One for the fu­ture

Finweek English Edition - - INVESTMENT - MARC ASH­TON

DUR­ING A lunch last week, CEO Fred Platt and CFO Chris Po­vall took me through their busi­ness model. One of the big con­cerns that many in­vestors have re­gard­ing th­ese smaller in­dus­trial com­pa­nies is that they all talk about try­ing to em­u­late the Bidvest model but end up mak­ing ex­pen­sive ac­qui­si­tion mis­takes.

Platt was very blunt, ad­mit­ting that they had made mis­takes in the past but were now get­ting back to a po­si­tion where they could grow the busi­ness sen­si­bly and at their own pace while iden­ti­fy­ing op­por­tu­ni­ties in the in­fra­struc­ture mar­ket. The board cur­rently be­ing as­sem­bled is of a high qual­ity, and in­cludes for­mer Iliad chief Ralph Pat­more.

The group has good BEE cre­den­tials, with Thebe In­vest­ment Cor­po­ra­tion hold­ing 18% of the shares. Also, man­age­ment and staff are be­ing given the mes­sage that share price ap­pre­ci­a­tion will be where the real wealth is cre­ated in the long run, so stick it out. At a P/E of un­der 9 times and a promis­ing in­fra­struc­ture out­look, this might be worth a look

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