Although VET makes up less than 1%, the real growth potential of...

Although VET makes up less than 1%, the real growth potential of this company in my view was pinned to the VET fee line of business. Given the Government had changed the ball game it will be interesting to see how ASH transform to get some growth under the new scheme.

Margins in labour hire are so tight. For every $1,000,000 of new hours billed the EBIT is around $20,000 to $34,000.

However in training (FY15 as an example) for every $1,000,000 of fees generated EBIT of $320,000 falls to the bottom line.

Doesn't take a rocket scientist to work out that margins in the training sector are 10x better than labour hire.

If government change policy then this can (as demonstrated) effects the growth opportunities of this company.

Putting training aside the company re labour hire had $9m EBIT less head office costs $2.6 = $6.4m. However in FY 16 this was reduced to $5m EBIT. Head office costs blew out, however assume we reign this back to $2.6m, EBIT should sit at $2.5m in labour hire alone. Based on a multiple of 8 (pretty high) we are at $20m cap.

Appears not much value has been attributable to the training business. Clearly we have value in the training sector. Given that costs have been stripped out and Cummins mentioned we are EBIT positive in most divisions then this would in my view appear a cheap buy.

Something still bugs me that stops me buying this stock with my ears pinned back and that is the sudden departure of Cummins. Something doesn't sit right. Hopefully the AGM will have some positive comments.