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5 exciting small cap shares to watch in FY 2019

I think there are a good number of shares at the small end of the market with the potential to grow significantly in the future.

While not all of these shares may be ready for investment today, I think they are all well worth having on your watchlists.

They are as follows:

Adairs Ltd (ASX: ADH)

Adairs is a home furnishings retailer which returned to form in FY 2018 with a 45.4% increase in profits to $30.6 million. A key driver of this growth was its successful strategy of focusing on large homemaker stores and its thriving online business. The latter grew sales by 75% on the prior year to $42 million.

Citadel Group Ltd (ASX: CGL)

Citadel Group is a software and services company which specialises in IT security and data management. Citadel delivered record revenues of $108.5 million in FY 2018 thanks partly to the growing popularity of its Citadel-IX platform. Citadel-IX is a modular SaaS platform designed to provide both domestic and international customers with secure, flexible options to manage their enterprise information.

LiveTiles Ltd (ASX: LVT)

LiveTiles is a digital workplace platform provider with a focus on the artificial intelligence market. Last year it grew annualised recurring revenues by 275% to $15 million due partly to its partnership with Microsoft. I expect strong growth again this year thanks to the engagement of a dedicated sales force and further development of the Microsoft and partner channels.

Paragon Care Ltd (ASX: PGC)

Paragon Care is a leading provider of integrated services to both the health and aged care markets. Over the last few years it has been growing at a solid rate due to organic growth and a series of earnings accretive acquisitions. The latter looks set to continue in the near term. Paragon Care recently pulled in $45.2 million through a placement of shares with China Pioneer. These funds are to be used for near term acquisitions of complementary healthcare businesses in Australia and New Zealand.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara Health Technologies is a breast imaging analytics and analysis software specialist. Earlier this week it announced the receipt of a new FDA 510(k) clearance for technologies used in Volpara Enterprise software and the Volpara Density clinical application. This means the company can now introduce its Volpara Live! System. I expect this to help the company with its aim of growing its market share in the U.S. breast screening market from 3.7% to 9% this year.

Lastly, don't miss out on these top up and coming shares which could be destined for big things.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended VOLPARA FPO NZ. The Motley Fool Australia owns shares of Citadel Group Ltd. The Motley Fool Australia has recommended Paragon Care 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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