PGC has recently come to my attention and I'm in the process of evaluating the business. I know there's been a lot of talk around this company from a trading and price perspective (that's what interested me in the first instance tbh), but I was hoping to start some sort of a discussion on drivers of the underlying business.
If anyone has information they'd like to share on the following I'd be grateful:
Do management give much insight into the various profit drivers of the company? I've seen a broker report from Halcyon which breaks down revenue and gross profit by division, but this is over a year old.
Has there been any evidence of Synergies/increased organic growth as a result of the acquisitions they've made over the last couple of years? They've seem to be running a strategy of tapping investors to fund acquisition, but how are these acquisitions performing vs. standalone given [IMO] the pretty high cost base of the PGC.
The Halcyon broker report makes an observation [paraphrasing here], that PGCs market is ~80% annual replacement spend (opex or at least lifecycle capex) vs ~20% project specific fitouts (upfront capex). Given the brutality of the recent budget in slashing the level of annual healthcare funding and that PGC have a suite of 'premium' products, what is the impact going to be on their business?
Related to the above - Have management given any insight into the mix between public/private hospital revenues?
PGC currently manufactures their (relatively small) product suite in at least 6 countries (USA, Germany, Netherlands, UK, Australia and Asia). 5 of these not what you'd think of as being traditionally low-cost manufacturing bases. Has any thought been given to consolidation of mfg operations? Is there any reason this could/couldn't happen?
I'm not entirely sold on the strategic direction of this business. The valuation isn't all that attractive either. But I'd like to know more about the business before forming an opinion - can anyone who has a better understanding of the company than me assist? Thanks
PGC Price at posting:
25.0¢ Sentiment: None Disclosure: Not Held
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