Macquarie points out a few things this company needs to get...

Macquarie points out a few things this company needs to get right;
"Catalysts: To drive a re-rate we believe MGH management needs to builda track record of: 1) delivering guidance; 2) sustaining organic growth; 3)maintaining leverage in target range or below; and 4) delivering capitalrecycling targets."
Further they note that 75% of the debt is floating rate with an average cost of 5.6%...
Interest will cost this business $33m over the FY24 year....hikes!!!!
Big investors in Aust have long memories around the rapid decline of cyclical businesses like these...banks will cut you off at the knees if they feel any level of doubt....The conference call yesterday was quite lackluster ...the CFO sounded defensive. Wes sounded flat and tied.
The stock trades at a discount to peers..... telling us that if WES keeping buying businesses, the debt will never come down...even if the RBA cuts rates, lenders will make MGH pay overs as they know how to price risk. ...
Capital recycling should be ramped up in size and urgency, the buy back should be cancelled as a sign that WES understands the current stresses on the balance sheet. Guidance should be carefully communicated to the market and they'll need to hit their targets consistently.
They may need to get better corporate advice and up the quality of the board to assist WES in the next phase of this biz. He probably deserves better.