As suspected, a low-key and under-stated affair, with, maybe 10 or 12 attendees and held in part of the staff canteen at their new warehouse in Prospect, 2km off the M4 out in the industrial heartland out in Sydney's west.
SNL is a company with a granular customer based, well-established supply chain and steady demand for its products. It is therefore a business with high earnings visibility.
In the light of that, management today guided to 1H2018 Revenue of $53m and EBIT of $5.3m, which reflects growth on pcp of 13% and 22%, respectively.
And its not as if that 22% EBIT growth projection is occurring off a low base ... DH2016 Revenue was up 10%, and EBIT was 26% up, on DH2015.
So I think it is fair to say that the business is....well... humming along just nicely.
It is a conservatively-run business that flies under the radar and just gets on with the business of consistently chipping away at is competitors' market share, year-in; year-out.
Ten years ago SNL Revenues were less than $35m. Today, Revenue is running at $100mpa. Over that period, EBIT has increased ten-fold, from less than $1.0m in FY2008, to $10.0m today.
Today, they re-articulated their objectives for the next 3 years, namely for a further $20m uplift in Revenue over that period at an unchanged EBIT margin of 10%.
That implies a CAGR of 6%pa for Revenue and 8%pa for EBIT.
Based on the scale-able nature of the business, the investment currently being made in capacity (they state that their new Sydney warehouse has can operate at a level of sales 50% higher than current levels, and their NZ facilities are being upgraded with the same spare capacity), and precedent, I suspect that 6%pa Revenue growth and 8%pa EBIT growth will be somewhat of a walk in the park.
When I first started researching SNL some 18 months ago, I found many aspects of SNL had hallmarks found in other very successful companies, such as Reece and ARB, e.g., the shareholder-value focused business model, the prudent and conservative management, the modest remuneration of its executives and their significant stakes in the business.
So it was quite striking that, in discussion with the CEO and Chairman after the meeting that, in response to my question, "Do you ever look to other companies as benchmarks to which SNL should aspire?", the answer I received was the following:
"Yes, we are keen admirers of Reece and ARB."
It figures.
SNL Price at posting:
$3.38 Sentiment: Hold Disclosure: Held
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(20min delay)