Which 5 NZX companies are growing in 2021?

Highlights

  • Growth stocks are the stocks of firms with significant cashflow and earnings likely to grow at a faster rate than average.
  • ArborGen delivered a strong 109% rise in EBITDA in FY21.
  • Rakon reported a rise in profits and EBITDA due to expansion in the telecom industry.

Growth investors are on a lookout for companies that provide above-average financial growth. This helps companies in catching market interest and generate strong returns. Though growth investments may yield some of the best returns, they also have higher risks than value-based equities, which have a slower growth rate but a more stable nature and excellent quality.

Source: Copyright © 2021 Kalkine Media

Let’s have a look at how these 5 NZX-listed growth stocks have been performing.

Enprise Group Limited (NZX: ENS)

Enprise Group is an investment vehicle for tech firms with high growth. It has 2 operating divisions - Enterprise Solutions and iSell Pty Limited.

The Group reported a revenue of $7.447 million and a net profit of $0.603 million for the 6 months ended 31 December 2020, up 100.3% and 189.9% on pcp, respectively.

ENS also bought Very Impressive software (VIS) in June to provide software products to SME firms. ENS paid 2cps on 16 March 2021 and is continuing to explore other prospects in the SME software market.

Enprise’s share prices have given a YTD return of 210%. On 23 August 2021, ENS ended the trading session at $2.93, down 5.48% from its previous close.

ArborGen Holdings Limited (NZX: ARB)

ArborGen Holdings specialises in forestry genetics and is the world's largest tree seedling supplier. ARB announced its FY21 results on 19 August.

Despite problems arising from COVID-19, ARB claimed a strong yearly performance. The company recorded a record EBITDA of $5.4 million, with $9.9 million in net cash from operations. However, as a result of the COVID-19 effect, seedling sales fell 10% to 391 million units.

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Arborgen intends to participate in reforestation and carbon project providers as part of the forest carbon solution.

Arborgen share prices have given a YTD return of 93.25%. On 23 August 2021, ARB ended the trading session at $0.32, up 1.59% from its previous close.

NZ Windfarms Limited (NZX:NWF)

NZ Windfarms is NZ’s windfarm operator and owner.

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The Group reported a solid financial performance, posting an EBITDA of $3.2 million for the 6 months ended 31 December 2020, down from $5 million in HY20.

NWF’s performance showed effective cost control, capital management and electricity price hedging through the company’s variable volume fixed price agreement (VVFPA). NWF announced its third VVFPA in May, which will apply to 25% of its output from 1 October 2022 through 30 June 2023.

NWF is on track to meet its EBITDA guidance between $5.7 million to $6.3 million for FY21. VVFA would imply that future revenue will become more predictable.

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NZ Windfarms share prices have given a YTD return of 65.61%. On 23 August 2021, NWF ended the trading session at $0.27, up 3.85% from its previous close.

Rakon Limited (NZX:RAK)

Rakon designs and creates advanced frequency control and timing solutions.

The Group delivered revenue growth and increased net profit and underlying EBITDA mainly from growth in the Telecommunications sector. Rakon is tracking to the top end of the underlying EBITDA guidance range of $27 million to $32 million for FY2022.

However, substantial global shortages and increased lead times for inventory could pose significant risks to EBITDA.

Rakon share prices have given a YTD return of 65.52%. On 23 August 2021, RAK ended the trading session at $0.95, down 1.04% from its previous close.

The New Zealand Refining Company Limited (NZX:NZR)

NZR reported an EBITDA of $41.5 million for HY21. The simplified refinery plan implemented from the year start allowed the firm to run cash neutral at the Fee Floor with a net debt of $230 million in June end.

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The firm also made an average gross refining margin of US$3.19/barrel for HY21. The Group is anticipated to generate more stable earnings with the likely transition to the import terminal next year and is well placed for the decarbonisation of NZ transport and the energy market.

NZ Refining share prices have given a YTD return of 62%. On 23 August 2021, RAK ended the trading session at $0.87, up 3.57% from its previous close.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)

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