I have not run a thorough ruler over the whole of the prelim final report but I have gone through the business update subsequently posted. The one thing which does stand out with the competitive security and cleaning segment of industry is that margins are everything. In the Feb 23 report issued by MIL they forecast that the gross margin for FY23 would be 15%. It has come in as a miss at 14.2% a difference of .8% which represents $2.1m of profit missed. In a company of this size that is a substantial amount. Particularly when their equity is only $1.36m. The current report states that new business is being won at competitive margins. I am fully aware that this segment of industry is highly competitive and full of undercutting smaller family companies which do not often carry the large overheads of admin salaries and commercial premises - so I understand why the margins are slim. It does indicate that MIL has to offer more than the competitors if it wants to increase margins. They say that they are trying to offer an increased diversity of services beyond straight cleaning contracts - I hope that this works because bundling services is one of the ways they can outperform the smaller companies and possibly increase margins. I hope it works.
MIL Price at posting:
28.0¢ Sentiment: None Disclosure: Held
