the purchase of FFS hasn't gone through, with consideration to be paid on 1 September
the FFS business generates strong annual revenue, and provides wharf cartage, warehousing, quarantine, fumigation and other complementary port-related services.
If you'll recall, the port logistics services are the more profitable aspect of SLH's existing business, so these additional services in additional locations makes a lot of business sense
Also great to remember these points from the financial results:
Revenue of $394.7 million, an increase of 22.1% on FY21
Underlying EBIT of $31.0 million, an increase of 27.6% on FY21
Underlying NPAT of $15.8 million, an increase of 45.0% on FY21
Full year dividend of 8.49 cps – fully franked (4.2% annual yield)
It would be very short sighted to focus on a 1.3% reduction in EBIT in one of many services offered by SLH and conclude that is a poor result. I also think it's great they're expanding into Perth with the FFS acquisition - SLH knows what it is doing and knows how to do it profitably, so expansion can only assist shareholders long term.
Happy to hold for a while on this one, currently very undervalued with plenty of room to run.
SLH Price at posting:
$2.32 Sentiment: Hold Disclosure: Held
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