Was really impressed by what I saw on the day. Around 40 people attended, mostly professionals. They split us into groups and showed us the Pemulwuy store and its warehouse, and the Distribution Centre and its office across the road. The management team answered all our questions, and gave us a deep run-down of the business, inside and out - at least as much as could be covered in 2 or so hours.
Full marks for transparency and shareholder relations!
Some key takeaways for me:
These are highly competent people, justifiably proud of what they are doing. Very open and direct, and they respect their customers.
Identifying ("interpreting") parts is a huge deal, and Multispares have a WhatsApp group where repairers send photos, "a picture is worth a thousand words".
The repairers are mostly independent, but they have some large customers with in-house repair teams for their fleets. With some of these large customers they have integrated computer systems and send them items on consignment, which the repairers can scan with an app to "self-checkout" as needed.
Large fleet operators don't tend to have exclusive deals with parts suppliers because it would introduce operational risks if a part goes out of stock.
Aftermarket parts vendors main competitors are the OEMs, who tend to support customers for the first 5 years of a machine's life, then support them less well because they'd generally prefer to sell a whole new machine after that. This is where shops like Multispares fill the gap for the next 5-10 years.
Beyond customer service, a key competitive advantage is their delivery network. They run hourly deliveries close to stores, 2-hour deliveries further out, and I think overnight deliveries otherwise.
The Pemulwuy store grosses the most, has 39 staff, and gets a lot of walk-ins.
The digital heart of their business is an Electronic Parts Catalog (EPC) which consolidates parts specs from all their suppliers. This EPC sounds like a valuable piece of IP in its own right. It helps their parts interpreters help their customers by consolidating a lot of otherwise siloed data from many suppliers, with internal annotations.
Almost all the parts they buy, they eventually resell. Only a tiny fraction of unsold inventory ever gets scrapped.
SNL Price at posting:
$38.00 Sentiment: Hold Disclosure: Held
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