ASX tech share latest to dump its dividend and guidance

ASX tech share Rhipe Ltd (ASX: RHP) has withdrawn its full year guidance and cancelled its dividend in the face of coronavirus uncertainty.

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Rhipe Ltd (ASX: RHP) has withdrawn its full year guidance and cancelled its dividend in the face of coronavirus uncertainty.

Rhipe is a cloud software licensing company that supports service providers in adopting cloud technology. The company said the increasing level of uncertainty arising from coronavirus meant it considered it appropriate to withdraw its previously announced FY20 operating profit guidance. 

Dividend dumped

Rhipe said it continues to be pleased with its performance, profitability, and retention of a strong balance sheet with significant cash reserves. Nonetheless, it has cancelled its interim dividend of 1.2 cents per share. The company said this measure was precautionary and reflected a desire to maintain strong liquidity in an increasingly volatile and uncertain time. 

Rhipe shares have fallen 34% from their peak of $2.42 in February and are currently trading at $1.58, which includes a 6% gain in today's trade.

Rhipe results 

In its first half results (released in February), the company reported strong sales and revenue growth. Group sales growth was 33%, due to demand for public cloud software and infrastructure, particularly Microsoft Azure and Office365. Revenue grew by 24% due to an increasing contribution from Microsoft Azure and the company's Asian operations, plus changes to vendor incentives and competition. 

Group earnings before interest, tax, depreciation, and amortisation grew 53% year on year to $7 million, while net profit after tax grew 7% to $3.3 million. Rhipe was predicting full year profits of $16 million prior to today's announcement. 

At the end of the first half, Rhipe had $24 million cash versus $25.5 million at 30 June 2019. By cancelling the payment of the interim dividend, Rhipe will save over $1.6 million. Rhipe is among a growing number of companies that have cancelled or deferred dividend payments in the last couple of weeks. 

Range of companies impacted 

Qantas Airways Limited (ASX: QAN) deferred its dividend of 13.5 cents per share from April to September, and cancelled an off-market share buyback in order to preserve $150 million in cash. Flight Centre Travel Group Ltd (ASX: FLT) cancelled its interim dividend of 40 cents per share in order to save some $40.1 million

A large number of ASX shares have also withdrawn earnings guidance due to the impacts of coronavirus. Auckland International Airport Limited (ASX: AIA) withdrew guidance as New Zealand introduced strict new border controls to contain the spread of the virus. Cochlear Limited (ASX: COH) withdrew guidance as cochlear implant surgeries were deferred

oOh!Media Ltd (ASX: OML) withdrew guidance due to the economic impacts of coronavirus on the advertising market. Seven West Media Limited (ASX: SWM) and Nine Entertainment Co Holdings Limited (ASX: NEC) did likewise. 

Should you invest $1,000 in Auckland International Airport Limited right now?

Before you buy Auckland International Airport Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Auckland International Airport Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Kate O'Brien owns shares of Cochlear Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. The Motley Fool Australia owns shares of and has recommended Flight Centre Travel Group Limited. The Motley Fool Australia has recommended Cochlear Ltd., Nine Entertainment Co. Holdings Limited, and oOh!Media 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.

More on Share Market News

Person pretends to types on laptop drawn in sand.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a happy finish to the week for ASX shares this Friday.

Read more »

Three people in a corporate office pour over a tablet, ready to invest.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A mature age woman with a groovy short haircut and glasses, sits at her computer, pen in hand thinking about information she is seeing on the screen.
Share Market News

ASX shares in April: 8 key takeaways according to Macquarie

Here are eight key takeaways from April, according to a new note from the broker.

Read more »

Woman looking at a phone with stock market bars in the background.
Share Market News

Market outlook: Should I 'sell in May and go away'?

May is the time to sell... If you believe in fairytales.

Read more »

Five young people sit in a row having fun and interacting with their mobile phones.
Share Gainers

5 ASX All Ords stocks rocketing higher this week

Investors sent these five ASX All Ords stocks soaring this week. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Block, Corporate Travel Management, Judo, and Zip shares are sinking today

These shares are missing out on the good times on Friday. But why?

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Share Gainers

Why Boss Energy, Capstone, Dimerix, and Platinum shares are storming higher today

These shares are having a good finish to the week. Let's find out why.

Read more »

A shocked man holding some documents in the living room.
Broker Notes

Macquarie's take on Judo Capital shares after suddenly falling 19% yesterday?

Judo Bank was the ASX's top-performing banking stock in 2024.

Read more »