If you’re looking to add one or two small cap ASX shares to your portfolio in June, then I think the two listed below are worth considering.

Here’s why I think these small caps could be destined for big things in the future:

Bigtincan Holdings Ltd (ASX: BTH)

Bigtincan is a $276 million tech company which provides enterprise mobility software to businesses. This software help improve mobile worker productivity and has a track record of increasing sales win rates and reducing costs. Unsurprisingly, this has gone down well with businesses and a growing number of blue chips are using its software. This includes one of the big four banks, Australia and New Zealand Banking GrpLtd (ASX: ANZ).

Pleasingly, its strong growth has continued unabated during the pandemic. Management recently reaffirmed that it is on track to achieve its 30% to 40% organic revenue growth target in FY 2020, with stable retention. I think this makes it one of the best small cap ASX shares on the local market.

ELMO Software Ltd (ASX: ELO)

Another small cap ASX share which I think could grow strongly over the next decade is ELMO Software. It is a $560 million software company which provides businesses with a cloud-based human resources and payroll software solution. This unified solution is proving very popular with businesses that are wanting to streamline everyday processes such as payroll, recruitment, and learning.

ELMO recently completed a $70 million placement, with the proceeds being used to accelerate organic growth initiatives and to fund acquisition opportunities. I believe these funds could be used to expand internationally in the future as well. Not that it necessarily needs to. Management estimates that the ANZ market is worth $2.4 billion. This compares to its FY 2020 revenue guidance of $50 million to $52 million, which will be up 17.4% to 22% year on year. I think this makes ELMO a small cap to watch.

More reading

• ASX 200 rises 0.3%, Zip rockets higher
• ASX 200 down 0.1%: Big four banks drag ASX lower ahead of RBA meeting
• ANZ share price climbs higher on asset sale
• The big oil price recovery and bounce in ASX oil stocks are bringing out the bears
• How to value the big four ASX banks

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BIGTINCAN FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Elmo Software. The Motley Fool Australia owns shares of and has recommended Elmo Software. The Motley Fool Australia has recommended BIGTINCAN FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post 2 exciting small cap ASX shares that could have big futures appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2BpLduR

Yesterday, the Amaysim Australia Ltd (ASX: AYS) share price was making headlines after the company responded to media speculation regarding the potential sale of its energy business, causing shares to surge.

The Amaysim share price is charging higher again today but for a different reason. For some background, Amaysim is a subscription utility provider, delivering mobile and energy plans to customers around the country. The company launched in 2010 and is Australia’s fourth-largest mobile service provider.

What did Amaysim announce?

This morning, Amaysim announced it has signed a binding agreement to acquire ~77,000 mobile subscribers from mobile virtual network operator (MVNO) OVO Mobile.

OVO is the largest independently-owned, asset-light Australian MVNO, other than Amaysim. It uses the Optus network, like Amaysim, and offers pre-paid plans on a month-to-month basis without any lock-in contracts.

Amaysim expects the transaction to be completed “imminently” and for a maximum consideration of $15.8 million.

More than 74,000 of the acquired subscribers are recurring, thus accelerating one of Amaysim’s strategic initiatives to grow its recurring mobile subscriber base. This takes Amaysim’s recurring mobile subscriber base to 821,000 as at 31 May 2020, up from 726,000 as at 20 February 2020. Including the non-recurring subscribers acquired from OVO, Amaysim’s total mobile subscriber base was 1.17 million as at 31 May 2020.

For some more context, at 31 December 2019, Amaysim had 706,000 recurring mobile subscribers and 1.05 million total subscribers.

Amaysim expects to complete the migration of OVO subscribers in less than 4 months. The company has experience in this area after recently migrating around 42,000 Jeenee subscribers in less than 3 months. 

Amaysim expects the acquisition to be earnings accretive in FY21, with an increased earnings contribution in FY22 and beyond. It will be funded by a mixture of debt and cash reserves.

Guidance update

Along with the OVO acquisition, Amaysim also shed some light on its guidance for FY20. In spite of the challenges currently facing the economy, the company is pleased with the performance of the overall energy and mobile businesses in the second half of FY20.

On the energy front, Amaysim reported 209,000 energy subscribers as at 31 May 2020, up from 201,000 as at 31 December 2019.

The company confirmed it is on track to achieve full-year underlying EBITDA within the guidance range of $33 million to $39 million.

The Amaysim share price jumped 15.27% at the open and is currently sitting 18.06% higher at the time of writing at 42.5 cents per share.

More reading

• Why Amaysim, Bingo, Brickworks, & BlueScope are pushing higher today
• Amaysim share price flies 22% higher after confirming interest in its energy business

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Amaysim share price soars 18% on mobile subscriber acquisition appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2BmrbRW

Is the Westpac Banking Corp (ASX: WBC) share price a buy?

The Westpac share price has risen by 12.3% over the past two weeks. Not bad for a business that a lot of investors are counting out.

I suppose the market is simply saying that the Westpac’s troubles won’t be quite as bad as previously expected.

The Westpac share price is still down 40% compared to where it was before. That’s a large decline. There have been quite a few leadership changes within Westpac recently. Hopefully that’s a positive sign of renewal rather than anything else.

It’s not too surprising that the Westpac share price has dropped so hard. The recent Westpac FY20 half-year result outlined a number of the issues.

The statutory profit dropped 62% to $1.19 billion and cash earnings were down 70% to $993 million. When you exclude notable items, cash profit was still down 44%.

A significant part of the decline came about from higher impairment charges due to COVID-19. Westpac’s provisions for expected credit losses increased to $5.8 billion which included $1.6 billion of additional impairment charges predominately related to COVID-19 impacts.

Another problem that Westpac provisioned for is the upcoming AUSTRAC penalty. The bank has provisioned $900 million. Some don’t think that’s a big enough number.

What will cause the Westpac share price to rise further?

The recent news that not as many people are on jobkeeper as previously expected was positive. That’s a good sign for the overall economy and it hopefully means there would be less bad debts for the bank. That’s seemingly what caused the Westpac share price to rise over the past fortnight.

But beyond that, investors are waiting for more signs of a recovery for the banking sector. We’re still quite early into this crisis. Australia has been fortunate compared to most places in the world when it comes to the spread of the coronavirus. It will take a while for the full effect of the restrictions to be felt economically across the country.

The rest of the world is still going through the pandemic, so there could be more economic pain to wash through the global economy. Westpac will also have to come to terms with the very low interest rate which may harm the net interest margin (NIM) for some time.

How long will it take the Westpac share price to return to above $25? It could take a very long time. But if Australia’s banking system is safer than expected, there could be a bit more value at the current level. I’m not making that bet yet though.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 down 0.1%: Big four banks drag ASX lower ahead of RBA meeting
• How to value the big four ASX banks
• 5 things to watch on the ASX 200 on Tuesday
• I don’t normally buy ETFs, but I would buy these 2

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Is the Westpac share price a buy? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2BsBTGJ