3 exciting small cap ASX shares to watch in June

Serko Ltd (ASX:SKO) shares are one of three that I think are worth watching at the small end of the market…

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I'm a big fan of small cap shares and believe it is well worth having a little exposure to them if your risk profile allows it.

Three small cap shares which I feel have bright futures ahead of them are listed below. Here's why I think they are worth watching closely in June:

Readytech Holdings Ltd (ASX: RDY)

Readytech is a recently listed provider of people management systems. It currently provides its services to 3,600 customers in the education and training sector, including tertiary institutions, VET providers, government agencies, and HR departments. The company has been growing at an impressive rate over the last few years and appears well-positioned to continue this trend as a listed company. Last week analysts at Macquarie initiated coverage on the company with an outperform rating and $2.20 price target.

Serko Ltd (ASX: SKO)

Serko is the leading online travel booking and expense management provider in the ANZ region and counts the likes of Flight Centre Travel Group Ltd (ASX: FLT), Microsoft, and Telstra Corporation Ltd (ASX: TLS) as customers. Last week it reported its full year results and revealed more strong growth. For the 12 months ended March 31, Serko achieved total operating revenue of $23.4 million. This was a 28% increase on FY 2018's result and the upper end of its guidance range of 20% to 30% growth. Pleasingly, management appears confident that this strong form will continue in FY 2020 and has provided total operating revenue growth guidance of between 20% and 40%.

Xref Ltd (ASX: XF1)

Another small cap share to watch in June is this human resources technology company. Xref allows prospective employers to conduct pre-employment reference checks on candidates via an online candidate-referencing system. It has attracted a wide range of big name clients to its service such as Bunnings, Nearmap Ltd (ASX: NEA), Qantas Airways Limited (ASX: QAN) and Westpac Banking Corp (ASX: WBC). Pleasingly, the company has just reported that its client acquisition costs and average revenue per account have now aligned. This means that Xref's cash flow break-even point is now on the horizon.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Flight Centre Travel Group Limited and Telstra Limited. The Motley Fool Australia has recommended Serko Ltd. 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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