As well as being home to countless blue chip shares, the Australian share market is home to a good number of promising small caps.
Two small cap ASX shares that could be worth adding to your watchlist are listed below. Here's what you need to know about them:
SILK Laser Australia Limited (ASX: SLA)
The first small cap ASX share to look at is SILK Laser. It is a laser, skin care, and cosmetic injections company.
It has been growing very strongly in FY 2021 and recently released a trading update for the first five months of the financial year. At that point, the company revealed that its unaudited network cash sales were up 63% on the prior corresponding period to $38 million. Pleasingly, this means SILK Laser is on track to beat its forecasts for the year.
Looking ahead, management sees plenty of opportunities to drive growth through the expansion of its network of clinics. At the last count, SILK Laser had a total of 53 clinics in operation. Management believes it can grow its network by 6 to 10 new clinics per annum up to a total of approximately 150 clinics.
Sovereign Cloud Holdings Ltd (ASX: SOV)
Sovereign Cloud is an infrastructure as a service (IaaS) company supporting the secure and continuous delivery of information. It counts the Australian government, the Australian Defence Force (ADF), and Critical National Industry (CNI) communities as customers.
Through the AUCloud brand, the company's IaaS service provides customers with a highly secure, scalable, automated cloud solution, delivering an efficient and effective hosting environment for critical and sensitive applications and systems.
Positively, the services and data managed by AUCloud are all hosted and maintained in Australia. This compares to other global IaaS brands which may store data overseas, opening the stored data up to potential legal and jurisdictional compromise.
With cyber threats to government and commerce posed by malicious actors increasing, demand for its services is expected to grow strongly in the future.
