Hi All, A while ago, I took some time and tried to value MXI. I owned MXI well before COVID and whilst I did a back of an envelope valuation then, I thought it should be easier to value now as a parts only business. Below is my basic consideration. There could be errors so don't take any of the below as gospel. It is merely a discussion starter. I am not encouraging any one to buy, sell and my current year numbers could be proven to be totally wrong. Good luck.
My summation was with 27 stores across Australia it will difficult to add stores and maintain revenue per store and margin metrics when the main sale items is truck parts.Maxiparts just acquired 80% of Forch Australia (Workshop consumables distributor) for $9.7 million (incl $2.7mill inventory) which last year had revenue of$11.7 mill. This will have a marginal impact on the Maxiparts bottom line, but could be more of an indicator that there is no room to grow with storesAustralia wide and there are only small growth areas in the segment at all.So then the question is what would someone be willing to pay for an annual profit of $7 mill give or take.
For completeness, I decided to sell as I thought there was more chance of it heading back to $2, than going to $3. But each to their own. Nothing above is advice.
MXI Price at posting:
$2.70 Sentiment: None Disclosure: Not Held
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