Although the pandemic has stifled the growth of a number of companies in FY 2021 such as A2 Milk Company Ltd (ASX: A2M) and Ramsay Health Care Limited (ASX: RHC), not all companies are struggling.
Two companies which have continued to deliver very strong growth in FY 2021 are listed below. Here's what you need to know:
Afterpay Ltd (ASX: APT)
This payments company has been an outstanding performer during the pandemic. Thanks to the accelerating shift to online shopping and the growing popularity of the buy now pay later payment method, Afterpay is on course for another stellar result in FY 2021.
During the first quarter of the financial year, Afterpay reported a 115% increase in underlying sales to a record of $4.1 billion. This was driven by a 229% increase in US underlying sales to $1.6 billion, a 346% jump in UK underlying sales to $0.3 billion, and a 63% lift in Australian underlying sales to $2.2 billion. Repeat usage, another large increase in merchant numbers, and a whopping 98% increase in active customers to 11.2 million helped drive the strong quarterly result.
Pleasingly, its strong form has continued since the end of the quarter. At its recent annual general meeting, co-CEO Anthony Eisen revealed that trading in October and November was strong.
Mr Eisen commented: "October was another record month for underlying sales globally and we are performing ahead of this in November. The growth of new customers is accelerating since the end of Q1 in both the US and UK as the pipeline of new merchants go live on our platform."
Xero Limited (ASX: XRO)
Another company which has been on form this year despite the pandemic is Xero. After a bumper result in FY 2020, Xero has followed this up with an even stronger first half to the new financial year.
During the half, the company's operating revenue grew 21% over the prior corresponding period to NZ$409.8 million. This led to Xero's annualised monthly recurring revenue (AMRR) growing 15% to NZ$877.6 million.
Pleasingly, things were even better for its earnings thanks to further operating leverage. Xero's earnings before interest, tax, depreciation and amortisation (EBITDA) increased by an impressive 86% to NZ$64.9 million and its net profit after tax was 26 times greater than the prior corresponding period at NZ$34.5 million.
Since this release, the company has launched a US$600 million convertible notes offering. These funds will be used to support its growth plans. There is speculation that this could mean a sizeable acquisition in the near future.