Looking back on the year that was 2020 – who would have thought in January that we would experience a global pandemic; working from home would become the norm; people would fight over toilet paper rolls; balcony raves would replace music festivals, and we’d be elbow bumping our way into 2021.
But nevertheless, the pandemic created unique circumstances that led to some unlikely big ASX winners for the year.
A sea of sanitisers
Everyone is now much more familiar with the humble hand sanitiser. As a simple and effective method of killing pathogens, demand for the product skyrocketed as a frontline defence against COVID-19.
The Zoono Group Ltd (ASX: ZNO) share price has benefitted from being a significant supplier of sanitiser and disinfectant products globally. Zoono has delivered an 83% return, compared to the S&P/ASX 200 Index (ASX: XJO) which has fallen 1.59%.
Logically, the share price rise is reflected in the revenue growth of the company. Zoono experienced enormous revenue growth, from NZ$1.8 million in FY19 to NZ$38.3 million in FY20.
Zoono is still eyeing off growth into 2021, with the company’s latest update outlining the signing of 2 new distribution agreements, regulatory approval for Russia, and the launch of a new ‘Zoono treated’ face mask.
Cooking up a storm
Closures and restrictions meant that it was a whole lot harder to go out and enjoy a good meal. This meant people had to turn to self-made options, but who wants to think about what to cook during a pandemic? Enter the subscription-based meal-kit provider Marley Spoon AG (ASX: MMM).
As notified in March, the company witnessed an unprecedented surge in demand for their home delivered meal kits in all its markets. This trend continued throughout the year and powered the company to deliver 21 million meals in the first half of 2020.
In Q3, Marley Spoon’s revenue had grown by 163% in the US compared to the prior corresponding period. The share price has certainly been no laggard either, with the 1-year return being 956%.
Marley Spoon is hungry for more. The company announced on 11 December that it believes the change in consumer behaviour is still in its early phase. Hence, the company plans to increase capacity through a number of manufacturing centre expansions.
Did someone say “DIY patio”?
“Bored in a house, and I’m in a house bored” – not just a Tik Tok song in 2020 – we lived it. At a point, restrictions limited leaving the house to ‘essential’ trips only, and then we were confined to a set distance. This gave very little freedom to do anything interesting or productive. Soon people realised that it was a great time to fix that fence they had been putting off; or build that patio they had been meaning to get around to.
The Wesfarmers Ltd (ASX: WES) share price has benefited from this, growing a very respectable 22% in the last year. A substantial contributor is the Bunnings business, which has been the go-to store during the pandemic for all DIY supplies. In Wesfarmers’ trading update Bunnings sales had increased by 25.2% year to date, compared to the prior corresponding period.
But it doesn’t stop there. Wesfarmers also benefitted from the working from home shift – which meant more people buying desks, chairs, stationery etc. from Officeworks. This lifted Officeworks year to date sales by 23.4%.
Lastly, Wesfarmers’ acquisition of the online retailer, Catch Group, put them in prime position for the online shopping bonanza – sales up 114.4%.
No one would have guessed that these 3 ASX shares would have performed as well as they did, and less likely would be to have predicted the reasons why. 2021 will certainly hold its own set of challenges and opportunities – which shares will be beneficiaries of that, at the moment that’s anyone’s guess.
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Returns as of 6th October 2020
Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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