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The Kleos Space SA (ASX: KSS) share price is in the spotlight today. Kleos shares are rocketing at the time of writing, up 21.37% to 80 cents a share after closing at 66 cents a share yesterday and opening at 69 cents this morning.

Whilst today’s move might seem dramatic, it’s just the latest gain for Kleos shareholders, who have had a truly fantastic month. Kleos shares were 28 cents each at the start of October, which means they have risen by more than 185% since 1 October. The shares are up more than 150% year to date, and more than 400% since the company’s IPO in August 2018.

So what is this high-growth share? And why is it exploding even higher today?

Kleos shares: an introduction

According to the company, Kleos Space was founded in 2017 by “experienced Space engineers”. The plan was to develop a “new Space enabled Data-as-a-Service concept and disruptive in-Space technologies.”

Kleos is dual-listed, sitting on the ASX as well as Germany’s Frankfurt Stock Exchange, and is based in Luxembourg.

The company operates satellites and satellite infrastructure that collect radio frequency information. It states that “rather than observing the Earth in the visible domain as you would with cameras, Kleos is observing it in the ‘radio frequency’ part of the spectrum using antennas”.

By using its satellites in conjunction with each other, it can identify where radio signals are coming from on the Earth. It’s a sort of “reverse GPS”, as the company describes the technology.

In this way, Kleos can determine whether signals it receives are coming from legitimate activity, or activity that might indicate an illegal operation, particularly in the maritime space. Thus, Kleos can assist with finding illegal fishing, smuggling and trafficking operations, and monitoring national borders. It sells this data as a service to governments and companies.

Fly me to the moon

Kleos has been progressing its scouting satellites program over the past month. This program aims to deliver commercially available data as well as demonstrate the company’s technology, underpinning plans for future expansion.

Kleos has a ride-share contract with the US-based Spaceflight Inc., and has four satellites at  ‘mission-ready’ status, where they have been since since the middle of 2019. They were ready to go at the launch site in February 2020, with the launch planned for March before the coronavirus pandemic delayed launch operations.

However, back in September, Kleos told investors that it has a new tentative launch date for early November, which saw a jump in the Kleos share price at the time. Today, this has been reaffirmed. Kleos told the markets this morning that it expects the launch to take place on Saturday 7 November. This will be the first phase of the satellite’s lifecycle, known as “the Launch and Early Orbit Phase”.

According to today’s announcement, this “is a critical phase of the mission, covering launch, deployment and in orbit commissioning to handover to the Mission Operations Team to enact day to day operations and data generation activities.”

It’s estimated that this phase will last 9–12 weeks. After that, the satellite will undergo a handover to the Missions Operations Team for the next stage.

Judging by the enthusiastic reaction of the markets this morning to the news, investors appear to be relieved to have some firm dates from Kleos. 

More reading

• Which small cap ASX shares were the best performers in October?

Motley Fool contributor Sebastian Bowen 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 Westpac Banking Corp (ASX: WBC) annual result has divided ASX analysts on the bank’s future. On one hand, the stockbroker, Morgans, is optimistic on the Westpac share price and retains a ‘buy’ recommendation. On the other hand, Bell Financial Group Ltd (ASX: BFG) head of research, TS Lim, believes Westpac “possibly came close to having a near-death experience in fiscal 2020”. However, most analysts have maintained a ‘buy’ on the Westpac share price. This includes UBS Group AG (NYSE: UBS) who reiterated it as a ‘buy’ with a $20.50 price target, after the bank announced what some would call a multi-year turnaround report card.

Testing the Westpac share price

While the bank has announced a multi-year turnaround plan, there are a number of headwinds it is working against. For instance, The Australian explains how the further reduction in the cash rate by the Reserve Bank of Australia to 0.1% reduces revenues. Meanwhile, non-bank lenders are providing further competition to the bank’s core mortgage and commercial lending business. 

Morgans also noted the average increase of full time employees (FTE) by 8% between the first and second half of FY20. Although, it does expect the FTE number to reduce as customers come off COVID support. Furthermore, Westpac CEO, Peter King, explained that mortgage processing issues emerged due to the pandemic in India and the Philippines, thus resulting in some duplication of work. He further announced during the results webcast that jobs would be brought back into Australia, reducing the overall headcount and increasing efficiency. 

Small business lending is another looming issue for the bank. Mr King noted that there had been a high non-response rate as the 6 month deferral period is coming to an end. He further commented:

“On small business, we’re at the end of the six-month period. A lot of people are indicating they’re going to commence repayments, but I do want to see it.”

Turning around the battleship

During the presentation, Westpac CFO, Michael Rowland, highlighted the negative growth in mortgages over both halves of FY20. According to Mr Rowland, in the second half of FY20, this was largely attributable to the issues in offshore call centres, along with the pandemic’s impact on demand. However, these reasons do not explain the fall during the first half of FY20. Mr King said:

“Mortgage growth has been a problem for us this year, we have not kept up with the market.”

Mr King and Mr Rowland, both acknowledged the effort it would take to improve the mortgage business. As part of its multi-year turnaround plan, the bank has dedicated much spending to fixing and simplifying IT infrastructure and people. In IT, the company plans to replace human steps by using digital and data.

In addition, there was an admission of poor processes contributing to the fall in mortgage growth. Indeed, this was also a recommendation from the Hayne Royal Commission into financial services. In December 2019, Westpac’s then CEO, Brian Hartzer, resigned. This came after AUSTRAC applied to the Federal Court for civil penalty orders against Westpac for deficient oversight of its anti-money laundering and terrorism financing obligations.

At the time, the Westpac share price was trading at $27.17 per share. Today, at the time of writing, it is asking $17.38.

Further improvements

As part of the company’s broad sweep, Mr King announced a range of additional measures. For instance, the bank would be simplifying the products and services offered in an attempt to reduce complexity. In addition, the company has decided to exit non-core businesses as well as introducing an end-to-end “line of business” service model to increase accountability.

The bank is targeting mortgage growth in line with major banks by the second half of FY21. However, while the remainder of the big four banks are spending on growth, Mr King has to devote 47% of his $1.7 billion investment bill to fixing issues of risk and compliance.

The light on the horizon

One issue that Morgans dwelt on, as did both Mr King and Mr Rowland, was the CET1 ratio. This measures a bank’s capital against its assets. Westpac has worked during the year to bring this to 11.2%, which Morgans believes is a strong pro-forma ratio.

In addition, the bank has already seen strong growth in customer deposits. Mr Rowland also spoke of an increasing rate of home loan applications, but was not yet ready to call it a positive trend. Importantly, Westpac said it had $16.6 billion in Australian home loans on repayment pauses at 28 October, reflecting 41,000 accounts. That was down from $54.7 billion at the height of the pandemic.

Morgans, UBS, Bell Potter and others have maintained a ‘buy’ on the Westpac share price despite the troubled year it’s had, and its multi-year turnaround plan. 

More reading

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• Glory days of ASX bank shares are gone: fundie

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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Infomedia Limited (ASX: IFM) has signed a strategic pan-European contract with Ford Europe to provide the next generation (Next Gen) of its Microcat electronic parts catalogue (EPC) in the region. In trading so far today, the Infomedia share price has leapt up by 7.5%.

What’s moving the Infomedia share price?

Infomedia is a leading software provider in parts, service and data insights to the global automotive industry. Moreover, its software includes an electronic parts catalogue, a service-selling product, a lubricant selection product, and a CRM. The company has 180,000 users across 186 countries and 80% of its revenue is from outside Australia. Greater than 95% of the company’s revenue is recurring and its 10-year average operating margin is 43%.

The total contract value of this strategic win is approximately $14 million over 5 years; revenue will begin to ramp up from January 2021. Infomedia believes its EPC is mission-critical aftersales software. It identifies the precise part and accurate pricing of those parts for every vehicle, based on the vehicle identification number. This enables dealers to provide timely, efficient and cost-saving benefits to customers.

The company declared a profitable year in its FY20 annual report. Revenue was up by 12% against the previous corresponding period (pcp). In addition, earnings growth was up 15% pcp. Also, cash earnings before interest tax, depreciation and amortisation (EBITDA), rose by 11% pcp. 

Infomedia has attributed this success to a range of reasons. On the sales side, it was the ability to do remote and hybrid installs while the world was locked down. In addition, an increased focus on debt collections. 

The Infomedia share price is currently trading at a price-to-earnings (P/E) ratio of 29.1, and has a trailing 12-month dividend yield of 2.16%.

Management commentary

Commenting on the deal, Infomedia CEO Jonathan Rubinsztein said:

This is a very significant achievement for Infomedia because it demonstrates that we are delivering on the strategic objectives we set for the business.

Over the last four years, we have been investing in our global platform to ensure our systems, architecture and resources would support global growth. The delivery of the Next Gen platform is the final stage of that strategy. The win with Ford Europe demonstrates how Infomedia will continue to take advantage of significant change impacting the global automotive industry with innovative technology solutions,

This is an exciting win for Infomedia and heralds in a new era for our Next Gen EPC platform, as the innovation and functionality of the platform differentiates Infomedia from its peers by taking an essential but siloed reference tool and turning it into an integrated parts selling platform.

More reading

• Analysts divided over future of Westpac (ASX:WBC) share price
• Gold explorer Tesoro Resources (ASX:TSO) jumps 25% on high-grade intercept
• The Nanosonics (ASX:NAN) share price is surging higher
• The Atomo (ASX:AT1) share price is up today. Here’s why.
• These were the best performing ASX 200 healthcare shares in October

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Infomedia. 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 Tesoro Resources Ltd (ASX: TSO) share price has climbed more than 10-fold this year following increasingly promising exploration developments. Today, the gold explorer announced infill and drill hole results that showed high-grade gold intercepts. The Tesoro share price jumped as high as almost 30% on open before cooling down. It is trading at 36 cents, up 25.86%, at the time of writing.

About Tesoro 

Tesoro Resources was established with a strategy of acquiring, exploring and developing mining projects in the Coastal Cordillera region of Chile. This region is host to multiple world class copper and gold mines, has well established infrastructure, breadth of service providers and an experienced mining workforce.

Large areas of the Coastal Cordillera remained unexplored due to the unconsolidated nature of mining ownership, but Tesoro has been able to secure rights to a district scale gold project. It currently holds interest in the highly prospective El Zorro Gold Project that is favourably located and demonstrates significant scale and gold grades. 

El Zorro project milestones to date 

During the September quarter, Tesoro expanded its landholding from approximately 100sq km to 540sq km following a regional review which identified prospective geology for which Tesoro made successful applications. 

Tesoro is currently focused on delineating gold resources at El Zorro. In other words, determining the size, grade, extent and mineralogy of mineral resources. More drilling is under way following previous encouraging results. 

On 23 October, the company announced infill drilling results that continue to intersect multiple gold bearing zones.

Tesoro managing director Zeff Reeves commented:

The extensive and ongoing drill program is proving extremely beneficial in uncovering the extent of the Ternera deposit at El Zorro. We believe the project has huge potential, with Ternera being the first of five targets identified at El Zorro, and our confidence in the exploration model continues to increase. 

High-grade gold intercept today 

Today’s announcement is a continuation of Tesoro’s drilling results. All holes intersected multiple mineralised gold zones with significant results adding to the large-scale potential of El Zorro.

Mr Reeves said that every hole drilled at El Zorro continued “to deliver quality gold results further adding to the scale of the Ternera deposit … we are yet to find the edges of the mineralisation and every hole adds additional scale. This indicates to us that we have a significant discovery at El Zorro.” 

More reading

• The Nanosonics (ASX:NAN) share price is surging higher
• The Atomo (ASX:AT1) share price is up today. Here’s why.
• These were the best performing ASX 200 healthcare shares in October
• Why the Atomos (ASX:AMS) share price is up 8% today
• 3 ASX dividend shares rated as buys by brokers

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The Nanosonics Ltd (ASX: NAN) share price has surged 9.38% higher to $5.60 in lunchtime trade. This jump comes after the company released a business update for the first 4 months of the 2021 financial year.

What did Nanosonics announce?

Nanosonics reported that sales of consumables, including its Sonex and NanoNebulant products, were up 4% in the 4 months to 31 October 2020 compared to the prior corresponding period (pcp). Additionally, sales of the same products were up 25% in the 4 months to 31 October 2020 when compared with the last 4 months of the 2020 financial year, during which the major impacts of COVID-19 were experienced.

Further highlights quoted in the report included: 

• In the four months to 31 October 2020, the number of new trophon units installed was 91% of the pcp with North America at 90% and EMEA at 119%
• The number of new trophon units installed in the first four months of FY21 was up 16% compared with the last four months of FY20. During this period, North America was up 14% and EMEA was up 64%.

Nanosonics CEO Matt Kavanagh commented on the outlook for the company, stating;

“Despite ongoing periods of uncertainty we remain optimistic about the future and investments in our growth agenda continue across the business as we look to further expand our geographical footprint and product portfolio.”

The company stated that it would release a more detailed business update at its AGM, scheduled for 24 November 2020.

About the Nanosonics share price

Nanosonics is a biotechnology company that specialises in technology for infection control. Nanosonics has been listed on the ASX since 2007.

In the year to 30 June 2020, Nanosonics had revenue of $100.1 million, an increase of 19% compared to FY19. The company had a net profit after tax of $10.1 million in the 2020 financial year, down 26% compared to the 2019 financial year.

The Nanosonics share price is up 38.15% since its 52 week low of $4.01, however, it is down 12.89% since the beginning of the year. Over the past 12 months, the Nanosonics share price has fallen 21.19%, compared to a drop of 10.1% for the S&P/ASX 200 Index (INDEXASX: XJO).

More reading

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• ASX 200 Weekly Wrap: Budget, US election sparks 5% surge in ASX shares
• These were the worst performing shares on the ASX 200 last week

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The Atomo Diagnostics Ltd (ASX: AT1) share price has risen today following its annual general meeting presentation to investors.

During midday trade, shares in the medical diagnostics company are up 3% to 34 cents. In comparison, the All Ordinaries Index (ASX: XAO) has dropped 0.8% to 6,213 points.

So, let’s take a look at what Atomos said in its AGM.

Key AGM highlights

• Revenue grew to $5.37 million, representing an increase of 10 times FY19’s annual sales. This was driven by the acceleration of the HIV rollout via Mylan, and the significant demand for COVID-19 test kits.
• Earnings before interest, tax, depreciation and amortisation (EBITDA) recorded a loss of $2.38, down from $4.08 million in FY19.
• Cash receipts in Q1 FY21 were $3 million, underpinned by sales from its COVID-19 antibody OEM business.
• Q1 sales reached approximately $2.5 million.
• Cash outflows are primarily related to building inventory levels, supply chain replenishment, investment in manufacturing, and research and development.
• The company reported $26.3 million in cash for the end of the September period.

How is Atomo progressing for FY21

Atomo advised it has completed a deal with Access Bio for its COVID-19 antibody testing devices. The agreement with the United States-based company will see an initial order of 250,000 units, supporting pending product launch.

Across the Pacific, DIVOC received an import permit for the Indian market, where evaluation for the product has been submitted. Product registration is anticipated to be achieved sometime in the current quarter.

In Australia, the Therapeutics Goods Administration (TGA) has approved the COVID-19 antibody test. Distribution agreements were signed with Health Solutions Group Australia for rapid deployment. Production capacity increased to 750,000 devices per month.

What’s next for Atomo?

The company listed its strategic priorities in continuing the expansion of its device sales via new OEM contracts. In completing this objective, Atomo appointed a US-based business development resource and started an OEM engagement program.

Launching new finished products in high value segments is also a major key milestone the company wishes to achieve. Atomo is negotiating with its partners on a number of potential products for existing markets.

Non-blood rapid testing is also seen as a huge avenue for growth. Emerging diagnostic technologies are predicted to compliment the current portfolio, leading to additional revenue streams.

How has the Atomo share price performed?

The Atomo share price isn’t far off its all-time low of 28 cents reached in June this year. Positive developments did leave the company’s share momentarily higher until late August. However, investor confidence has recently been slightly weak.

Only time will tell if Atomo can reach its all-time high of 63 cents from listing on the ASX back in April.

More reading

• Why the Atomos (ASX:AMS) share price is up 8% today
• The Austal (ASX:ASB) share price has dipped despite positive news
• ASX 200 Weekly Wrap: ASX 200 has another shocker as US election approaches
• Why the Fluence (ASX:FLC) share price is up 10% today
• Why the CV Check (ASX:CV1) share price is edging lower 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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S&P/ASX 200 Index (ASX: XJO) healthcare shares have surprisingly underperformed other sectors such as energy, consumer staples, financials and technology in October. This likely follows a prior period of outperformance due to COVID-related tailwinds for healthcare businesses. However, there were still market-leading winners amongst ASX 200 healthcare shares. Here are the best performers from October. 

October’s top performing ASX 200 healthcare shares

Pro Medicus Limited (ASX: PME) 

The Pro Medicus share price delivered a return of 20% in October. Interestingly, this wasn’t on any significant market sensitive news besides two contract wins signed across September and October. 

On 11 September, Pro Medicus signed a $25 million, 7-year deal with NYU Langone Healthcare. NYU is rated as one of the top ten hospitals in North America, operating an academic institution and multiple hospitals that are major health providers in their respective cities. On 15 October, Pro Medicus also signed a $10 million, 7-year deal with LMU Klinikum. LMU is one of the largest university hospitals in Germany and extends Pro Medicus’ footprint in the European hospital segment. 

Polynovo Ltd (ASX: PNV) 

The Polynovo share price had been bouncing within the range of $2.10 to $2.40 between July and October. Its share price started to pick up momentum towards the end of October which saw it deliver a total return of 17% for the month. 

On 28 October, the company announced that its NovoSorb BTM product had received approval by the Taiwan FDA for sale in Taiwan. NovoSorb BTM is a man-made synthetic polymer that can be used to temporarily close wounds and aid the body in generating new tissue. Polynovo said it had contacted Evermed, a Taiwan-based distributor to sell BTM. Polynovo Managing Director, Paul Brennan, said, “Taiwan has an advanced health system and has a population of circa 23 million concentrated in three regions. The dermal matrix market in Taiwan has good potential for us in reconstructive surgery, trauma and burns.”

Resmed CDI (ASX: RMD) 

This ASX 200 healthcare share delivered its upbeat quarterly update on the last day of October which saw the Resmed share price jump almost 10% on the day. Across October, the Resmed share price delivered a total return of nearly 17%. 

The Resmed share price had already started to gain momentum at the start of October after hovering around 6 month lows. Its quarterly update provided a much needed boost in sentiment which highlighted a 10% increase in revenue to $751.9 million and a 27% increase in net operating profit. Its firm result was largely driven by strong sales across its mask product portfolio including increased demand for its ventilators due to COVID-19. 

Resmed’s standout performance in October has recovered most of its share price losses incurred earlier this year due to a weaker than expect FY20 result. This now brings the Resmed share price within 5% of its previous all-time high. 

More reading

• Leading brokers name 3 ASX shares to buy today
• Why the ResMed (ASX:RMD) share price smashed the market in October
• Big brokers upgrade Resmed (ASX:RMD) share price target
• Top brokers just upgraded the ResMed (ASX:RMD) share price and this other ASX stock
• Why the Pro Medicus (ASX:PME) share price rocketed 22% higher last month

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of POLYNOVO FPO. 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. The Motley Fool Australia has recommended ResMed Inc. 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 Atomos Ltd (ASX: AMS) share price is gaining ground today following the release of a positive trading update.

Shares in the video technology company surged up 8.7% to 68.5 cents in mid-morning trade before retreating to 67 cents at the time of writing. In comparison, the All Ordinaries Index (ASX: XAO) has plummeted 0.8% to 6,214 points.

Trading update

For the month of October, Atomos reported solid growth as sales begin to recover to pre-COVID-19 levels. An uplift in demand saw its customers uptake its existing product lines. This was backed by the recent integration of ProRes RAW by major global camera manufacturers.

The company experienced monthly sales improvements greater than 50% in July, 60% in August, and 100% in September. The increase was compared to the sales run-rate during the second half of FY20, which it achieved $2 million per month.

In October, however, run-rate performance marked an acceleration of over 200% over H2 FY20. The strong momentum showed a return to pre-COVID sales, which is three months earlier than the previous guidance.

Atomos advised that while the product range was holding up, it remained cautious given the economic uncertainly. The company is aware that potential further lockdowns in the northern hemisphere could impact in its largest market.

Furthermore, Atomos noted that all costs thus far are in line with previous forecasts.

Atomos is seeking to launch a new steaming and live video product in the second quarter of FY21. Further details and trading updates will be announced at its AGM on 30 November.

What did the management say?

Commenting on the trading update, Atomos chair Chris Tait said:

We have been pleased with the continuing positive recovery momentum post the COVID-19 lockdown and the resulting improvement in the top line, which is off a lower cost base, and are seeing the benefits of the operational changes we made following the initial COVID outbreak.

Adding to Mr Tait’s comments, Atomos CEO Jeromy Young addressed the ProRes RAW accomplishment, saying:

Our decision to partner with Apple on ProRes RAW many years ago and to build out an ecosystem is starting to really bear fruit. The ProRes RAW format is now being embraced by all major camera companies globally and is having a strong positive impact on our revenue.

The bounce back has been significant in both ProVideo and Entertainment due to affordable 4KHDR and RAW workflows, in which our products are leaders.

About the Atomos share price

The Atomos share price is down almost 50% since the beginning of the year, reflecting weak investor sentiment from COVID-19. The company, however has slowly been on the mend, recuperating from its all-time low of 24 cents in March.

Atomos has a market capitalisation of $165.4 million and a negative earnings per share of 0.12.

More reading

• The Austal (ASX:ASB) share price has dipped despite positive news
• ASX 200 Weekly Wrap: ASX 200 has another shocker as US election approaches
• Why the Fluence (ASX:FLC) share price is up 10% today
• Why the CV Check (ASX:CV1) share price is edging lower today
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Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Atomos Ltd. 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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It can be an interesting insight to know what brokers think of an ASX dividend share. The problem is that a single broker can be wrong or biased.

If you can get a consensus among brokers about which shares are best, then that may give a clue about what to buy and what to avoid.

Every so often MarketIndex collates the broker recommendations of 150 ASX shares and totals the buys, holds and sells for those shares. The higher or lower the average score the more of a strong buy, buy, hold, sell or strong sell that share is rated.

The below shares have dividend yields above 5% and a market capitalisation above $1 billion. However, MarketIndex cautioned that a high dividend yield can indicate a falling share price or limited growth prospects.

Here are three of the ASX dividend shares that fit the above screens:

Harvey Norman Holdings Limited (ASX: HVN)

Harvey Norman Holdings is the business that is behind the Harvey Norman stores that sell appliances, devices, furniture and so on. In Australia it operates a franchisee model. According to the ASX, Harvey Norman has a market capitalisation of $5.63 billion.

The ASX share reported double digit profit growth in FY20. Profit after tax went up 19.4% to $480.5 million whilst profit after tax excluding AASB 16 and revaluations went up 30.9%.

There has been a vibrant retail performance this year by several ASX retailers such as JB Hi-Fi Limited (ASX: JBH), Adairs Ltd (ASX: ADH) and Nick Scali Limited (ASX: NCK) despite the impacts of COVID-19.

At the end of FY20 it paid a special dividend of 6 cents per share and also just paid a dividend of 18 cents per share. That brings the trailing grossed-up dividend for the ASX share to 7.55% at the current Harvey Norman share price.

DEXUS Property Group (ASX: DXS)

Dexus is one of Australia’s biggest real estate businesses – it’s a real estate investment trust (REIT). It owns $16.5 billion of office and industrial properties.

The REIT has a market capitalisation of $9.84 billion according to the ASX. The Dexus share price is still down by 33% compared to the pre-COVID-19 crash price.

Dexus recently gave an update. For the three months to 30 September 2020, it said its office occupancy by income was 95.4%, down from 96.5% at 30 June 2020. However, its office weighted average lease expiry (WALE) increased by 0.1 years to 4.3 years. The industrial portfolio’s occupancy by income reduced to 94.8% at 30 September 2020 and the WALE was maintained at 4.1 years.

The REIT has a $10.4 billion development pipeline, which it says provides the opportunity to grow and enhance future returns.

In terms of the distribution guidance, the ASX dividend share is expecting the distribution to be consistent with the FY20 distribution guidance of 50.3 cents which amounts to a yield of 5.6% at the current Dexus share price if it were to pay the same distribution again.

Aurizon Holdings Ltd (ASX: AZJ)

This is a railroad business that owns a large railway network that carries a lot of resources across its network.

According to the ASX, its market capitalisation is $7.13 billion.

FY20’s profit growth supported growth of the dividend. Its underlying earnings per share (EPS) went up by 15% to 27.2 cents and statutory EPS grew by 30%. That helped FY20’s total dividend climb by 15% to 27.4 cents.

At the current Aurizon share price, that trailing dividend amounts to a dividend yield of 9.5% with the Aurizon share price falling by around 25% since 3 July 2020.

In FY21 Aurizon is expecting underlying earnings before interest and tax (EBIT) to be between $830 million to $880 million, which would represent a decline from $909 million in FY20.

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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends ADAIRS FPO. The Motley Fool Australia has recommended ADAIRS FPO and Aurizon Holdings 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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PayGroup Ltd (ASX: PYG) announced today it has completed its acquisition of Payroll HQ Pty Limited. Payroll HQ is an Australian-based outsourced payroll provider with high quality corporate client base, delivering approximately 120,000 payslips annually. The PayGroup share price was up 5.45% in early trading but has since retreated to a price of 56 cents, up 2.73% .

Headquartered in Melbourne, PayGroup provides payroll and human capital management solutions. The company has operations in 11 countries, with more than 995 clients, and processes more than 5 million payslips per annum.

For the first quarter of FY21, PayGroup announced record contract growth of $5.4 million in contract wins. This was up 93% on the prior corresponding period, and 98% of its entire FY20 total contract value.

What’s moving the PayGroup share price?

Payroll HQ offers Software-with-a-Service (SwaS) payroll outsourcing services based in Sydney. At the time of sale, it has 100 corporate clients in Australia and New Zealand. All contracts have 3 year recurring revenue terms with automated renewals in place and a client retention of >95%.

The acquisition is worth the equivalent of $2.535 million, payable through the issue of 4,122,694 PayGroup shares at $0.615. A further earnout of circa $1.28M is expected to be achieved based on the FY21 forecast revenue.

The acquisition immediately adds 100 clients with significant cross-sell opportunities. Moreover, PayGroup plans to appoint the experienced Australian-based sales team to help drive PayGroup’s growth strategy. The company expects the acquisition will add $2.25 million in revenues. 

What did management say?

PayGroup managing director Mark Samlal said the Payroll acquisition would “significantly transform” PayGroup’s SwaS payroll presence and increase sales capabilities in Australia.

Payroll HQ has an excellent client base and sales pipeline, and is led by a group of experienced and high-performing industry experts. In this current environment, when payroll is so critical to the livelihood of workers, and cost efficiency and agility is a crucial element for all businesses in a post-lockdown economy, we see significant opportunity to grow this business and we welcome the Payroll HQ team on-board.

Payroll HQ Chief Executive Officer Ross Heron also welcomed the move, saying:

We see real benefits of integrating our business with PayGroup and have already identified many of their product lines – such as Treasury Services and HCM SaaS modules – as being highly attractive to our client base…We believe that working together with PayGroup will put us in the best position to capitalise on post-pandemic business opportunities.

More reading

• PayGroup (ASX:PYG) share price falls despite positive update
• PayGroup (ASX:PYG) share price moves higher on contract win
• What’s driving the PayGroup (ASX:PYG) share price higher today

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