ASX Growth Stocks Under $1

Team Veye | 10-Sep-2024

A growth stock is not just a stock escalating in price. It is generally considered to be in a Growing Industry and sectors likely to witness significant growth. Such a stock normally grows faster than market average.

PointsBet Holdings Limited (ASX: PBH)

PointsBet Holdings Limited in its FY24 annual results for the period ended 30 June 2024, saw a 17% increase in revenue compared to the previous year. The company’s gross profit margin improved to 52.8%, due to better global efficiency and growing contributions from Canada, where the unit economics are more favourable. 

Product and technology costs dropped by 29% due to reduced cloud hosting expenses following the sale of their US business, though some costs have since normalized. By June 30, 2024, PointsBet had A$28.1 million in cash. Net asset changes were influenced by the receipt of US$225 million from the US business sale, minus related costs and a US$21 million funding commitment. Overall, the company is well-positioned financially to support future growth and continue executing its Strategic Plans.

In its latest update, PointsBet highlighted significant improvements, with Canada reducing its statutory segment EBITDA loss from $35.8 million to $19.7 million, and Australia achieving a record revenue of $211.5 million, a 10% increase from the previous year. 

PointsBet has shown consistent revenue growth since its inception, expanding its footprint in Australia and Canada. The company has tapped into a substantial total addressable market for online sports betting and iGaming, with notable progress in Canada since its launch in April 2022.

In Australia, PointsBet’s net win growth is on an upward trajectory, supported by stable contributions from customer cohorts and improving product loyalty, a trend that is also evident in Canada. For FY25, the company anticipates revenue between A$280 million and A$290 million, up from A$245.5 million in FY24. The company expects to achieve EBITDA of A$11 million to A$16 million, compared to a loss of A$1.8 million previously. This growth will be driven by market share gains, maintaining a solid gross profit margin despite increased costs, and leveraging their fixed cost base for better efficiency. PointsBet aims to be cash flow breakeven by the end of FY25.

Looking ahead, PointsBet is well-positioned for growth with its advanced proprietary technology, including the platform sold to Fanatics but retained for further development, and the Banach ‘Oddsfactory’ technology that enhances in-play and parlay betting features. 

Red Hawk Mining Limited (ASX: RHK)

Red Hawk Mining Limited announced its Quarterly Activities Report for the period ended 30 June 2024.

The Pre-Feasibility Study (PFS) for Red Hawk Mining's Blacksmith Project has shown significant improvements from the previous Scoping Study. The PFS now includes four key deposits—Delta, Paragon, Blackjack, and Champion—resulting in an increased annual production rate of 5Mtpa while maintaining a mine life of over 20 years. 

The study has also developed a robust capital and operating cost estimate, alongside an execution schedule that highlights the project's strong economics, with a pre-tax NPV8% of $523M, an IRR of 31%, and a development capital requirement of $217M. Notably, a maiden Ore Reserve has been established for the Delta deposit, comprising 45.98Mt at an average grade of 60.54% Fe, which will support the first 13 years of production. Additionally, a DSO Mineral Resource update has successfully converted 77% of the Mineral Resource Estimate (MRE) for the Delta deposit into the Measured category, bringing the total Blacksmith MRE to 172Mt at 60% Fe.

Over the past five years, Red Hawk Mining Limited's revenue from business activities has shown modest growth, increasing from AUD 0.06 million in 2019 to AUD 0.21 million in 2023. Despite minimal revenue in the earlier years, the company's financial performance has significantly improved, transitioning from a loss of AUD 5.47 million in 2019 to a profit of AUD 13.19 million in 2023. This turnaround indicates a successful strategy implementation and operational efficiency in recent years.

In the next six months, Red Hawk Mining plans to achieve several key milestones, including the release of a maiden DSO resource for the Eagle deposit and the initiation of a Definitive Feasibility Study (DFS) within the current quarter. 

Additionally, Red Hawk has been informed by Pilbara Ports of a forecasted annual throughput allocation of 1Mtpa at the Utah Point Bulk Handling Facility, expected to become available in 2026. This allocation aligns with the company’s Pre-Feasibility Study for the Blacksmith Project, which anticipates ramping up export volumes from 1.2Mtpa in Year 1 to 5Mtpa over five years. 

Red Hawk Mining Ltd is making solid progress with its Blacksmith Project, backed by positive PFS results and resource updates. The company's efforts, particularly in securing port capacity, are key to realizing the full potential of the project. Positioned for growth, Red Hawk is dedicated to enhancing its resource base and refining its production strategies. 

Source: Company’s Report

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