Ann: Skyfii 2020 AGM Chairman's Address, page-7

Speculating who may or may not be selling or buying shares on any given day is a bit of waste of time, I think, because firstly, you'll never know the answer and secondly, it makes no difference to the fundamental value of the company.

Instead, focusing on how the business is performing over time is the important thing.

And in the case of this business, I am increasingly impressed by the flexibility and the speed with which its management and staff are able to innovate in response to demand for the sorts of products/services it is able to provide.

Recognising that Covid induced a step-function change in the level and type of demand for SKF's services, that the company has managed to develop and roll out new products in quick time speaks to the corporate ethos of creativity, innovation and being attuned to trends in market needs.

Even though the market is valuing the business at a higher level than before in its listed life, given the demonstrated traction in product development, which is translating into growing sales, I think that the company is in a way possibly as good an investment today as it was 18-months ago, when I first came across it.

It has very long runway for revenue growth and I see no reason why it won't - at some stage over the next 3 or so years - be clocking $30m pa in Revenue which, after even allowing for a meaningful step-up in the cost base to support the revenue growth, would still see the company generating Free Cash Flow approaching $10m pa.

When that happens, the company will certainly not still have an Enterprise Value sub-$90m [*].


[*] Note: When looking at SKF's market cap, don't forget to account for the 46m in unquoted ordinary shares.

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