Ann: FY17 Update, page-21

"...but I do have a positive view of overseas growth, more room for acquisitive growth, and a de-risking of earnings by diversifying the revenue base."

@thunderhead1,

I'm afraid that when Net Debt -to-EBITDA is approaching 2.0 times (I think it will come in at 1.9x for this year, up from 1.6x for 2016...despite the company having raised $35m in September last year via placement to cover the DRP shortfall), then the scope for further meaningful acquisitions is limited, especially considering that off balance sheet liabilities and expenditure commitments (refer to Notes 30 and 31 of the last Annual Report) are not immaterial compared to the level of net borrowings of the company.

As for acquiring more things to diversify the revenue base, one of the key low-risk features of this company, as articulated by some of its followers as well as its management, is how diversified it already is, what with it operating across multiple geographies, both domestically and internationally, offering a range of different product and service offerings, with positions spanning the entire supply chain as wholesaler, distributor, retailer, and franchisor.

I'm not sure they could get any more diversified than that. If anything, there is a risk that they end up juggling too many balls in the air. In other words, once companies get to a certain inflexion point in diversification, any moves beyond that point results in dis-economies of scale, i.e., di- worse-ification.