Ann: Completion of Retail Offer Booklet Despatch, page-86

Apologies if this has been posted ....It is a interview with Alex Waitlitz Subholder .....Patrick: More on the turnaround side of things, Service Stream (ASX:SSM) was a company that was, let's say somewhat of a market darling up until about two years ago or so. To start with, could you maybe explain what some of the challenges that Service Stream has faced over the last couple of years have been? What are some of the changes that you have advocated for or are advocating for in order to turn it around there?

Alex: Well, if you go back a little bit further then a couple of years, we've been involved in Service Stream for quite a long time. It was connected to Skilled Engineering originally, which was a listed company, and it was a service for utility in the telco industry. It was actually like laying a lot of the cable and doing their trenches. So it was, if you like, another asset or division within Skilled that wasn't getting enough attention for what it was. So it eventually went on its own journey and became a separate public company, but struggled in doing that after some good momentum, because it went out of its bandwidth and it entered a JV which costs them a lot of money, and it was of a scale that they couldn't manage well.

So, that in itself led to a change for them to get back on the right track. They introduced new management, a gentleman who was on the board at the time stepped into the role. He'd actually sold his business to them. He came in and became a much more active director. He recruited a new CEO who's the current CEO, and they went about turning around that big city business, exiting the bad contract, taking that on the chin, recapitalize, streamline the business, went back to their basics. And then there've been a huge beneficiary over the last few years of obviously the NBN rollout and some of the things that's happening in the telco space.

People didn't realise that they started expanding also into utilities, smart meters, radio, gas and electricity, and those types of things which was a good diversification. But I think with the spend on NBN being so huge, everyone's focus was on that. There was kind of a view that, because that was a perception that that was being badly managed, that would be rivers of gold forever. I think even though they were running the company well, it would then got to be too expensive because the multiples of the market gave it were too high, I think on the basis that that would go on forever and achieving good margins while doing that. So I think it went too high.

In fact, we sold out a lot of our position when the stock, not that long ago got up to $3 or through $3 a share. We just felt even though fantastic management, even though good contracts and all solid the valuation had got ahead of itself. So we were quite disciplined in selling quite a lot of stock.

Now, I think it's come the other way around, as people have said, okay, NBN is finished and the margins are not there as much, it's gone right down. But NBN hasn't finished because there's so much maintenance to still keep going and they've diversified, as I said, previously in utilities, and then more recently through this acquisition of Lendlease services, and that gives them diversity, it gives them scale, it gives them plenty of synergies.

And if you believe in the management team, which we do, we think they've got one of the best management teams that are out there, certainly for a company of this size and a very strong, capable board of which many of the board members have equity in the business and actually put more equity in, in this recent capital raising. I think they will capture those synergies and run that business well. I believe that actually the market is valuing a too low now relative to the potential that this new business gives to them.

So we actually participated in the capital raising, and we look forward to them producing the results and the market understanding them better that telco is only one part of their business and this is a further diversification for them to balance the business and smooth out the earnings much better going forward, and that the management team is capable of delivering a very good outcome. So I definitely think this is a stock to watch over the next six, 12, 18 months. ...... Cheers V