Over the years ,ZGL's main strength has been its Offshore deck machinery & Construction Equipments......This was behind Roger Montgomery's call a couple of years ago...Then he changed his views soon after.
A vital piece of information is being ignored by the market....That is PRECISION ENGINEERING.
In 2009 Precision Engineering constituted less than 5% of ZGL's revenues.
This "insignificant" segment Has been growing at blistering speed since.
2010....Grew 84%.
2011....Grew >100%.
2012....Grew 14%.
HY2013..Grew 60%, Where it constitutes 40% of total revenues.
In other words ,this segment has grown from 5% to 40% of the entire business......This is massive & CONSISTENT growth.
The other 2 divisions are subject to wide fluctuation in performance...from growth to contraction of up to 50%.
Also,it is worth mentioning that profit margins are much healthier in Precision Engineering than the other divisions.
Now...ZGL is transforming from a heavy machinery manufacturer into a more clever company with sustained growth that is not heavily dependent on cyclical fluctuations in construction or O & G.
I expect ZGL to continue acquiring controlling stakes in Hi Tech or Biomedical outfits nearing commercialization.
In other words controlling its own destiny by owning lucrative businesses & manufacturing their clever products in house.
This is what the market will eventually wake up to.
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