At the small end of the Australian share market, there are a number of companies with the potential to grow materially in the future.
Two that investors might want to get better acquainted with are listed below. Here's what you need to know about them:
Booktopia Group Ltd (ASX: BKG)
The first small cap ASX share to watch is Booktopia. This online book retailer has been growing at an explosive rate. This has been driven by its strong market position, the shift to online shopping, and its new distribution centre. In respect to the latter, late last year the company completed the first stage of its $20 million expansion and automation project at the Lidcombe Distribution Centre in Sydney. This increased Booktopia's outbound capacity from 30,000 units to 60,000 units per day, allowing it to capture the heightened demand and ship more books than ever.
One broker that is very positive on Booktopia's future is Morgans. Its analysts were impressed with the company's performance in FY 2021. In response, they retained their buy rating and lifted their price target to $3.72. This is notably higher than where the Booktopia share price trades today.
Whispir Ltd (ASX: WSP)
Another small cap share to watch is Whispir. It is a software-as-a-service communications workflow platform provider. Whispir's platform allows businesses and governments to deliver actionable two-way interactions at scale using automated multi-channel communication workflows.
While it has been growing its recurring revenue at a strong rate over the last few years, it is still only scratching at the surface of its overall market opportunity. For example, management estimates that it has a total addressable market (TAM) of US$4.7 billion in the just United States. Whereas late last month Whispir released its first quarter update and revealed a 31.8% increase in annualised recurring revenue (ARR) to $56.8 million.
Positively, Whispir also reaffirmed its FY 2022 guidance. It continues to expect ARR of $65.4 million to $70 million. This represents year on year growth of 22% to 31%.
Ord Minnett currently has a buy rating and lofty $3.89 price target on the company's shares.
