2 growth shares that deserve investors' attention right now

Updated: 
growth-arrow

Communications specialist Maintel Holdings(LSE: MAI) delivered a decent set of full-year results today that were dominated by the contribution from the firm's acquisition of Azzuri, which completed during May.

Integration going well

Revenue expanded by 114% compared to the 2015 outcome, pre-tax profit ballooned by 52%, earnings per share went up 29% and operating cash flow improved around 56%. The acquisition caused net debt to surge by around 520%, to just over £20m, which is just over six-and-a-half times the level of operating profit achieved during 2016. This raises the stakes, but the directors underlined their confidence in the enlarged firm's prospects by pushing up the full-year dividend by 5%.

Integrating Azzurri's business with existing operations is going well and is ahead of the directors' expectations, which provides some evidence that the gamble may be paying off. Maintel has its sights set on rapid growth in the cloud environment and recent contract wins are encouraging.

Growth on track

Chief executive Eddie Buxton reckons organic growth has been robust, too, with a strong recovery in the second half of 2016. Looking ahead, Maintel expects further synergies to materialise within the enlarged business that should drive cash inflow and debt-reduction. The company aims to grow both organically and by keeping an ear to the ground for further potential acquisitions.  

Today's share price of 1,037p puts the firm on a forward price-to-earning (P/E) ratio of just over 12 for 2017, and the forward dividend yield runs at 3.3 %. City analysts following the firm expect forward earnings to cover the payout around 2.5 times, which doesn't strike me as outrageous. I don't think valuation seems likely to impede the upward momentum of the shares at the moment.  

Impressive figures

Data-focused marketing solutions provider Taptica International(LSE: TAP) delivered some impressive full-year results today. Revenue shot up by 66% compared to the year before, net cash from operations improved by 227% and cash on the balance sheet swelled 126% or so to sit at $20.3m. The directors of the Israel-based company pushed the full-year dividend up by a whopping 29%, which suggests they are confident about the firm's forward prospects.

One of the difficulties for investors with firms like Taptica, if my experience is typical, is that it's hard to gain visibility for the firm's earnings because it's difficult to see how the firm actually makes its money on a day-to-day basis. The firm tries to help by describing itself as, "a global end-to-end mobile advertising platform for advertising agencies and brands," but it's still hard for me to gauge how sales may behave in the future, unlike, say, a pie maker whose operations seem rather less opaque. However, advertising is often a cyclical business so I think it's safe to assume that Taptica will see volatility in its operations as macroeconomic conditions undulate over time.

Fair-looking valuation

That said, the firm is growing fast right now and doesn't seem to have an excessive valuation. At a share price of 295p, the forward P/E ratio runs at just under 11 for 2018 and the forward dividend yield is around 1.9%. City analysts following the firm expect forward earnings to cover the payout 4.75 times -- a high level that suggests the directors see more room for growth ahead and thus better places to invest the cash than into the dividend.

Are you aiming for a million?

I think Maintel Holdings and Taptica International deserve your attention and further research right now because there could be much more to come from these two firms.

Small-cap growth firms can really drive your returns when they click. To help you make share investments really work for you The Motley Fool analysts have put together a report called Ten Steps To Making A Million In The Market.

Take the next step on your journey to a million, by making the report part of your toolkit. You can download your copy now, free of charge. Click here.

Kevin Godbold has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.