Investment Rationale
- Market Leader - As one of the longest established Australian suppliers of non-ferrous metals, this business is ideally positioned to leverage the market growth resulting from the booming data construction industry;
- Strong & Diverse Customer Base - the Business has an extensive history of servicing its customers, particularly involved the manufacture of switchboards including for data centres. The Business has several long-term loyal customers with seven of the top ten customers having been customers for five or more years;
- High Return on Capital - of 35.0% (EBIT / Net Assets);
- Excellent Reputation & Market Position - The Business is highly respected and is well known for its credibility, honesty, reliability, product quality and superior service levels including having on time delivery in excess of 99.75%;
- Significant Growth Opportunities - including:
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Additional Demand from Data Centres - Industry estimates that there will be over $250 to $300 billion spent on the construction of between 90 and 100 data centres over the next decade and increase data centre energy consumption by over 300%;
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Growing Markets - as a result of large infrastructure spending in Queensland associated with the 2032 Olympics being hosted and the ongoing demand for the construction of mines and renewable energy infrastructure including solar farms and e-vehicle charging stations;
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Interstate Expansion - The Business believes that there is a significant opportunity to expand interstate and open additional branches;
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Expansion of Products - there are opportunities to expand into the distribution of other speciality metals such as stainless steel and aluminium; and
- Experienced Management Team & Systems - The Company has a very experienced and knowledgeable management team that also has excellent systems and processes including holding ISO accreditations.
