With 2016 and its many upsets behind us, investors are no doubt crossing their fingers for a smoother 2017 – I know I am. Whatever happens though, here are two companies I think could have another strong year in 2017:
Retail Food Group Limited (ASX: RFG)
The master franchisor behind many of Australia's popular brands – Gloria Jean's, Donut King, Michel's Patisserie, and more – Retail Food Group has made a number of acquisitions in recent times that it will be integrating this year. The company expects a significant increase in profits from these acquisitions, and should also see an improvement in pre-acquisition earnings as a result of its expansion overseas.
A much-needed menu refresh should also help revive interest in some of its franchises, and should deliver additional growth for both Retail Food Group and its franchisees. For these reasons and a few more, I'm expecting Retail Food Group to have a strong 2017.
Nearmap Ltd (ASX: NEA)
Nearmap recently confused the market when the well-financed company raised additional capital from shareholders without any prior warning. Either way, the debt-free and cash-rich company is now debt-free and cash-richer, putting it in a good position to expand its operations in the USA. Nearmap has already experienced some success in this market, having delivered five quarters of successive growth there already in the past 18 months.
The most recent quarterly report suggested that the sales pipeline remains strong, with leads ahead of targets and management reporting growing confidence in 'both the size of the opportunity and our (Nearmap's) ability to compete'. I am wary of management spending imprudently now that Nearmap is cashed up, but the stage appears to be set for further growth in 2017.
