The growth of this "boring" little industrial business over the...

The growth of this "boring" little industrial business over the last five years has been truly spectacular.
I note that EBIT has grown by 650% in the last five years, which I think is pretty impressive for any company, considering that includes the Covid period, high interest rates, slow down in economy and anything else you could throw at it.

What I like most though, it that they are getting growth in revenue without sacrificing profit, as evidenced by the 2023 result where revenue grew by 38% and NPBT grew by 36%, so pretty much in line. In addition, they are growing without dramatically increasing debt and the quality of the balance sheet is as strong now as what it was five years ago.

I think the outlook for the company is optimistic as well. For a start, they mention they are actively looking for acquisitions, which always sends a shiver down my spine. So what has been their recent history of acquisitions? Well they bought a 50% interest in Orbis Mining a couple of years ago for $800,000 when it made EBIT of $0.34 million the previous year. So how has that worked out? Well it made $1.4 million this year! Does that give you confidence that these guys might be pretty savvy when it comes to acquisitions?

The sales of capital equipment increased this year by 75% ( and they increased their margin) and apparently demand is continuing at record levels, so while consumable sales grew by 40% it would be reasonable to think that the growth of consumables will continue to be high as all of those new machines will all need consumables. I note that the consumables margin slipped a bit, but apparently lithium is a major input into these consumables and we have all seen the gyration in the lithium price, so I think the minor slippage in margin given such volatility in input prices , is to be commended. If they can get their margin in consumables back to 2022 levels, then at current turnover level there is another $0.5 million waiting to go to the bottom line in 2024 just in margin improvement alone.

I note that net profit grew at a lower level than EBIT, but it is fully explained in the company tax rate increasing from 25% to 30% and the extra share of profit that belongs to non controlling interests ( the 50% of Orbis that they don't yet own). Of course that means that the dividend that has increased by 32% on last year is now franked at 30% instead of 25%, so all to the good.

I am looking forward to the first quarter update to try to get a handle on just what level of increase in everything is likely for 2024. If only every stock I owned performed like this.

As usual DYOR and congratulations to all holders.