3 companies that broke their way into the ASX 200 in FY21

These 3 companies, through trials, tribulations, and successes, made their way into the ASX 200 Index.

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The S&P/ASX 200 Index (ASX: XJO) had a wild ride in the last financial year. Emerging from the depths of the COVID market crash, the index ended up gaining nearly 1,400 points – or a record 23.4% – over the 12 months. The index eventually surpassed its pre-coronavirus levels to break its all-time high.

Some companies thrived in these unexpected conditions while others struggled to recover.

Once a quarter, S&P re-evaluates the ASX 200 to ensure the list is up to date. Here are just 3 businesses that did so well last financial year, they were able to climb into the vaunted index.

Zip Co Ltd (ASX: Z1P)

The buy now, pay later (BNPL) provider entered the top 200 in the first quarter of FY21. The company grew 38% during the year to end at $7.57 per share and a market capitalisation of around $4.3 billion.

Big stories that affected the Zip share price last year included partnerships with Harvey Norman Holdings Limited (ASX: HVN) and eBay Australia. The latter deal sent Zip shares rocketing more than 20% at the time. Zip also announced an expansion into Europe and the Middle East in the second half of the year. This news sent the BNPL’s price up 5% on the day.

In its half-year report, Zip reported revenues of $2.3 billion and earnings before interest, taxes, depreciation, and amortisation (EBITDA) of -$14.9 billion.

Kogan.com Ltd (ASX: KGN)

The online retailer was recognised as one of Australia’s 200 largest public companies in the second quarter of FY21. Its value decreased during the 12 months by around 22%. The Kogan share price dropped to $11.58 on the last day of the year and its market cap was about $1.2 billion.

During the financial year, the biggest story about Kogan was its purchase of online retailer Mighty Ape for $122 million. Kogan shares appreciated about 5% on the day of the announcement. Kogan also passed a milestone 3 million “active” customers last year.

For the six months to 31 December, gross sales increased 97% to $640 million and EBITDA was up 184% to $51.7 million. The Kogan share price sank 9% on the news.

Nuix Ltd (ASX: NXL)

Software provider Nuix jumped into the ASX 200 in Q3 of the last financial year. The company only floated on the stock market in December 2020 but, up to 30 June 2021, lost an astonishing 72% in value. Shares were swapping hands for $2.21 and its market cap crashed to just over $700 million. For perspective, its largest market valuation was about $3.8 billion.

The company has been mired in controversy for most of its life as an ASX 200 company. Repeated profit and earnings downgrades sent investors fleeing time and time again. Reports also emerged of poor business practices at the company, including questions over the accuracy of its financial reports.

In May, Australian Federal Police began investigating the company and it was even called out in federal parliament. The first signs of trouble for the beleaguered company came with the release of its first financial report as an ASX-listed entity. The share price plummeted 27% on a 4% decline in revenue to $85.3 million and a net loss of $16.6 million.

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Returns as of 15th February 2021

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Kogan.com ltd and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. 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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