Ann: LaserBond Expands to Queensland, page-5

I am nervous about the margins. Laserbond has achieved NPAT margins in the 11-12% range the last couple of years (I should go back further -> no time ATM) and I consider them a very well run enterprise. I just don't see how a private company in Bethania (literally 20min from where I live) is hitting those margins and only wants that price for the business? Something does not add up.

I note on the QSP Eng website the owner has been in the industry for 40 years so clearly at retirement age, so its clearly understandable he is looking to sell, but there is something suspicious about those figures, and he would've been setting the business up for a sale a while ago. I note the accounts are unaudited. Was a lot of CAPEX written down in the years preceding the last 3, hence there is next to no depreciation hitting the NPAT figure?

I personally will be working on them bringing $3-4 mill in revenue to the table with a NPAT of $300-500k long term. I think the NPAT of $1.1 mill will prove to be fantasyland over time.

I am definitely not against the acquisition, I just wouldnt be adding $1.1 mill to the Laserbond bottom line and expecting it to stick.