I was impressed by the presentation. They are spending money to reduce costs and upgrade equipment, as well as expand the product range. I had been thinking of selling as I saw this as a stagnant business, but it seems to have been given a new lease of life by the HWB takeover.
Looks to me with full year (an extra 2 months) from HWB and further expansion of the old business, this year's underlying profit could rise 10% from 4.5 cps to 5 cps and the dividend from 3 cps to 3.5 cps. That suggests 50 cps is a reasonable price target with a PE of 10 and fully franked yield of 7%. Moreover with little debt they can look at further expansion either organic or by takeover and continued growth next year.
A solid, high dividend paying, company, even if consumer spending slows. Happy to hold now.
