Ann: Change in substantial holding, page-6

Hello @plough the business of LBL requires specialised training to run the machinery required to carry out their coating work. So when I look at the PE and its current growth I see a typical industrial company where people and equipment cost will need to grow for the business to continue to grow. I am not sure there is a great inflection point unless it becomes automated and robots carry out the task.

As a consequence, the growth rate of such a business although positive and heading in the right direction is not going to be SaaS like as it’s dependant on the recruitment, training and retention of specialist staff using very specific equipment.

That is why the addition of licence selling is all about improving those margins as they will be able to clip an ongoing ticket. Now if this takes off then all bets are off and margins could accelerate very quickly.

The AGM presentation from Oct 2023 talks a lot about staff recruitment including more trainees and overseas migrants in order to improve retainment of staff. They mention the strategies that have been investing in are having a positive effect. However, it’s important to keep in mind this is a specialist area so staff recruitment, training and retention is important to their ability to handle greater workloads.

So in order to gain more revenue they will need more staff to help run the machinery all this costs significant monies so I am not sure how much operational efficiencies will improve margins significantly above a nice steady as you go industrial business. As such, I see nice and steady gradual share price rises as the NPAT steadily grows. Nothing wrong. In fact I am happy it will be supported by actual NPAT.

I see patience being rewarded here. In 5yrs time I hope the price to double from where it is today. Nothing to sneeze at and ahead of the market.

I hope that kind of explains what I mean. So I am looking to accumulate each time it takes a dip into the mid 80s with a long term outlook of doubling in 5yrs.