Thornybot, May I add a few points. The Game Plan. 1) you buy the business from a financial entity/ venture capitalist.
2) You go around knocking off contracts. How?? By undercutting all others. If you are ever in Kalgoorlie ask about McAleese. Short term your turnover booms. Profit can be dollied up to look fantastic.Growth is super high. All looks good, good and even better.
3)But you are now getting growing pains. Management has to run to keep up.Your debt is rising fast. You economise as best you can (maintenance). Buy second hand gear etc etc. You must keep running faster and faster to keep the banks and customers from looking too closely.
YOU HAVE NO EXIT/PAYOLA STRATEGY. AND YOU HAVE NO TIME PLAN! Short term your okay. Long term your dead unless you have a plan. 4) Viola/IPO and hope that down the track a big boy takes you out.You then retire and let financial gravity take hold of shareholders/new owners. BUT MONA VALE BROUGHT EVERYTHING TO A HALT. Also Shell and some others knew what you were up to. They bathed in the cheap rates while the going was good. Every 3 years, your head goes on the chopping block.
Now you are no longer a bulk fuel transporter.60% of your business evaporated. You need to consolidate, restructure which also includes finance and see were you stand 6 months from now. This is a grind, harrowing, like pulling teeth and very long winded. And all the time your net worth has cratered and needs to be rebuilt. Good luck to management. the good/easy times have gone. How long will the banks be agreeable. I keep thinking back to the days of Alan Bond and Bell Bros. Nothing new here.
MCS Price at posting:
66.0¢ Sentiment: Hold Disclosure: Not Held
