Investors scanning ASX listed companies for growth stocks could consider these stocks for their potential.
Codan Limited (ASX: CDA)
Codan Limited (ASX: CDA) posted a solid first-half FY25 financial result with group revenue increasing 15% to $305.6 million. Earnings before interest and tax increased by 21% to $65.8 million, while net profit after tax also rose by 21% to $46.1 million. A significant contributor to these results was the Communications business, which saw a 22% growth in revenue, exceeding its 10-15% growth target. The Communications segment's profit rose by 31%, with a margin improvement to 27%, reflecting strong operational leverage.
The company, is among high growth stocks having also experienced solid growth in its Metal Detection business, which rose 5% year-on-year, with Africa contributing to the improvement. Codan’s net debt stood at $124.1 million as of December 31, 2024, an increase driven by the acquisition of Kägwerks and a higher working capital requirement to support the growth of the Communications segment. Cash flow remains healthy, and the company continues to focus on managing debt effectively with a net debt-to-EBITDA ratio below 1. Additionally, Codan declared an interim dividend of 12.5 cents per share, a 19% increase from the previous corresponding period. The dividend is fully franked and will be payable on March 17, 2025, to shareholders on the record date of March 13, 2025.
Codan's Communications business is targeting 10-15% organic growth, with an additional boost from Kägwerks. Minelab revenues are expected to remain stable in the second half of FY25. The company is also exploring further acquisition opportunities to enhance its Communications segment, aiming to improve revenue quality through recurring and contracted revenues, particularly with government customers.
Codan's key business units showed strong performance in H1 FY25. Tactical Communications saw growth in law enforcement and unmanned systems, while Zetron strengthened its position in public safety and transport. Minelab exceeded expectations in Africa, particularly West Africa, and the Rest of World segment remained resilient despite economic challenges. Codan is committed to investing in next-generation products and strategic acquisitions to fuel long-term growth.
Collins Foods Limited (ASX: CKF)
Collins Foods Limited (ASX: CKF) reported its financial results for the half-year ended 13 October 2024, showing a slight revenue growth despite a challenging economic environment. Total revenue from continuing operations increased by 1.2% to $703.5 million, driven by modest growth in Australia, while European performance was softer. However, underlying EBITDA fell by 6.6% to $102.7 million, reflecting persistent inflationary pressures and flat same-store sales. As a result, underlying NPAT decreased by 23.8% to $23.7 million. In spite of these difficulties, the company recorded robust cash flow, lowered its net debt to $158.9 million, and paid a fully franked interim dividend of 11.0 cents per share.
On a brand performance basis, KFC Australia posted a 2.7% sales increase, with same-store sales growth of just 0.1%. Digital sales grew to 33.7% of total sales, and the company focused on offering value and innovation to navigate the tough consumer landscape. KFC Europe experienced solid growth, with a 3.4% increase in sales and 3.8% same-store sales growth, particularly driven by strong performances in the Netherlands and Germany. Taco Bell, with a network of 27 restaurants across Australia, experienced modest same-store sales growth of 0.3% and continued its focus on value pricing and effective marketing to boost brand engagement.
Despite weaker consumer conditions continuing into the second half of FY25, Collins Foods expects to maintain a steady outlook. Sales performance in the first seven weeks of the second half showed a slight improvement in KFC Australia, while KFC Europe faced a soft QSR sector. The company anticipates a full-year EBITDA margin range of 14.2% to 14.7%, with higher costs due to leases and commodity inflation in both Australia and Europe. Collins Foods remains committed to expanding its restaurant network and exploring growth opportunities through both new developments and strategic mergers and acquisitions.
(Source: Company's Report)
Veye Pty Ltd(ABN 58 623 120 865), holds (AFSL No. 523157 ). All information provided by Veye Pty Ltd through its website, reports, and newsletters is general financial product advice only and should not be considered a personal recommendation to buy or sell any asset or security. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation, or needs. You should look at the Product Disclosure Statement or other offer document associated with the security or product before making a decision on acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Any recommendation contained herein may not be suitable for all investors as it does not take into account your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure accuracy of the content and that the information is gathered and processed from reliable resources, we strongly recommend that you seek professional advice from your financial advisor or stockbroker before making any investment decision based on any of our recommendations. All the information we share represents our views on the date of publishing as stocks are subject to real time changes and therefore may change without notice. Please remember that investments can go up and down and past performance is not necessarily indicative of future returns. We request our readers not to interpret our reports as direct recommendations. To the extent permitted by law, Veye Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss, or data corruption) (as mentioned on the website www.veye.com.au), and confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report. Veye Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services.
