The mid cap side of the Australian share market is home to a number of companies that have been growing strongly over the last few years.
Two that have achieved this are listed below. Here's what you need to know about them:
Adore Beauty Group Limited (ASX: ABY)
Adore Beauty is a recently listed $600 million beauty retailer. It was created in a garage in Melbourne 20 years ago and now has over 590,000 Active Customers across the ANZ region purchasing third-party beauty and personal care products from its website. This calendar year the company is expecting to generate revenue of $158.2 million, this will be an increase of 76% on the prior corresponding period. Also expected to grow strongly is its net profit, which is forecast to increase 150% year on year to $3.5 million.
This is still only scratching at the surface of a beauty and personal care products market estimated to be worth $10.9 billion in 2019 according to Frost & Sullivan. Management has its eyes on winning a greater slice of this market and intends use the funds it raised from its IPO to support its growth strategy and future growth opportunities.
Jumbo Interactive (ASX: JIN)
Jumbo Interactive is a $788 million online lottery ticket seller and the operator of the Oz Lotteries website. At present the company generates the majority of its revenue from the Oz Lotteries website, but it is far from a one-trick pony. Jumbo also has a growing software-as-a-service (SaaS) business – Powered by Jumbo.
Management expects its Powered by Jumbo SaaS business to be the key driver of growth in the future. It estimates that it has a US$303 billion global total addressable market, with only 7% of this market online at the moment.
One broker that is confident on its future is Goldman Sachs. Yesterday it initiated coverage on the company with a buy rating. It is forecasting a 16% compound annual growth rate for Jumbo's revenue over the next three years. This is expected to be supported by the lottery industry reaching an inflection point in digital penetration and the structural shift to online sales.
