Hi Mars I entirely agree. You are right, Thailand is primarily a...

Hi Mars

I entirely agree. You are right, Thailand is primarily a manufg plant - external sales are only $4m pa (1+% of total revs). Through the various emails I was trying to understand the performance to date of the overseas expansion. Thailand clearly is a success in that they have shown they can do business outside Aust (manufacturing). The other markets are true export markets (selling product only) and are at various stages - in the long established USA revenues are growing strongly, indeed they are now accelerating, and (with revenues per $ of capital, well above that in Aust (no manugf of course). US margins are meagre - but they are so consistent I figure it is a mgmt preference/tax decision rather than indicating the expansion is unprofitable. Europe and middle East are much more nascent - ARB has made substantial investment, but product is not yet proven - revenues should hopefully improve.

In summary, we were jointly worried about whether overseas expansion was going to reduce returns on capital. ARB's returns on capital have been declining (eg, ROE) but there are some innocent reasons (recent entry investment into middle East and Europe, declining debt/growing cash, and it seems a deterioration in Australia (in terms of revenue per capital $). None of this makes me worry that the overseas expansion is going awry - indeed if anything I'm more bullish about it than before.