I’m a big fan of small cap shares and believe the Australian share market is home to a large number with the potential to grow meaningfully in the future.
Four that I think are worth watching very closely are listed below. Here’s why I like them:
Citadel Group Ltd (ASX: CGL)
Citadel is one of my favourite options in the tech sector right now. It is a fast-growing software and services company specialising in IT security and data management. It delivered record revenues of $108.5 million and a 26% increase in net profit after tax to $19.4 million in FY 2018 thanks partly to the growing popularity of its Citadel-IX cloud-based enterprise information management platform.
Megaport Ltd (ASX: MP1)
In FY 2018 this provider of elasticity connectivity and network services delivered an 85% increase in revenue to $19.8 million. This was driven by its growing footprint and a 41% increase in customer numbers to 1,038. These customers include many blue chip names such as Aon, Flight Centre Travel Group Ltd (ASX: FLT), and Vodafone.
Redbubble Ltd (ASX: RBL)
Another up and coming tech share is Redbubble. It is an ecommerce company providing a global online marketplace that connects independent artists with customers. In FY 2018 the company had a strong year and grew revenue by 29.7% to $182.8 million. The strong result was driven by the winning combination of rising customer numbers and increasing repeat customers. Management has forecast revenue growth of 30% on a constant currency basis in FY 2019.
Serko Ltd (ASX: SKO)
Serko is a relatively new listing on the Australian share market. It is a provider of travel and expense technology solutions to a growing number of companies including industry giant Flight Centre. The company recently signed a letter of intent with Flight Centre to develop unique product offerings based on Serko’s travel management technology. This year management expects revenue growth in the range of 20% to 30%.