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Revolution Magnificence Group (LSE: REVB) and Kodal Minerals (LSE: KOD) are two penny shares in reverse industries.
Right here’s why I reckon traders must be taking a better take a look at them.
Magnificence and healthcare
Revolution is a magnificence and private care enterprise with a number of manufacturers. It sells direct to customers by way of e-commerce in addition to in shops. The enterprise has been on a terrific development trajectory and went public again in 2021.
Over a 12-month interval, the shares are up 20%, from 24p presently final 12 months to present ranges of 29p.
Yesterday’s FY24 replace caught my eye, for constructive causes. The enterprise reaffirmed its goal of reaching £1bn in gross sales by 2030. A giant a part of that is driving efficiencies and enhancing margin ranges, particularly with present inflationary pressures.
In its half-year replace in November, it mentioned it anticipated to succeed in single-digit EBITDA and income development for the complete 12 months. It has now elevated its EBITDA goal to low double-digit figures, which is promising and reveals indicators the technique is already bearing fruit.
Revolution has had points with accounting and reporting buying and selling late prior to now. This resulted in a shift in administration with each the CEO and CFO departing final 12 months. A brand new CEO may convey a recent impetus to the enterprise.
From a bearish perspective, certainly one of its majority shareholders is fast-fashion agency boohoo. You might recall boohoo skyrocketed in recognition just a few years again. Nonetheless, fame points and declining efficiency despatched the shares tumbling after a terrific run. A rising affect by way of shareholdings from the beleaguered agency is one thing I’ll regulate.
Based on Statista, the well being and wonder market is just set to develop. That is excellent news for Revolution, its potential, and present shareholders.
Lithium growth
Lithium shares have some thrilling potential, in my opinion. That is as a result of plethora of actual world purposes that the commodity provides, together with in electrical autos and renewable power initiatives. All this might imply lithium is in excessive demand for years to come back.
Kodal possesses a growing mining asset, the Bougouni mine in Mali. If it could possibly efficiently mine at this asset, there are doubtlessly 220,000 tonnes of lithium-based spodumene available for it to promote annually.
The largest threat for many commodities corporations, and extra so smaller ones like Kodal, is operational points in addition to mines not yielding the anticipated output. Moreover, geopolitical instability in Africa might current points for Kodal. Plus, mining isn’t an affordable endeavour, a robust steadiness sheet is vital, and sometimes the explanation small-cap corporations fail.
Nonetheless, I’m buoyed by the truth that Kodal has a $100m cope with Chinese language large Hainan to get issues going. This might assist catapult the challenge, and the enterprise, to new heights. It’s additionally an indication of confidence in Kodal and its ambitions, when you ask me.
I reckon there’s some doubtlessly thrilling occasions for Kodal. If it could possibly produce the quantity of lithium-based spodumene it has talked about, efficiency and its shares may soar.
