Booktopia Group Ltd (ASX:BKG) and this ASX small cap share could be worth watching closely in 2021…
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As I’m a big fan of small cap shares, I feel quite fortunate to have such a large number of them to choose from on the Australian share market.
Two small cap ASX shares that stand out from the crowd and could have bright futures are listed below. Here’s what you need to know about them:
Booktopia Group Ltd (ASX: BKG)
Booktopia is an online book retailer which has been growing very strongly.
During the first half of FY 2021, the company shipped a total of 4.2 million units for the six months. This was up 40% on the prior corresponding period. This strong growth is being driven by the shift to online shopping and its investment in additional automation and increased capacity at its distribution centre.
This ultimately led to Booktopia reporting a 51.1% increase in revenue to $112.6 million and a 502.3% jump in underlying EBITDA to $8 million.
Analysts at Morgans were pleased with the result. In response to it, the broker retained its add rating and lifted its price target slightly to $3.53. The broker believes the company is well-placed for growth thanks to market share gains and operating leverage.
Universal Store Holdings Limited (ASX: UNI)
Universal Store is a fashion retailer which aims to deliver a frequently changing and carefully curated selection of on-trend products to a target 16-35 year old fashion focused customer.
Last week it released its half year results and revealed that FY 2021 has started very positively. For the six months ended 31 December, Universal Store reported a 23.3% increase in sales to $118 million and a 63.6% increase in underlying net profit after tax to $21.1 million.
This was driven by like for like store sales growth of 19.1% and a 128.3% jump in online sales. This offset store closures in Melbourne between August and October.
Pleasingly, the second half has started just as strongly. During the first seven weeks of the half, it achieved sales growth of 23.5%. This is being driven by like for like sales growth of 28.2%, which offset store closures during recent lockdowns.
Morgans was very pleased with its result. So much so, it retained its add rating and lifted its price target to $8.37.
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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. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.