Some ASX shares are growing very quickly, including Bapcor Ltd (ASX:BAP).
The post 2 ASX shares that are rapidly growing appeared first on The Motley Fool Australia. –
There are a group of ASX shares that are growing at a very fast pace. Some are growing revenue by double digits, or even triple digits.
Businesses that are producing fast revenue growth may be able to generate profit growth and benefit from increasing scale.
Here are two businesses that are growing really quickly:
Bapcor Ltd (ASX: BAP)
This business has the goal of being the leading auto parts business in the Australasian region.
It has a number of operating segments include Bapcor Trade (which includes Burson), Bapcor New Zealand, retail (including Autobarn and Autopro), specialist wholesale (such as commercial vehicles and electrical), and service (like Midas and ABS).
In the first six months of FY21, the ASX share reported it had grown revenue by 25.8% and it saw net profit growth of 49.7%.
One of the main ways that Bapcor is looking to grow revenue and profit is by increasing its network footprint, both physical and online. It has plans to grow its number of stores, rolling out improved ‘concepts’ to differentiate against competitors. Bapcor wants to provide customers with an online offering to supplement its physical stores. The company also wants to grow its existing store sales and geographic expansion in Asia.
In Australia, it’s looking to grow its trade network by 10 to 12 stores per annum to a total of 260 over the next five years, up from 200. For Australian retail, it currently has 133 stores and will add around 12 new stores a year as it targets 200 Autobarn stores for the longer-term.
In Asia, the ASX share is targeting more than 60 stores in Thailand, it currently has six stores. This may translate into $100 million of annual revenue. Overall, Bapcor is targeting $500 million of Asian revenue thanks to its Tye Soon stake purchase.
Bapcor is also consolidating 13 distribution centres in Victoria into one located in Tullamarine.
Temple & Webster Group Ltd (ASX: TPW)
Temple & Webster is an online homewares and furniture business that sells many thousands of products by suppliers which ship directly to customers. That saves on inventory costs for the ASX share and makes delivery quicker.
In the third quarter of FY21, Temple & Webster said it continues to exceed expectations with revenue growth of 112%. Active customers reached around 750,000.
April 2021 revenue was up more than 20%, despite April 2020 having a large amount of sales because of the nationwide lockdowns.
The ASX share said it has a growth strategy to grow its online market leadership, utilising its strong balance sheet and capitalising on the significant market opportunity as more people buy homewares online.
In the short-term, the business is expecting a lower earnings before interest, tax, depreciation and amortisation (EBITDA) margin, but then it expects to achieve higher profit margins from greater scale benefits.
Temple & Webster CEO and co-founder Mark Coulter said:
You only need to look at the US to see how the e-commerce market is playing out, and why we remain bullish about the shift from offline to online. We are at the start of this once in a generation shift, and now is the time to put our foot down to secure market leadership and ensure we are the brand for the next generation of future shopper.
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Motley Fool contributor 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 and has recommended Temple & Webster Group Ltd. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia has recommended Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.