The new management team need time to turn the business performance around to give the market confidence.
Also there is assumptions that costs such as resin are going down. This is not necessarily the case with other costs, shipping delay etc... having negative impacts.
I also believe they are undervalued, however when you have such a market dominance how are you going to grow??????? There is nothing left to buy and what there is the ACCC will not let them buy!
They can only grow by buy businesses overseas and with that you have little if any synergies. Also in this environment and the inability of travel that is a very high risk scenario.
Growth will be difficult and the co-packing business has had a blip in sales, but keep in mind buyers are very aware of the COVID19 spike and will factor that in to any multiple they pay.
I am not trying to be negative I am just saying they are in a low growth segment that will be focused on rationalization and cost control. We will still see some uplift driven by COVID19 but keep in mind it is only temporary.
PGH Price at posting:
$2.31 Sentiment: Buy Disclosure: Not Held
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