This article is about two ASX shares that are seeing a turnaround after the lockdowns and restrictions caused by COVID-19.
For some industries there was a sharp increase in activity earlier in 2020. Companies like JB-Hi Limited (ASX: JBH), Kogan.com Ltd (ASX: KGN) and Wesfarmers Ltd (ASX: WES) saw strong revenue growth start earlier in the year.
There are also some businesses that saw initial weakness earlier in the year but are now recovering.
Here are two examples:
Serko Limited (ASX: SKO)
Serko describes itself as a leader of online travel booking and expense management business.
Today, the company announced it intends to provide periodic updates to assist the market to assess changes to the environment it operates in.
Serko said it has seen a gradual improvement in transaction booking volumes after the easing of domestic travel restrictions within Australia over the past couple of weeks.
Transaction volumes increased to 44% of prior year volumes for the month of November. This was an improvement from 35% of prior year volumes for the month of October. Serko revealed that the past week has seen some daily transaction rates around 50% of prior year volumes.
New Zealand domestic travel increased to 85% of prior year volumes for the month of November, which was an increase from 76% of prior year volumes for the month of October. Australian domestic travel increased to 33% of prior year volumes for the month of November, up from 26% of prior year volumes for October.
The ASX share said it was pleased to see Australian travel bookings start to recover with the current easing of domestic travel restrictions.
The travel company also confirmed that new customers in select global (predominately English-speaking) markets are now being directed to the new Booking.com for business platform powered by Zeno.
Fund manager Wilson Asset Management recently outlined that Serko was a position in one of its funds called WAM Microcap Limited (ASX: WMI).
Bapcor Ltd (ASX: BAP)
Bapcor is the biggest Australasian auto parts business with major networks in Australia and New Zealand. It also has a small, but growing network in Thailand.
A significant part of the normal demand for Bapcor products is to replace parts that broke due to wear and tear. The lockdowns earlier in the year saw traffic significantly reduce. Bapcor decided to launch a capital raising to ensure its balance sheet remained strong enough.
In recent months the ASX share has seen growth rebound strongly. This was confirmed recently when Bapcor announced a trading update.
Burson Trade revenue was up 10%, with same store sales growth of 7.7% – it was up 17% excluding Victoria. New Zealand revenue grew by 6% on same store sales growth of 4%. Retail revenue soared 47% higher, with Autobarn same stores sales going up 36%. Finally, specialist wholesale revenue went up 45%, though excluding acquisitions revenue went up 18%. Overall, group revenue went up by 27%.
In that update the Bapcor CEO Darryl Abotomey spoke of the company's defensive qualities: "The automotive market is a resilient industry and historically has performed strongly in difficult economic circumstances. Recent trading is another example of its resilience assisted by the increase in sales on second hand cars, reduction in use of public and shared transport modes as well as government stimulus."
At the current Bapcor share price it's trading at under 18x FY23's estimated earnings with a trailing grossed-up dividend yield of 3.5%.
