Pinned straw:
Had a quick look at his and I will throw in my unsolicited 2c.
From a look at the latest annual report. Revenue has declined for 3 years in a row in what I would consider the boom of the cycle, management are telling a gross margin story. FY25 profit was down FY24 if you exclude discontinued operations. Them paying a dividend also struck me as strange, you are aiming for growth, yet you are paying back your cash, and also it's pretty pitiful, what's the point.
Management have obviously sharpened the pencils on tenders and managed to be more selective on projects. So great, margins are stable, debt is better managed but now the question is how are you going to grow the top line again? They could just do the easy thing and go back the other way and be less selective in tenders and reduce their margin or grow more sustainable at slower rate.
The other thing is engineering/mining services are a dime a dozen on the ASX, so I think a quality focus is sensible.
Quick valuation, say 9.5x trailing pe and forward pe, say 5m NPAT brings it down to 7x, Austin engineering is also on 7x trailing. So yes maybe, a simple thesis is they show some top line growth again and get a bump.
I should say I'm biased against these kinds of services businesses, I just think they are too hard to run sustainably and judge their quality (probably requires instilling a certain type of culture through the org).
I see they have got some cash with selling the training business, so my questions would be around how they will grow, trying to judge management quality.