I have done a bit of a review myself and the core question I have is that despite 5 years of capital investment and substantial growth in floor space, this FY's revenues did not grow at all. One can argue that this represents significant capacity into which SRV can grow into in the future in a cost efficient/low capex manner, however the lack of growth in revenue in the last FY is a bit of a red flag for me.
The message is all about New York New York however I would have thought that as a global business SRV's business in other sectors could offset one bad egg and show some growth in aggregate. That is what healthy businesses do.
Basically SRV appear to be morphing into a low growth, lower P/E, higher dividend stock. Maybe this is not such a bad thing for some, but what will be share price do in the meantime? Wallow around as low growth stocks do.......?
Only time will show. The question right now is whether there are better places to park ones investment equity with lower risk of under performance.
Gosouth
SRV Price at posting:
$5.97 Sentiment: None Disclosure: Held
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