The two ASX shares in this article are impressive and could be worth thinking about in August 2021.
Businesses that are producing a good amount of revenue growth give themselves a strong chance of also producing profit growth. Seeing as investors like to judge and price companies on their profit and cashflow, revenue growth is an attractive feature to have.
The below ASX shares are seeing plenty of growth:
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City Chic Collective Ltd (ASX: CCX)
City Chic is a leading retailer of clothes, footwear and accessories for plus-size women.
It operates under a number of different brands including City Chic, CCX, Avenue and Evans. With those brands (and a couple of others), it has a good and growing market position in Australia and New Zealand, the US and the UK.
City Chic is building a portfolio of brands so it can meet the clothing needs of all of its customers. Indeed, the business recently announced another acquisition. It's called Navabi, which is an online marketplace that sells hundreds of third-party women's plus-size brands. It has also developed its own brands that are sold on the marketplace.
The customers are predominately from Germany, so this acquisition gives the business an opportunity to expand in Europe. In 2020, the Navabi websites had 5.8 million customer visits in 2020, generating €10.4 million of sales revenue. COVID-19 has affected the business – before the pandemic its website was seeing traffic of more than 10 million visits. Even so, in 2021 the business has been trading profitably.
The ASX share continues to grow, with total profit rising faster than revenue. In a trading update for FY21, City Chic said that sales revenue was up 32.9% to $258 million. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be in the range of $42 million to $42.5 million, being growth of between 58% to 60%.
Trading in FY22 had "exceeded budget" with strong US and UK performance outweighing store closures in Australia.
VanEck Video Gaming and Esports ETF (ASX: ESPO)
This is an exchange traded fund (ETF) that is focused on some of the world's leasing game makers and other businesses involved to make video games possible.
It's a fairly concentrated portfolio with 26 different names in the portfolio, though they aren't ASX shares.
Looking at the holdings list, the biggest 10 weightings are these businesses: Advanced Micro Devices, Nvidia, Sea, Tencent, Nintendo, Unity Software, Activision Blizzard, Netease, Electronic Arts and Take Two Interactive Software.
Video gaming has been around for a long time but revenue continues to grow for these companies at a double digit rate. VanEck says that since 2015, revenue for the video gaming industry has grown by an average of 12% per annum.
But e-sports is where a lot of the growth is right now. The industry is getting audiences the size of the Olympics and it's unlocking various streams of earnings such as game publisher fees, media rights, merchandise, ticket sales and advertising. E-sports revenue has grown by an average of 28% per annum since 2015.
Past performance is not an indicator of future performance, although the index of these shares has done very well. Over the last five years, the index that this ASX share tracks has grown by an average of 32.75% per annum.
