It's due to acquisitions and growth. It's worth recalling that PCP was a lockdown affected period, which post that led to a rebound in activity and sales, which requires investment in inventory i.e. tyres etc. We know this because inventory almost doubled YoY to $11.6m - this is what you're seeing in the cashflow. To check that it's flowing through you will note that trade debtors has also increased by ~50% to $6.4m. This will turn into cash once it's collected.
In effect, the Group is in investment mode both in terms of acquisition but also scale up as it tries to leverage cross sell and the re-opening theme.
This is a classic roll-up play. Buy small businesses aligned to the Group on low multiples. Extract cost and revenue synergies and leverage the multiple arbitrage. As the business grows and demonstrates improved operating leverage, profits will increase leading to multiple expansion. That then compounds the arbitrage play when it acquires more businesses. The TAM is pretty large and there are a lot of medium sized businesses for sale that would complement RPM.
Smart play, good industry, under the radar, insto supported, well funded and strong management/shareholder alignment. Just bottom draw this and come back in three years.
- Forums
- ASX - By Stock
- RPM
- A little Gem for forward thinkers
A little Gem for forward thinkers, page-34
-
-
- There are more pages in this discussion • 21 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
NEWS
Breakthrough programs slash healthcare events, driving a significant A$1.8M+ annual revenue boost
LU7
Discover the strong preliminary feasibility of the Bécancour Lithium Refinery, showcasing resilience in a low pricing environment and a strategic plan to capitalize on future price recoveries
Add RPM (ASX) to my watchlist
(20min delay)
|
|||||
Last
7.0¢ |
Change
0.003(4.48%) |
Mkt cap ! $17.66M |
Open | High | Low | Value | Volume |
6.9¢ | 7.0¢ | 6.9¢ | $8.534K | 123.4K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 313088 | 6.9¢ |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
7.0¢ | 423079 | 2 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 313088 | 0.069 |
4 | 175013 | 0.067 |
1 | 49271 | 0.066 |
3 | 39384 | 0.065 |
2 | 212500 | 0.064 |
Price($) | Vol. | No. |
---|---|---|
0.070 | 423079 | 2 |
0.071 | 43000 | 1 |
0.072 | 21000 | 1 |
0.074 | 145005 | 1 |
0.075 | 25000 | 1 |
Last trade - 16.10pm 04/10/2024 (20 minute delay) ? |
Featured News
CC9
Chariot Corporation (ASX:CC9) refines Black Mountain strategy, launching Pilot Mine to seize U.S. lithium opportunity
NEWS
Antler Copper Project hits major permitting milestone – air quality permit advances to final review
RPM (ASX) Chart |