Ann: Investor Presentation, page-11

Here endeth the gushing....

I confess to not being a gusher with this company. That's not to suggest that I'm not an admirer of a company that has progressed its profit as steadily as it has for some time now. And it's a company that's as likely as any to actually profit from inflation as they clip the ticket on rising insurance premiums that pass by.

Their acquisitions have, as best I can tell, worked well. Their consistent results suggest that they don't overpay for the businesses they procure and they then add them into their systems seamlessly providing some improvement along the way through IT etc.

I've looked at them before and the thing is that they're on a P/E of about 27 and, therefore, need to continue to grow to retain their current price.
Such growth comes from acquisitions. The acquisitions in the past have been financed by a combination of capital raising and external debt.
Not paying fully through share offerings have helped to make the EPS and ROE numbers improve steadily while interest rates were low.
I've just looked at this quickly and I notice as a result of their approach to financing acquisitions that net debt has trebled from about $200m in 2019 to about $600 in 2022.
There's no issues as a result of all of this as far as I can see as Interest Cover is running at about 17 times at the moment.

The thing is that as interest rates rise, the mix between external debt and Capital for funding may need to change and that may take the edge off the graphs. I note that the directors performance is measured in part at least by positive movement in the EPS so their judgement may be coloured a little by this. It may become a little more difficult to acquire businesses inside their financial plans dependent upon the move in interest rates across the next six months.

So, yeah ....... really solid and smartly planned business but I'm not quite there with the gushing.