With markets approaching record highs, there are still some high growth stocks, which after some correction/retracement are ready to move higher. From ASX listed companies, two such stocks are
Catapult Group International Limited (ASX: CAT)
Catapult Group International Limited (ASX: CAT) reported strong financial results for the half-year ending September 30, 2024, showing solid growth across key metrics. The company's Annualized Contract Value (ACV), a critical indicator of future revenue, rose 20% year-on-year in constant currency terms, reaching US$96.8M (A$143M). Revenue also grew by 19% to US$57.8M (A$85M), driven primarily by strong performance in its core SaaS business. The company saw a remarkable profit margin of 75% on the incremental revenue, resulting in Free Cash Flow (FCF) of US$4.8M (A$7M), marking a significant year-on-year improvement. Customer metrics remained strong, with ACV retention at 96.2%, a 7% increase in customer lifetime, and a 7.9% rise in the number of pro teams using Catapult’s products, now totalling 3,470 teams.
The company is among growing companies to invest in. Its two key business verticals, Performance & Health (P&H) and Tactics & Coaching (T&C), both demonstrated robust growth. P&H, which includes wearables, grew 22% year-on-year in ACV, driven by expanding markets in Europe, the Middle East, and Asia, along with continued success in North American college sports. In T&C, which covers video solutions, ACV grew 18%, with the New Video Solutions segment performing especially well, up 42% year-on-year. Catapult's strategy of cross-selling its solutions to existing customers is paying off, with an 80% increase in multi-vertical pro team customers, boosting average ACV per pro team by 11%. The company is on track to meet its target of 2,500 teams using its new video solutions in the mid-term.
Catapult’s financial performance is also underpinned by its focus on profitability and cost management. The company saw a 48% contribution margin, up from 44% last year, and delivered a Management EBITDA of US$6.2M. The company also made significant progress in reducing debt, repaying US$6M of its debt facility, leaving it with a balance of just US$5M. Moving forward, Catapult remains confident in its strategic direction, focusing on continued product innovation and profitable growth, with an emphasis on ACV expansion, cost efficiency, and increasing cash flow in FY25.
Flight Centre Travel Group Limited (ASX: FLT)
Flight Centre Travel Group's latest financial results underscore significant progress in both financial performance and strategic positioning, despite a complex and fluctuating trading environment. With emerging positive market trends, FLT could be one of the best growth stocks to buy now.
For the year, Flight Centre achieved a record total transaction value (TTV) of $23.74 billion, surpassing FY19 levels by $1.8 billion, or 8% year-over-year. Notably, this milestone was reached with fewer employees and a reduced cost base, reflecting strong productivity gains and growth in scalable models, such as their online platforms and independent agent network in the leisure sector.
The group, one of the dividend paying stocks, also demonstrated substantial profit recovery, with underlying profit before tax (PBT) up by 131% to $320 million and statutory PBT climbing 212% to $220 million. Importantly, underlying profit margin increased by 72 basis points, rising to 1.35% and largely supported by a 100-basis point improvement in revenue margin. This movement brings Flight Centre closer to its target of a 2% underlying PBT margin, a key profitability goal.
Flight Centre also posted record operating cash inflow of $421 million, which not only allowed reinvestment in growth areas but also facilitated enhanced shareholder returns and major capital management initiatives. This robust cash generation has significantly strengthened the group’s balance sheet, which now includes over $1.1 billion in cash and investments and substantially reduced debt levels. Additionally, Flight Centre launched a capital management policy aimed at optimizing shareholder value over the long term. Under this framework, the group will allocate 50-60% of net profit after tax (NPAT) to dividends and other capital management activities, contingent on the company’s needs. In FY24, Flight Centre made approximately $450 million in capital management investments. This included repaying $300 million in bank debt and overdrafts, investing $84 million to buy back convertible notes, and distributing $62 million to shareholders through fully franked dividends. These actions not only enhance shareholder value but are likely to support future earnings per share growth.
Productivity, particularly in the leisure segment, has more than doubled over the past five years, driven by advances in system efficiencies and the growth of scalable, labour-light models like Envoyage, the company’s independent agency business. Corporate productivity has also improved, with additional gains expected once the Productive Operations Project is fully executed. Looking forward, Flight Centre’s strategy to drive further growth is well-aligned with its strengthened financial base. The ongoing investments in personnel, network expansion, and customer experience initiatives across its global brand portfolio are designed to ensure sustained value creation. In sum, Flight Centre is emerging from the challenges of recent years as a more efficient and productive business, with a strong balance sheet and a focused strategy to boost profitability and deliver enhanced returns for shareholders.
Source: Company’s Report
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