There are some ASX shares that could be good to look at in June 2021.
The two businesses in this article have a heavy focus on technology with the offerings that they provide for their clients and customers.
These two ASX shares might be interesting to think about in the coming weeks:
Volpara Health Technologies Ltd (ASX: VHT)
Volpara has grown to be one of the leading breast screening businesses in the US with a market share of almost a third. That means that approximately 32% of women have at least one of Volpara’s products used on their images.
The business has been improving its offering for clients. But the acquisition of CRA Health can take it to another level.
Volpara says that there is an increasing push at the biggest US sites to use a single electronic health record (EHR) system. The ASX share recognises that it needs to work closely with these EHRs. CRA Health software is tightly integrated with these systems.
According to Volpara, there are major US tailwinds for personalised breast care. This includes the US CDC pushing for genetics testing and the CMS including breast cancer risk assessment as a quality measure for reimbursement adjustments. The company has also seen that identifying those women who should get genetics testing can significantly increase the average revenue per user (ARPU).
CRA Health was profitable and cashflow positive in the previous three years. Volpara signed its largest contract to date through CRA Health. The contract was worth over US$400,000 per year of annual recurring revenue (ARR). It covers the provision of breast cancer risk scores to a large Indiana-based organisation that has sites across more than 20 states and runs a major electronic health record system.
Temple & Webster Group Ltd (ASX: TPW)
Temple & Webster is already one of the biggest furniture and homewares businesses in Australia.
The business has been growing at a fast rate and continues to do so. In the first half of FY21 it saw revenue growth of 118% to $161.6 million. The third quarter of FY21 saw revenue growth of 112% year on year. April 2021 revenue increased more than 20% despite April 2020 being a very big month of strong online sales growth during the COVID-19 lockdowns.
Temple & Webster is about to embark on another few years of investment as it aims to capture more market share and capitalise on the opportunity of the continuing shift to digital shopping.
Over time, the ASX share is expecting longer-term profit margins to be higher than many of its comparable offline peers.
There are a few different things that could help Temple & Webster generate much higher margins: improved supplier terms, more repeat customers which will reduce marketing expenses, a slowing of investment in fixed costs and a higher percentage of exclusive products with higher gross profit margins.
Temple & Webster CEO and co-founder Mark Coulter said:
You only need to look at the US to see how the e-commerce market is playing out, and why we remain bullish about the shift from offline to online. We are at the start of this once in a generation shift, and now is the time to put our foot down to secure market leadership and ensure we are the brand for the next generation of furniture shopper.
Temple & Webster aims to remain profitable at the earnings before interest, tax, depreciation and amortisation (EBITDA) level during this scale-up phase.