Despite Australia being vast in size, with approximately 24.5 million inhabitants, it doesn't provide companies with the biggest market opportunities.
Unsurprisingly this leads to many companies looking overseas for growth. Two which have embarked on sizeable international expansions are listed below.
Here's why I think it makes them great investments:
BWX Ltd (ASX: BWX)
After huge success in the local market, the company behind the Sukin skin care brand recently launched into the UK, Canada, and China markets. The early progress has been very pleasing, with first-half export sales growing 115.7% on the prior corresponding period to $6.2 million. This equated to just 18% of total first-half sales. But considering the size of all three markets, I wouldn't be surprised to see its exports grow to become the biggest contributor of its sales in the next few years. Furthermore, this morning the company announced plans to acquire the number one natural cosmetics brand in the US, Mineral Fusion, for US$38.4 million.
Collins Foods Ltd (ASX: CKF)
The KFC operator isn't just intent on expanding its footprint in Australia by 8 to 9 restaurants a year, it has its eyes on a sizeable opportunity in the European market. Following on from the acquisition of 12 KFC restaurants in Germany and 16 in the Netherlands, over the next five years management intends to increase its European footprint by between 8 and 10 net new stores each year. I believe this will result in Collins Foods delivering strong earnings growth that justifies its shares trading at a significant premium to where they trade today. At present investors can pick up Collins Foods shares for under 17x trailing earnings. By comparison, Domino's Pizza Enterprises Ltd. (ASX: DMP) shares are changing hands at approximately 35x annualised earnings.
