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Two penny shares I plan to purchase once I subsequent have some spare money are DP Poland (LSE: DPP) and Revolution Magnificence Group (LSE: REVB).
Right here’s why!
DP Poland
The enterprise franchises the well-known Domino’s Pizza model in rising markets Poland and Croatia.
DP Poland shares are up 50% over a 12-month interval from 8p right now final yr, to present ranges of 12p.
From a bullish view, demand for quick meals in Poland and Croatia is hovering. Rising markets current a possibility for the agency to capitalise on rising private earnings ranges, in addition to present low market penetration.
The enterprise has recorded wonderful efficiency in current occasions. In truth, it recorded its finest ever quarter, the ultimate quarter for 2023. Like-for-like gross sales on this interval elevated a whopping 27.5%.
For the yr as an entire, the enterprise posted an replace in January. Like-for-like gross sales in Poland and Croatia rose by a powerful 19.4% and 16.4%.
From a bearish view, the quick meals business is very aggressive. I’m certain others can be trying to capitalise on this probably profitable rising territory. Plus, present inflationary pressures are an ongoing danger as they might take a chunk out of revenue margins.
General, the DP Poland continues to open new areas. Moreover, it’s investing closely in advertising and expertise to zero in on a dominant market place. A wholesome wanting balance sheet ought to stand it in good stead. One among my largest worries with small cap shares is an absence of money, which might typically result in bother.
Revolution Magnificence Group
Private care and wonder enterprise Revolution Magnificence Group has been on a terrific progress journey, and went public again in 2021. The enterprise sells various manufacturers direct to shoppers by way of e-commerce, in addition to in retail shops.
The shares are up simply over 12% throughout a 12-month interval from 24p right now final yr, to present ranges of 27p.
In line with knowledge revealed by Statista, the sweetness and private care market is just set to proceed to develop at a fast price. This could possibly be excellent news for the enterprise.
Revolution has a lofty goal of hitting £1bn value of gross sales by 2030. A brand new administration crew, introduced in on account of an accounting and reporting scandal, want to ship recent impetus to the enterprise to hit this goal.
Final month’s buying and selling replace shed additional mild on current buying and selling, and full-year expectations. The enterprise stated EBITDA progress ought to are available at low double-digit figures, which is an improve on the earlier forecast. It appears just like the agency’s strategic evaluate to drive efficiencies, margins, and profitability is already working.
From a bearish view, I’m going to keep watch over beleaguered quick vogue agency boohoo‘s growing influence on the business. It currently holds close to 30% worth of shares in the business. boohoo’s properly documented struggles are one thing I’m hoping that Revolution can keep away from sooner or later.
General, a constructive journey to this point, recent impetus, and strategic evaluate wanting prefer it’s bearing fruit. These, together with a burgeoning market place assist construct my funding case.
