The small end of the Australian share market is home to a number of companies with the potential to grow materially in the future.
Three that investors might want to get better acquainted with are listed below. Here's why they should be on your watchlist:
Audinate Group Limited (ASX: AD8)
Audinate is a leading digital audio-visual networking technologies provider. The key product in its arsenal is its popular Dante audio over IP networking solution. This solution is used across a number of industries and is the clear industry leader. For example, the number of Dante enabled products manufactured by its customers is eight times greater than its nearest rival. This puts the company in a great position to benefit from increasing demand once the pandemic passes. In fact, this demand is already showing, with Audinate reporting its highest ever quarterly revenue last week.
Serko Ltd (ASX: SKO)
Serko is an online travel booking and expense management provider. Its two key products are the Zeno Travel and Zeno Expense platforms. Serko's Zeno Travel provides AI-powered end-to-end travel itineraries, cost control and travel policy compliance to corporate customers. Whereas Zeno Expense allows businesses to automate and streamline their expense administration function, identify out-of-policy expense claims, and prevent fraud. Given its exposure to travel markets, it will come as no surprise to learn that demand has fallen heavily during the pandemic. However, with travel markets beginning to recover, Serko has also reported improvements in its performance. Another positive is that a significant deal with travel giant Booking.com could be a game-changer once trading conditions return to normal.
Universal Store Holdings Limited (ASX: UNI)
Universal Store is a fashion retailer aiming to deliver a frequently changing and carefully curated selection of on-trend products to the fashion focused customer. Unlike the others, it has been a particularly positive performer during the pandemic. For example, during the first half of FY 2021, Universal Store reported a 23.3% increase in sales to $118 million and a 63.6% increase in underlying net profit after tax to $21.1 million. Positively, it is expecting a strong second half and bumper full year profit result. Looking further ahead, the company has opportunities to expand its footprint meaningfully over the next decade to drive further growth. As things stand, management has identified up to 60 new store sites. This compares to the 65 stores it was operating from during the first half.
