Distributing car parts across Australia and New Zealand is never going to be all that exciting any more. It doesn't help when supply chains, an integral part of the end result, are interrupted on a regular basis as we've seen across the last year or so. The monetary impact of that disruption is reflected, in part, by the reduction in the gross profit margin. Some of that margin reduction was also attributable to the lower profits obtained from the new products resulting from the acquisition, according to the report. It wasn't quite clear how much of the tightness was attributable to each of the issues and whether the new product margins were a result of transitioning or are to offer a similar weighting on a continuous basis. Organic growth in the Automotive division was suggested to be about 18% for the year but the pent up demand after 2019 and 2020 would have been a contributor to that so, again, assessing the future is not easy. I think they run a tough business pretty well and the relative consistency of the ROE and ROIC figures across past years suggests that their acquisitions are financially prudent. I agree that their results will show small improvement only from now on but it's priced accordingly. I will continue to watch closely
GUD Price at posting:
$11.64 Sentiment: Hold Disclosure: Held
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