Some of the S&P/ASX 200 Index (ASX: XJO) shares available to investors are producing a lot of profit growth.
Businesses that produce profit growth give themselves a better chance of producing capital growth over time for shareholders.
The below two businesses have been doing very well expanding globally and could continue to do well:
Premier Investments Limited (ASX: PMV)
This is one of the leading retail businesses on the ASX. It operates a group of retail, consumer products and wholesale businesses.
It owns a number of retail brands including Smiggle, Peter Alexander, Just Jeans, Jay Jays, Portmans, Jacqui E and Dotti. Premier Investments also owns just over a quarter of Breville Group Ltd (ASX: BRG). Breville’s brands include Breville, Kambrook and Sage by Heston Blumenthal. Breville also distributes Ronson and Philips products in Australia.
The business has been seeing an excellent performance by its online operations which have really driven the profit margins and bottom line higher.
Premier’s global retail sales went up 7.2% to $784.6 million, but online sales increased 61.3% to $156.7 million. Global like for like sales grew 18.2%. The retail gross margin improved by 286 basis points and the earnings before interest and tax (EBIT) margin grew by 1,308 basis points. This helped EBIT surge by 88.5% to $237.8 million. Statutory profit rose 88.9% to $188.2 million.
Management believe its apparel brands are well positioned to deliver future growth. It continues to invest in its online capabilities to maximise its opportunities with digital.
The ASX 200 company is indicating that there is going to be further growth in the second half of FY21. Global like for like sales were up 32.1% in the first seven weeks of the second half, with the gross margin up 379 basis points.
According to Commsec, the Premier Investments share price is valued at 20x FY22’s estimated earnings.
ResMed Inc (ASX: RMD)
ResMed is one of the leading ASX healthcare shares.
Before COVID-19, a key focus of the business was to help people sleep better. Its products and services are designed to help with sleep apnea. Its mission is to provide global leadership in sleep medicine and non-invasive ventilation based on technology advancing the diagnosis, treatment, and management of sleep-disordered breathing.
One of the ways that ResMed can help sleep apnea is with continuous positive airway pressure (CPAP). It’s a device that delivers a constant flow of air via a mask while you sleep, preventing your airway from becoming blocked and enabling you to sleep peacefully, according to ResMed.
The ASX 200 share has also been helping with COVID-19 thanks to its machines that help people breathe.
For the nine months to 31 March 2021, ResMed has seen underlying net income increase by 17% to US$582.2 million.
Its software as a service (SaaS) operations are giving a helping hand with this growth. The SaaS revenue comes with a higher profit margin than the non-SaaS parts of the business. The quarter ending 31 March 2021 saw SaaS revenue increase 5% due to the continued growth of resupply service offerings and stabilising patient flow in out-of-hospital care settings.
According to CommSec, the ResMed share price is valued at 37x FY21’s estimated earnings.