There are some ASX shares that are rapidly in size and profit. These businesses may be worth looking at because of how quickly they are growing.
If a company is producing a lot of growth then it may be able to produce attractive returns for investors if things go well.
Here are two of them:
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Australian Ethical Investment Limited (ASX: AEF)
Australian Ethical is a fund manager that aims to provide people with funds that only invest in businesses that align with their ethics. It has two main segments: superannuation and managed funds.
The ASX share is experiencing both investment performance and fund inflows, which are driving the funds under management (FUM) higher.
Over FY21, the business received net flows of $1.03 billion and market movements of around $1 billion. The net flows were a 56% increase compared to FY20. There was a 50% overall increase in FUM to $6.07 billion.
Growth in FUM can be an important driver of revenue and profit.
Australian Ethical has guided that the underlying net profit after tax (UPAT) for FY21 is expected to be between $10.7 million to $11.2 million. A mid-point increase would mean an 18% increase of UPAT compared to FY20.
The CEO of Australian Ethical, John McMurdo, has said:
We are seeing unprecedented interest and demand for ethical investing as Australians open their eyes to how our products deliver attractive investment returns and make a positive different in the world. Looking ahead, we expect this growth in ethical investing to accelerate.
Our momentum to date gives us confidence in our strategy and confirms that now is the time to cement out market leadership. Expensive growth in the short term will be reflective of our investment to capture the acceleration in demand.
Bapcor Ltd (ASX: BAP)
Bapcor is another ASX share that is growing rapidly. It's an auto parts business that has a variety of segments including trade (like Burson), retail (such as Autobarn), service (including ABS) and specialist wholesale.
The company has plans to add dozens more locations for its different segments over the coming years. Australian retail and service locations are two areas where it plans to add many more stores.
Bapcor is benefiting from the current conditions where there's strong retail demand, as well as the fact that Aussies are stuck in Australia (and possibly going on driving holidays).
The FY21 half-year report saw revenue growth of 25.8% to $883.6 million, leading to net profit after tax growth of 49.7% to $67.7 million.
In a trading update, Bapcor said that through to March 2021, business performance has continued at similar levels to the first six months of the year. Trade same store sales were up around 13%, Autobarn same store sales were up around 35% and specialist wholesale revenue was up 31% (or 17% excluding acquisitions).
The ASX share has big growth aspirations in Asia. It wants to grow its Thailand Burson network to more than 60 locations, which would see revenue there reach $100 million (it is/was $4 million at the time of the update). Tye Soon, an Asian business, could also double its revenue from $200 million to $400 million – Bapcor owns 25% of this business.
