The small end of the Australian share market is home to a number of companies with the potential to grow strongly in the future.
Three small caps that investors may want to get better acquainted with are listed below. Here's why they should be on your watchlist:
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Booktopia Group Ltd (ASX: BKG)
The first small cap ASX share to watch is Booktopia. It is the largest Australian-owned online book retailer by market share. Since FY 2012, Booktopia Group has sold more than 32.6 million items to its rapidly growing customer base. This includes 6.5 million items in the 12 months to 30 June 2020. Pleasingly, this number looks set to be surpassed in FY 2021 thanks to the shift online and its new distribution centre. The latter is allowing it to capitalise on the online shopping shift by shipping more books than ever.
Damstra Holdings Ltd (ASX: DTC)
Another small cap ASX share to watch is Damstra. This integrated workplace management solutions provider's cloud-based workplace management platform is used by businesses globally to track, manage, and protect their workers and assets. Demand has been strong for this technology during the pandemic, leading to stellar recurring revenue growth. For example, Damstra recently reported a 65% year on year increase in its annual recurring revenue to $35 million. This compares to its 2022 estimated total addressable market (TAM) of US$20 billion.
IntelliHR Ltd (ASX: IHR)
A final small cap ASX share to watch is IntelliHR. It is a cloud-based human resources and people management platform provider. IntelliHR has been growing its subscribers and ARR strongly over the last couple of years. This is being driven by the shift to the cloud and its international expansion. Looking ahead, management sees continued revenue growth in new and existing markets. It also intends to make further investments in both R&D and sales and marketing resources. This is to capitalise on a large and fast-growing global market.
