Growth pathways do not come in a day. While it takes proper conditioning and other measures for potential growth companies, astute investors spot these early to milk the benefits fully. Two such high growth stocks scaling up further are
Tuas Limited (ASX: TUA)
Tuas Limited (ASX: TUA) has recorded significant growth in its mobile business in Singapore for the 2024 financial year. The company has added 234,000 mobile active services, growing to 1,053,000 as of July 31, 2024, from 819,000 the previous year. This expansion contributed to a significant 36% year-on-year increase in revenue, which rose to $117.1 million in FY24, compared to $86.1 million in FY23. The company one of the growing companies to invest in also experienced a 60% increase in EBITDA, from $31.1 million to $49.7 million, which improved the EBITDA margin to 42.5%, up from 36.1% in the previous year. Mobile Average Revenue per User also grew slightly, from $9.37 to $9.68. These results were driven by a combination of higher subscriber numbers and a broader mix of mobile plans that cater to various customer needs. The company also reported a healthy cash flow from its operations amounting to $60 million against $40 million in FY23. The company's cash and term deposits closed at $55.3 million from the previous year's level of $44 million.
Tuas has also continued its investment in its network infrastructure, spending $48.6 million on plant and equipment, particularly for Simba's mobile and fibre broadband network. The company is focusing on expanding its 5G coverage and has been enhancing its mobile product offerings, such as Data-Only SIMs and eSIMs. The recent regulatory approval for 5G on the 900MHz band further supports the company’s growth strategy in the mobile sector. Additionally, Tuas has made strides in its fibre broadband business, achieving over 10,000 active subscribers as of November 2024 and completing a 10Gbps rollout for all Central Offices serving residential homes.
Tuas expects continued growth in both its mobile and broadband segments. The company remains focused on expanding its mobile subscriber base and increasing product value at all price points. For FY25, Tuas has forecasted capital expenditure between $45 million and $55 million, with plans to continue enhancing its network and increasing mobile and broadband offerings. The company is also targeting a positive NPAT for FY25 and aims to further build on the momentum of its fibre broadband services.
Lovisa Holdings Limited (ASX: LOV)
Lovisa Holdings Limited delivered a solid FY24 performance, showcasing effective execution of its global expansion strategy and strategic investments in infrastructure. The company opened 128 new stores during the year, bringing its total to 900 across 46 markets, including key entries into China, Vietnam, and Ireland, alongside franchise launches in Senegal, Ecuador, Guadeloupe, and Gabon. Post-yearend, the store count increased to 908 with additional openings in Ivory Coast, Republic of Congo, and Panama. Operating across six continents and 49 markets, Lovisa has solidified its position as a global leader in the jewellery retail sector, trading in 32 currencies.
Operational efficiency was enhanced with the August 2024 launch of a distribution centre in Columbus, Ohio, capable of supporting over 1,000 stores and e-commerce needs. This facility complements existing centres in Melbourne, Qingdao, and Wroclaw, reinforcing Lovisa’s supply chain and reducing reliance on third-party logistics providers. Revenue for FY24 rose 17.1% year-over-year (YoY) to $699 million, primarily driven by network expansion. Comparable store sales declined 2.0% for the year but turned positive in the second half. Gross profit increased 18.7% YoY, with gross margins improving by 110 basis points to 81.0%, supported by effective pricing strategies amid inflationary pressures. Higher operating costs, due to wage inflation and investments in new market support, were offset by reduced CEO incentive expenses. Depreciation and interest costs reflected growth in lease liabilities and higher rates. Cash flow remained robust, with operating cash flow before interest and tax increasing 27.6% YoY to $240 million. Capital expenditure dropped to $23.3 million due to landlord contributions for prior-period store fitouts.
Already among dividend paying companies, Lovisa’s strong balance sheet enabled a 26% increase in the full-year dividend to 87 cents per share, underscoring confidence in its growth trajectory. Early FY25 trading is encouraging, with comparable store sales up 2.0% and total sales increasing 12.7% in the first eight weeks. The company remains focused on expanding its physical and digital footprint, leveraging infrastructure to drive operational efficiencies. With a disciplined growth strategy and resilient financial position, Lovisa is well-positioned for sustained success and shareholder value creation.
Source: Company’s Report
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