Thanks @madamswer for your analysis.I have had a look into this...

Thanks @madamswer for your analysis.

I have had a look into this one, and I too am intrigued. Optically looks cheap, and there's some growth to be eked out in FY24 from the WB Hunter acquisition (around +5% EBITDA , bringing the EV/EBITDA below current rate of 5x).

I suppose the question I have is three fold. First, cash flow. Interest rates will go up with the debt-financed acquisitions. Perhaps not so material. But the maintenance CAPEX has increased from $27m to $36m, and that's substantive. So the price on a FCF may not be as cheap as it firsts seems.

Second, organic growth. The rate of organic growth may be in low SD or even potentially negative if El Nino impacts the rural economy quite substantially.

Third, margin durability. Question I have is whether the margins are boosted in FY23 due to the demise of Scotts and the lessening of competition, and if this can be maintained. They do forecast more M&A in this space, which could be good for margins. But FY23 was an outlier, with around 13.2% EBIT margins being above the long term average of 10%.

To my mind, not so clear cut on the current valuation vs potential growth.