The ASX 200 fell 0.5% on Thursday

The S&P/ASX 200 Index (ASX:XJO) fell by 0.5%. However, the Xero Limited (ASX:XRO) share price rose after another strong report.
The post The ASX 200 fell 0.5% on Thursday appeared first on Motley Fool Australia. –

ASX 200

The S&P/ASX 200 Index (ASX: XJO) went up by 5% today to 6,418 points.

Here are some of the highlights from the ASX:

Xero Limited (ASX: XRO) reports

Xero reported its FY21 half-year result today.

The software business reported that for the six months ending 30 September 2020, its operating revenue grew by 21% to NZ$409.8 million.

Total subscribers rose by 19% to 2.45 million whilst net subscriber additions decreased by 30% to 168,000. The total lifetime value of subscribers increased by another 15% to NZ$6.17 billion.

The rest of the world subscribers demonstrated the fast growth rate with an increase of 37% to 136,000 with revenue growth of 38%. This was led by South Africa, with progress in Singapore.

UK subscribers rose by 19% to 638,000 with revenue growth of 33%. Australian subscribers grew by 21% with revenue growth of 18%. New Zealand subscribers rose by 13% with revenue also increasing by 13%.

The average revenue per user decreased by 4% to NZ$29.81 whilst annualised monthly recurring revenue increased by 15% to NZ$877.55 million.

The ASX 200 share’s gross margin percentage rose by 0.5 percentage points to 85.7%.

Xero’s earnings before interest, tax, depreciation and amortisation (EBITDA) went up by 86% to NZ$120.8 million. The net profit after tax (NPAT) rose from NZ$1.3 million to NZ$34.5 million and the free cash flow jumped from NZ$4.8 million to NZ$54.3 million.  

CEO comments

Xero CEO Steve Vamos said: “This result demonstrates the value our customers attribute to their Xero subscription and the underlying strength of Xero’s business model. We continue to prioritise investment in customer growth and product development in line with the long term opportunity we see.

“Subscriber growth was positive in all geographies, with stronger net subscriber additions in Australia and New Zealand with relatively less disruption in those markets from COVID-19. During a difficult period, it’s pleasing to report we grew to exceed one million subscribers in both Australia and in our international segment.

“We’ve responded to COVID-19 by delivering new products and services that meet our customers’ and partners’ changing needs. These include assisting with small business access to government stimulus and delivering Xero On Air, our first global digital customer and partner engagement event.”


In terms of the outlook, Xero said that it’s a long-term orientated business with ambitions for high-growth. It will continue to operate with disciplined cost management and targeted allocation of capital. It will continue to innovate invest in new products and customer growth, and respond to opportunities and changes in its operating environment.

But it couldn’t provide guidance or further commentary due to the uncertainty created by COVID-19.

The Xero share price rose by 0.6% today, though it reached around $130 in early trading.

Telstra Corporation Ltd (ASX: TLS)

The telecommunications ASX 200 giant held an investor day today. It laid out a plan to create three separate legal entities within the Telstra business.

The first division will be called InfraCo Fixed which will own and operate the passive or physical infrastructure assets including the ducts, fibre, data centres, subsea cables and exchanges.

Second, InfraCo Towers will own and operate the passive or physical mobile tower assets, which will look to monetise over time.

Third, ServoCo will focus on how to create innovative products and services, support customers and deliver the best possible customer experience.

The idea behind this is to take advantage of the increasing value of infrastructure assets globally, the importance of the digital economy, and the dependence of the digital economy on telecommunications.

The Telstra share price rose 3% today.

Wesfarmers Ltd (ASX: WES)

The ASX 200 retail giant released a trading update today.

It said that in the four months to the end of October 2020, Bunnings sales have grown 25.2%, Kmart sales went up by 3.7%, Target sales decreased by 2.2%, Catch sales went up 114.4% and Officeworks sales grew by 23.4%.

In the year to date, its retail businesses have delivered total online sales growth of 166%, excluding Catch. Excluding online sales in metropolitan Melbourne, which were significantly elevated due to government-mandated trading restrictions, online sales growth was 98%. Including Catch, which is 100% online, total online sales across Wesfarmers increased to $1.3 billion.

Wesfarmers also said that its industrial businesses have made a pleasing start to the year.

The Wesfarmers share price went up 2.5% today.

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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. owns shares of Xero. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of Wesfarmers 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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