A pretty good result considering weather impacts were out of...

A pretty good result considering weather impacts were out of management's control. It's a shame I wasn't paying too much attention and missed the sub $1 opportunity but I'd be happy to add on further weakness.

The main part of the business - transport is flying with the tilt towards rail very very positive to margins. This is the fastest growing part of the business and the highest margin. On the analyst call they said that 575 of the 600 were in operation so there's a bit more capacity utilisation to be squeezed and further growth is expected this half.

Hunters was obviously the biggest disappointment, but again, flooding and cyclone impacts are out of management's control. This business will be a bit more cyclical than transport but the service offering is important to attract customers. It's also worth recognising that cyclicality works both ways - there will be bumper years too.

Other interesting things to observe included the accelerated depreciation. This non cash expense will impact NPAT but not cashflow. The average age of the fleet still looks great and with the pivot to rail, there is an opportunity to sweat these assets a bit longer than the balance sheet suggests. Capex in 2H24 will also be lower, providing capacity to reduce debt, grow dividends etc.

Overall though, what I love about this business is the +20% ROIC, single digit PE and ~5% dividend yield that also has a DRP that comes with a 5% discount. This can be a nice little compounder, which is why adding on some softer but temporary trading may not be the worse thing.

On the analyst call the other two things that were mentioned was organic growth in the business was still very strong even when you strip out the inorganic growth. Also, it's likely there will be a transformational initiative announced in 2H24 to do a deeper dive on both margins and costs, which seems sensible given the business has scaled pretty quickly.

A couple of reports to digest too - it's worth noting that even the analysts are fairly conservative with price targets that still only generate a PE of ~12x, which is well below peers and the market. That's not a huge stretch.