Over the last 4 years SIQ has generated 20.2% p.a. growth in EPS. As I have said ad nauseum on HC strong growth in EPS is the holy grail of investment.
The FY'20 results to be released in Feb'21 will show no growth. That no growth has been caused by (i) the significant reduction in insurance commissions due to changes coming from the review of financial services and (ii) the impact of Covid-19 [mainly lower new leases/new vehicle sales] and (iii) the lack of business acquisitions.
SIQ has a consistent history of volume (organic) growth, approx 10% productivity improvements in its FTE to leases ratio and acquiring businesses. SIQ is also a business that is capital light and generates very strong cash flows.
The staff productivity will continue, SIQ is brilliant in this area. Voluume growth in new car leases will start to come back on FY'21. However the big kicker to the share price will be a big acquisition or a number of smaller acquisitions. The industry has been cnsolidation over the last 6 years however, in my view, the Covid-19 crisis will likely lead to further consolidation at the top end.
Cheers.................Daicosisgod
SIQ Price at posting:
$6.01 Sentiment: Buy Disclosure: Held
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