Ann: Market Update, page-9

@Rothbard
Thanks for your kind words. It is nice being on relatively inactive stocks with long-term holders. Although I am relatively new to the registry I have been observing this closely for 2 yrs (when you went by a different alias). I thought towards the end of 2016 would have turned things around but then the agreement for the energy absorbing bollard went. Also there was a potentially flagged capital raising last year which held me off for longer.

All the while debt has been reducing despite moving head office and increasing underlying growth.

SRH has a number of the qualities I like in investments:
- low KMP remuneration
- high KMP equity holdings --> aligned interests
- long history- and improving metrics (ie risk of business failure is low), which also lays a very solid base for both operating leverage and explosive growth

AND more importantly:
- under the radar- the business improvement cannot be seen in the accounts as EBITDA and FCF >> reported profit
- free kick from improvement in terms of bank facility and principal repayments from debt

against a backdrop of worldwide massive infrastructure investment.

Nevertheless very real risks exist:
- lack of recurring revenue
- commoditised industry with low margins
- improvement in underlying road safety due to technological change reducing end-user demand for products (this is slow burn).

I think there is enough of a track record to survive and prosper despite all of this and at these prices has limited downside risk - particularly in the context of the broader market. Let's see how it goes.