Increasing a company’s market share is a great way to grow its revenues. Even better is when the company’s market is also growing. This means that not only is the company’s slice of the pie increasing, but the overall pie is also getting bigger. Yum!
The following three ASX companies all operate in growing markets while simultaneously also increasing their market share.
Propel Funeral Partners Ltd (ASX: PFP)
Propel owns 120 funeral, crematorium and cemetery locations throughout both Australia and New Zealand.
In Propel’s FY19 investor presentation, the company drew attention to notable industry figures. With death volumes in Australia expected to increase by a rate of 2.4% p.a. until 2026 and 2.1% thereafter until 2050, the industry has an indelible tailwind. New Zealand is a similar story with 1% p.a. growth until 2026 followed by 1.8% until 2050.
However, not only is Propel’s market growing, but the company itself is also growing within it, carving out a larger slice of that growing pie. In fact, between 2015 and 2018, Propel managed to grow its market share over 3.5x from 1.2% to 5.6%.
And, thanks to the highly fragmented Australian funeral market, Propel looks set to increase its market share further still with recent acquisitions of Gregson & Weight Funeral Directors and Graham’s Funeral Services.
Corporate Travel Management Ltd (ASX: CTD)
Corporate Travel designs customised travel solutions for businesses of all sizes. What makes the company more compelling is that for every dollar spent on its services, more than a dollar is returned to clients in savings.
Importantly, Corporate Travel operates globally and in a growing market. The company estimates this market to be worth US$1.5 trillion, growing at around 2.7% p.a. The industry is also highly fragmented, where Corporate Travel has less than 1% of global market share.
In FY19, the company reported strong market share gains in all markets (Europe, USA, Asia and ANZ) with an investment in technology stated as being a catalyst for these gains in the Europe and ANZ regions. Corporate Travel also noted a similar opportunity existing for the USA and Asian regions.
Additionally, Corporate Travel Management has also increased its market share through acquisitions, with the most recent acquisition being Texas-based Corporate Travel Partners.
Altium Limited (ASX: ALU)
Altium has a long history in printed circuit board (PCB) design, providing PCB design software for entry-level designers all the way up to professionals. With the proliferation of electronics thanks to the internet of things, long-term growth looks set for the foreseeable future.
The company has also been stealing market share from competitors such as Mentor and Cadence, growing from around 16% market share in 2014 to roughly 25% today.
Altium has noted its success as stemming from strong performance in three domains: Dominance, Transformation and Leadership. With very ‘sticky’ software, Altium has a target to reach 100,000 active subscribers by 2025 and anticipates to reach the halfway mark as early as this year.
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Motley Fool contributor Michael Tonon owns shares of Corporate Travel Management Limited and Propel Funeral Partners Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Propel Funeral Partners Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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