I’m going to talk about two ASX shares that I’d buy and hold for the long-term.
Businesses that are growing rapidly could deliver strong returns because of their ability to compound profit and returns.
I believe these two ASX shares can deliver market-beating returns in the next three years.
Collins Foods Ltd (ASX: CKF)
Collins Foods operates numerous KFC restaurants across Australia, the Netherlands and Germany. The business also has the responsibility for Taco Bell outlets in Australia.
When the company reported its HY24 result, it said it reached Australian restaurants, with aims to open nine to 12 new restaurants in FY24. In Europe, it had 72 restaurants with a further three net new restaurants expected to open in the Netherlands in the FY24 second half.
The ASX share reported KFC Australia same store sales (SSS) growth of 6.6% and KFC Europe saw SSS growth of 8.8%. Those are strong sales growth numbers for existing outlets and supports my thinking that Collins Foods should continue to grow its networks.
Collins Foods reported strong overall numbers, with rising profit margins. Revenue increased by 14.3% to $696.5 million, underlying EBITDA grew 16.7% to $109.9 million and underlying net profit after tax (NPAT) jumped 28.7% to $31.2 million.
If it keeps growing its store numbers, particularly in Europe, and achieves SSS growth then the future looks bright.
Tuas Ltd (ASX: TUA)
Tuas is a rapidly-growing telco based in Singapore, it was demerged from TPG Telecom Ltd (ASX: TPG).
Its subscribers are growing every six months. In the FY24 first half it reached 938,000 subscribers, up from 691,000 at HY23 and 487,000 in HY22.
The subscriber growth is combined with average revenue per user (ARPU) growth – it reached $9.56 per month in HY24, up from $9.37 per month in FY23.
HY24 saw revenue growth of 38%, EBITDA growth of 56% and an improvement of the net loss from $7.8 million last year to a net loss of $3.5 million.
With improving operating leverage, ongoing subscriber growth, imminent positive net cashflow, plans for broadband growth and investments in its mobile network, this ASX share has a very promising outlook.
