed up investors’ long term optimism is driving share prices higher (from Bloomberg):

There’s nothing else to buy. People have this excess cash and they’re buying into the market and they’re chasing it. People are ignoring the short term and just jumping in and buying. All the short terms news is being ignored for long term optimism.

Advantage cyclical shares

With the recovery play picking up speed, investors interest in cyclical shares is ramping up.

These are shares that tend to see their earning and profits, and hence their share prices, rise when the economy is growing. And conversely fall when the economy is lagging.

November has already seen many leading cyclical shares post strong share price gains. But with most still down for the year, they could have a lot further to run.

Bill Callahan, investment strategist at Schroders, says (from Bloomberg):

Even though we’ve seen this pretty sharp rotation into cyclical stocks, we think this could go on for much longer given how unbalanced many investors’ portfolios are… With the vaccine announcement, it really doesn’t matter if the vaccine is distributed in the second quarter or third quarter next year, there is a light at the end of the tunnel…

Investors and institutions and fund managers are still heavily overweight to defensive and growth sectors. There’s still a lot of money that needs to come into these cyclical sectors before the move is over. I think it’ll continue to go higher.

Two quality ASX cyclical shares to buy today

There are a number of quality cyclical shares in the travel, leisure, and mining sectors that you may wish to add to your holdings.

Today we look at 2 of those.

First up, Sydney Airport Holdings Pty Ltd (ASX: SYD).

Ben Clark, from TMS Capital, tells Livewire Markets Sydney Airport is a buy:

I’d have a buy on Sydney Airport. I think this is probably the safest way to play the reopening of travel. We think you can be wrong by a year with Sydney Airport, but ultimately, you can still be right. There’s a great asset behind it. Regardless of whether airlines go to profitable or less profitable routes, you’re still going to get foot traffic going through the airports.

The Sydney Airport share price has gained 25% so far in November, though it’s flat in intraday trading today (at the time of writing). Shares remain down 23% from the 23 January recent highs.

The second ASX cyclical share for your consideration is Australian resources company Alumina Limited (ASX: AWC).

Here’s why Investors Mutual portfolio manager Daniel Moore likes Alumina Limited (from the AFR):

Alumina is the main commodity required to make aluminium, and the price of alumina has been hit in the short term because of weakness in demand caused by COVID-related shutdowns. Alumina’s current share price is capitalising current low margins, which are 30 per cent below our view of sustainable long-term margins…

As economic activity recovers, demand from the building and construction and car manufacturing sectors will be supportive of demand for Alumina’s products, and lead to higher prices and earnings.

The Alumina share price, up 1.6% in intraday trading, is down 19% year-to-date.

More reading

• ASX 200 up 0.8%: Fisher & Paykel Healthcare impresses, Harvey Norman’s profits surge
• Why these ASX 200 shares just hit record highs
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 rises more than 1% on Tuesday
• ASX stock winners from the $23 billion Victorian state budget

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Volpara Health Technologies Ltd (ASX: VHT) share price is falling today after the company announced its half-yearly results for FY21. At the time of writing, the Volpara share price is down 2.8% to $1.39.

Let’s take a closer look to see what’s moving the Volpara share price today.

What’s driving the Volpara share price lower?

It seems, despite reporting a decent result for its FY21 half-year performance, the company’s performance has failed to meet investors’ expectations, if the falling Volpara share price is anything to go by. 

For the period ending 30 September, Volpara received total revenue of NZ$9.5 million, up 38% on the prior corresponding period (pcp). This was underpinned by a 71% increase in its subscription revenue of NZ$8.8 million.

Annual recurring revenue (ARR) grew to NZ$19.9 million compared to the NZ$15.7 million recorded at the half-year of FY20.

Average revenue per user (ARPU) also lifted to US$1.16, up 26% over the comparable period.

Net operating cash outflow came to NZ$7.8 million, a slight improvement from the NZ$7.9 million that was recorded in the first half of FY20. COVID-19 brought some challenges to the business, affecting sales and marketing techniques which involved face-to-face contact and trade shows. As a result, the company decided to move further into the digital marketing space, and is starting to see results.

Overall, the group stood at a net loss of NZ$8.9 million, however this is an 11% upturn on the pcp.

The company revealed a holding cash balance of NZ$64.3 million at the end of the period. The jump from its NZ$31.4 million achieved at the end of FY20 was due to a recent capital raising of NZ$29.5 million.

Furthermore, the cash balance includes a NZ$2.6 million low-interest loan received as a COVID-19 relief package from the United States government.

Management commentary

Volpara CEO, Dr Ralph Highnam, commented on the group’s achievement for the first-half of the year. He said:

In the face of this unprecedented challenge, we proactively modified our strategic approach on several fronts. We shifted to digital marketing, reshaped our US commercial team, and began investigating ways to address women directly to drive demand. We are focusing on R&D to generate improved products and services. And we have developed a new sales model to lower the cost of customer acquisitions.

Fortunately, we have a healthy balance sheet, and with vaccines seemingly on the horizon, the environment should correct itself in due course.

FY21 outlook

Looking towards the remaining part of the FY21, Volpara advised that it is on track to meet its expectations for the full-year. No guidance amount was given in the report however.

ARR is anticipated to grow in the coming months, but may be at a slower rate as COVID-19 is affecting its US market.

ARPU is also expected to rise despite the chance of the company losing contracts with a number of clinics. This is due to Volpara targeting MRS System customers to upgrade to its software-as-a-service (SaaS) platform. SaaS is viewed by Volpara as being much more meaningful to revenue than ARPU.

Volpara share price summary

The Volpara share price has lost ground over the past six months, falling by 6%. In comparison, the All Ordinaries Index (ASX: XAO) has moved more than 20% higher over the same time frame.

Whether or not the Volpara share price can reach its former glory when it was trading around the $2 mark remains to be seen. It will be interesting to watch the company’s developments before reporting its full year-result in May next year.

More reading

• Here’s why the Volpara (ASX:VHT) share price is pushing higher today
• 2 exciting small cap ASX shares for your watchlist
• Volpara (ASX:VHT) share price on watch after Q2 trading update

Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of VOLPARA FPO NZ. The Motley Fool Australia has recommended VOLPARA FPO NZ. 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to extend its winning run with another solid gain. At the time of writing the benchmark index is up 0.8% to 6,695.7 points.

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

Mesoblast limited (ASX: MSB)

The Mesoblast share price is down 5% to $4.24. This appears to have been driven by profit taking after a meteoric rise over the last few days. Prior to today, the Mesoblast share price was up 37% over the prior three trading days. Investors have been buying the biotech company’s shares following the announcement of a major deal with pharma giant Novartis.

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price has crashed 9% lower to $9.83. The catalyst for this decline appears to be the ongoing rotation from COVID winners to other areas of the market. The online furniture retailer’s shares have been on fire this year and are still up 272% in 2020 even after today’s sizeable decline.

Xero Limited (ASX: XRO)

The Xero share price has fallen 3% to $131.69. Investors have been selling the cloud-based business and accounting software platform provider’s shares after it announced the pricing of a US$700 million convertible notes offering. The proceeds will be used to repurchase existing notes and raise additional capital on favourable terms. Xero upsized its offering by US$100 million due to significant demand from across its global investor base.

Zip Co Ltd (ASX: Z1P)

The Zip share price is down 4% to $6.00. Not even a reasonably positive broker note out of Citi has been able to give the buy now pay later provider’s shares a boost today. This morning the broker upgraded Zip to a neutral (high risk) rating and lifted the price target on its shares to $6.70. This follows the release of its recent trading update.

More reading

• Why has the Zip (ASX:Z1P) share price gone nowhere in 6 months?
• Why these ASX 200 shares just hit record highs
• Xero (ASX:XRO) share price on watch after launching US$600 million notes offering
• 2 rapidly growing ASX shares rated as buys
• Leading brokers name 3 ASX shares to sell today

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 Temple & Webster Group Ltd, Xero, and ZIPCOLTD FPO. The Motley Fool Australia has recommended Temple & Webster Group 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 Why Mesoblast, Temple & Webster, Xero, & Zip shares are dropping lower appeared first on Motley Fool Australia.

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