Given what is happening with COVID, its realistic to expect some...

Given what is happening with COVID, its realistic to expect some volatility in ASH's earnings in 2022. Demand for ASH's LH will never be as strong, but delivering its services without disruption will be difficult as workers are forced into various forms of lockdown. Accordingly, we could see some volatility in the share price. However, for LH companies with the size and balance sheet strength of ASH, this is likely to be to ASH's long term advantage. Smaller players without the wherewithal to absorb these short term difficulties could disappear or become bargain takeover targets, allowing players like ASH to continue to grow market share. Its also worth noting that ASH could always start buying back its own shares if the share price falls too far, however acquisitions are likely to provide the more attractive growth path unless the share price falls to the low 40c level (which is highly unlikely).

The investment case here remains compelling given: highly aligned and capable majority owner and mgt team; low head office/fixed costs; P/E <10x; strong balance sheet; strong free cashflow generation; return on equity >30%; strong growth prospects (both organically and via M&A); growing complementary training operation that provides both an attractive growth platform in its own right but also a source of competitive advantage (via cross selling); disciplined acquisition strategy; and a majority owner that may look for an exit in the next 3-5 years or so. With a name like Ashley Services, a small free float and a mgt team that is focused on running the business well rather than marketing to instos, you can see why these strengths aren't fully reflected in the share price, but they will be at some point. GLTAH.