1. low valuation
i) current p/e is around 12.4 X against historical p/e of 15.0 X
ii) most related companies are trading at a much higher p/e
2. consistent good dividend yield
i) consistant yield of above 4% since listing
ii) yield is among the highest in related companies
3) potential future growth
i) revenue and profit have been growing in the past 3 years
ii) current year (2021/2022) is likely to see further growth as it will
reflect the full contributions of acquisitions made in 2020/2021. The
contribution from Tenderfresh will also be reflected. Tenderfresh is
a major acquisition.
iii) company is committed to make further acquisitions as and when
opportunities occur.
4) sizable cash horde
i) company is net cash, with a cash horde of $95.0 mil.
ii) company is in the cash accretive business. It is likely that the cash
will grow further.
Above are just my personal assessment and I could be wrong.
Please do your own dyodd.
2021/2022 is likely to be another good year with contributions from Tenderfresh plus
the acquisitions made in 2020/2021. Can also expect a dividend of around 2.0 cents given that the ccompany has a dividend policy of distributing 50% or more of it' s profit.
The net profit for FY21 and FY20 were supported by one off gain of government grants and rental rebates. If you remove the $18million from FY21, the net profit is about the same as FY2019. Also, if you remove $15million from FY2020, the net profit is about 11million only. Considering the number of acquistion they made over the years, the net profit is actually rather flat. Also it feels that the co founder was trying to siphon money off via a related party transaction when they tried to buy over the drinks company few years back.
