Good Moderate Growth, page-6

You raise some good points around the cost of acquisition and slow NPAT growth. We will need to delve deeper to get a truly clear answer.

As for a 2 cents worth answer, expansion/revenue growth is always costly and soaks up both working capital and profits. NPAT can take years to catch up. That's a cheap answer but I would expect profits to catch up once they reduce expansion or hit maturity as a business. If at that point they don't catch up then the investments in growth were inefficient. Still too early to tell perhaps?

The high inventory and slow inventory turnover may well be a symptom of the industry/products. The items they sell are very high $ value and dependent on patient needs (as opposed to a fast moving consumable) which may be hard to predict. It may also reflect long lead times for specialist items i.e. when is inventory recognised? When paid for, shipped or in the warehouse? All ideas that would require more delving and a better understanding of this industry (which I don't really have).

Anyway, let's keep these discussions going.