2 little known ASX growth shares to buy

These 2 little-known ASX growth shares have lots of growth potential. One of them is Volpara Health Technologies Ltd (ASX:VHT).

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There a group of small ASX growth shares that are little known but producing a lot of underlying growth for shareholders.

Smaller businesses have a lot of growth potential because they’re earlier on in with their growth journeys.

These two have big plans for revenue and profit growth over time:

Volpara Health Technologies Ltd (ASX: VHT)

Volpara is a promising ASX growth share in the healthcare space. It specialises in breast screening technology, risk analysis and practice management software.

The business is producing strong growth each quarter. In the fourth quarter of FY21, which is to 31 March 2021, it saw its annual recurring revenue (ARR) increase to US$18.6 million which included a 20% organic year on year increase. The quarterly increase of ARR was US$1.1 million.

Its market share continues to rise, particularly after the acquisition of CRA Health. The ASX growth share now estimates it has at least one software product being used in the screening of approximately 32% of US women for breast cancer.

One of the main ways that Volpara can grow its profit is an improvement in the average revenue per user (ARPU). This measure improved to US$1.40 in the fourth quarter, up from US$1.22 at the end of the third quarter.

As a result of the tailwinds it’s seeing in the United States, the company’s main focus is shifting to risk and genetics for FY22 as it seeks to further accelerate sales growth. Its plan is to provide women with the information needed to make informed decisions, this is planned to begin in October 2021. A new form of patient letter that includes the women’s breast images will be launched at that time. Jill Spear is joining from GE Healthcare to lead the US sales and marketing.

Healthia Ltd (ASX: HLA)

Healthia is another healthcare smaller ASX share that is generating a lot of growth. It is the parent company of a number of allied health brands including My FootDr Podiatry, Allsports Physiotherapy brands and the Optical Co. It has an aim to be one of Australia’s leading allied health companies.

The ASX share says that its future growth is expected to come from both its focused organic growth strategies and the acquisition of additional well-established allied health businesses throughout Australia.

For example, the ASX growth share recently announced new optical acquisitions. It said it had reached settlement for Bernie Lanigan Optometrist in Townsville, Queensland, and it also announced it has entered into a binding agreement to acquire The Eyecare Place in Abbotsford, Victoria.

Those acquisitions were the first ones since the establishment of its ‘eyes and ears’ business. The total consideration for those is $0.62 million and these businesses are expected to generate $0.2 million of annualised earnings before interest, tax, depreciation and amortisation (EBITDA).

Healthia is generating a lot of growth, even in earnings per share (EPS) terms.

The FY21 half-year report showed revenue growth of 38.9% to $61.5 million, underlying EBITDA was up 90.7% to $11 million, the underlying EBITDA margin increased 486 basis points to 17.87%, underlying net profit increased 85.5% to $4.7 million and underlying EPS rose 78.2% to 6.86 cents.

The strength of the business and the growth allowed the board to declare a fully franked interim dividend of 2 cents per share.

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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends VOLPARA FPO NZ. The Motley Fool Australia has recommended HEALTHIA FPO and VOLPARA FPO NZ. 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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