The unprecedented consequences of the coronavirus pandemic have taken a heavy toll on the global economy. As a result, the pandemic has forced individuals and society to adapt in order to function and endure. Despite the widespread chaos for most businesses, some notable ASX COVID-19 success stories have emerged.
Here are 3 companies that have come into their own as a result of the coronavirus lockdown.
Temple & Webster Group Ltd (ASX:TPW)
Temple & Webster is Australia’s largest online retailer of furniture and homewares, boasting more than 150,000 products for sale. The company has been a market darling during the coronavirus lockdown period as shoppers switch to online retail avenues.
Temple & Webster acknowledge this strong demand in a recent trading update, which highlighted a 130% surge in gross sales to 28 June on a year-on-year basis. In mid-June, the online retailer reported a 668% increase in year-to-date EBITDA of $7.1 million. Additionally, Temple & Webster reported a 68% increase in year-to-date revenue of $151.7 million.
Despite being debt-free and boasting around $30 million in cash, Temple & Webster recently completed a $40 million share placement. The company noted that this will allow for further investments in growth and will improve its technology, product and service offerings.
Marley Spoon AG (ASX: MMM)
Another company to capitalize on the demand for online and convenience services has been Marley Spoon. The subscription-based meal-kit provider saw an unprecedented surge in demand during the pandemic. Marley spoon reported that 7.5 million meals were delivered in the first quarter of 2020.
This surge in demand resulted in Marley Spoon recording its first-ever positive cash flow and accelerating future growth plans. This has been reflected in the company’s share price, which has surged more than 600% since mid-March. In response, the company completed a $16.6 million capital raising to strengthen its balance sheet and fund continued global expansion.
Kogan.com Ltd (ASX: KGN)
Kogan.com is fast becoming a household name following the coronavirus pandemic. During the lockdown period, Kogan’s active customer base grew to over 2 million, with 126,000 additional customers as of 31 May.
Kogan reported a 100% increase in gross sales across April and May thanks to consumers opting for the convenience of online shopping. The online retailer also reported a 130% surge in gross profit for the same period.
The demand has rippled into the Kogan share price which has surged more than 300% from late March to trade near all-time highs. The online retailer recently completed a $115 million capital raising in order to accelerate future acquisition opportunities.
The trend among these ASX COVID-19 success stories is the benefits they have all experienced from the change in consumer behaviour and their continued investment in online exposure.
Although all 3 companies have rallied tremendously since March, I can’t advocate buying shares in any at the moment.
Instead, I think a prudent strategy for investors would be to compile a watchlist of similar companies that could thrive in 2020 and beyond.
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Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia has recommended Temple & Webster Group 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.