Ann: Notice of Results - FY23, page-9

My takes on BOL are as follows:

Firstly, I observed that in the past, Boom Logistics engaged in a buying spree to acquire new Plant and Equipment (P&E) at the peak of market cycles. Unfortunately, these acquisitions later faced impairment due to declining market values as the market conditions normalized. In light of the company's recent announcement about committing to further investments in new assets to drive growth, I am concerned that such mistakes will be repeated.

Secondly, I have noticed that the company's return on invested capital is currently below the cost of finance. It appears that the more the company borrows to fund growth, the more the interest discrepancy negatively impacts the overall financial performance. This dismal rate of return on invested capital leads me to believe that the company's business model might inadvertently resemble that of a finance enterprise, essentially subsidizing its customers to utilize the assets without the need for a substantial upfront investment to purchase the assets themselves. Given the significant increase in the Crane Producer Price Index and the fact that the current market value of the cranes exceeds their written down value, I am of the view that liquidating these assets at a profit, which would potentially be in the best interest of shareholders. This approach could potentially provide the company with a profitable exit and allow the proceeds to be returned to shareholders.